Microsoft will close down its Xbox Entertainment Studios (XES) as part of a broader, 18,000 employee headcount reduction it has announced. I, for one, am not surprised by this outcome. A year-and-a-half ago, at the D: Dive Into Media conference, I watched an interview with Nancy Tellem, head of XES (and former head of CBS Entertainment) and Yusuf Mehdi, Xbox's chief marketing and strategy officer, that left me wondering whether the company really understood what role it wanted original programming to play or how it would be differentiated.
Basic questions on whether originals would be included in the current subscription service or cost extra, whether they would be ad-free or ad-supported, exclusive to Xbox or available elsewhere and more were essentially left unanswered, creating a very unfocused vibe. But, since it was still relatively early days for XES, I was inclined to cut them some slack.
Watching online video on connected TVs is now completely mainstream, as evidenced by Hulu noting that 62% of its views are on connected TVs. This powerful trend makes delivering immersive HTML5 video ad experiences to connected TVs and pay-TV set-top boxes an imperative for advertisers to accomplish their reach and frequency goals.
At the recent Video Ad Summit, Active Video demo'd how they're solving this problem, by rendering ads in the cloud and then delivering them - with full interactivity - to any type of set-top box. In the demo, ads from American Express and L'Oreal illustrate how it works. The Active Video presentation followed one by Quiznos, showcasing their "Toasty.TV" campaign, which would be a perfect fit for a living room experience.
More evidence this morning about mobile video's surging adoption: in its Q1 2014 Global Video Index, Ooyala found that 21.5% of all online video views occurred on mobile phones and tablets, up from just 3.4% in Q1 2012. In addition, in Ooyala's prior Q4 2013 report, it predicted that by end of 2015, 37% of all video viewing will be on mobile devices, and by the end of 2016 it would be up to half.
Qplay, an app which organizes short online videos into longer-form personalized experiences (dubbed "Qs"), announced today that it now supports Chromecast and that it has introduced two new features, Party Qs and hashtags. Qplay was founded in August, 2012 by Mike Ramsay and Jim Barton, founders of TiVo.
With Chromecast, Qplay now gives users who want to watch Qs on their TVs the ability to do so without having to buy the $49 Qplay TV Adapter. Leveraging Chromecast's broad popularity is a smart move by Qplay to reduce the barrier to users accessing the service on their TVs. This is a key company objective as it seeks to transform online video into more of a living room type experience.
I'm pleased to present the 231st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
This week we explore the concept of the "appification of TV," which means accessing TV programming and experiences via apps on a set-top box or connected TV device vs. through a typical linear or even on-demand/DVR model. Of course apps are already hugely popular on tablets and smartphones, but not nearly so on TV, as they require either a connected TV device or a set-top box that can run apps.
In the latter category is Comcast's new X1, which the company is aggressively rolling out and which currently has a limited assortment of apps available (back in February I shared a video demo of how the NBC Olympics "Live Extra" app works on X1). This week Colin saw a demo of another example - CNNx - a recently announced app from CNN, which we use as a jumping off point for our discussion.
As we discuss, the appification of TV raises a slew of questions, including whether it's a net positive for the broadcast/cable network, the pay-TV operator and the viewer. Colin believes that competitive pressure from online providers will spur the appification process forward, though I think caution will be the watchword particularly given uncertainties around monetizing apps on TV. We raise more questions than we have answers around this provocative topic, but it's all great food for thought.
Listen in to learn more!
Click here to listen to the podcast (19 minutes, 42 seconds)
Here's a new measure of how deeply online video viewing, and Netflix in particular, have penetrated the living room: 49% of all U.S. households now have at least one TV connected to the Internet, slightly over double the 24% level from 2010. For Netflix, 49% of its subscribers report watching online video on their connected TV weekly vs. 8% weekly use among all non-Netflix subscribers. 78% of Netflix streaming subscribers watch Netflix on a connected TV.
TVs are connected either through game consoles, Blu-ray players, Smart TVs or devices like Roku, Apple TV, Chromecast, etc. The data is according to the 8th annual Leichtman Research Group's Emerging Video Services study.
Connected TV is still in its adolescence as an advertising channel, but a survey conducted this month by video ad solution provider Mixpo suggests that's all about to change. Mixpo surveyed 130 media buyers and planners and found very strong interest in including connected TV on media plans - and soon. Some are taking action now, trying to get out in front of a rapidly maturing channel.
"Connected TV" (sometimes referred to as "Smart TV") is essentially internet content brought to the "big screen in the living room." The Mixpo survey defined it as programming, including video advertisements, streamed through OTT devices connected to the internet (Roku, Apple TV, Xbox, Amazon Fire).
