A patent for “control-based content pricing” that Microsoft received a few months ago is suddenly stirring a lot of interest as digital advertisers discover its potential to charge viewers dynamically for skipping commercials or for replaying program segments, such as big plays during a sports telecast.

Patent Number 8,065,696 would let a content provider (network operator, programmer or other) charge viewers an extra fee when they push a button on their remote control, which signals a “client device” (pronounced “set-top box”) to trigger a “valuation application” from a remote content server. In turn, that server pulls the appropriate on-demand media content (or skips over it) from the content storage host.

The patent’s illustration includes a schematic that starts with a familiar STB remote control, although conceivably the interaction could be delivered through any online interface device. Microsoft’s technologists filed the application just over eight years ago, but the flurry of interest has escalated since the issued patent drew greater visibility two weeks ago. It prompted an official statement from the Redmond behemoth:

“Microsoft regularly applies for and receives patents as part of its business practice,” said a company spokesperson. “Not all patents applied for or received will be incorporated into a Microsoft product.”

This one, however, seems destined to find a market (and conceivably some infringement protests). It fulfills the long-envisioned vow to give viewers the option to pay more to see a show without commercials or to request on-demand viewing of specific show segments. According to the Microsoft concept, pricing may be assessed as a debit or credit function; for example, viewers could get a credit to watch a commercial before receiving the video content - whether via a TV set or online video connection.

Separately, another Microsoft patent published this month offers an alternative peek into the company’s control and viewing agenda. This one involves a 3D “heads-up” viewing feature delivered via goggles or a helmet. Ostensibly, it’s for use with Xbox 360 videogames, but it’s easy to imagine that the goggles (actually more like enhanced sunglasses) could be used with mobile devices and other gizmos that increasingly interface with “wherever you’re looking” so that you can see a virtual image. The current specs envision a 16:9 aspect ratio image visualization as if it a 21-inch diagonal image about an arm’s length from your face.

Significantly, both Microsoft patents are part of Silicon Valley’s agenda in the living room and beyond. Google and Apple, among others, are also working on interactive goggles/glasses to enhance personal visualization, and especially the advertising/revenue opportunities of personalization. And their own advertising ideas go toward greater customization.
Hence, although it was surely coincidental, on March 20, within days of the Microsoft control-pricing patent brouhaha, the Patent Office issued to Google a patent for “advertising based on environmental conditions” - likely a mobile implementation, but potentially one with in-home characteristics.

Patent 8,138,930 matches “the environmental condition …based on a signal output from a sensor” to deliver an advertisement that matches the weather conditions.

That’s a lot of interactive advertising and control capability popping up within the same month as the cutbacks at Canoe Ventures. Now let’s see what actually comes to market — and how soon.

Gary Arlen is president of Arlen Communications LLC in Bethesda, Md., and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com  

Between Yahoo’s renewal of five online video series last week, Hearst’s plan to create two online video channels this week and the “Digital Content New Fronts” ad sales pitches starting next week, April’s array of activities underscore the emergence and immense validation of broadband video.

Let’s also include the announcement late last month that IFC (AMC Networks’ Independent Film Channel) will carry the long-anticipated next arc of R. Kelly’s “hip hopera” “Trapped in the Closet” music drama, which was originally a made-for-Web video series. Inevitably, the cult webisodes will be available online and trigger reviewing of the original 22 chilling chapters.

And I haven’t even mentioned the Google/YouTube $100 million original video juggernaut, which is just coming to screen. Add in the data from the Arbitron/Edison Research “Infinite Dial 2012″ study, which came out on Tuesday and you have an avalanche of evidence that broadband video’s day has arrived.

Hearst’s announcement is in ways the most revealing since it marks an effort by a strong media company to extend its demographic magazine franchises into the digital landscape. Hearst will launch two YouTube channels (with $10 million of Google funding); basically it will bundle female and male content clusters (sorry to sound sexist, but that’s what it looks like). The former will become “Hello Style” channel, with content drawn from five of Hearst’s titles, including Cosmopolitan, Harpers Bazaar and Marie Clair; it will debut on April 15. The “Car and Driver” channel, which will show up on May 1, includes content from Hearst’s auto-focused titles.

