Amazon Web Services Start-up Entry

Thank you for entering the 2008 AWS Start-Up Challenge. We were flooded with great applications and were impressed by your innovative business ideas and diverse uses of AWS. We have carefully selected seven finalists with promising businesses built on top of AWS. These start-ups will compete in the final judging round for the grand prize. Read more about the finalists.

You will be receiving a $25 service credit which will be placed on your AWS account during the next billing run.

We truly want you to succeed. Please check out the co-marketing opportunities which include submitting your solution to the AWS Solutions Catalog.

Best regards,

Tracy Laxdal
Amazon Web Services

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I thought we had a strong entry. It seemed that all the finalists had products and services that were already up and running. Below is our entry:

* Provide a summary of your idea, application, product or service:

OPENIVO New Television: A PC - Digital Video Recorder Application (PC-DVR) with Targeted Advertising Delivery System

A managed network of television set-top personal computers with TV tuners with output to the analog or digital television screen

• Connected to internet

• Running digital video recorder (DVR) software

• Subsidized with targeted advertising and e-commerce tie-ins to make the system inexpensive to purchase and free of monthly fees for service.

This is a black box, like a signal converter box, that sits on top of the television, allowing the user to pause live TV, record programs from an on-screen guide and fast-forward through programming and commercials.

The internet connection also enables the box to:

• provide video-on-demand,

• shop for merchandise,

• read and post reviews of merchandise, and

• view commercials directed to the user based on their previous known television watching, searching, and shopping experiences.

* Describe what stage you are at in your design/development process:

The basic design of the system has been described. Provisional patent claims have been filed. Several hardware prototypes have been built and function well with digital video recorder functionality for purposes of demonstration. The software and interfaces for Amazon Web Services are in an early stage of design and development.

* How have you incorporated Amazon Web Services as part of your solution/application? What services used and how?

There are three core functions of the system, DVR, targeted advertising, and e-commerce. AWS provides the server architecture for the system.

DVR services function locally at the PC to record TV programs to the hard drive. DVR data such as shows watched, shows recorded, ads watched, and ads skipped will be uploaded through to AWS. Simple DB is used to index uploaded user information. The DVR software allows the viewer to access the on-screen electronic program guide (EPG) and to search for programs based on title, genre, etc.

Ads can be targeted to the viewer determined by a profile based on the uploaded DVR data. The system can be personalized for each viewer in the household. Various widgets (weather, stock market, Disney channel line-up, etc) favorite channels, and preferences would be personalized. This would allow collection of viewing data by household member. Although highly detailed personal marketing data would be available, personal identity information would be highly secured, protected, and remain private. EC2 is used to query the Simple DB database to analyze DVR data, assign users to profile categories, and calculate which commercials to send. Queries will be run quickly in real time to control targeted advertising. S3 will be used to store commercial video files and other downloadable video. Targeted ads can be skipped by using a different remote control keystroke. A plus or a minus response would be required to skip the commercial. Plus means the viewer likes the commercial, but does not want to watch it now. Minus means the viewer dislikes the commercial and never wants to see it. Commercials could be easily test-marketed. Commercials with high minus ratings would be withheld from wide distribution. The goal would be to make the viewer experience of targeted commercials similar to watching the commercials on the Super Bowl. These commercials should entertain, inform, and be desirable for the viewer.

The Openivo set-top PC-DVR functions as a platform for e-commerce. If an item on a targeted ad appears interesting, a keystroke on the remote can get additional information and user reviews. If this is satisfactory, then another remote keystroke can buy the product. Two or three weeks later, the system can prompt the user to enter a brief review of the product. One marketing model would be to sell the system for $299 with a monthly $10 rebate for two years. The rebate would be financed with advertising revenue. The online account would make it easy and well motivated for the viewer to use e-commerce. FPS would handle e-commerce charges. Associates Web service would handle Amazon products sales. Fulfillment Service for e-commerce products and for Openivo boxes.

SQS handles messaging between central servers reliably. The queue service allows data processing and analysis to occur at the same time as DVR unit control without loss of messages or bottlenecks. SQS will help provide decoupling within the application. For example, data from the set-top box will be sent via SQS and processed on-demand within EC2. This will help offload processing in a robust way. This fast, reliable, fault-tolerant system is key to the functioning of the system. When a TV viewer turns the set on, the expectation is that the set will work 99.9% of the time

Mechanical Turk could be very useful for analyzing and categorizing ad video. Normally there is no available electronic program guide data for commercial messages. In order to analyze DVR control data for non-targeted ads, the commercials will have to be manually analyzed. This would not need to be done in real time, but could be added to the database later.

* What was your inspiration or what problem is being addressed with this application?

I remember when watching television was a wonderful experience. Now television has too many commercials, and programs I like are never on when I want to watch. The DVR has changed this. Now I watch what I want when I want. I have been building PC-DVRs for home use for several years. I like the fact that there is no monthly fee. I have been impressed by the constantly decreasing cost of hardware. When I first heard that the over-the-air analog signals were going to be discontinued, it occurred to me that a PC-DVR would be an excellent solution. When I first read of the development of targeted advertising, the pieces all fit together. Give away DVR services in return for advertising access. DVR software with targeted advertising would be the killer application that puts set-top PCs in the majority of American homes. This new platform would transform the television viewing experience. It would usher in the era of Personal TV. Control of advertising and programming would no longer be in the hands of a Cable MSO or a Network executive, but would be held in the hand of the TV viewer.

* Who is your target customer/ user and what is the potential market size?

