I’m pleased to present the 365th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
First, we’d like to thank our podcast sponsor Akamai Technologies, which will show its Media Acceleration capabilities and range of cloud-based solutions at the NABShow in Las Vegas, in booth SL3324. Click here to schedule a meeting.
On this week’s podcast, Colin and I discuss Amazon’s burgeoning role in video and how Amazon Prime’s unique model gives the company unprecedented advantages. Prime’s power was on full display earlier this week when Amazon nabbed the rights to the NFL’s Thursday Night Football package for $50 million, 5 times more than what Twitter paid last season.
Colin and I agree that Amazon’s ability to view video investments as drivers for Prime membership retention/acquisition and ultimately increased commerce is a huge threat to everyone in the industry. Colin shares research on how the world is starting to wake up to this, though we believe that Amazon’s video potential is nowhere close to being fully appreciated yet.
Listen in to learn more!
Click here to listen to the podcast (21 minutes, 59 seconds)
Amazon further reinforced its position as the most influential company in the video industry with news late yesterday that it had won the rights to stream the NFL’s 10 game Thursday night football package for $50 million, with plans to make the games available for Amazon Prime members only (they'll still be broadcast alternatively on CBS and NBC, and on NFL Network). The sum is a whopping 5 times more than the $10 million that Twitter reportedly paid for the same rights last season.
The key to understanding Amazon’s willingness to pay up for the TNF rights is the power of its unique business model, based on Prime. As I wrote last November, Prime is the linchpin for Amazon’s ever-expanding video initiatives.
At last summer’s Recode conference, Amazon CEO and founder Jeff Bezos plainly articulated Prime’s value to the company in driving greater customer loyalty and increased purchases (if you’re a Prime customer, you no doubt know this dynamic yourself). And keep in mind, with approximately 60 million members paying $99 per year, Prime generates $6 billion in revenue for Amazon before a single purchase has been made.
Recode reported a couple days ago that Apple is potentially looking to sell online subscriptions to HBO, Showtime and Starz in a single bundle to subscribers. Since Apple has made so little progress in video compared to its peers, a bundling move like this could give it a boost. But if I were handicapping which company is much more likely to sell HBO, Showtime and Starz in a discounted bundle - and succeed with it - I’d put my money on Amazon far sooner than Apple.
Brands, publishers and celebrities are all experimenting with Facebook Live, to see how live-streaming can help them connect with their target audiences. One interesting example that hit my radar is Lowe’s home improvement stores, which, this past Saturday night, used Facebook Live to broadcast a 45-minute show featuring HGTV’s “Property Brothers” to reveal a sample of Black Friday sale items.
In the video, Drew and Jonathan Scott open a series of boxes which often contain gentle pranks (e.g. a marching band, confetti, puppies, etc.) as well as actual products that will be on Black Friday sales (e.g. wine chiller, combination tool kit, Roomba vacuum cleaner, etc.). For much of the video, the brothers are ad-libbing, casually jibing each other and keeping the show moving along.
Here’s an eye-opening data point: according to new research from Brightcove, 46% of respondents said they made a purchase as a result of watching a branded video on social media (with 53% of U.S. respondents doing so). And another 32% of respondents said they considered doing so. The data shows the increasing importance of social media as an influential platform for marketers and the power of branded videos - as opposed to conventional 15 or 30-second ads - as a key purchase motivator.
With marketers increasingly concerned about ROI on their spending and consequently shifting dollars into digital media, the research only magnifies the challenge TV networks face in retaining advertisers’ allegiance.
A few weeks ago, I got an email from stand-up comedian Louis CK announcing his new show Horace and Pete, available on his website for $5. Not on Netflix or FX or even YouTube but his website. I’ll let that sink in a little.
Now, why would one of the top-earning comedians whose show has a stellar cast (Alan Alda, Steve Buscemi, Edie Falco and Jessica Lange) take this route? Here’s why - Five years ago, Louis sold his Live at the Beacon Theater special direct to customers from his website and raked in a sweet $1million in just 12 days. Since then, he has continued to deal directly with his fans, eliminating the middleman and seen an upward trend in earnings. On his site, you’ll find shows and often tickets to his live shows as well, sans the much dreaded Ticketmaster fee.