Look at this as a late - but very aggressive - effort (underwritten by Google) to avoid what happened to Sports Illustrated 30 years ago. Why didn’t Time Inc., already immersed in cable TV and programming, extend its legendary “Sports Illustrated” brand into a full-time cable sports channel, rather than cede that big niche to start-up ESPN? Hearst, like other publishers, is staking its video claim now and will exploit its brands.

Meanwhile, Yahoo Screen  - which has often been overlooked as Google/YouTube escalates its visibility - has also beefed up its video lineup. It has okayed second-season renewals for its slate of women’s series such as “Let’s Talk About Love,” “Reluctantly Healthy,” and “Chow Ciao!” Yahoo says its video line-up currently reaches 61 million unique visitors per month and in February, had 21 of the top 25 original online video programs. One of its women’s shows, “omg! NOW,” drew nearly 13 million unique visitors per month.

Against this background, findings from the 20th annual Arbitron/Edison study - now labeled “Navigating Digital Platforms” solidifies data we’ve seen often about online video habits. The study’s “Nontraditional TV Viewing” section notes that more than 27% percent of us (a far higher 41% in the 12 to 34 year old age bracket) have watched TV by streaming or downloading shows during the past month. It points out the impact of smartphones and tablet, with more than half of respondents saying that such devices, especially the iPhone, have had a “big impact on their lives.” Broadband access ranked up there, too, with 43% citing its “big impact” factor.

While such data will help us keep track of the growing importance of online viewing, the creative landscape is an even more exciting gauge. The torrent of new content and advertising initiatives reminds me of the cable programming nirvana in the early ‘80s, when each week seemed to bring forth new channels and programs (we didn’t call it content back then).

Which brings us to the Digital Content New Fronts (DCNF) - Silicon Alley’s alternative to the broadcast and cable network upfronts. Hulu, Microsoft, Aol, Yahoo and Google/YouTube will be strutting their video lineup to potential advertisers. Digitas, the integrated ad agency and another sponsor of the DCNF, has already teased the process with its own research showing how online vide engages viewers. Among the highlights: Digitas says that 53% of viewers would follow their favorite celebrity to a Web or online video series if the star skipped away from linear TV; 58% said they would watch a favorite TV show online if it posted exclusive videos.

The Digitas data also reveals fascinating generation issues - or lack thereof. Nearly half (47%) of older baby boomers - age 55-plus - say they want to see exclusive online content from their favorite TV shows. Among the 18-34 age cohort, about 69% expressed interest.

Data like that - along with the bigger issue of more online video - are reminders of why advertisers are looking at how and how much of their spending they want to shift to online video. This month’s deluge of data and drama suggest that it will be a lot.

At the expense of … whom do you think?

After the Senate Commerce Committee’s curious April 24 hearings about “The Emergence of Online Video” , lingering - and unanswered - questions remain:

Why did Sen. Jay Rockefeller (D-WV) call the hearings, and what does he plan to do next to determine (as the session’s subtitle asks) “Is It the Future?”

Although the idea of updating the 1996 Telecommunications Act was bruited about several times during the session, there is no serious expectation that Congress will start that arduous task so late in the term, or even next year. Nor is there any definitive plan for next steps in the online video exploration. A Committee staffer told me he is “not sure” when any follow-up hearings might be scheduled, acknowledging only that this week’s session was intended to “sort of get the ball rolling.”

What ball?

Since no legislation is in the works, the hearing - which deliberately eschewed broadcasters, cable companies and telcos  - was even more perplexing. The media and telecom giants, who ultimately will have a big say in any eventual legislation, cleverly avoided any responses to Tuesday’s session - although a few predictable glib lobbyists’ Tweets and commentary popped up during the hearing.

