As the year approaches the end, let’s look back and review some of the impactful events in the digital media business in 2010. Many of those events generated substantial buzz when they just happened, but quickly people forget about them and move their attention on to new things. As a year-end review, this summery is intended to help us relearn these events and gauge their impact on the industry and companies in the future. Events about Google:

Google claimed it was threatened by cyber attacks originated from China in January. Following the event, Google decided to stop censoring search results in China, which put themselves in a direct confronting position with the Chinese government. As the conflict between Google and the Chinese government deepened, Google had to redirect the traffic on its China site to the Hong Kong homepage. Google had not only lost market share to its competitors in China but also lost plenty of talent due to the uncertainty of its business in China. With only a constrained access to the largest Internet market in terms of users, now Google’s growth solely relies on the expansion to other business lines, such as display advertising, Android platform and TV business.

Google’s social network initiatives remained unsuccessful. Google Buzz was introduced in the year, but even with the Gmail integration the service has been forgotten by the public. The once highly buzzed Google Wave was terminated by Google, as most people cannot figure out how to use the innovative service. Despite the popularity of Gmail, the dominant Facebook and the growing Twittier and LinkedIn will only make Google’s future in social media gloomier.

Google unveiled Google TV with its partners Sony, Intel and Logitech. While Google had depicted a splendid picture for the Google TV when it introduced the product, its lack of premium content support and the severe competition from Apple, Microsoft and Amazon already led many to question the feasibility of the product. Sony’s slash on the price in the holiday season for Google TV-embedded TVs magnified the concerns on the product’s outlook. 2011 will be the key year for Google TV’s success. And if Google could build healthy relationship with Hollywood studios for the platform, it would still gain some ground in the new TV business.

Events about Apple:

Apple’s introduction of iPad has clearly changed many aspects of digital media consumption. Publishing and news industry has found a new and more versatile content distribution platform, which seems could further offset the decline of traditional revenue streams. With a bigger screen compared to smart phones, iPad is a better device for mobile video consumption. Movie studios and pay TV companies started to put strong focus on distributing their content through iPads. We expect the iPad to continue its robust growth in the next year, along with its importance to premium content distribution.

Games have always been top-selling apps in Apple’s app store. The introduction of Game Center on iPhones and iPads makes Apple a formidable player in the social game distribution business. Going forward, the gaming piece will continue to augment the appeal of Apple’s platform.

Events about others:

Microsoft’s Kinect has shown signs of good reception in the holiday season. With the tremendous investment put in the project, it finally delivered quality gaming experience to casual gamers, dwarfing Wii’s motion censor device. Although Xbox only accounts for a relatively small portion of Microsoft’s total revenue, the success of the device could pave the way for its home entertainment strategy if implemented correctly. The solid experience of Kinect also counters the argument that Microsoft has lost the innovation capability. In addition, Microsoft struck a deal with ESPN to provide ESPN programs to Xbox Live users.

Netflix keeps up its growth and now has 16 million subscription members. Given its expansion to other devices and other countries, we expect the service to maintain the growth momentum in the coming year. On the other hand, Hulu also adopted a paid revenue model with the introduction of Hulu Plus. But given the limited content catalog, Hulu Plus faces challenges to grow its paid users.

Facebook keeps the ball rolling by introducing a number of new features and services on the platform. Meanwhile, social games gained attraction with their virtual currency revenue model. Games from Zynga and Playdom have gained millions of users, most of which are based on social networks. As the ad rates on social networks remain low, the social gaming business could help Facebook break through its profitability challenge. And the social gaming companies will surely benefit from the secular growth of social networks.

