It’s in the script for every OTT service with an app for phones and tablets: “your favorite shows are now available anytime, anywhere!” It’s in the script because marketers know that “available anytime, anywhere” is what audiences want. Their impulse to make this promise is the right one, and it may induce an initial consumer engagement. But failing to deliver on that promise will quickly frustrate users and potentially increase churn. Saying it does not make it reality.
I’m pleased to present the 432nd edition of the VideoNuze podcast, with my weekly partner Colin Dixon of nScreenMedia.
Colin is eating some crow on this week’s podcast, because he’s finally (!) come around to understanding the value of video downloading, which I’ve been promoting for nearly 6 years. Colin has a new white paper out in which he cites his research finding 55% of U.S. and 58% of U.K. viewers saying downloading functionality is very important to them. We discuss all aspects of downloading’s value proposition.
Then we segue to talking about Verizon’s announcement this week that when it rolls out 5G to 4 U.S. cities later this year it will include an Apple TV and discounted YouTube TV (exact terms weren’t released). Noting the caveat that we haven’t seen 5G perform, we both believe it has a ton of potential to disrupt the wired broadband business which cable TV operators have dominated. As Verizon’s announcement shows, it also presents interesting opportunities to bundle pay-TV with 5G and wireless service.
Listen in to learn more!
Click here to listen to the podcast (23 minutes, 13 seconds)
Yesterday Netflix announced a very cool new feature called “Smart Downloads,” which automatically deletes an episode you’ve downloaded and finished watching on your mobile device, triggering the download of the subsequent episode. The process happens as soon as you’ve connected to WiFi and occurs invisibly in the background. Smart Downloads is available for Android devices now and for iOS devices later this year.
Smart Downloads is a clever way of automating a manual process, so that users always have something downloaded and ready to watch (although having to manually download a TV episode clearly falls in the category of “first world problems”). Smart Downloads is a a savvy move by Netflix to increase subscribers’ engagement time, which in turn leads to higher satisfaction and better retention. But perhaps most fascinating about Smart Downloads is that it illustrates how fully and quickly Netflix has evolved from an avowed downloading skeptic to an impressive innovator.
Hulu had a lot of updates at its NewFront/Upfront presentation this morning, but among the most interesting for me was that Hulu will offer downloading of its content, but with ads included. Since the vast majority of Hulu’s 20 million+ subscribers are on the ad-supported plan, this means Hulu is going to be breaking some new ground in downloading, relative to its ad-free SVOD peers Netflix and Amazon, both of which have been offering downloading for a while.
VideoNuze readers know I’ve been a huge fan of downloading for years since TiVo first offered it, seeing it as way for time-starved viewers to gain full access to the compelling content available on SVOD or DVR when they’re either not online (e.g. in airplanes), enduring spotty carrier connections (e.g. in trains and cars) or on expensive capped mobile data plans (as most wireless subscribers still are). Since many of us are in these modes very frequently, downloading is essential for allowing us to maximize the value of our monthly subscriptions, which in turn leads to higher satisfaction and reduced churn.
Penthera, which makes software to power video downloading to mobile devices, has raised $6 million from Liberty Global Ventures, the venture investment arm of Liberty Global International, which is the biggest international cable company and chaired by John Malone. Liberty Global is also a Penthera customer.
Penthera’s Cache&Carry software enables video providers to let their viewers download video to their iOS and Android mobile devices. Cache&Carry includes DRM support, configurable business rules, download queuing options, mobile DVR and “FastPlay” which launches buffer-free viewing.
Viewers’ interest in being able to download videos, as well as stream them, is strong, though awareness of a downloading feature in streaming services remains modest, according to new research from software provider Penthera. In a poll of U.S consumers 18-44 years-old, Penthera found that one third or more of subscribers to major SVOD services like Netflix weren’t aware downloading was available (Netflix officially launched downloading for select titles last November after consistently saying it didn’t believe it was a valuable feature). Dan Taitz, Penthera’s COO told me in a briefing that the relatively low awareness reflects downloading still being in an “early adopter phase.”
Downloading video for offline playback continues to gain momentum with Showtime announcing late last week that it has enabled downloading of its entire roster of programs from its standalone subscription and TV Everywhere apps at no additional cost. Downloading is available on iOS and Android phones and tablets plus Amazon Fire tablets.