So other than providing a platform for a few Senators’ pet projects - such as Senator Jim DeMint (R-SC) and his “Next Generation Television Marketplace Act” (S.2008, a pro-broadcasting overhaul of the retransmission consent-must carry process) - what did those two hours of dialogue accomplish? Aside from letting InterActive Corporation CEO Barry Diller defend his Aereo venture’s copyright stance, the two-hour blabfest looked like merely a typical Washington posturing event. It gave Microsoft’s Blair Westlake a chance to promote a new Kinect game controller feature that lets kids play along with Sesame Street telecasts; Amazon lobbyist Paul Misener pitched his company’s Kindle e-reader; both of them asked for ‘Net Neutrality support.

(To the inveterate cynics, the session also provided a reminder to the rich organizations and their PACs that it’s time for some campaign contributions.)

But there may indeed be real ramifications, if only very long term. Rockefeller, as stated in his opening remarks, wants “to know if the emergence of online video will do more than improve content and expand choice.” After taking a dig at “escalating bills” from cable and satellite companies, he smacked “crude” programming and asked how “disruptive technology” can affect the TV industry and consumers.

And that’s where the curious process really begins. We all know the caution about the ugly dangers of watching sausage or legislation being made. In the case of Rockefeller’s hearings, which were allegedly in the works for six months fueled by Silicon Valley interests, here’s the thinking. Rather than invite cable operators, telcos or broadcasters as the first witnesses and establish the battle lines, the Senate Commerce Committee opted to let technology companies lay out their plans. The morning’s fourth witness, Nielsen’s Susan Whiting, was on hand to offer data-filled veracity about the growth and outlook for online video.

Now Rockefeller can use this initial session to put legacy media and telecom companies on the defensive, responding to the promises and visions of this week’s witnesses. They will have to put into the record their survival plans in a realm defined by IAC, Microsoft and Amazon.

Despite the calls, which have been heard for years, about revising the ‘96 Telecom Act, such action is unlikely. (The call by Sen. Dean Heller, R-NV, for FCC oversight hearings is far more probable near-term, although Rockefeller shows no interest in such a probe.)

Several analysts have noted that the ‘96 Act has only one reference to the Internet. A rewrite, especially if it includes Internet clauses, will be a lengthy process in today’s toxic political environment. Among other things, the number of parties - including the Justice Department, Pentagon, Federal Trade Commission and FCC - that want a role in such revisions will be daunting. Even more significantly, legislation which puts any controls on the Internet will send the wrong message to the world. At a time when the U.S. is telling other countries to keep their hands off the Internet, legislation to control the Net would make us look hypocritical.

Any tinkering with the ‘96 Act is likely to generate surgical modifications of portions of the bill, possibly to reflect the changed nature of the industry in the past 16 years: telcos as IT companies, MSOs as multimedia conglomerates; digital startups not even born in ‘96 (think Google, Facebook) with global reach.

The underlying message of Rockefeller’s hearing was accurately that we’re in the midst of historic change. The session does open an official record about the competitive value of Internet video. It’s worth skimming through the nuances during the two-hour set piece (archived here if only to become familiar with get whatever eventually becomes the rubric for “future television.”

But don’t expect any actions in the near video future.

Gary Arlen is president of Arlen Communications LLC in Bethesda, Md., and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com  

Suddenly, everyone wants to be in some part of the TV business.

While we await whatever Apple TV becomes, we can look forward to the Ikea “”Uppleva” TV set, already on sale in Europe. Just as the buzz about an Intel-branded set-top box and accompanying online video service calms down, Samsung pops up with a plan to insert advertisements on its mobile devices - a probable prelude to a similar commercial role peddling apps on its “Smart TV” sets.

Beyond the obvious growth of over-the-top and online video, the television industries are morphing in ways that far exceed the high-tech glimpses we get at the CableNet pavilion or “Imagine Park” during this month’s NCTA Cable Show. The multiple sectors of the TV industries that build receivers, package content and sell advertising are changing their very make-up as new competitors enter the business. The resulting revisions may not manifest themselves in the immediate future (the next 18 months), but some of the successful products and services will trickle into operation during the decade.

If form follows function, the look and feel of TV receivers are in play, and not just because of mobile/handheld video. “Leaked” (or merely purloined or imagined) versions of the long-rumored Apple TV receiver indicate a new form factor, with a wider and slightly curved screen; it may be optimized for video displays that are not merely images from sitcoms, cop dramas and talk shows.