A lot of the analysts that follow Google have been recently focusing on Google’s intention to acquire Groupon, an Internet collective purchasing site. While the talk between Google and Groupon has stalled with Google’s bid being rejected, the Internet search giant still managed to do some shopping for the holiday season. It has grabbed Widevine for an undisclosed amount, a Digital Management Rights (DRM) solution provider which has been on Strategy Analytics radar for a long time. As DRM business isn’t something that is interesting to consumer media, the discussion on media about this acquisition is far less than that about the Groupon deal. But as important as Widevine’s role in the premium content distribution value chain, this acquisition isn’t just discretionary spending for Google and it demonstrates Google’s dedication to be involved in the premium video content business. Widevine explains itself to be capable of doing three things: Multiplatform DRM, Enabling TV Everywhere and video optimization. These are all of great importance for Google in relations to premium video business. YouTube has been growing as the bellwether in the user generated content (UCG) business in terms of video views, while the profitability issue of UGC is still something that YouTube needs to overcome. With the DRM capability provided by Widevine, YouTube is more likely to obtain serious premium content which could markedly beef up the money-generating capability of the popular web video site. And given Widevine’s credibility for helping pretect content for Hollywood studios, it makes studios more eased to partner with Google in the video business, which has been regarded as the major disruptor for the traditional media businesses. The more premium content availability will also enhance Google TV’s competitiveness in the market, which has been reported having trouble to get deals with major Hollywood studios and being forced to cut the price for the new Google TV-embedded gadgets. Moreover, Widevine’s know-how in delivering video content to multiple platforms will benefit its Android system as well, by enabling the Android phones more securely and easily getting access to premium videos. While these implications are all positive, the acquisition of Widevine is far from a home-run for Google to succeed in the premium video distribution business. Significant challenges lie ahead that seem quite unaddressable for Google in the short term. From a revenue perspective, Google is a advertising driven company that controls online content distribution and ad distribution. Small online content creators are in a weak position to negotiate ad revenue terms with Google, whereas Hollywood studios mandate a close supervision on their ad operations. Even Hulu, the joint venture by the three major networks, has to compromise to the networks’ own sales operation when it comes to premium ad inventory sales and management. The fight over control of ad operation will be a key obstacle for Google and Hollywood to overcome before a long-term solid partnership being established. In addition, some analysts speculate that Google might be planning to offer Widevine service for free to content providers. This idea is pretty in line with Google’s Everything-free strategy, from online search to smartphone to TV strategy. It clearly will lure many content providers at least to try to start relationship with Google and potentially will shake up the entire industry. But such a drastic shake-up could result in backlash from industry incumbents and arouse anti-competition concerns. It would also be expected for Google to introduce a Google-branded video store or service in the future, armoring the tech giant in the battle with Apple, Amazon and Netflix. -Jia Wu

Two months ago, when the Hulu Plus rumor came out in the industry, we did a comparison between between Netflix and Hulu Plus here. Now that Hulu Plus is officially introduced, let’s take a further look at the new service. According to Hulu, Hulu Plus is not a replacement for Hulu.com. Hulu Plus is a new, revolutionary ad-supported subscription product that is incremental and complementary to the existing Hulu service. For almost all of the current broadcast shows on our service, Hulu Plus offers the full season. Every single episode of the current season will be available, not just a handful of trailing episodes. Moreover, Hulu Plus subscribers can now watch their favorites through more than just the browser on their Mac or PC. Hulu Plus subscribers will be able to watch all the Hulu shows on Internet connected TVs, iPhones, iPads and game consoles. In short, Hulu Plus offers a deep catalogue of TV shows and a wide range of content distribution channels. It is the TV Everywhere by broadcasters. So will consumers be willing to pay for the service? Without statistical evidence yet, a qualitative comparison among online premium video offerings could shed some light on the future of Hulu Plus. Netflix is a similar service which we’ve already compared with Hulu Plus in the previous post. As Hulu Plus has made it universally accessible, Netflix on iPhone is also coming soon. Both services are going the video everywhere approach. From the content distribution portfolio perspective, Hulu Plus is on par with Netflix streaming service. With $1 price advantage, Netflix could gain a slight edge over Hulu Plus, although a minor one. The key difference between the two services come down to content selection. While Netflix is a back-catalogue movie service, Hulu Plus is a back-catalogue TV show service, as all consumers can watch recent TV shows on regular Hulu service. So the competition could be somewhat simplified to TV shows VS movies. Netflix again has an edge over Hulu, with some of the TV shows such as Lost, 24 and Prison Break, also being included in its catalogue. Going forward, Hulu Plus could grow its catalogue significantly, but Netflix’s big user base makes it hard for broadcasters to ignore and not to sign deals with. Cable companies’ TV Everywhere is definitely a competing service to Hulu Plus. With similar content distribution portfolio in which users can access content on TVs, PCs and mobile phones, TV Everywhere could have better content selection than Hulu Plus. And for current cable subscribers, there is no incremental expense to enjoy TV Everywhere programs. But the speed of rolling out TV Everywhere service is questionable so far. Hulu Plus is clearly an experiment by the broadcasters in the hope of generating revenues by distributing content on their own. If Hulu Plus could prove its viability on profitability, there will be more content providers joining the game. And cable companies would inevitably lose their leverage in the negotiation. It is foreseeable that Hulu Plus could potentially become a formidable over-the-top TV service provider that rivals Comcast and Time Warner Cable, once all the major content providers join Hulu Plus. This could lead to the failure of cable companies’ TV Everywhere and eventually the distinction of cable companies. But right now it is still too early to tell. -Jia Wu