Loyal VideoNuze readers know that I’ve been an enthusiastic downloading proponent for 4 1/2 years, back to when I first experienced TiVo’s implementation of it via TiVo Stream. I immediately saw downloading as a killer app because it allowed high quality out-of-home viewing independent of shaky or non-existent WiFi hotspots and/or eating up expensive mobile data plans (if they could even support video streaming).
In a move that was long, long overdue, Netflix announced yesterday that it was enabling downloading of content to iOS and Android mobile devices. Not all shows and movies are available for download, but importantly, it looks like most, if not all, of Netflix’s original productions are included. I tried downloading last night and it worked perfectly.
I’ve been saying since 2012 that downloading is a bona fide killer app, after I first started using TiVo’s excellent downloading feature to watch recordings on my iPad when traveling. Amazon totally understood the value of downloading as well, enabling it back in September, 2015. In a press release that both touted the new feature and implicitly tweaked Netflix, Amazon proclaimed it as “The First and Only Subscription Streaming Service to Offer This Feature.”
I'm pleased to present the 341st edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.
Over the past few years, online video viewing has become a completely mainstream activity. There are no better indicators of this shift than viewers’ adoption of mobile and connected TV devices for watching increasingly long-form entertainment programming. Yesterday’s FreeWheel VMR for Q2 ’16 revealed key data around these trends, which Colin and I dig into today.
Critical for mobile video viewing (which we explored in depth on last week’s podcast) to expand further is improving viewing experiences. This is being addressed in lots of ways, and I continue to believe that downloading, for offline viewing, is one of the main solutions. Colin and I also discuss the value of downloading, in the context of YouTube Go, a new offline viewing app launched earlier this week.
Listen in to learn more!
Click here to listen to the podcast (23 minutes, 56 seconds)
Yesterday YouTube announced YouTube Go, a new mobile app that provides sophisticated new features for offline video use. While YouTube Go will initially only be available in India, it will no doubt be introduced in other geographies once proven in.
YouTube Go builds on YouTube’s embrace of downloading for offline viewing in India and other Asian territories begun nearly two years ago with the introduction of YouTube Offline, which allowed downloading of certain videos for viewing within 48 hours. Earlier this year YouTube added the “Smart Offline” feature that allows users to schedule their downloads to take advantage of off-peak data use.
I’m posting this week’s VideoNuze podcast a day early as the first segment focuses on the new Apple TV, which was introduced yesterday.
Colin and I both see the new Apple TV as solid, but not spectacular. In many ways, it’s just catching up to what other devices have been offering: voice search, search across apps and gaming capabilities. The latter could ultimately be Apple TV’s big differentiator if Apple’s legion of developers take advantage of the new “tvOS” operating system SDK to create breakthrough new gaming experiences. We were both intrigued by the new remote with swipe capability, as well.
We then turn our attention to Netflix’s anti-downloading stance, which I dug into yesterday. I find it both perplexing and frustrating, with the company’s explanation not adding up. Colin isn’t initially as convinced as I am that downloading is a killer app, though with a 10-hour flight to Amsterdam today, he’s beginning to realize how much value it would have.
Listen in to learn more!
It’s been 4 years since Netflix’s “Qwikster” fiasco, in which the company infamously tried to separate its DVD business, eliciting emphatic objections from its subscribers. Netflix offered implausible explanations for its move and ultimately reversed itself. Since then the company has executed flawlessly, expanding its content, extending its international footprint, watching its stock price soar and most importantly, winning back the love of its subscribers.
Thus it is perplexing and frustrating to see Netflix oppose the idea of enabling its content to be downloaded for offline viewing, as an augment to streaming it. Reminiscent of Qwikster, Netflix is offering up bizarre and non-sensical explanations for opposing the download feature that it readily admits its subscribers are hungry for. Further, with Amazon’s expansion of Prime Video downloading to iOS and Android devices last week, it also appears to be a new competitive lever among SVOD providers.
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).
Amazon has announced its new Kindle Fire HDX tablet which includes many new features, but from a video perspective the one that stands out as a key differentiator is the ability to download Prime Instant Videos and watch them while not connected to the Internet. The downloading feature will be available to Prime members at no extra charge.
The new downloading feature opens up great new use cases (on a plane, at a beach, no WiFi, etc.) that add meaningful value to Prime membership and help to differentiate Prime from Netflix and the HDX from the category-leading iPad.
