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Next Generation TV

In the Spotlight

Web Video Made Simple: EyeWonder
January 06, 2003
By Stephen Warley

The true potential of video on the Web has yet to be unlocked, until now. Imagine
no longer having to worry about downloading the latest player software to view

Advertisers could use rich media more effectively in their online marketing campaigns.
Programmers would have the ability to achieve wider distribution for their video content
with greater ease. EyeWonder's player-less streaming technology makes those dreams
a reality. John Vincent, CEO of EyeWonder, tells how this new technology is simplifying
how video is delivered on the Web.

How does EyeWonder's player-less streaming technology work and what are its

Simply put, it has the same types of consumer experiences and abilities as player-
based type experiences. However, on the digital rights management side there's a more
scalable way to sort of spread the RM to be more easily executed on a massive scale,
that's mainly towards the broadcasting side of the equation and the publisher’s concern.
From a consumer perspective, you have the functionality of a player, you can have fast-
forward, rewind, stop, start, all these various things, but the difference is it doesn't
require any type of a download install on your computer.

If I see a video application on a Web site that has this technology, can I
automatically view the video?

Correct, and there's literally no necessary buffering either. For a broadband experience
you're dealing with maybe 2 seconds before the video can start. For a dial-up
experience you're dealing with about maybe, say 5 seconds.

Is the quality of the video different as it's playing?

EyeWonder Inc.              Overlook III            2859 Paces Ferry Road, Suite 1200   Atlanta, GA 30339
p. 770.261.5070 f. 770.261.5080
Yes. Simply put, we are a technology company that has multiple different groups, one of
those is a compression, algorithm development division. Just like Microsoft and Real
and various other companies develop algorithms, so do we. Our algorithms are so
concise we are able to pack those into a very, very small application, which is less than
30K in size, send that with the content and it opens up automatically and plays through
that small application.

For content providers and advertisers, will they have any type of special needs or
are they going to need any additional equipment or special programming to use

It's a really good question. To use EyeWonder's technology it doesn't require any
additional hardware at all for the organization. If they have a Web server today and if
they have a Web page, they are able to serve our content from the exact same server,
just like they would be serving, say a GIF image, so it doesn't require anything
additional at all. The only thing that it would require is for them to take their video
content, which say is an AVI or in a BETA-tape format, and encode it into the
EyeWonder format. Remember I was talking about those algorithms? Basically you
have to get it in a form that our algorithms can decode them and that compresses the
data, just like Microsoft and Real compress data, so that it can be of good quality.

There is a movement among players, like Real and QuickTime, to have an open
source code. Is that something you are considering as well?

What's interesting is that the reason those organizations are moving to an open source
code is to try to increase ubiquity of their distribution per the consumer. They have a
limited distribution. Effectively, we in a way are already open because we ride on top of
Java, which is already ubiquitous. Today, over 97% of all Internet users can
successfully stream in EyeWonder's format. We're doing absolutely nothing.

A technology like this really puts a lot of power back into the content creator's

You hit the nail on the head. That's our business model. It's really interesting that you
point that out, it's very different than that of a player environment. The players' strategy
is to enable the end user to be able to get content and then effectively make people pay
a toll to use that player. What we decided was to enable the end user to have an
extremely simple -- keep it simple, stupid model -- and then work out business models
that empower the content distributor and support their existing business models, which
are mainly in the ad revenue format. Now we are rolling out models that support
subscription, as well as pay-per-view opportunities.

EyeWonder Inc.              Overlook III            2859 Paces Ferry Road, Suite 1200   Atlanta, GA 30339
p. 770.261.5070 f. 770.261.5080
Is your primary source of revenue is from licensing this technology or are you
doing anything with advertising partnerships?

We do quite a bit on the advertising partnerships side of the equation, however it is still
under a license model. As a company, we help marry marketers with publishers. For
instance we have a license agreement with Yahoo!, AOL, with about 90% of the top 100
Web properties today. Those agreements are structured in such a way that effectively
it's a revenue share, it's a $5 CPM per streaming ad onto their Web site. Then we
consult with agencies and customers to educate them about the feasibility, about
successful campaigns, etc. and then advertisers will go and spend their ad dollars in a
way that is meeting their objectives. An interesting aspect there is what they are looking
at is meeting their direct marketing objectives, as well as their branding objectives,
which is what they created their TV spots for.

Advertisers have been waiting for viable rich media on the Web, this seems like
the solution they are seeking. What are they saying about it?

Not to brag, but that is exactly what they have said, just what you've said. For instance a
quote from Coca-Cola, who is one of our major customers, "We use to be effectively
wasting or underachieving 98% of our marketing plan online because we were only
getting out direct response component satisfied at a 2% click through, (which as
industry averages go was a very high click through) but the remaining 98% wasn't
achieving our other marketing objectives, which are really driven by sight, sound and
motion, our brand." Now with EyeWonder they are able to hit their other 98% marketing
objectives, which make sure there is sight, sound and motion and the pizzazz of the
Coca-Cola brand, simultaneously hitting their click through metrics, which is a direct
response metric.

Beyond advertisers, who else are you targeting for this technology?

EyeWonder is a technology and communications development company, so we license
our technology into organizations for their own corporate communications and training
objectives as such. We license it towards advertising objectives for marketers, etc. We
also license to publishers, which are looking to take their video content and drive a
stickier site or new revenue streams, new inventory. For instance, FOX 23 out of Albany
is one of our licensors using EyeWonder. It now to sends out video e-mail and updates
on their local news during the day, broadcasts news content for breaking stories and is
able to sell advertisers, both online and for their broadcasts.

EyeWonder Inc.              Overlook III            2859 Paces Ferry Road, Suite 1200   Atlanta, GA 30339
p. 770.261.5070 f. 770.261.5080
About the Author

Stephen Warley has made a career out of assessing the future direction of television.
From producing for CBS News and CNBC to working as a project manager for
interactive media agencies like ThirdAge and Osprey Communications, he has gained
an insider's view as to where tomorrow's content and business opportunities lie in the
video media industries. He is currently an MBA candidate at Fordham University with
concentrations in media management and finance. He can be contacted at

EyeWonder Inc.              Overlook III            2859 Paces Ferry Road, Suite 1200   Atlanta, GA 30339
p. 770.261.5070 f. 770.261.5080

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