There’s a lot we can learn about doing business in a digital world from Louis CK:
It’s no secret that the content monetization models of yore have had a tough run over the past decade. Newspaper print revenues are down 70% in that time period. The decline in home video sales is outpacing growth in digital options. CD sales dropped 30% between mid-2015 and 2013, and digital downloads fell 13% over that same span. Then there’s pay TV, which has lost nearly 900,000 net subscribers in 2015 alone.
Clearly, the Internet has fundamentally changed the way people think about paying for content. Particularly with video content, there are some big success stories. Over The Top (OTT) video services like Netflix, Hulu, and Amazon have been able to monetize shifting consumer attitudes through lucrative subscription models. As a result, the OTT video market has been on a big growth path.
What’s a viewer’s willingness to pay in order to have an ad-free video experience? The question is in focus yet again with yesterday’s announcement of YouTube Red, the company’s long-rumored $9.99/month ad-free service. Unfortunately for YouTube Red, in its case, willingness to pay is going to be heavily influenced by the fact that YouTube has arguably the most viewer (and advertiser) friendly video ad model, which will undoubtedly impact interest in paying for YouTube Red.
I'm pleased to present the 291st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Video is emerging as a top priority for Amazon and its varied investments appear to be paying off as it builds an ecosystem to compete with Apple. On this week’s podcast Colin and I dig into the key device and content announcements Amazon has made recently (see also my post from earlier this week) and why they’re important.
Amazon has clearly concluded that video is a successful driver for its Prime service, which is one of the company’s most important consumer-facing priorities. Colin notes that research released from Digitalsmiths earlier this week showed that Amazon Prime video is now used by over 20% of U.S. households, up from 7.5% 2 years ago (by comparison Netflix increased from 28% to 49.4% and Hulu increased from 6.3% to 11.8%).
Colin and I expect a lot more video-related investments by Amazon as it leverages its deep pockets and multiple lines of business to change the rules of the game in OTT.
Listen in to learn more!
Startup VHX has unveiled a turnkey SVOD platform with no upfront cost, no exclusivity and full branding/pricing/packaging control by content providers. The platform is intended both for both premium content providers and online original creators (e.g. YouTubers) seeking to diversify from free, ad-supported only models.
Jamie Wilkinson, co-founder and CEO of VHX sees the SVOD platform as allowing content providers to easily "roll their own" Netflix or HBO Now service. He distinguishes VHX's approach because the content provider is in control and retains all viewer data. Unlike a storefront like iTunes or Amazon, VHX's platform is meant for content providers that want to set up branded video businesses online, rather than just sell their content through third-party outlets.
Digital purchases of movies in the U.S. boomed in 2014, to $1.55 billion, up 30% from $1.19 billion in 2013, according to new data from the Digital Entertainment Group. However, the $360 million increase was more than offset by a decline in purchases of physical movies (DVD and Blu-ray) of $844 million in 2014, to $6.93 billion, an 11% drop. In fact, as the chart below shows, physical sales have declined by over $2 billion since 2011 when they were nearly $9 billion.
Vessel has pulled back the curtain on its long-rumored business model this morning, which essentially boils down to being a huge willingness-to-pay test case. The fundamental question: will online video viewers pay $2.99/month for Vessel's service, which includes a "modest amount of advertising," to gain early access to select online videos that will otherwise be available for free within 3 days or more?
If the answer is yes, there is no doubt we'll see an explosion of paid early access models from all kinds of video content providers. If the answer is no, then Vessel would have to revert to an ad-supported only business model, which would leave it with a far less interesting value proposition to content creators.
If you have kids that love to gorge themselves on Disney, Pixar and Marvel movies, then today's news that Disney Movies Anywhere (DMA) has been integrated with Google Play, allowing Android users full access to their purchased movies, is a huge win.
Since February, when Disney Movies Anywhere launched, movies have only been viewable on the web, in iTunes and on iOS devices. Given the close Disney-Apple relationship, it made a ton of sense for Disney to launch DMA with iTunes. However, there's a big mobile world beyond Apple devices, with comScore reporting Android accounted for 51.5% of smartphones in July '14 and IDC recently reporting that iPad market share has dropped to less than 23%. Getting beyond Apple was clearly an imperative for DMA.
In a key test case of whether standalone SVOD services can succeed, even when well-branded and targeting appealing audiences, Sesame Workshop has unveiled its own service today, dubbed "Sesame GO." The ad-free service carries a $3.99/month or $29.99/year fee and includes the newest full-length episodes of Sesame Street, a catalog of Sesame Classics and two seasons of Pinky Dinky Doo.