1. Analog over-the-air viewers. These customers watch free commercial broadcast television over-the-air with “rabbit ears” or roof antennae. On February 17, 2009, all over-the-air analog signals will be discontinued. All of these people are forced to buy some kind of signal converter box to connect to their old TV set, or they will have no reception. The Openivo box is an alternative to the converter box and gives much more functionality.
2. Analog cable viewers. These customers are cable subscribers, but use no set-top box. For the near future, the analog signal on cable will be maintained, so they do not need to buy a converter box. Although they are not being forced to buy a box, once they see the added DVR functionality (pause live TV, one-click recording, fast-forward, etc.) the expected demand will be high.
3. Home theater viewers. A home theater typically includes a color TV 25 inches or larger, an audio-video receiver with surround sound, four or more speakers and components. These customers already have digital cable or satellite and may have DVRs installed either from a TiVo subscription or from their cable or satellite provider. They will be enticed by higher quality video and larger capacity machines at lower prices without monthly fees. Although the initial cost for equipment would be much higher, the revenue from directed advertising and e-commerce from this group with considerable disposable income would be lucrative.

Size

It is estimated that there are 10-20 million analog OTA viewers. They have an average of 2.6 TV sets per home.

There are an additional 50-70 million analog cable viewers. They probably have the same or more TV sets per household.

According to CEA consumer surveys, from 2000 to 2005, the percent of homes with home theater systems jumped from 21% to 33%. This would be in the range of 25 to 35 million households.

* List key competitors of your idea, application or service and how your idea is different?

1. Set-top Boxes. Apple and Microsoft each have set-top boxes, but these are media extenders and do not have DVR functionality.

2. DVR services. The closest competitor would be TiVo. TiVo provides DVR services and user control of television. TiVo has also initiated a T-commerce system called “Product Purchase” with Amazon.com. Openivo is different because it is not a proprietary set-top appliance. It is a true PC with open systems that already allow streaming Netflix videos and many other third party applications. Unlike TiVo, the cost of Openivo would be heavily subsidized by its patent pending targeted advertising system. Because TiVo charges a monthly fee for its service, extra advertising would also be considered unacceptable. Cable TV providers also supply DVR services. The service is very similar to TiVo above, but is considered lower quality.

3. PC-DVR software. Numerous software packages provide DVR functionality for personal computers. Three are available with no extra cost. Microsoft Vista Media Center is part of the operating system. Yahoo offers Yahoo Go for TV. There is an open-source option, MythTV for Linux. None is user-friendly for set-up and use. None is as controllable and expandable as the commercial packages. BeyondTV and SageTV are two popular software packages. Recently, TiVo has collaborated with Nero to offer its branded interface as a software package for PC.

4. Targeted Advertising. Although the concept is relatively new, the large potential revenue has attracted several large and small entrants. Navic Networks, which concentrates on Cable set-top systems, was recently purchased by Microsoft. Google TV Ads, which has a contract with Echostar and NBC Universal, has been marketing heavily. Smaller entrants include BlackArrow, Invidi technologies, and Canoe Ventures, a joint effort by Comcast Corp., Time Warner Cable, Cablevision Systems, Charter Communications, Cox Communications, and Bright House Networks

The five-part synergy of non-proprietary PC architecture, DVR services, targeted advertising, e-commerce, and Amazon Web Services infrastructure offers several competitive advantages.

A patent pending system for cost subsidy with targeted advertising allows selling the system for low or no cost, to capture market share.

A rich and flexible DVR/Media center implementation and development environment.

An open architecture to allow third party applications, such as Personal Pay-Per-View, a monetized higher definition form of YouTube, where user uploaded video could be sold to other users. Confidential video mailboxes could be used for downloading adult-oriented material. A wide user installed base would be an excellent channel for third-party development. This is not available in any of the other proprietary systems.

An enhanced and transformative user experience to usher in the era of Personal TV to all viewers, digital, analog, cable, satellite, and over-the-air.

* List names and brief bios of key team members:

Marc Allan Feldman MD MHS is the founder and director of Openivo, Inc.

Marc received his Bachelor’s in Philosophy from Northwestern University, an MD from the Johns Hopkins University School of Medicine, and a Master’s degree in Health Finance and Management from the Bloomberg School of Public Health at the Johns Hopkins University. Dr. Feldman was the site Principle Investigator in the Study of Medical Testing for Cataract Surgery, a study of over 19,000 surgical procedures at 10 sites in the US and Canada. After 11 years on faculty at Johns Hopkins, Dr. Feldman now is the head of anesthesia for the Cole Eye Institute at the Cleveland Clinic.

Jeffrey Rice is a founder and CEO of Direct Thought. Jeff has over 20 years of experience with innovative software technologies. He has taught classes worldwide on Java, software development, and UNIX and has presented at Java conferences in the US and Australia. Jeff has co-authored two books on Java for McGraw-Hill and was the series editor for their Java Masters Series. He has a Bachelor of Science Degree in Engineering Science from Penn State University and a Masters of Science in Mathematics from Syracuse University

David Kavanagh is a software consultant for Direct Thought in Upstate New York. He has been designing and developing software for 15 years. For the past year, his focus has been on leveraging Amazon Web Services. He is the author of the open source typica library, which provides a Java interface for an expanding set of Amazon Web Services and has been developing AWS-based applications for a variety of customers.

Morgan Paul is a software engineer with 25 years of experience in aircraft avionics software and Computer Based Training and simulation software. He has also worked for several years with a compiler company developing User Interface features and debugger functionality. Over the last three years, he has been developing functionality plug-ins and theme skins for SageTV implemented in Java, C++, and SageTV Studio code including a rehost and overhaul of NetFlix for SageMC. He has a Bachelor of Science Degree in Computer Science from the University of South Florida.