Separately, Ikea, the furniture retailer, allegedly spent more than two years developing its all-in-one Uppleva smart TV  that’s blends an advanced video receiver and display into the furniture. For its first venture into electronics production, Ikea teamed with TCL, the huge Chinese electronics manufacturer, to create an integrated device; it reminds me of a streamlined version of grandma’s 1950s vintage entertainment console with TV, music and other features all-in-one unit. Uppleva digital display furniture is expected to go on sale in America next year for under $1,000.

As for Samsung’s foray into ad insertion, the company is working with OpenX Technologies, which is developing a system that lets advertisers place targeted messages on Samsung phones and tablets. The project will begin after July and, according to the Wall Street Journal, is the first strike in Samsung’s attempt to bring targeted advertising to other electronic devices, including its Internet-connected TV sets.

Like other tech promises, these visions of tomorrow’s “TV” are disruptive to a number of industries. They come at a time when the legacy structure of the TV industries is facing a shift. Maybe we’ll hear more visions about what TV should look like during this week’s this week’s SMPTE Forum on Emerging Media Technologies in Geneva (May 13-15). The Society of Motion Picture and Television Engineers, if anyone, should have a grasp on what tomorrow’s TV will look like and what kinds of images it will display.

Broadcasters are already grappling with the challenge of next generation television. An engineering-oriented global consortium - the Future or Broadcast TV initiative  - formalized its mission at a meeting during last month’s NAB convention. Broadcast associations and authorities from North and South America, Europe, China and Japan will try to define a truly global terrestrial broadcast TV standard.

FOBTV’s mission comes just as other entities are rethinking what TV should look like. In Japan, which has seen its once-dominant TV manufacturing sector diminish as Korean and Chinese TV makers ascend, the government is backing a domestic alliance that would allow major Japanese TV set producers to pool their engineering skills and research-and-development funds. The incarnation of this vision is Japan Display Inc., a joint venture between Sony, Toshiba and Hitachi. Just last month, the group, which was created in November, announced its initial plans to capture the largest share of the world’s small- and mid-size flat-panel TV market within five years.

All of these attempts to re-imagine the video viewing device and the value chain behind it come as the content side of the business is in upheaval. NBCUniversal president andCEO Steve Burke offered a telling comment at a Creative Artists Associates retreat a few weeks ago. Burke told the assembled talent agents that the movie business is in “steady decline,” according to The Wrap. He observed that profit margins for the movie business have gone from double digits, to single digits to nonexistent, the report said - suggesting that the long-promised overhaul of content production may be in plays.

As the mantra declares, content is king, or something along those lines. As new digital content emerges, and as the ecosystem through which it is delivered, displayed and funded evolves, the way we watch TV will change dramatically. We all know that and some of actually believe it. We’ll only see a tiny glimpse of the near-term possibilities at the Cable Show in Boston.

But we better be ready for what happens - even if it’s years away.

Gary Arlen is president of Arlen Communications LLC in Bethesda, Md., and a long-time interactive TV enthusiast. Reach him at GArlen@ArlenCom.com

It could have been the technology promises that “seemed like a good idea at the time.” It might have mentioned National Cable Television Association president Tom Wheeler and general counsel Brenda Fox doing “porn patrol” in the early 1980s, shutting down video displays that were too explicit for the exhibit hall. Or this list could have included myriad tales of Ted Turner’s “outrageous” behavior, a topic on which many of us can wax extensively.

Given my own “interactive-TV” predilection, I could have loaded this list with early examples (Warner-Amex’s QUBE, Cox’s INDAX) or later attempts (Liberate Technologies, Open TV). But the following “Top Ten” roster is a broader view of personal favorites from NCTA conventions, based on subjective perceptions of defining moments in a growing industry.

In deference to the nine times, the Cable Show has set up in New Orleans, I added a “lagniappe” - a little extra from the gleaming programming visions, technology promises and policy realities that were showcased during the “National Show” each spring.

