David Katz has seen the online media business from all sides: First at a traditional television company, then for a Web portal, and how at his own start up.

At CBS he was senior VP of strategic planning and interactive ventures, which put him in charge of the network's website as it was first evolving from, essentially, a marketing brochure to a destination with real content. In 2005, after leaving during a shake-up at CBS, he joined then-new head of media Lloyd Braun's team at Yahoo, overseeing sports, entertainment and original video production. By late 2006, perhaps seeing the writing on the wall, he left just a week before Braun did the same.

For the past two years, Katz has been developing his own site, SportsFanLive, which launched last summer. Katz's goal with the site is to bring a more social, more personalized, and more local experience to online sports business currently dominated by sites like ESPN, Sports Illustrated, and his own former Yahoo Sports.

Last week Katz spoke to Technotainment about his new company and the overall industry. In the first of a two part interview, he discusses his goals with SportsFanLive and how it's competing with much bigger players. Tomorrow we talk about new approaches he's taking and the overall online media market.

Ben Fritz: Tell me about the premise of the site. What are you trying to do? Why did you start it?

David Katz: The whole concept of SportsFanLive was... When I was at Yahoo Sports, and CBS before that, those sites had a very good run. Yahoo Sports did incredibly well, became a number one sports site on the Internet, and we saw a lot of potential there, quite frankly, that wasn't even being realized.

Yahoo Sports was great at aggregating news and information, then breaking stories, putting video out there, but my personal belief was that social media was going to play a much larger role in the sports space. When you think about the sports experience, it shouldn't be any dissimilar to the experience that someone has when they walk into a sports bar. There's a socialization process: you care about certain teams, you're there to watch a certain event, you're there to engage with the people around you who either love your team or hate your team.

So the question we asked was, "If you were building a Yahoo Sports or an ESPN.com from scratch today, knowing everything you know about social media and where that's going, knowing everything you know about how the traditional media DNA needs to evolve to include the bloggers and the blogosphere and everything that's going on there, how would it be different – would it be different? – and more importantly, can you innovate in that space?"

That's because a lot of these sites started to look the same. You change the color of the site, you change the logo at the top, and swap out of a couple of the writers they had, and it's effectively the same site powered by the same content coming from the stats.

So at SportsFanLive, we took that step back and said, "Let's just think about the space, and be innovative." And what we built at SportsFanLive was an ecosystem that, we think, had a level of innovation that didn't exist on a lot of the other sports sites, both large and small.

It really came down to to three buckets. One, aggregating the best news and information, personalized to your favorite teams and players. We didn't see enough personalization on these sites and we felt like ESPN didn't want you to know that SI.com wrote a really good piece about your favorite team. I still believe that the majority of sports news is broken at the local newspaper level, and they don't get enough credit for that, so we aggregate all of that stuff from all the sources in one place, and we think we've got the most robust filtering and aggregation system that exists for sports sites.

Two, the community aspect. "Can you pull in the right information from the relevant people, and connect users with their friends and other relevant folks?" When I go on ESPN and some of these other sites, I've never felt the impetus to share what I'm experiencing there with anyone else. I kind of read the article, and if I like it and there are some great articles there, I move on to the next article, or I see the next video clip. Our standpoint is, "Can we build those connections between people?"

Mind you, this was two years ago we were conceiving of this. Facebook was small, but we thought had potential. MySpace was big. YouTube had just been acquired. We opted for more of a Facebook-ian experience, where you bring your friends in and you connect more to what your friends say or do. But we also said, from a social perspective, "Could you come up with innovative features that do not exist today?" and one of those that we came up with was called FanFinder.

The concept of FanFinder was very simple. I'm from Baltimore, I'm a big Baltimore sports fan, I live in L.A. now. It's guaranteed that they will never show a Baltimore sports game here in Los Angeles as long as I live, so I'm forced to go out to a sports bar if I want to watch the Ravens. So I'd go out to these sports bars, and no matter where I went, I was surrounded by Steelers fans, guaranteed. They're everywhere. So I ask myself the question, "Where do Ravens fans in Los Angeles get together to watch these games?" Thus, FanFinder was born. It's effectively a sports bar locater where fans tell you where they're going to watch certain games, and you can sort of cluster around your team affinities.