Everywhere I look there are companies doing innovative, clever things to bring broadband video to the TV and to mobile devices.
Yesterday brought another great example, from Vuze, a company with roots as a BitTorrent client that has evolved to an aggregator of hi-def niche broadband video using its desktop application for discovery, download and playback. Vuze announced an update that enables users to drag-and-drop downloaded videos for playback on non-PC devices such as Xbox, PS3 and - via an integration with iTunes - to the iPhone, Apple TV and iPods. It's a pretty cool extension of the Vuze client experience and I spoke with Vuze's CEO Gilles BianRosa and Sr. Director of Marketing Chris Thun to learn more.
Without getting too far into the technical details, what Vuze has done is capitalized on hooks that have existed in these various devices, making videos downloaded via Vuze visible in these devices' interfaces. As Gilles explained it, these hooks have been available for a while, but only the super-technical would have invested the time and effort to benefit from them.
The connections to Xbox (installed base of 30M) and PS3 (installed base of 23M) are quite complimentary to Vuze, which has 10M unique visitors/mo and about 50M downloads to date, because its content library is heavily skewed toward SciFi, animation, games and comedy (all HD btw) along with its user base. In other words, there's an affinity audience who will immediately benefit from being able to watch Vuze's content on their big screens and on-the-go. In fact, in a recent survey of its users for how they'd want to connect their PCs to TV and mobile, Vuze got 30K responses with a strong emphasis on gaming and Apple devices.
In prior conversations with Gilles I've raised a concern about the viability of Vuze's (or anyone's) client download model given the ever-increasing quality of browser-based streaming. But these integrations do shed new light on the value proposition of having a desktop presence. With its update, Vuze actually goes one step further by automatically transcoding downloaded videos into the format appropriate for the target device, often in real-time, thus eliminating playback issues.
Gilles noted that this is a beta release however, and that one current limitation is that ads cannot be passed through. This is a not insignificant gap for an ad-supported site. Vuze hopes to have ads up and running within a month or so. It also has its eye on integrating with additional devices. My bet is that TiVo is next up given that TiVo founder Mike Ramsey sits on Vuze's board.
For now Vuze's content is relatively nichey and Gilles concedes that despite ongoing negotiations with major studios and TV networks, they're still getting comfortable with Vuze's P2P platform. Given the crowded video aggregator space, Vuze's ongoing challenge is to bolster its content library to broaden its appeal.
But Vuze's new update, sure to mimicked by others, which comes on top of Netflix reporting 1M Watch Instantly users connecting to their Xboxes and consuming 1.5 billion in the first 2 months of its availability, Boxee's multiple integrations and other PC-to-TV convergence initiatives underway, shows the huge pent-up interest users have in watching broadband video on their TVs. The genie is way out of the bottle and content providers need to begin adapting to the coming landscape where video flows between PC, TV and mobile, offering unprecedented convenience to users.
What do you think? Post a comment now.
Amazon and Roku announced yesterday that Amazon's VOD service will soon be available on Roku's $99 Digital Video Player. The deal starts to make good on Roku CEO Anthony Woods's intentions about "opening up the platform to anyone who wants to put their video service on this box."
With Amazon VOD's 40,000+ TV programs and movies added to the 12,000 titles already available to Netflix subscribers via its Watch Instantly service (plus more content deals yet to come), little Roku is starting to look like a potentially important link in the evolving "over-the-top" video distribution value chain.
More interesting though, is that I think we're starting to see the battle lines drawn for supremacy in the download-to-own/download-to-rent premium video category between Amazon on one side and Apple on the other. Though Apple dominates this market today, having sold 200 million TV programs alone, there are ample reasons to believe competition is going to stiffen.
Apple is of course in the video download business for the same reasons it was in the music download business: to drive sales of the iPod and more recently - and to a lesser extent - the iPhone. According to the latest info I could find, iTunes now has 32,000+ TV programs and movies, including a growing number in HD. For now that's slightly less than Amazon VOD, but my guess is that over time the two libraries will be virtually identical.
While Apple has a near monopoly on portable viewing via the iPod and iPhone, it is a laggard in bridging broadband-to-the-TV. Its Apple TV device, introduced in January, 2007, and meant to give iTunes access on the TV, has been an underperformer. Certainly a detractor has been price, with the 40GB lower-end model still running $229. But more importantly, as an iTunes-only box, Apple TV perpetuates a closed, "walled-garden" paradigm that consumers are increasingly rejecting (as companies like Roku astutely understand).