Sesame GO uses Kaltura's MediaGO, a "Netflix-like" OTT solution for content and service providers to quickly launch SVOD services.
At first blush, Sesame GO's ad-free, child-centric UI, featuring popular content, would seem like a pretty strong bet. However, Sesame GO is entering an increasingly competitive landscape for online kids content created partly by Sesame's own licensing practices.
Topics: Sesame Workshop
Disney launched its long-planned digital movie service today, dubbed Disney Movies Anywhere ("DMA" for short). Disney made a bold decision when it opted not to participate in the UltraViolet consortium that includes 6 of the other big Hollywood studios, choosing instead to go with its own "KeyChest" authentication technology. Having spent some time with Disney Movies Anywhere this morning, I think there are 5 reasons that DMA looks like a winner, offering lessons for other content providers seeking to capitalize on paid online models.
Score another win for the importance of authenticity in video: newly released data from EXPO shows that in a test program when consumer generated video product reviews were placed on the relevant product pages in a major e-commerce site, they drove a 30% increase in site revenue for those products.
The test covered 8 different household and beauty products from Reckitt Benckiser Group such as Lysol, Airwick, Clearasil which were being sold on an undisposed retailer's commerce site. Sales for the products during the test period of June, 2013 were compared to June, 2012, adjusting for any that were discontinued or newly launched. The product review videos were supplied by consumer's using EXPO's platform.
The Internet is awash in free videos to watch. For consumers, that's been great news as there are more choices available today than ever. For independent content creators, the Internet offers an unparalleled opportunity to build audience and visibility. The problem is that for these creators, actually making money online has remained a tough nut to crack.
Now, a startup named LittleCast is giving content creators an easy way to sell their videos, via Facebook and in iOS and Android mobile apps. CEO Amra Tareen explained to me that the process is pretty straightforward - content creators just upload their videos to LittleCast and decide how much to charge. LittleCast transcodes the video into various formats and HD/SD resolutions and stores them in the cloud. They can then be published in LittleCast's media player on Facebook and in the mobile apps.
I'm pleased to present the 179th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. Yesterday, YouTube confirmed that it will offer content partners the ability to charge for subscriptions. In what its calling a pilot program, 53 subscription channels are being launched, some from established brands like UFC, PGA, National Geographic and Jim Henson, and many more from less well-known content partners.
In this week's podcast Colin and I discuss whether this is a big deal or not. Colin's more bullish than I am, seeing it as a very important piece in the YouTube puzzle, adding to existing advertising, rental and purchase monetization options.
I agree it's smart move by YouTube, but I don't think it's a game-changer. While I see this as the right thing to offer content partners - especially those with huge audiences on YouTube - this is akin to "freemium" type option that will require partners to very clearly differentiate the incremental content available in their subscription tiers in order to convert a small percentage of their free viewers to monthly subscribers.
A complicating factor is that for many users, YouTube subscriptions will be on top of - not a substitute for - already expensive pay-TV monthly bills. Then there's also a Netflix, Hulu Plus, Amazon or other SVOD subscriptions which already make a claim on finite entertainment dollars too. Lastly, YouTube is perceived as a "free" site by many, so it will take significant promotion by channels to persuade users to pay.
Bottom line: YouTube is doing right by its content partners in offering this capability, but it's up to the content partners themselves to make it successful. My guess is for most partners, advertising will continue to dominate their YouTube-related revenue for a long time to come.
Listen in to learn more!
Click here to listen to the podcast (18 minutes, 15 seconds)
At the NABShow last week, NeuLion and Deluxe Digital Distribution announced a partnership creating the "NeuLion TVE Platform with Deluxe OnDemand" which enables customers to deliver branded online movie stores. Targeted customers include retailers, service providers and content owners who can tap into Deluxe's catalog of 50K movie and TV show titles.
At NABShow I did a video interview with Chris Wagner, NeuLion's EVP and co-founder, who explains the deal and its potential.
Disney's announcement that it was shutting down its Disney Movies Online service on Dec. 31 is another blow for transactional VOD and digital lockers for movies, two corners of the online video ecosystem that are struggling for traction.
Transactional VOD - renting or buying movies online - has become a tougher sell to consumers in the digital age. Not long ago Hollywood studios' home video divisions boomed as many consumers were keen to buy DVDs and create large collections of movies that they prominently displayed. But while DVD sales have gone off the cliff recently, digital rentals and purchases haven't picked up the slack.