Well, we decided to take that one step further. We got a lot of attention when we launched around that feature, because from a high concept standpoint, people found it pretty creative, and it solved the specific sports fan need. We were approached two months ago by Panasonic, who said "We love that feature – what can you do that's new and cool around it?" So we created our first iPhone app.

FanFinder Mobile uses GPS to identify where you are in the U.S, will immediately tell you where the ten closest sports bars are to you, wherever you are, and then you can specify the teams you follow, shake the device and it will re-sort to tell you whether there are any sports bars catering to your team's fans within X number of miles from your location.

BF: And Panasonic is going to be sponsoring it?

DK: Panasonic is going to be sponsoring it. I think part of the rationale was that they're excited about the idea, they have a new Panasonic TV that was coming out that's great for sports, and were trying to push that into sports bars around the country. "Here's a way to get people into sports bars." So they were the official sponsor.

We got it up literally the day before the NCAA Tournament, and Apple... you know, dealing with these companies, it's a bit of a black box. You go it, and there's no one you can talk to. You follow the rules in the API, and you do your best to present something you think they might like. Apple loved what we were doing. We got a phone call from them, and they said, "We're approving your app. We love it. It'll be in there for the Tournament," and they actually made it the number one featured app in the entire App Store for the first ten days of the NCAA Tournament.

It was phenomenal. It's the best promotion money can't buy, and it was really just about touching a chord with them that they think is interesting and utilizes a lot of the cool things you can only do on an iPhone.

BF: It seems like regardless of whether you're getting local content for me as a fan, or you're getting information on a sports bar, that's a lot of information. Are you developing a platform around that, or are you having to get that manually in a lot of cases and enter it? Where does that data all exist?

DK: We spent the larger part of almost a year building a platform and the majority of that stuff is automated and filtered. There's a little bit of human intervention in terms of building the databases, in deciding what you're going to be culling from, and pulling from, and where those sources are, but we wanted to make the effort today to get all that stuff so it could run on its own. We have a very small team with limited manpower, and we want to make sure we're putting our efforts towards the most important things.

BF: But is there a database of what sports bars, for instance, are for which teams?

DK: We built it.

Most of the games and other apps I have seen that use the iPhone and iPod Touch's motion sensing capabilities are difficult to control (like aiming at things in a game) or really gimmicky (shake to get a result instead of pushing a button!). But this new turntable app for the second generation iPod Touch (no other version and not the iPhone) is very clever and cool, if not necessarily useful.

As Gizmodo explains, "It works like a turntable, changing the speed depending on the revolutions-per-minute." It's not in the app store yet, but I don't see how this doesn't become popular if/when it does. And if it gets improved and starts including the ability to scratch and control tracks precisely, it could actually become useful to DJs and a respected little part of the music industry:

Spinning vinyl ipod app from Theodore Watson on Vimeo.

Here's the good news, while DVD revenue was down a stark 14% last quarter, according to the Digital Entertainment Group (a home entertainment trade organization), Blu-ray revenue was up 105% and digital downloads were up 19%.

But here's the bad news: About a decade after digital movie downloads started and over two years after Blu-ray launched (and a year since HD DVD folder), their substantial growth is still not big enough to make up for the declines in DVD revenue.

To be precise, Blu-ray revenue rose $118 million to $230 million, while digital download revenue grew $78 million to $487 million.

Standard DVDs, however, fell $470 million to $2.89 billion.

That's a $291 million gap between growth in new formats and the decline of the old.

While Hollywood has been busy figuring out whether and how the future of movie distribution will arrive via digital downloads and streaming, a big legal case is presaging a different approach: ripped DVDs.

In the music industry, of course, consumers were ripping CDs onto their computers for years until labels started offering affordable and accessible downloads via iTunes. The fact that it was so easy to get tracks off a CD and then onto an MP3 player (or share it on the Web with friends or the world) was one of the main arguments used to spur the music industry into selling downloads and, finally this year, abandoning restrictive DRM software.

Though there's a decent amount of movies available to download or stream, it's nowhere near as wide a selection as music and the DRM is still very restrictive. One of the obvious reasons is that it's still the best alternative to piracy. Because DVDs come with copy protection, consumers can't easily copy movies onto their computers they way they have always been able to with CDs. And because movies take up numerous gigabytes on a hard drive, most people can't store anywhere close to their entire film collection on a single computer, they way they can their music collection.