1972: FCC chairman Dean Burch was wandering alone after dinner through the Chicago Conrad Hilton Hotel lobby. My boss, his friends and I (a cub reporter at my first big convention) were sitting there, but no one had the temerity to invite Burch to join us. We later learned he was actually looking for someone to talk to - back in the day when the FCC chairman actually mingled with regulatees, not surrounded by a protective entourage.

1978: The monsoon-like rains came on get-away day. Flooded French Quarter streets curtailed the convention’s finale, and I (lucky to catch one of the last flights out that day) have never encountered a rockier take-off.

1979: Turner, with a somewhat perplexed Daniel Schorr beside him, announced that a full-time cable-news network would begin operations one year hence. Disbelief ensued, until CNN debuted about 55 weeks later.

1979: Jimmy Carter’s “virtual” presence marked the only time a sitting U.S. president appeared “live” at an NCTA convention. The president’s remarks came in via satellite, which required placing an uplink on the White House lawn - very advanced in that era.

1980: Premiere, a pay TV network came and went quickly. Four studios, using Getty Oil money, create a premium network of their own to rival HBO and Showtime. Premiere threw a great party (as it had done the previous year), but never launched. A couple months later, the U.S. Justice Department filed a successful antitrust suit, calling Premiere “an illegal conspiracy” to monopolize the cable market.

1982: John Coleman and his financial backer, Landmark’s Frank Batten, pulled a lever at the Weather Channel booth, and the non-stop meteorological forecasts began.

1982: Show me a guy with dust on his shoes, and I’ll show you someone who was at the CBS Cable party out in the desert. An ersatz souk city was classiest venue that the culturally-oriented offshoot of the “Tiffany network” could create near Vegas. CBS Cable’s upscale concert/dance/arts programming mix ended about seven months later.

1993: In an era of convergence dreams, Time Warner Cable, Silicon Graphics Inc. and AT&T unveiled details about the “Full Service Network,” an interactive TV venture. At a press conference, TWC executives were at one side of the podium table, SGI and AT&T execs at the other end. As the press corps filed down a center aisle, they picked seats as if attending a wedding: cable reporters in front of TWC’s Jim Chiddix and his colleagues, Silicon Valley tech reporters on the side where SGI’s Jim Clark, AT&T managers and their teams sat. The Q&A was similarly bifurcated. After a particularly geeky tech question from across the aisle, a savvy cable reporter whispered to me, “‘WTF’ does that mean?” Note: by late the following year, Clark had left SGI to join Netscape, which created the first Web browser, and many of TWC’s interactive concepts eventually migrated to the Web. FSN struggled on briefly.

1999 (or it could have been any year during the dot.com/telecom bubble): Liberty Media’s John Malone strolled the exhibit floor, surrounded by a scrum of investment analysts and reporters eager to see which booths the mogul would stop to query, hoping to catch an insight into where he - and by extension, they - might invest.

2003: Madness on the exhibit floor as Michael Jackson appeared at the booth of Major Broadcasting Cable Network, owned in part by his brother Marlon. The King of Pop planned to create “several programming projects” for the urban-oriented channel over the next 18 months. MBCN morphed into the Black Family Channel the following year and ceased operations in 2007.

2009: Although the policy-wonk throngs form Capitol Hill and Federal agencies may have overlooked it, the rollout of EBIF (Enhanced TV Binary Interchange Format) was the geek centerpiece of the show. Particularly impressive was an in-booth explanation by top execs Brian Roberts of Comcast, Richard Green of CableLabs and Robert Clasen of Starz. Green did most of the talking.

2010: Brian Roberts demo’d a Comcast iPad app, barely four weeks after the Apple tablet hit the market. It was a “wow” moment, since many attendees at the keynote session had not yet been in the same room with an iPad.

2011: The first booth front-and-center in the exhibit hall was NBC Universal’s. NBCU had become a Comcast subsidiary about four months earlier. Some old-timers recall when the first booths at the exhibit hall entry were Motorola on one side and Cisco (neé Scientific-Atlanta) on the other.

It was another sign of the changing times. As always.

Gary Arlen is president of Arlen Communications LLC, Bethesda, MD, a long-time analyst and a frequent contributor to Multichannel News.