We've published an in-depth analysis last year examining the competition between free online video services YouTube and Hulu. We believed that Hulu was in a better position than YouTube when it comes to profitability outlook, as Hulu's premium content could charge higher ad CPM and it's lower cost for carrying User Generated Content (UGC). But apparently a pure advertising model is not the best way to maximize profit, not even sufficient for the publishing industry, let alone the TV programming and filmed entertainment industry, which carries extravagant production cost. So quite expectedly, Hulu is going to put up its pay wall as soon as May 24, according to a couple of news source. The new subscription service, Hulu Plus, would continue to provide for free the most recent episodes of shows. But viewers who want to see old episodes would have to pay $9.95 a month. $9.95? Yes, just one dollar more than the cheapest streaming plan from Netflix. We believe that it is not a coincidence for Hulu to set the price so close to Netflix. With the new subscription service, Hulu is now in head-to-head competition with Netflix. Driven by its outstanding performance in the last quarter, Netflix's stock price has surged almost by 100% since January this year. Now Netflix is one of the leading US companies in the media sector that show robust growth, primarily due to its attractive streaming service. Given Hulu's entry in the market, is Netflix going to maintain its edge in the competition? Early evidence shows that Netflix is in a strong position which might be hard for Hulu to catch up. As the subscription services from the two are mainly providing back-catalog of shows and movies, the services look almost identical, except that Netflix might sometimes have new movies for DVD rental. Although Hulu offers for free recent shows, they are also available for Netflix users. Netflix's advantages of being slightly cheaper and offering DVDs are not significant, but this could still make consumers somewhat favor Netflix over Hulu. Furthermore, Netflix has ample distribution portfolio including all major game consoles, iPad, set-top-boxes, computers and TV services such as Boxee. Netflix app on iphone is also believed to be released soon. In contrast, Hulu only distributes content through PCs despite some early attempt of multiple device access. But its owners do not want Hulu's content to be accessed on big screen TV sets at this moment, which would cannibalize their existing revenues. In addition, it is not costless for existing Netflix users to switch services, as Netflix's rating and recommendation system knows ours taste well, while switching to Hulu might require us to build up our profiles once again from scratch. Looking at users numbers, Netflix has 14 million subscribers as of Q1 2010, while Hulu has about 40 million unique viewers in February 2010 according to comScore. Industry consensus for digital media freemium model is that about 5%-10% of total users could be converted to paying users, which leads to Hulu's potential high-end subscriber number to 4 million.Based on this assumption, Hulu's annual subscription revenue could reach 4 x 10 x 12=$480 million. But of course, Netflix's competition would put pressure on Hulu's acquisition of subscribers. So maybe $200-$300 million is more realistic, if not too optimistic, number for Hulu to generate. It almost doubles Hulu's current revenue size, but is still far from people's original expectation on the company. We are sure that Hulu will eventually improve its service, distribution outlet and increase the size of catalog, while with the pressure from Netflix and its investors, Hulu has a lot to work on right now. Jia Wu

