Earlier this month, Comcast launched Fancast XFinity, their branded name for their version of TV Everyehwere. Essentially, XFinity is a distributed authentication system, in which users prove their association to an existing cable subscription, and receive corresponding entitlements to an online video catalog.

Browsing to a video which requires authentication results in this modal dialogue:

Trying to View Premium Content on Fancast Requires Authorization

Comcast Access (and a specific Movie Player from Move Networks) has to be installed to your machine – and running – to be able to view videos behind the paywall. Comcast Access is an Adobe AIR based application and is available for Mac OS X (intel-based Macs running OS X 10.5 or later) and Windows (XP Service Pack 2, Vista, or 7). No love for Linux and Unix users (which won’t make Comcast Access very popular around Optaros), older PowerPC Macs, or Windows users stuck on Windows 2000. (This also means you’ll have to have or accept AIR being installed on the machine as well). Finally, you’ll need administrative rights on the machine(s) you install Access on – which may restrict some work desktops (a popular place one might want access outside the home).

Installer for Comcast Access on Mac OS X

Users can authorize up to three named computers for access – though it isn’t clear to me yet what happens when you reach your fourth machine (can you un-authorize the first and sawp in the second, as in Apple’s FairPlay DRM in iTunes?).

Once you’ve installed Access (and the Move Networks player) you can authorize the machine it is running on:

Setting up Comcast Access

The process was relatively painless (though I did have to chat with a customer service rep to find my “comcast email account,” something I set up when subscribing to cable but have never used) on my MacBook Pro, unless you count the pain of accepting yet-another set of digital restrictions management (DRM) shackles. Specifically, the Comcast Access Terms of Service make it clear that this isn’t really TV Everywhere. (I’m reminded of one of my favorite The Princess Bride quotes: “You keep using that word. I do not think it means what you think it means”).

In addition to the platform restrictions, and the requirement that Comcast Access be running as you watch the videos, the TOS notes:

• “You may only install the Software . . . and use Protected Services on Authorized Devices.” – Comcast defines which devices are authorized – they mention PDAs and portable devices, but if your device isn’t on the list you’re not part of everywhere
• On software upgrades: “Upgrades will either be optional, in which case you will be presented with the choice to install such Upgrade, or mandatory, in which case the Upgrade will install automatically and you will be notified after such Upgrade has been successfully installed. By installing and/or using the Software, you consent to such Upgrades being delivered and implemented in such manner.” At least some upgrades might be optional. ;)
• Whose devices can you authorize? “you will not . . . designate as an Authorized Device any device that is not owned and used solely by people then-resident at the service address for your Comcast Digital Cable subscription.” Does this mean that by authorizing my laptop, which I don’t technically own (Optaros does) I’ve violated the TOS? What does then-resident mean: if I’m travelling on business for a week, am I still resident at my service address? What if your roomate moves out – is it your responsibility to de-authorize her authorized devices?
• You also will not “export, import or re-export the Software in violation of any applicable law, rule or regulation of any jurisdiction.” Does traveling with a laptop on which the software is installed constitute export? What if the installer itself is sitting on the desktop? Is it my responsibility to know about the applicable laws in all jurisdictions?

Much (if not all) of this is fairly standard proprietary software TOS fodder, I suspect. DRM systems have to be able to insist on the ability to force updates in case holes in existing versions are discovered and need to be plugged. Controlling the devices (and system software versions) on which the software can be legally installed also helps prevent folks from, for example, hacking a version to run without enforcing DRM.

I wonder how Comcast Access deals with geographic restrictions – can I access premium content to which I have rights as a Comcast customer even while in, say, the UK or Germany where those rights haven’t (potentially) been negotiated?

Or would Fancast, maybe even before requiring Comcast Access authentication, already geolocate my IP and prevent me from requesting material not available in that geography?

Will TV Everywhere be enough to keep cable subscriptions relevant? Frankly, if faster fiber-optic were available at my home address, I’d drop cable in a heartbeat. For me cable is and has been since the mid-nineties primarily about access to the Internet, and only secondarily a way to see a breadth of content on TV. But I recognize I may be the minority there.

Might folks who are not Comcast Cable Subscribers someday be able to purchase a “Fancast XFinity” subscription independent of whether they current have coaxial cable hooked up to their home address?