But the ongoing case of the motion picture studios against RealNetworks, initially about a piece of not particularly useful piece of software, has turned out to be about that very possibility. Ostensibly it's about the RealDVD software, which lets users copy a DVD onto their hard drive. Given that it limits playback to five machines, while plenty of free programs on the Web do the same thing for free with no such limitations, it was never going to be a major factor in the industry. Especially since, for the storage reasons I noted above, transferring DVDs onto a PC isn't too useful a proposition.

But in court yesterday, RealNetworks CEO Rob Glaser unveiled the real heart of the matter: Facet (that's a none-too-sexy prototype on the left), a new piece of hardware the company wants to sell that uses the RealDVD software, has a (presumably) huge hard drive to store hundreds or thousands of copied DVDs, and plugs directly into a television with its own simple interface for watching films.

It's essentially a cheap version of the well regarded by super expensive ($10,000) Kaleidascape.

"Kaleidescapes are like Porsches. They're very expensive. We thought we could develop Chevys, a $300 product that could replace a person's DVD player," Glaser said in court according to CNET News.

Theoretically, Hollywood should have no problem with the Facet's capabilities, as described by CNET:

During Glaser's demonstration of Facet, he showed how the box made the process of scanning, selecting, and pulling up digital DVD copies as simple as managing an iTunes music library.

In addition, the box could instantly provide a synopsis about a film or the movie's cover art, as well as enable a user who interrupts the playback for whatever reason to instantly return to the spot where the movie left off. Glaser used a copy of a box set from the show "The Sopranos" to demonstrate how a Facet owner could begin playing any episode within the set almost instantly.

One little problem, though. As Glaser has admitted, there's no way to ensure that a DVD has only been copied once. There's nothing to stop consumers from renting a copy from Netflix of Blockbuster and then copying it onto the Facet so that they own it for the price of renting. Or, even more alluringly, buy one copy and then share it with an infinite number of friends, all of whom can make a digital copy and then pass it onto the next Facet owner.

CNET summarized Glaser as saying the MPAA's case is nothing more than a "thinly cloaked attempt to quash competition." And it is, without a doubt, an attempt to maintain the current business model through which consumers have to pay more -- sometimes a few bucks along with a DVD, sometimes $10 -- to get a digital copy of a movie they might already own.

On the other hand, it's foolhardy and naive -- in that all-too-typical Silicon Valley way -- to suggest that Facet doesn't enable and encourage mass stealing of movies in the way I described above. If the Facet became popular, studios would have to respond with some draconian new DRM measure on DVDs or by eliminating the low cost rentals that serve consumers so well.

The only fair solution, it seems, is to find a way to build the Facet so that it can only copy any single DVD once. It's easier for me to suggest than an engineer to do. But it's the only way to address very real piracy concerns and keep Real's potentially very useful product on the market so that it really is a matter of legitimate new business model versus legitimate old one.

The appointment of former Facebook COO Owen Van Natta to replace co-founder Chris DeWolfe atop MySpace has numerous Web pundits buzzing over the same question: What does the News Corp.-owned social networking site have to do to rebuild its buzz and its business?

On the former point, MySpace is clearly losing to Facebook and even, to a certain extent, Twitter. Though it's hardly that small, it is now to Facebook what Friendster was to MySpace a few years ago.

On the latter point, News Corp. is having a tough time justifying its $580 million purchase of the site, especially now that its approximately $300 million search deal with Google (the site's main monetization tool) is set to expire next month and unlikely to be renewed at anywhere near the same rate.

"The company then has a potential black hole in terms of profitability," Sanford C. Bernstein & Co. analyst Michael Nathanson told the New York Times.

News. Corp's new chief digital office, Jon Miller, was obviously brought on in large part to help figure that problem out. And his first move is apparently new management brought in from MySpace's biggest competitor.

So what should MySpace do? What strengths does it have to build on?

Caroline McCarthy at CNET News argues it should increasingly become an entertainment company. Two of its most compelling features currently are social gaming (which she says help explain why MySpace's pageview lead is so big even though its unique user lead over Facebook is rapidly shrinking) and its well received new music offering, which joins together social networking with streaming tracks.