Viacom is not happy. It is not happy sharing ad revenues with Hulu for their hottest TV shows. It believes the shows should worth more than Hulu can offer now. So Hulu has to remove Comedy Central’s The Colbert Report and The Daily Show With Jon Stewart. Here is Hulu’s blog post about the issue with Viacom. This is clearly bad for consumers, who want to have their content access all at one place rather than going to different sites. As Internet is playing a more important role in TV and video content distribution, consumers benefit from the openness of Internet, where they can search for specific content they want. Meanwhile, they also have to live with the pain that content distribution is so fragmented online that they have to jump around a bunch of video websites to watch different content. Some media executives say that media industry is a convenience industry. What it means is that one of media companies’ major value propositions is to provide convenience to consumers to purchase and to enjoy media content. It is apparently true. If a media company creates great content, but makes it hard or unaffordable for consumers to access, it would end up for consumers either pirating the content or looking for something else to entertain themselves. This might not be the case for the two Viacom’s show, as consumers can still watch the show at TheDailyShow.com and ColbertNation.com, but it at least suggests that Viacom hasn’t found its ideal content distribution practice online. Hulu, founded by NBC and FOX in 2007, provides consumers an single gateway to access content from NBC and FOX as well ABC now. Its owners like Hulu, as it is their own distribution channel online that is fully controlled by them. 100% of the revenues generated by Hulu goes to the shareholders proportionally, after subtracting the costs. However, for an outsider like Viacom who does not have a stake in Hulu, the video aggregator is merely like another YouTube with more targeted audience, as Hulu will take a cut of the revenues generated by Viacom content. We at Strategy Analytics have been long positive at Hulu’s business model than at YouTube’s, given that Hulu is not required to pay upfront minimum guarantee to its owners, while for YouTube, the upfront payment is usually needed. But in Viacom’s case, Hulu has no difference from YouTube for them. I believe it is a loss for both parties to remove the show from Hulu, as Hulu loses great content whereas Viacom loses audience, despite Viacom believes that its own loss is not as big as Hulu’s. So is there a solution for the issue? Probably. Viacom could join ABC, NBC and FOX’s club to own a stake in Hulu, which could let them enjoy Hulu’s long-term growth in stead of caring about short-term money. Hulu would also benefit from Viacom’s high quality programs enhancing its current competitiveness. Consumers will love it since they don’t need to jump to different websites to watch the videos they like. Certainly, there are several barriers that need to be tackled in order for this to happen. First, it is unclear if ABC, NBC and FOX are willing to let their competitor to own a part of Hulu. Even they are, conflicts on the control of the site among these large media companies could be an issue in the future. Second, Hulu would be declared as a monoply if they gain investment from most of the big media firms. A similar online video service proposed by BBC, ITV and Channel 4, Project Kangaroo, has already been blocked by the UK Competition Commission.  Stay in the status quo or go to buy a stake of Hulu? Now it’s up to Viacom to decide. Jia Wu Client Reading: Online Video: YouTube vs. Hulu - Let the Battle Commence! Technorati Tags: Online Video

A new Web TV Portal launched in the UK this week. It is made up by the remnants of “Project Kangaroo”, the Web TV joint venture between ITV, Channel 4 and BBC which was blocked by the UK’s competition commission a year ago. After Project Kangaroo stalled, the technology platform was scooped up by infrastructure and media services company Arqiva which is now launching its own Web TV portal named SeeSaw. At launch, SeeSaw is offering 3,000 hours of television content and will be the first major Web TV portal in the UK that offers content from UK broadcasters BBC World, Channel 4 and Five in one place. Content from ITV, however, is notable for its absence.   ITV is believed to be contemplating an exclusive deal with HULU, the American Web TV joint venture between Disney, News Corp and NBC Universal, which is yet to launch in the UK but most likely will instantly become SeeSaw’s biggest rival once it does. Until now, many broadcasters in the UK and elsewhere have done reasonably well from offering their own individual Web TV services but what HULU has made devastatingly clear in the US market is that – given the choice – most consumers will choose a Web TV portal over individual channels' Web TV services. In the long term, there is likely only going to be room for a couple of large mainstream Web TV portals in each market. This is just the nature of the Internet and we’ve seen it over and over again with Google in search, Facebook in social networking and Amazon in ecommerce. The Web TV space is no different in this respect and at the moment it’s very much a race for land-grab and positioning in a nascent but rapidly growing new market. The fact that SeeSaw managed to launch before HULU in the UK market will undeniably give it a head start in attracting users but the real test will come when the American Web TV portal finally launch later this year. Client Reading: European Web TV: Era of Anywhere, Anytime TV Approaches

Global advertising revenues are forecast to decline by 8.5% this year, according to Strategy Analytics’ latest Global Advertising Forecast. In such a tough environment the need to find new communications platforms and ad-based business models is more urgent than ever. In theory the arrival of so many new IPTV services, in both managed and over-the-top environments, should give cause for optimism. If IP technologies have any advantage over traditional alternatives it is that they enable closer, more measurable relationships between those with the message (advertisers) and those receiving it (viewers). So far, however, with a few exceptions, we have seen little commercial evidence of these capabilities in the real world. These are some of the issues we will be exploring at the forthcoming “Future TV Advertising Forum” in London on December 11th. I will be chairing a session on Advertising in the Age of Convergence, with speakers from Coca-Cola, Thinkbox, RomTelecom and the Co-Operative Group. Other keynote speakers at the event include Turner Broadcasting, Sky, Channel 4, ITV, Discovery, Telenet and Ford. It promises to be a compelling and thought-provoking event. Early bird conference passes are available until the 25th November or register to watch the event live online FREE of charge at www.futuretvads.com. Twitter: twitter.com/DavidMercer_SA Client Reading: Online Video: YouTube vs. Hulu - Let the Battle Commence!

