Akimbo Systems Plans To Bring Internet Video To TV Screens
- by Larry Dobrow , August 31, 2004
Concisely blurbed by Chief Executive Officer Josh Goldman as IVOD (Internet Video-On-Demand), Akimbo's delivery model isn't exactly novel. What the company hopes to do is take programming that can currently only be found on the Internet, jazz it up quality-wise, and bring it to set-top boxes in living rooms across the nation via the Web. There are obvious drawbacks--consumers aren't especially keen as is with the number of gizmos straddling their televisions, and they may not be eager to shell out $230 for another box--yet Akimbo believes that the niche programming it plans to offer will convince them to take a chance on the new model.
Goldman notes that since the advent of satellite 15 to 20 years ago, no new method for delivering high-quality video into the home has emerged. Thus, companies with a range of content to distribute have had few options, among them going the VHS/DVD route (expensive) or fighting their way onto cable/satellite tiers (super-expensive). If Akimbo takes off, would-be content providers should be able to get into consumers' living rooms for a fraction of the cost. For consumers, the service won't come cheap: in addition to the $200+ set-top box, there will also be a monthly fee of $10.
"For 40 years, the way we've watched video in the home is sitting on the couch with our feet up on the coffee table," Goldman says. "We think the timing is right to economically deliver high-quality content from the Internet to TVs. The technology allows us to do this now."
He cites a number of reasons why the time has arrived for the company's delivery model. Data transport costs have plunged (from $30 per 1 GB in 2001 to around 30 cents now), while the ability to compress high-quality video into a manageable size has increased. In addition, broadband penetration has jumped sharply, and the cost of enabling home networks has fallen. While Goldman acknowledges that the need for yet another set-top box is a hurdle for the company to overcome ("it's no secret that there will be some resistance to another device"), he believes that there are two ways around this.
"If you give consumers something in the way of content that they can't get anywhere else, they'll buy into it," he argues. "You can also make it work on the set-top boxes they already have." Goldman envisions Akimbo technology being built into not only existing boxes, but also DVD players, satellite tuners, and gaming consoles.
Sean Badding, president and senior analyst of The Carmel Group, agrees with some of what Goldman has to say. "They have the right type of model and the right executive team, but it has to have the right economics," he notes, adding that the content Akimbo offers could prove the key differentiator. "They can't win offering what cable or satellite is offering, so they're going after niche markets--foreign programming, some sports. That makes sense."
As for advertising, Goldman concedes that it will likely take marketers "a while" to figure out exactly what to make of the new service, and gives few specifics about anticipated offerings. Some programming--like iFilm's offerings--will be preceded and followed by simple commercials. "Like with all new mediums, you start by emulating the old ones," he says. "But we're not going to be rolling out packages like 'we'll get your message to fly-fishers who like to travel and make more than $100,000 per year.'"
Adds Badding: "[Advertisers] probably see the potential, but they're going to sit on the sidelines and wait to see how it develops. You'd think they'll want to make sure that this is a service that's going to be around for the long run."
Akimbo plans to launch in October, offering more than 20,000 hours of video from around 50 providers of content. Among its biggest investors is VC giant Kleiner Perkins Caufield & Byers.