"If people can be confident that MySpace is a reliable hub for finding insidery information about the latest in entertainment--fresh new bands, movie previews, the fall TV season, great Web video--that could be enough to get its momentum back," McCarthy writes. "It might've started out with the tagline "a place for friends," but maybe the attitude should change to "a place to be cooler than your friends."

Meanwhile, Jason Calacanis, CEO of Mahalo.com, founder of Weblogs Inc. (since sold to AOL), and my former boss at Digital Coast Reporter / Silicon Alley Reporter, has a suggested list of ten priorities for Van Natta. Some seem a little wacky, like buying a search engine to to keep some of the traffic its losing to Google (those of us with a Google bar in our browser will still search the way we want to) and buying or building a network of content sites (because content is such an easy way to make money online these days? As Jason admits, much of Weblogs' value lied in its technology, not its consumer-facing product). But others seem very savvy:

You know who may just be some of the most powerful folks in digital media? The anonymous editors at Apple who decide what's feature on the front of the iTunes Store and its various sections.

I have had executives in several different industries -- music, movies, games -- tell me that being featured on the iTunes Store is pretty much vital to good sales, unless you've got a huge brand name. And usually they don't know when it's going to happen. They're just as surprised as we are.

There are two options to become noticeable without searching or intense browsing on the iTunes Store: Either get listed in the charts (ideally top 10 so you're on the front page, but at least top 100 so people can click and find it), which presents a bit of a Catch-22 situation; or get noticed by those mysterious and powerful editors.

The other way to get clicks is, of course, recommendations and links. But as this very interesting chart from the makers of Locavore, a new iPhone application that tells you what food is in season and available in farmers' markets, demonstrates their relative importance:

So the links on Serious Eats and Gizmodo/Lifehacker helped, but nothing came close to beign on the front page of the App Store on iTunes. And of course that led to being on the top 100 chart, which led to Locavore selling almost as well for another few days.

Perhaps it's a good thing those editors stay relatively anonymous, because if they weren't, they would probably be lobbied more than a buyer at the Pentagon.

Jeff Bewkes is going to love this one.

By the end of this year, Comcast will launch a new service via its Fancast website that makes all of its cable content available online on stream. Just one catch: You have to be a subscriber.

Karen Gilford, senior VP of interactive for the cable provider, told PC World every cable subscriber will, for no additional charge (for now at least) get a login and password to watch programs on Fancast. Most notably, they won't just be cable networks that already stream on their own website or on Hulu, like Comedy Central and TNT. It looks like it will include some that don't -- even pay channels like HBO. As PC World notes, "[W]ith its long-standing relationships with virtually all major video content producers (the networks, HBO, CNN, etc.) [Comcast] is in a unique relationship to provide a single omnibus video site that has a broad range of content and a consistent way of viewing it all. Those relationships might allow Fancast to feature a lot of content that other online video sites don't have."

The greatest fear of television executives (besides greenlighting the next "Do Not Disturb") is that more of us will follow the small but growing number of young people who cancel their cable/satellite subscriptions and get all their TV via the Internet, either on a PC or by using one of a number of devices that put the Web on a TV. With no cable carriage fees and a fraction of the ad revenue they get on-air, their business models would be destroyed.

But if you have still subscribe the old-fashioned way (or with a new-fashioned Internet plan) to get the good stuff, executives would be fine with it. Then we're just transferring the old business model onto new technology. Quick and easy. No pain. That's why Bewkes recently said a model like Comcast's is necessary.

A senior television executive recently told me in an interview that he feels forces (like Bewkes) pushing against online TV and he could foresee a day when the only free stuff online is promotional clips and library content. If Comcast's technology works and if consumers take to it, you've got to wonder whether a lot of television executives won't be pushing to make that day come faster.

Or will they have to accept that the only way to compete with free piracy is with free, but ad-supported, streaming?

Back during the 100 Years' War Hi-Def DVD format war, Warner Bros. was the studio that played both sides, releasing its movies in HD DVD and Blu-ray. When it finally committed exclusively to Blu-ray at least year's CES, its decision killed Toshiba's format.

Given that it essentially screwed the tens or hundreds of thousands of people who bought HD DVD movies from it, Warner Bros. left behind some slightly pissed off customers. Which is probably why it's now giving them a great deal via a new website: Red2Blu. (Red was the color used by HD DVD to differentiate it from Blu-ray).

