Life For Tech

I was introduced to CinemaNow almost a decade ago by its first CEO, Curt Marvis, who briefed me on the downloadable movie service while I was working for the San Jose Mercury News. And after almost a decade of indifferent results, the company may finally be taking off.

Originally based in Marina del Rey, CinemaNow made its formal launch in 2001 with the help of investor Lionsgate, which licensed its films for downloading as soon as they hit the pay-per-view channels on cable. Other studios were not so forthcoming, however, which is one reason the company struggled to build a customer base. Other hurdles included the consumer-unfriendly conditions that studios placed on downloadable flicks (e.g., making it all but impossible for customers to watch the movies they rented or bought on a living-room TV set) and the pokey broadband connections that were common in the first half of the decade.

The company gradually shifted its focus away from its online store, concentrating instead of providing the technology that would enable retailers and consumer-electronics manufacturers to offer movie downloads through their own websites or devices. Still, the prospects for CinemaNow were so uncertain that Sonic Solutions of Novato was able to buy it from investors for only $3 million in 2008. (Marvis had left earlier that year to become Lionsgate's head of digital media.)

Sonic reported its quarterly earnings Thursday, and its numbers reflect how the company has shifted …

… from the costly process of building a digital distribution platform to the more lucrative practice of deploying it. While revenue was slightly less than than the same quarter last year, net losses were significantly lower.

CEO Dave Habiger said the company invested more than $300 million on the "plumbing" for distributing movies through the platform it now calls Roxio CinemaNow. "For the most part, the building is built," he said. "Additionally, you actually have people using it, renting and paying you."

One reason more people are using CinemaNow is that the company has closed the gap between the Web and the TV set. Its technology is embedded in a rapidly growing number of Internet-connected TV sets, Blu-ray players and set-top boxes, enabling people to rent or buy movies from their couch with a few clicks of the remote, then watch them minutes later.

That beats the heck out of downloading a movie to a specially equipped PC and burning it onto a copy-protected disc, as Hollywood requires for its online releases. (Sonic makes the technology for that, called Qflix, but it's a better fit for DVD-on-demand services.)

Habiger said 300,000 devices with the CinemaNow service were in the field in September. The number grew to 1 million in December, and now stands near 1.4 million, he said. In December and January, the number of people who started using the service grew by "multiples of 10."

And that's just the start. The company expects the number of devices with its technology to rise to 3 million by the end of June, and to 30 million a year after that. That's because it has deals with a number of major equipment makers (e.g., Samsung, LG and Funai) and Best Buy. The latter deal, Habiger said, will result in CinemaNow technology being embedded in every TV and set-top sold at Best Buy that's equipped to pull content off the Internet. 

Another factor that Habiger expects to help Sonic is the studios' evolving attitude about digital distribution. Noting the deal Netflix struck with Warner Bros. to delay DVD rentals until they've been on sale for four weeks, Habiger said there's growing interest among Hollywood executives in giving downloads an advantage over discs. That's one way studios could push back against cheap DVD rental services such as Redbox, which generate lower profit margins for Hollywood than digital services can.

The studios' growing enthusiasm for the Net will help Sonic's competitors too, including Amazon.com, Apple and Blockbuster. Even so, the industry has much yet to learn about what prices and business models consumers will embrace. And the studios' contracts with conventional distributors limit the ability of online outlets to experiment with subscription services, a la Netflix. Still, Habiger likes the position Sonic is in today. "How you price it is easy," he said. "Building a platform is not easy."

– Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division. Follow him on Twitter: @jcahealey

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Facebook has been challenging the Internet giants since infancy. Now, at 400 million users and growing, it’s firing a salvo directly at Google and Yahoo.

TechCrunch’s Michael Arrington reports that Facebook is deep into a project long rumored to be in the works: creating its own Web-based e-mail.

With Facebook gravitating to the center of the online world for hundreds of millions, it is well positioned for such a move. Facebook users already  stay in touch and share links and photos with friends on the social networking site, making it a logical place to e-mail and chat. Time spent on Facebook soared to 27.6 billion minutes in December, up from 17.8 billion minutes in October, according to data from ComScore.

Facebook is all about communication, whereas Yahoo aggregates content and Google focuses on search. Yet both Internet giants have legions of faithful e-mail users and deep stakes in the messaging market. The proof for Facebook will be in the execution.

So it would make sense that Facebook tap the creator of the popular Gmail to lead its effort that TechCrunch reports has been dubbed internally “Project Titan” and that some employees have unofficially dubbed “Gmail killer.”

No way, says Paul Buchheit, the former Google engineer who joined Facebook last year after Facebook bought his social networking start-up FriendFeed.

“No, I am not working on anything related to e-mail,” Buchheit said on FriendFeed and Twitter. “Nor do I plan to.”

But a question remains: In the age of Twitter, texting and insta-chat, are users clamoring for another old-fashioned e-mail account? 

– Jessica Guynn

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When I learned how to ride a bike, my father ran behind me screaming as I precariously teeter-tottered over an unforgiving cement surface. He was followed by my mother, who was hysterically screaming at him because her daughter was, well, inches away from needing a skin graft on her face. 