Things certainly didn't run according to the slick rollout plan Sky and Microsoft had promised us. In the grand scheme of things that is unlikely to have any major impact on tomorrow's world of connected TV. But the fact that two well financed global players can stumble so badly at the first hurdle demonstrates the severity of the challenges that lie ahead in the race to bring online TV to the big screen. The day after the official service launch Xbox posted the following message: “due to the unprecedented levels of simultaneous demand, we did not have the capacity to satisfy all service requests”. Xbox indicates that “many tens of thousands” of users tried to use the service. We, on the other hand, are surprised that this level of demand was not predicted in advance for such a high profile launch. The service will certainly have to cope with much higher volumes if Sky’s expectations are realised. The current status as far as we can tell (neither Sky nor Xbox have admitted to a more detailed analysis of the problems so far) is that some Xbox owners are successfully using Sky Player, some have downloaded it and been unable to use it, and others have yet to be offered the service. After the furore of the first day, when the application was withdrawn within hours of its launch, Xbox admitted that there were issues with some servers and that the service would instead be rolled out gradually to ensure that quality was not compromised. My own experience has veered from the excellent to the frustrating. I can say that we have managed to watch an on-demand streamed movie from beginning to end without a single glitch, and the video quality was quite acceptable. By contrast an on-demand sports game yesterday refused to play for more than a few minutes without buffering. I am currently still encoutering many buffering problems and Sky Player disconnections. I have also noted a few minor niggles with the user experience. The Xbox controller switches itself off after a few minutes of non-use, which is inevitable during the viewing of any TV show or movie. So live pause or any other functions cannot be selected until the controller has connected with the console, a process which usually takes 10 seconds or so. The aspect ratio on a number of shows, notably in Sky World News, are incorrectly set, so that tops of heads and captions are chopped off. News tickers are affected by jerky motion. The release dates of some programmes are not indicated in the programme description, which can be especially frustrating in the news genre. Most of these issues will surely be resolved over time. Both Sky and Xbox may be surprised (although they really have no excuses) at the initial demands put on their software and network systems and have to make further investments in order to maintain quality levels. One further point to note is that fast forward during advertisements during on demand shows has been disabled, which should certainly please advertisers. Assumign that these early problems can be solved quickly, it is clear, as we indicated before, that Sky on Xbox has the potential to shake up the UK's online TV market just as the BBC's iPlayer did two years ago. When it works, Sky on Xbox offers an entirely new way of selecting and watching TV on the big screen. The Sky Movies channel experience alone is transformed by the ability to choose instant start from a selection of hundreds of films. On-demand movies in our view will be one of the most used services, at least until Sky and its broadcast partners populate the libraries of television shows, which currently are somewhat restricted. We remain to be convinced that the streaming platform is yet sufficiently robust to support the expectations of subscribers who choose to get Sky for the first time using the Xbox platform. Given the monthly premium of up to £41 which Sky on Xbox customers will be paying there will be no room for the quality problems which are apparent at this early stage. We are also doubtful that many existing Sky customers will opt to pay an additional £9.75 a month to use the Xbox for live television on an additional TV set. The appeal of on-demand TV is immediately apparent, however, and we expect this to be a key selling point. It could be enough to tempt existing Sky customers to buy an Xbox 360. Xbox had better make the most of this window of opportunity: the rumours are already circulating that the PS3 will also offer Sky Player before too long. Twitter: twitter.com/DavidMercer_SA Client Reading: Online Video: YouTube vs. Hulu - Let the Battle Commence!