What will Fancast XFinity, and Comcast’s purchase of NBC Universal, mean for services like Hulu? Is this the beginning of a “return to paywalls” for professional video online?

I hope not. I hope that it’s a first step in the direction of acknowledging the user desire for control, and a first step toward separating the value of the content from the value of the delivery medium. (Just as newspapers aren’t the only or even the best way to consume/distribute news, coaxial cable via subscription isn’t the only or even the best way to consume/distribute professionally created long-form video content.)

Freeing the content from the channel should enable lots of different monetization models, including some form of Freemium access (let users watch the first five episodes of Entourage free, or all free two weeks after original air date) as well un-bundled access (I never want premium sports channels, but many packages include them).

Will the restrictions imposed by the DRM encourage consumers to keep going to unauthorized channels to get content, or will the ease-of-use (so far it has been quite simple) and the low barrier to entry (for subscribers) make this an iTunes moment for online video? (Perhaps this is only possible if/when the service gets extended beyond current cable subscribers and becomes a way to subscribe to premium content online directly).

Photo by ehnmark, cc-by license

I’ve submitted two panel proposals this year – each is described below with a voting link.

The first is Who Pays for Content?: Re-evaluating Paywalls. As described in the proposal:

Everyone knows Stewart Brand’s statement that “information wants to be free,”. Less well known is the other half: “information also wants to be expensive.” If no one pays for content, and no one clicks on ads, how will we fund online initiatives, applications, and sites? What could drive users to pay for content? What has, historically, and how can we learn from that?

I think this is a very timely discussion that hits at the core issues for SXSW attendees – what funds the work so many of us do on the web? What models other than advertising and pay-for-content will work in the assembled web?

The other is What’s in it for me? Open Source and Interaction Design. This builds on the video podcast I did as part of last year’s extended content program. As an open source developer and advocate who has also long been a promoter of the value of interaction design, I want to broaden awareness within the interaction design community about why licensing matters. From the proposal:

Open source advocacy has generally focused on the perspective of developers, for whom access to source code is a real need and the opportunity to change or extend functionality is a practical possibility. But what about the interaction design community? In this talk I explore why interaction designers should care about free and open source software.

You’ll have to register to vote, of course. You can also leave comments here or in the panel picker itself.

See you in Austin in March!

Hope. Which Way? (Photo by bixentro, cc-by license, click through for details)

Mass High Tech, which I still read in print, featured on its front page Richard Anderson from Village Soup and Alan Baker of the Ellsworth American. (The article is online here: Two Maine newspapers test the future of newspapers’ plans). Additionally, there were a number of articles about Amazon’s new Kindle, and how e-Readers in general might represent new hope for publishers.

Approach one: hyperlocal, shared platform, business-sponsored

Village Soup sign in Belfast, ME (Photo by Timoth Valentine, cc-by-nc-sa license, click through for details)

Anderson’s model, which you can experience in a number of communities linked from VillageSoup.com, is essentially a hyperlocal model, in which a significant portion of revenue is driven by sponsored blog posts, which VillageSoup calls bizOffers:

The most distinctive component of our model are the sponsored postings . . . that businesses can buy. The posts, which run right next to the ordinary editorial content, are not controlled by us. No fetters, no filters.

In the two most mature of the four markets we serve, the sponsored blogs help generate a large portion of the online sales that collectively generate 19% of our $2.5 million in annual advertising revenues.

(You can see the bizOffers in action in the right column of the Knox County Village Soup site).

VillageSoup also received a Knight Foundation News Challenge grant in 2007 to

create an open-source version of VillageSoup’s successful community news software, combining professional journalism, blogs, citizen journalism, online advertising and “reverse publishing” from online to print.

Unfortunately, I wasn’t able to locate a meaningful update on their progress in that direction. There is some discussion of code access under the name “Village Soup Common”:

How does this model work?

VillageSoup handles the technical stuff. While a version of the platform code is available free, the installation, maintenance and improvement of the code is not. Software engineers and connectivity costs can be shared among all members of the Common. VillageSoup also allows provides the brand and its promotion. This promotion goes in two directions. To the public, we promote theSoup as a trusted source for hyper-local information around the globe. To the major product brands, we promote theSoup as a direct connection to the hyper-local residents as they head to their local retailer. Finally, a VillageSoup Common wiki provides a repository of experiences and ideas which empowers small operators to learn and advance in ways not achievable as stand-alone entities.