For Amazon, the world's largest online retailer, video downloads are a rich growth market. The company brings significant advantages to the table, starting with tens of millions of existing customer relationships with credit cards or other payment options just waiting to be charged for video downloads. Amazon has strong brand name recognition and trust. And of course, it has a near-limitless ability to cross-promote downloads with DVDs and other products.
Determined not to be left behind in the great race to get broadband delivered video all the way to the TV, it has been integrating its VOD service with 3rd party devices like TiVo, Sony's Bravia Internet Video Link, Xbox 360 and Windows Media Center PCs. Its latest deal with Roku is far from its last.
Amazon VOD's adoption will benefit from the fact that there are many non-Amazon reasons that people will be buying these devices. For example, consider Roku, TiVo and Xbox 360. With Roku, Netflix is fueling sales. As Netflix subscribers realize that new releases are generally not available in Watch Instantly, but are through Amazon VOD on Roku, they'll be prone to give Amazon VOD a try (the Netflix limitation is course due to Hollywood's windowing, and another reason why I believe it's crucial for Netflix to make deals with broadcast networks for online distribution of their hit programs). For TiVo and Xbox 360, each has a well-defined value proposition for consumers to purchase. Amazon VOD's availability is a pure bonus for buyers.
Still, Amazon VOD's Achilles heel that it is missing a portable playback companion on a par with the iPod and iPhone. Users clearly value portability and Amazon needs to solve this problem (hmm, can you say "Kindle for Video?"). Yet another issue is that despite its various 3rd party device deals, the user experience will always be governed by these devices' strengths and weaknesses. In this respect, Apple's ownership of the whole hardware/software/services ecosystem gives it significant user experience advantages (which of course it has masterfully exploited with iTunes/iPod).
Apple and Amazon hardly have the market to themselves though. Others like Microsoft Xbox LIVE, Vudu and Sezmi are vying for a place in the market. And then of course there are the VOD offerings from the cable/satellite/telco video service providers, who have big-time incumbency advantages. Not to be forgotten in all of this is consumer inertia around the robust DVD market, which to a large extent all of these video download options seek to supplant.
In the middle of all this are Joe and Jane Consumer - soon to be overwhelmed by a barrage of competing and confusing offers for how to get on-demand TV program and movie downloads in better, faster and cheaper ways. In this market, I believe simplicity, content choices, brand and especially price will determine the eventual winners and losers. These are front and center considerations for Amazon, Apple and all the others going forward.
What do you think? Post a comment now.
Looking back over two dozen posts in May and countless industry news items, I have synthesized 3 key topics below. I'll have more on all of these in the coming months.
1. Broadband-delivered movies inch forward - breakthroughs still far out
In May there was incremental progress in the holy grail-like pursuit of broadband-delivered movies. Apple established day-and-date deals with the major studios for iTunes. Netlix and Roku announced a new lightweight box for delivering Netlix's "Watch Now" catalog of 10,000 titles to TVs. Bell Canada launched its Bell Video Store, complete with day-and-date Paramount releases, with others to come soon. And Starz announced a deal with Verizon to market "Starz Play" a newly branded version of its Vongo broadband subscription and video-on-demand service.
Taken together, these deals suggest that studios are warming to the broadband opportunity. This is certainly influenced by slowing DVD sales. Yet as I explained in "iTunes Film Deals Not a Game Changer" and "Online Move Delivery Advances, Big Hurdles Still Loom" broadband movies are still bedeviled by a lack of mass PC-TV connectivity, no real portability, well-defined consumer behavior around DVDs and the studios' well-entrenched, window-driven business model. Despite May's progress, major breakthroughs in the broadband movie business are still way out on the horizon.
2. Broadcast TV networks are embracing broadband delivery - but leading to what?
Unlike the film studios, the broadcast TV networks are plowing headlong into broadband delivery, yet it's not at all clear where this leads. In "Does Broadband Video Help or Hurt Broadcast TV Networks" and "Fox's 'Remote-Free TV': Broadband's First Adverse Impact on Networks?" I laid out an initial analysis about broadband's pluses and minuses for networks. I'll have more on this in the coming weeks, including more in-depth financial analysis.