Netflix will be integrated by 3 small U.S. cable TV operators via TiVo, per a joint announcement by the companies. Atlantic Broadband, Grande Communications and RCN will begin integrating Netflix in multiple ways: by assigning Netflix its own channel in their on-screen guides, exposing the Netflix app for quick access to sign-up or login and incorporating Netflix content in recommendations and search results alongside linear, VOD and the subscriber's DVR content.
For Netflix, the deals follow similar implementations in Europe with Virgin and Com Hem. Netflix has avidly pursued inclusion in the primary pay-TV experience, helping it become even more mainstream by eliminating the step of switching inputs to a connected device. Another benefit to Netflix is the cable operators will also integrate with Netflix's Open Connect content delivery platform.
There are many different ways to think about the deals; below are 5 of my key takeaways:
I'm pleased to present the 224th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. This was an unusually busy week with many industry announcements, so today's format is a roundup discussion of four items that seemed most significant to us.
First up is HBO's exclusive new licensing deal with Amazon, which is the latest evidence of the surging value of high-quality content libraries. Second is Apple's reveal that it has sold 20 million Apple TVs to date, making it more than just a "hobby." Next, we turn to Netflix, which reported stellar Q1 results earlier this week. Finally, we look at Comcast's Q1 and Time Warner Cable's Q1 results. Both companies reported healthier video subscriber numbers (though Verizon reported a much smaller quarter for FiOS video subscribers). The question still looms how meaningful cord-cutting is in reality.
(Note, we had major technical issues with Skype this week, so in the last one-third of the podcast I sound like I'm in a fish tank. Apologies in advance.)
Click here to listen to the podcast (17 minutes, 46 seconds)
Since a report appeared in The Verge over the weekend about a new Google initiative called "Android TV" I've been puzzling over the question of whether the world (or even Google) really needs this device. Ordinarily I'm all for innovation, but the (admittedly preliminary) description of Android TV, makes it awfully hard to understand Google's bet here, especially as the momentum and adulation for Chromecast keep growing.
No doubt, Google's primary motivator is to gain the upper hand in the biggest gold rush since the advent of the Internet itself: ownership of the digital living room. Broadband's presence in the living room is getting stronger each day, putting everything up for grabs: how viewers will interact with programming and TVs, where their finite subscription dollars will be allocated, how advertising will work and importantly, which devices will control the experience. With tens of billions of dollars already sloshing through the living room, it's a massive market opportunity that appeals to giant companies as well as startups.
I'm pleased to present the 221st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. This week we assess Amazon's new Fire TV connected device. As I wrote earlier this week, I see it as a double, but not a home run, and I further explain some of my main points.
Colin believes Amazon also over-stated the problems with existing connected TV devices in its effort to differentiate the Fire TV. Those 3 differentiators were Fire TV's openness, improved search and better performance. Colin only sees the performance as meaningful, with Fire TV's new "ASAP" content pre-loading feature - but with the caveat that it has to actually work (and not just for Amazon's own video).
We also discuss Fire TV's gaming features, which Amazon is clearly betting on, though we're not quite certain exactly where they'll fit in the market. On the positive side, Colin likes how Fire TV will prioritize searched-for content by price and availability.
Click here to listen to the podcast (19 minutes, 9 seconds)
Among the apps launched this week on Amazon's new Fire TV was the ACC Digital Network, a joint venture between Silver Chalice and Raycom Sports. ACC Digital Network is the Atlantic Coast Conference's multimedia destination featuring live streaming and other original programming. In addition to being online, it also recently launched on Apple TV.
To get up and running quickly on Fire TV, SportsLabs, a division of Silver Chalice, turned to 1 Mainstream, a platform for deploying HD video services on a variety of connected TV and mobile devices that launched last December. I caught up with Rajeev Raman, 1 Mainstream's CEO (and previously head of product at Roku), to learn more about how the company is helping content providers quickly build and deploy apps.
The march of content providers into the living room is getting yet another boost as JW Player, whose video solution is used by thousands of content providers, will support Chromecast. JW Player's CEO Dave Otten and creator Jeroen Wijering told me yesterday that the beta is underway with 5 different content providers implementing JW Player with Chromecast support, which will go live over the next several weeks.
JW Player will support VAST-compliant advertising, so that video ads will be viewable on TVs when playing through Chromecast. As this demo video shows, JW Player has also enhanced its ad implementation by enabling companion banners to appear on the device driving the Chromecast, so users can engage with the advertiser as their video ad plays on the big screen.
In baseball terms, Amazon's new Fire TV connected device will be neither a home run nor a strikeout; more likely it looks like it will be a solid double. Amazon deserves credit for some clever new features that will distinguish the Fire TV in an increasingly crowded connected TV landscape. But, by beefing up its specs - and therefore its own costs - Amazon has priced the device relatively high at $99. That in turn will likely limit its appeal mainly to certain segments of the market: families with younger kids and/or casual gamers.
