Tuesday, September 4, 2012, 10:25 AM ET|Posted by Will Richmond
If you were trying to tune out last week, whether lying on a beach or on a family getaway, you didn't miss all that much exciting online video-related news. However there were some items worth noting and below I've highlighted five that caught my eye.
HBO Goes Direct to consumer in Scandinavian countries
In the wake of HBO GO's success, lots of HBO fans in America have been clamoring for the network to untether itself from pay-TV bundles and offer HBO GO direct to consumers. While HBO has resisted for now, last week it took a step in that direction by unveiling HBO Nordic, a joint venture that will make a linear HBO feed plus a VOD catalog of its award-winning series available directly to consumers over broadband connections for about 10 euros per month.
HBO Nordic said it's pursuing a target group that is younger and more urban who watch on multiple screens. This is the same "cord-never" crowd that Aereo, for example, has set its sites on here in the U.S., but which HBO has been reluctant to cultivate. At a minimum, HBO Nordic should give the company great data about behaviors and adoption rates among cord-nevers that might eventually make it more comfortable offering HBO GO standalone elsewhere.
Google Fiber changes fiberhood definitions
Lots of people are watching Google's fiber deployment in Kansas City, and last week the company made it just a little easier to claim success by tweaking how it counts the number of homes in each of its "fiberhoods." This is important because the company's "build by-demand" approach is guided by thresholds of pre-registration interest shown in fiberhoods.
While nobody outside Google knows the particulars of these changes, conveniently they positively affected pre-registration ratios in all but two fiberhoods. Regardless, as I pointed out recently, the true test of Google Fiber will be actual adoption and retention, not pre-registration interest. There needs to be a whole lot of KC residents beyond early adopters to make this project a success.
ESPN's $5.6 billion MLB deal underscores rights fee surge
If you thought sports licensing costs couldn't get any crazier, guess again; ESPN announced a deal last week with Major League Baseball for $5.6 billion. The $700 million ESPN will pay per year is double its current deal, a rate of increase even higher than ESPN's NFL renewal which was 73% higher per year. As VideoNuze readers know, I've repeatedly highlighted the rapidly rising cost of sports rights as a key vulnerability for the pay-TV industry as it causes non-sports fans to subsidize these expensive deals.
While ESPN's president said "we're not going to our distributors to ask for an increase for our content," faced with competing networks, ESPN has been on a huge spending spree lately (NFL, NBA, Rose Bowl, NCAA, etc.). Unless it's planning to take a margin hit to absorb the billions in rights fees it is paying, then ESPN's renewals with pay-TV distributors will inevitably be more expensive. Then as pay-TV operators attempt to pass on their higher costs from cable sports networks to subscribers, affordability becomes a more acute challenge for many, leading to interest in less expensive, OTT-only options.
Online originals get mainstream media attention
Those of us in the weeds of online video know that original productions have ramped up in a big way over the past year. Yet one of the big challenges all these productions face is awareness and audience building. That's why a front-page story in this past Sunday's Boston Globe "Online TV explodes as big names step into field," caught my eye. The article highlighted various original programs from Yahoo, YouTube, Hulu, Netflix and others, along with the celebrities that are involved with them.
Articles like these in mainstream media matter because they help expand awareness of online originals beyond early adopters. With the number of homes with Internet-connected TVs surging and pay-TV becoming ever more expensive (see above), online originals have huge potential.
First Internet cat festival: back to YouTube's roots
YouTube may be working hard to move beyond its roots as the home of the user-generated silly/cute cat video, but that doesn't mean there isn't still significant interest in the genre. Case in point: last week, Minneapolis' Walker Art Center, one of the country's most-visited modern art museums, staged its first "Internet Video Cat Festival," which drew over 10,000 attendees to watch 79 different videos. Many attendees not only brought their snuggly friends, some dressed up as them as well. Another purr-fect (sorry!) example of how YouTube has helped foster niche communities of interest.