On the plus side, in "2009 Super Bowl Ads to Hit $3 Million, Broadband's Role Must Grow," "Sunday Morning Talk Shows Need Broadband Refresh" and "Today Show Interview with McClellan Showcases Broadband's Power," I illustrated some opportunities broadband is creating. On the other hand, "Bebo Pursues Distinctive Original Programming Model" and "More Questions than Answers at Digital Hollywood" explained how exciting new programming approaches are taking hold, challenging traditional TV production models. Broadcasters are in the eye of the broadband storm.
3. Advertising's evolution fueled by innovation and resources
Last, but hardly least, I continued on one of my favorite topics: the impact broadband video is having on the advertising industry. Over the last 10 years the Internet, with its targetability, interactivity and measurability has caused major shifts in marketers' thinking. With broadband further extending these capabilities to video, the traditional TV ad business is now ripe for budget-shifting. We'll be exploring a lot of this at a panel I'm moderating at Advertising 2.0 this Thursday.
In "Tremor, Adap.tv Introduce New Ad Platforms" and "All Eyes on Cable Industry's 'Project Canoe'" (from Mugs Buckley), key players' innovations were described along with how the cable industry plans to compete. Content providers are being presented with more and more options for monetizing their video, a trend which will only accelerate. Yet as I wrote in "Key Themes from My 2 Panel Discussions Last Week," many issues remain, and with so many content start-ups reliant on ads, there may be some disappointment looming when people realize the ad market is not as mature as they had hoped.
That's it for May. Lots more coming in June. Please stay tuned.
Online movie delivery is back in the news, but dramatic change is still well down the road in this space as usability, rights issues and incumbent business models/consumer behaviors pose formidable hurdles.
Yesterday Netflix announced a $99 appliance with Roku, enabling the company's "Watch Instantly" streaming service on TVs. That news follows Apple's deals with a number of big studios in early May obtaining "day-and-date" access to current titles. And today brings news that Bell Canada, that country's largest telco, is formally launching its Bell Video Store, also providing day-and-date delivery, of Paramount titles to start (and soon others), plus portable viewing on Archos devices.
Netflix, which I last wrote about here, took a shot across the bow of Apple TV and Vudu by introducing the Roku box, the lowest-priced broadband movies appliance yet. Apples-to-apples comparisons aren't fair as the stripped-down Netflix/Roku box doesn't have a hard-drive or equivalent processing. That inevitably means lower quality delivery vs. locally-stored content with the others, plus uncertainty about HD-delivery. Netflix/Roku's big advantage is that it's a value-add service for current Netflix subscribers, meaning no new fees as with the Apple TV/Vudu approaches.
However, Watch Instantly has older titles and amounts to less than 10% of Netflix's total catalog. I don't see that changing much; Watch Instantly runs smack into studios' incumbent windowing approach and deals with HBO, Showtime and Starz for premium TV. Netflix's model is built on the home video window, so new online delivery rights must be obtained which will be a tough road. However, with Paramount, MGM, Lionsgate and others splintering from Showtime recently to set up their own premium channel, it's possible that some studios' rights may loosen up, but of course at a price.
Still, I don't see the Netflix/Roku box breaking 10% penetration of Netflix's sub base any time soon, barring a box giveaway. Enlarging the value proposition by licensing the Roku technology for inclusion in other devices (e.g. Blu-ray) could also help drive adoption.
Meanwhile, today Bell Canada is announcing the formal launch of its Bell Video Store. In beta since late '07, it offers 1,500 titles, now including day-and-date delivery from Paramount (and others soon according to Michael Freeman, Bell's director of product management who I spoke to yesterday). This is noteworthy, as it appears to be the first time a service provider has received day-and-date online access from any studio. If other providers follow suit we may finally witness some internal competition with sacrosanct-to-date Video on Demand initiatives.
By using ExtendMedia's platform, Bell is also enabling downloads-to-own directly to Archos portable devices. With a couple million satellite homes and fiber IPTV fiber-based deployments continuing, there are multiple three screen options looming for Bell. Yet for now these are limited. Michael confirmed Bell has no plans to offer a branded movie appliance a la Netflix/Roku, meaning it will dependent on XBoxes and other PC-TV bridge devices.
Renewed progress and experimentation are welcome in this space, but lots of hard work remains for online movie delivery to become mainstream.
What do you think of the online movie delivery space? Post a comment now!