The UK’s 1.3m Sky TV subscribers who own Xbox 360s are about to get a real treat. Instead of putting up with Sky’s archaic EPG they will soon be surfing Sky’s content using the slick Xbox Live interface. We were given a live demonstration of the service today and everything (well, almost everything) is looking good for the commercial rollout on October 27th. Let’s get the slight caveat out of the way first of all: today’s demonstration from a central London location used a broadband connection to the production servers which will support the commercial service rollout. However, during live IP “broadcasts” one of Sky’s sports channels the picture was not 100% reliable, and occasional freezing and jerkiness was noticeable on several occasions. This would not perhaps be significant on a normal streamed video service to a PC, but it seems doubtful if TV viewers will be quite so forgiving. I’m sure Xbox and Sky will ensure that the commercial service is not plagued by these slight problems. Sky’s Griff Parry, who heads the Sky Player group, and Microsoft’s Jerry Johnson, head of Xbox Live in Europe, offered a united front to the partnership, claiming that, after initial and understandable caution, both teams had worked together extremely well and with considerable mutual respect. Of course we have seen previous apparently rosy partnerships involving Xbox fail to deliver, but this is clearly different. Sky would not be putting its substantial reputation for quality and reliability on the line if it was not convinced that the Xbox Live platform was robust, and the evidence so far (subject to the earlier qualification) is looking extremely promising. As expected the Sky programming sits behind one of the Xbox Live menu items in the Video Marketplace tab. As soon as the Sky option is selected the background and colour scheme become blue, reflecting Sky’s corporate image. The Sky menu items closely reflect the standard Sky TV EPG, down to channel and genre options. For relevant options there is the choice to watch on demand or live. In my view the biggest benefit of Sky on Xbox will be for Sky Movies subscribers to have access to a considerable library of true VOD movies on their TV set. Sky believes there are two major opportunities from this initiative: first, to secure loyalty from existing customers; and second, to tap into a lucrative 20-30 demographic for which its traditional satellite-based distribution may not be appropriate. Sky is thinking here particularly of young males who have yet to “put down roots”, who may move home frequently, and who inhabit apartments where satellite dishes are prohibited. This segment is seen as prime Xbox owning territory and therefore ripe for upgrade to premium TV services. Besides increasing the overall customer base, the Xbox Live platform offers Sky a new avenue towards advanced services. The early example of avatars sitting in front of a big home cinema screen watching live football together may or may not prove to be a gimmick. But a real opportunity for Sky certainly lies around integrating communications and content into exciting new services. Parry admitted that he sees headset-based voice chat during programmes as one of the most compelling opportunities in the early days of the Xbox Live venture. We can only imagine the possibilities as Xbox continues to add peripherals such as the set-top camera/microphone – the crowd noise during live sports could soon become the sound of a million home-based viewers shouting at the TV screen . Given what has been possible before, it would seem that Sky and Xbox together really can take the TV experience to a completely new level. If anything disrupts progress it will be corporate disagreements, rather than technology failings. Twitter: twitter.com/DavidMercer_SA Client Reading: Online Video: YouTube vs. Hulu - Let the Battle Commence!

Perform and Kentaro have confirmed that "close to" half a million viewers watched the live internet stream of Ukraine v. England on Saturday (see my previous post). While this number includes British troops and cinema audiences, these numbers are not likely to reduce the internet audience significantly. At a conservative average revenue per subscriber of £5 (given that some proportion - those who paid in the last day or so - will have paid significantly more) this means that income from the match will have exceeded £2m. Ironically £2m is also the sum Kentaro (the rights holder) was reported to have been demanding for rights to broadcast the game live on regular TV. So if these estimates and reports are accurate, Kentaro may be pleased that it has generated more income than it originally hoped. Of course, it is not quite as straightforward, since Kentaro will have shared income with its distribution and marketing partners such as the national newspapers, and will have had to bear the significant costs of internet delivery with its partner, Perform. Whether the game actually made a profit for either partner is likely to remain a well-kept secret. Kentaro’s willingness to negotiate a last-minute deal with the BBC for highlights suggests that it was not prepared, contrary to its previous statements, to rely solely on the internet for its revenues. This suggests that it was struggling to balance the books on this event through online-only distribution. It also risks alienating future online sports subscribers who may in the future be reluctant to pay on the assumption of online exclusivity, only to find highlights will be available free-to-air after all. But as I indicated previously, it seems clear that delivery of live internet sports to a mass audience is now at least technically viable, and Perform should be congratulated for the technical success. Whatever the financial results of this particular event, hundreds of thousands of sports lovers have now seen with their own eyes that live internet sports broadcasting can be delivered effectively, and that has a significant marketing value. The quality is clearly not close to the best television can offer, but it will only improve over time. Twitter: twitter.com/DavidMercer_SA Client Reading: Online Video: YouTube vs. Hulu - Let the Battle Commence!