For $4.95, customers can trade in any HD DVD disc they have for the same film or TV show on Blu-ray. All they have to do is mail the cover art. Warner Bros. doesn't even want the discs. That's how worthless HD DVD is now, apparently.

If there's any network that should be thriving online, it's PBS.

Freed largely -- though certainly not entirely -- from the financial concerns that keep television networks and studios hemming and hawing about how much content to put online, where, and when, PBS can afford an aggressive digital strategy. Its goal is to gets it content in front of as many people as possible and, through a combination of government, corporate, and individual funding, try not to lose money while doing it.

Some PBS programs are already on Hulu and YouTube. And many episodes were on PBS.org, organized by show (click on the "Frontline" section to watch a "Frontline" episode, etc.)

But public broadcasting is taking a big leap forward today with a new video hub that's arguably the most innovative and well designed on the market. With its tiles arranged horizontally by show and third-dimensionally (one behind the other) by episodes of each show, it's an incredibly intuitive and easy to manage system. It's amazing what Web designers can do when they're not trying to maximize page views at all costs.

It's being driven in large part by a new backend content management system PBS has installed that lets it do a lot more digitally. Most notable to me is the way it's bringing together the previously divided content produced by the national network and its local stations into one platform.

"All our national video is now available to our 357 local station websites and we can allow the best content being produced locally to bubble up onto our national website," said Jason Seiken, PBS's senior VP of interactive.

Unlike the commercial networks, which tend to put episodes online soon after they air then take them off as soon as a DVD is available for purchase (and then sometimes put them back on the Web again after DVD sales have faded), Seiken says PBS's plan is to put episodes online and keep them there for as long as PBS has the rights, typically two-to-three years. It's also adding some library shows that have, as he put it, "lots of nostalgic interest," like Julia Child's cooking program.

Since PBS isn't looking to maximize profits, it doesn't have to be quite as concerned as networks like CBS and NBC are about the fact that programs streamed online generate a fraction of the advertising revenue as those on-air (not to mention subscription fees for cable networks). But Seiken said PBS will start looking for digital-specific video underwriters in the future, though for now the sponsorship are the same as those on-air.

The new PBS video site is the second step in a three-part strategy that has already launched a new video site for kids and will soon introduce one for teachers.

More than any commercial network, PBS certainly has a brand problem with certain demographics. The median age of its on-air viewers is a near-elderly 62. Online it's pretty dramatically different. Two-thirds of PBS.org's 12.8 million monthly visitors are under 45 and almost one third are between 18 and 34.

Which makes sense when you think about it. Speaking as someone in that last demo, I watch TV entirely via my DVR. Which means I mostly watch the series I like and occassionally special events I have heard about. But PBS has very few scripted series. Its best programming is documentary series like "Frontline" and "Nova" that are entirely different every week. I only watch those when I know I'm specifically interested. Which means I probably hear about it after the fact. That makes it the perfect on-demand programming for digital platforms.

Now that Blu-ray players are being made in China, the format's price problems may rapidly be disappearing.

Mark Leathan, Samsung's Marketing Director, told Blu-ray.com that the entry of Chinese manufacturers into the market means we'll start seeing $99 players soon. Most likely, I'd think, in time for the holidays.

Just this past holiday season, it was a big deal that Blu-ray players cost less than $250, reaching that price point much faster than the original DVD. While it's growing healthily despite the recession, the Blu-ray format is still a tiny fraction of the overall home entertainment biz. Last year it failed to meet the $1 billion mark predicted by supporters early in the year and wasn't nearly enough to make up for the decline in standard DVD sales.

$99 players could make a big difference. Video game console manufacturers have found that $200 and $100 are both psychological barriers below which sales are boosted significantly. Granted, these won't be the high quality players from manufacturers like Sony. But just as there are nicer name brand TVs and cheaper ones from no-name companies that do the same basic thing, Blu-ray will likely benefit from the same differentiation.

But while player costs may be falling, there's no evidence yet that discs will do the same. Studios have been loathe to reduce wholesale prices for the Blu-ray discs to the same as standard DVDs. And,  because the install base is so small, retailers never use them as "loss leaders." The result is that while prices for new DVDs generally range from $15-$25, hi-def discs cost $25-$35. Until the same efficiencies we're seeing in players reach the discs, Blu-ray will most likely never reach the heights of DVDs.