According to GyroBike, a company based in San Francisco, my family's momentary hysteria could have been avoided.

GyroBike is releasing a wheel in December that allegedly trains kids how to ride bikes. Inside the wheel there is a disk that spins like a top, using a force called gyroscopic precession to stay upright. When a rider wobbles, the wheel re-centers the bike.

"It simulates fast riding at low speeds," said Ashleigh Harris, GyroBike's marketing director.

Harris said that unlike training wheels, Gyrowheels teach riders correct riding techniques and enforce muscle memory. She added that most of the kids who tested the product learned how to ride a bike within an hour.

The Gyrowheel comes with internal rechargeable batteries and a charger. It has three stability settings — high, medium and low — and works like a regular wheel when shutoff. The company will release the 12-inch wheel Dec. 1 for $99.95. The 16-inch wheel will be released in the spring.

The concept for this product was developed by four undergraduate Dartmouth students. Daniella Reichstetter, who was in Dartmouth's business school at the time, took on the project and founded GyroBike in 2007.

– Melissa Rohlin

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Microsoft's WebTV service proved pretty conclusively that the masses don't want to surf the Web on their TVs. They want to watch videos, not browse for bargains on Craigslist. Technologies that integrate Web content into TV programming, on the other hand, seem much more promising. Vudu, which delivers movies on demand through the Internet to TV sets, is launching one example today, adding content streamed from Wikipedia to its program guide. 

It's a pretty simple idea. When Vudu users steer their TV sets to one of Vudu's "movie details" screens, they see a brief description of the film in question along with links to more information about the cast, reviews and similar titles. Today, Vudu is adding a new link that will take viewers to the relevant page in Wikipedia. 

There's some technological niftiness involved — for example, the links inside the Wikipedia pages will be live, enabling people to navigate around the site as if they were using a browser. And any reference in Wikipedia to an actor, director or movie that's in Vudu's database will include links to movies in the Vudu service.

The addition of Wikipedia content is a baby step in the direction of integrated Web content, but it shows off one of the advantages of Vudu streaming its user interface to devices, rather than having it baked into the set-top box. That approach enables the company to update the features of its software in a way that's consistent across all devices, whether they are dedicated Vudu set-tops or multi-purpose devices running Vudu's software. Umm, but there's a catch — this feature will reach the multi-purpose devices today, but the Vudu set-tops will have to wait for it.

– Jon Healey

Healey writes editorials for The Times' Opinion Manufacturing Division. Follow him on Twitter: @jcahealey

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Google and TiVo have been responsible for a good deal of anxiety within cable and network television circles. Put both together in the same sentence, and you have the potential need for some serious psychotherapy.

Yes, the two Silicon Valley companies are teaming up. Google, which sells television and online ads, today said it agreed to subscribe to TiVo's user data.

Here's where the fear and loathing come in. Google promises that advertisers pay only when their ads are seen. But TiVo lets viewers fast-forward through commercials. Now, with TiVo's data, collected from millions of digital video recorders across the country, Google can tell exactly which of those commercials are being bypassed. If all the commercials are being skipped, the channel gets no money. It's easy to see why TV executives get heartburn over this.

Google currently has an agreement with EchoStar to sell ads on its Dish Network and collect similar data from the satellite TV company's subscribers.

Information is the stock and trade of Google, which distinguishes itself by its ability to tell advertisers how often their ads are seen. On the Internet, that's a relatively trivial trick to tally up "clicks" or "impressions." But that's harder for television.

"In general, the feeling is that TV needs more accountability for the audience it is delivering to advertisers," said Todd Juenger, vice president of TiVo's 4-year-old audience research business, said in an interview. "Right now, TV is kind of fuzzy. It is such a powerful medium, but it suffers from a lack of tools to measure its impact. We help to provide those tools."

Today, the 800-pound gorilla is Nielsen Co., whose TV show ratings determine how much networks can charge for ads on certain shows. But Nielsen focuses on how many people watch a given show.

Google, however, wants second-by-second feedback on whether people are watching ads and who is watching them. Through its deal with EchoStar, Google already processes more than 1 billion channel clicks a day to determine whether a client's ads are seen, at least by satellite TV customers.

"Now we have TiVo data to add breadth and depth," said Mike Steib, director of emerging platforms at Google.

Steib and Juenger are cautious to add that the data are "anonymized," so Google and advertisers cannot trace viewing behavior back to any individual.

They also argue that networks have little to fear. About 3 in 10 companies that buy TV ads through Google have never advertised on TV before, Steib said. "Our system makes it easy for people to buy TV ads," he said. "We're lowering the barriers to entry, which has the effect of growing the market."

Juenger delivered a similarly soothing message: "More and more marketing dollars are being directed to Internet and search largely because of the accountability those mediums offer. If you are confident that you’re getting what you’re paying for, you’re more inclined to pay. To the extent that we can do that for TV, that ought to stimulate demand."

In this economy, TV executives are likely to embrace anything that stimulates demand. Even Google and TiVo.

– Alex Pham

Follow my random thoughts on games, gear and technology on Twitter @AlexPham.

Image courtesy of Dan Hontz.

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