As one of the commentators on Anderson’s recent blog entry on making hyperlocal pay pointed out, however, that doesn’t seem likely to be what the Knight Foundation expected when it funded creation of an open source project. Perhaps we’ll hear more as the end of the grant period (June 2009) approaches?

Regardless, it stretches credulity to think of hyperlocal as a new strategy in 2009. Hyperlocal undoubtedly plays a role in the future of news publishing, but it is unclear whether it will produce the kind of revenue necessary to significantly impact the large publishers who are in trouble.

Approach two: rebuild the online paywall / make users pay for content

Not free (photo by ol slambert, cc-by license, click through for details)

Users are offered, on the landing page of the Ellsworth American, a choice: go to the free limited edition of the paper, a site called FenceViewer which offers summaries of stories from the paper, or subscribe:

The full Ellsworth American is available weekly as a PDF download to those willing to pay a $32 annual subscription.

While paid subscription to online newspaper editions is something the rest of the industry has struggled with – famously only the Wall Street Journal has been able to maintain a paywall over time – the paper is hopeful in the case of this small Maine community, perhaps due to its niche presence:

The Ellsworth American’s payment strategy serves an even narrower niche. From 12 percent to 15 percent of its subscription revenue is in mail subscriptions — typically snowbirds who get the paper by mail during winter months. Problems with the postal service have taken their toll.

So far, about 100 readers have subscribed online, said Chris Crockett, the paper’s IT manager, but it’s still early in the process. There have been “some comments,” about the new model, he said, but many people have been satisfied to be pointed to the paper’s trimmed-down free site.

Is 100 readers subscribing only a sign of hope, or yet another sign that users don’t want to pay for access to content online? While it may be too early to tell for Baker and Crockett, the rest of the web seems to have pretty clearly voted on this one already, and recreating an information scarcity economy seems unlikely.

Approach three: sell content on new devices

Kindle (Photo by Brian Vallelunga, cc-by-nc-nd license, click through for details)

While new devices can certainly reset user expectations – look at the influence of the iPhone on mobile web applications in the U.S. – it is difficult to imagine that such devices will create a market for paid content that replaces the drastic decline in traditional subscription revenue.

Additionally, while the gadget sites and tech press have been quite excited about the new e-reader formats, it’s hard to imagine proprietary format readers ever becoming nearly as ubiquitous as mobile phones and netbooks using existing open formats. As Alan Mutter puts it:

Instead of trying to persuade consumers to adapt to an expensive, awkward and idiosyncratic gizmo like the wide-body Kindle, newspapers would be wiser to spend their time and resources optimizing their existing offerings for the interactive formats already in popular use. Netbooks are already here, growing in popularity, and much more likely to find broad acceptance than dedicated readers.

While some users will adopt, and evangelize for, e-readers of various styles, they’ll never match the audience of the web (and the mobile web). If developing for those formats requires significant investment in proprietary formats (and associated DRM technologies to enable paywall and prevent piracy), publishers risk again missing the bulk of the audience. (See also MG Siegler’s excellent Tech Crunch post “The Big Screen Kindle Hail Mary To Newspapers Will Fall Incomplete“).

Users in the assembled web expect to be able to consume (and share, and interact with) content where they are – in social networks, on community sites, and throughout the web. Content I can’t share is inherently less valuable than content I can. In other words, what makes the e-reader story so attractive to publishers – relatively closed (non-generative) platforms which enable paid content subscriptions – is exactly what makes them unattractive to most readers. (Or, to put it another way, piracy of paid content will be what makes them attractive).

Will the short-term gain (a bump up in revenue as the initial readers roll out) be worth the long-term loss of taking focus off making the web work?

No silver bullet

Ultimately, all of these strategies (hyperlocal sponsorship, paywalls for niche web content, and new devices/new formats) can contribute to the evolution of existing publishers into new media, but none of them represents a silver bullet. Publishers need to focus on reigning in costs and eliminating unnecessary duplications of effort, while at the same time generating compelling content which will attract audiences that advertisers desire, and even potentially be worth paying for.