Of course a connected TV device from Amazon has been long-rumored and highly expected since it complements so well numerous other initiatives such as Prime, Kindle, Prime Instant Video, Amazon Studios, etc. How exactly Amazon would execute on the opportunity was debated. Would it roll out an inexpensive stick or more polished box (or both)? Which devices would it compete directly with? What content strategy would it use (free! pay-TV!)? And what features would differentiate it?
Expanding on their existing partnership, Bonnier, one of the largest U.S. magazine publishers, and Net2TV, a startup connected-TV media company, will create 30-minute TV programs for Bonnier titles "Cycle World" and "Saveur." The companies have also renewed the current "Popular Science" program. All of the programs are built by curating short-form videos into shows that are available on Net2TV's Portico TV service, on millions of connected TVs.
As I've written in the past, Net2TV's model is to create ad-supported TV-like experiences using high-quality short-form videos from branded partners. The videos are curated and assembled into 30, 60 and 90-minute programs, often accompanied by hosts who help create a narrative. The programs are typically updated on a weekly basis for now, with more frequent updates planned in the future. The Portico service is delivered from the cloud, accelerating the scaling of its integration with multiple connected TVs and devices.
I'm pleased to present the 220th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. First up, we discuss the WSJ report from earlier this week that Apple and Comcast may be collaborating in some way to deliver video through a "managed service" from Comcast. Neither Colin nor I can understand why Comcast would enable anything in its territory that would be remotely competitive with its own video services, but since the WSJ was thin on details, we don't know enough yet to fully judge.
We're also dubious about the fit for Apple given the company's emphasis on global scale for its products and also its premium positioning. And we're both struck by the regulatory red flags a "managed service" would raise for Comcast, at the very time they're trying to gain approval for the TWC deal. More of my thoughts are here.
We then turn quickly to Aereo's Supreme Court filing this week. As expected, it paints the case as being about cloud services in general, not just copyright specifically. We agree it's a clever strategy that positions Aereo as pro-innovation and pro-consumer, making it harder for the Supreme Court to rule against Aereo this summer.
Click here to listen to the podcast (19 minutes, 58 seconds)
The Wall Street Journal reported last night that Apple and Comcast are discussing a partnership for Apple to launch a streaming TV, VOD and DVR service, including dedicated Comcast bandwidth (a "managed service" as opposed to one delivered with typical "best efforts").
On the surface, it's a sexy-sounding deal, especially for those who have long-harbored a vision of Apple moving beyond its modest Apple TV device. However, scratch the surface just a little and you'll quickly find many reasons to be skeptical anything will result. Here are my top 5 (I'm sure there are others as well):
I'm pleased to present the 219th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia, who was at the TV Connect conference this week in London. First, up, Colin shares some of what he heard from Francisco Varela, YouTube's global director of platform partnerships. Francisco talked about YouTube taking back development of their apps from Smart TV manufacturers so users can have more immersive experiences.
We then turn our attention to the settlement of the Google-Viacom litigation, over alleged copyright infringement by YouTube, dating to 2007. It's legitimate to ask if there was ultimately any point to the litigation. As I explain though, I agree that at a minimum the litigation accelerated the development of YouTube's Content ID system which has been very valuable to the entire ecosystem.
Last, we also discuss new research from Vubiquity which found that 58% of respondents said they're interested in downloading TV shows and movies included in their pay-TV subscription. This echoes my bullishness on TiVo Stream's download feature which I've found extremely useful.
Click here to listen to the podcast (19 minutes, 24 seconds)
According to a new study by Vubiquity, 58% of consumers would like the ability to download to their tablets TV shows and movies that are included in their pay-TV subscriptions. Of these, 63% would be willing to pay $1 to $5 to stream or download content. Respondents who expressed interest in downloading already consume proportionately more content across all platforms.
Vubiquity believes a downloading feature offers a big opportunity for pay-TV operators to differentiate themselves. Coincidentally, Will wrote back in October, 2012 how he believed TiVo Stream's download feature was a killer app. In late 2012 Comcast introduced a similar feature for certain TV shows (there are rights issues involved in deploying this more broadly).
These are highly uncertain times for global TV manufacturers. As IHS reported last week, sales of TVs declined by 6% in 2013 to 225.1 million units, following a 7% contraction in 2012, creating first ever back-to-back down years for the global TV industry. IHS pinned the blame for the declines mainly on market saturation and difficult economic times.
To rebound from the doldrums, TV manufacturers are betting heavily on consumers upgrading to 4K TV and Smart TVs. 4K, or Ultra-High Definition TV, has significant challenges with content availability, price and picture quality differentiation it must overcome to go mainstream. Meanwhile, although the price premium for Smart TVs has shrunk, bringing them closer to conventional HDTVs, their value proposition is still not widely understood by consumers and access to online content is still very limited.
In this already difficult climate, another challenge for TV manufacturers is now taking shape from a whole new category of devices: low cost streaming sticks.