VideoNuze Posts

Back at the Cable Show, I got a demo of what has to be the coolest product (err, prototype) I've seen in a long while: "Surfaces," a wall-sized interactive TV created by pay-TV technology provider NDS. Consisting of six huge LCD screens, running entirely in a HTML5 on a Chrome browser with 4K resolution video and controlled via an iPad, Surfaces is unlike any TV experience you've ever seen.

In addition to recording the demo, I interviewed NDS' CTO Nick Thexton about the Surfaces prototype, when consumers might actually be able to buy one, and what NDS' goals were in creating it. It's a pretty remarkable glimpse into what TVs in the future could ultimately look like. Enjoy.

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I'm pleased to be joined once again by Colin Dixon, senior partner at The Diffusion Group, for the 139th edition of the VideoNuze-TDG Report podcast.

Breaking with tradition, we're posting this week's podcast a day early to share our thoughts on Aereo's big legal victory - the decision by U.S. District Judge Judith Nathan to deny the broadcast networks' request for a preliminary injunction to block Aereo's service. As Colin and I agree, though the broadcasters have promised to pursue an appeal, for now it's a very significant milestone for Aereo, as it validates the company's assertion that the Cablevision precedent should hold.  

Our discussion focuses on the ruling's implications. Certainly it opens up a whole new option for pay-TV operators to avoid paying hundreds of millions in retransmission consent fees by either partnering with Aereo or developing comparable technology (patent issues notwithstanding) to deliver broadcast programs. It also opens up opportunities for OTT providers to potentially beef up their services in partnership with Aereo. While Colin sees Aereo as offering some benefits for the broadcasters, I view the ruling as key setback to their strategy to develop a secondary revenue stream.

The ruling also comes in the context of two other significant developments - the decision by DirecTV to drop Viacom's networks and the news that Netflix's usage surpassed 1 billion hours in June. Both underscore the impact that evolving consumer behaviors are having on the relationship between pay-TV and online video delivery. The Aereo decision scrambles that dynamic even further. No question, we are living in very interesting times.

Listen in to hear all of the details.

Click here to listen to the podcast (23 minutes, 17 seconds)

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A new report being released today from London-based video ad technology provider Videoplaza, and research firm IHS Screen Digest adds to the case that broadcasters must diversify into IP-based delivery of their content to multiple devices in order to achieve continued growth. The report, "A Future for TV: IP-delivered Video Advertising in a Connected World" presents new data on adoption of connected devices by TV and PC households in North America and Western Europe, share of ads now being delivered by non-PC devices and video ad loads by device, among other data.

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Comcast has been letting me test-drive its new "X1" platform on a second TV in my house for the last couple of weeks. X1, which was recently announced at the Cable Show, is the company's new state-of-the-art set-top box, built by Pace, that delivers video via traditional "QAM" technology along with apps and other content via web-standard IP technology. The latter allows X1 to create a richer, more web-like user experience.

X1's biggest leap forward vs. the traditional Comcast digital set-top (which I still have on my main TV) is its speed and responsiveness. X1 is amazingly fast, unlike any other pay-TV set-top I've ever used, and easily on a par - or better - than any web site or iPad/mobile app I've recently used (it actually feels faster than many web sites I visit given their increasingly bloated pages). X1 also blows away my Samsung connected Blu-ray player's abysmally slow performance.

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In case you missed it while vacationing for July 4th, last week Netflix CEO Reed Hastings posted on his Facebook page that Netflix's streaming exceeded 1 billion hours for June, a new record for the company. BTIG's Rich Greenfield calculated that equates to approximately 2,388 viewing minutes per Netflix U.S. subscriber for the month (that's up from 2,000 minutes/mo which I calculated for Q4 '11). To put the June minutes in context, it's nearly double the average 1,315 minutes that the 180.5 million U.S. Internet subscribers each streamed in May, according to comScore's data.

Admittedly, it's a little bit of apples vs. oranges (comScore vs. Netflix internal data, May vs. June, free vs. paid, etc.), but assuming the numbers are at least in the ballpark, they demonstrate how thoroughly Netflix dominates in time spent per viewer vs. all other sites. For example, Netflix's 2,388 minutes/sub in June is more than 5x YouTube's 462.7 minutes/viewer in May and almost 10x Hulu's 253.7 minutes/viewer in May. Beyond YouTube and Hulu, the disparities become even more glaring; Netflix has 30x or greater viewing time of sites like Yahoo, VEVO, AOL and others.

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Each week it seems there's another research research report showing how viewers are increasingly splitting their time watching video on multiple devices. Audience fragmentation is creating new opportunities and headaches for advertisers trying to reach their target audiences efficiently and cost-effectively.

This was the topic of one of our panel discussions at the VideoNuze Online Video Advertising Summit a couple of weeks ago, which included Marc DeBevoise, SVP/GM, Entertainment at CBS Interactive, Suzanne McDonnell, SVP, Ad Solutions, Discovery and Anupam Gupta, President and CEO, Mixpo, with Nick Buzzell, President and Executive Producer, NBTV Studios, moderating.

Two of the recurring themes of the session were that simplicity is essential for advertisers to capitalize on advertising opportunities across three screens and that it is still early days, so multi-screen advertising approaches vary depending on specific circumstances. The excitement around new technologies and devices is compelling but understanding client objectives and their level of sophistication is crucial. This is one of the reasons that pre-rolls, mid-rolls and post-rolls have become omnipresent; they're comparable and complimentary to existing TV advertising, making them relatively easy to work with.

There were lots of other great insights and lessons shared in this 25 minute session.

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Amazon has been offering its customers the opportunity to upload video product reviews for years, but peruse the site and you'll see that text reviews still dominate, with only a scattering of videos. No doubt recognizing how powerful video has become, it looks like Amazon may be putting a new emphasis on video product reviews. In an email I received yesterday from the company (which millions of other Amazon customers are likely receiving as well), the subject line read "Review your recent purchases at Amazon.com," with a large callout:

"New on Amazon! Grab your video camera or webcam and add video to your customer review. Click on "Review this product" above to upload a video or find a different product to review"

To be accurate, video reviews aren't a new feature on Amazon, though clearly they haven't been used much; for the 3 products I had bought, all had a healthy number of text reviews, but none had any video.

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At the recent VideoNuze 2012 Online Video Advertising Summit, TDG senior analyst Colin Dixon sat down with Ed Haslam, SVP of Marketing at YuMe to discuss the market for video advertising on connected TVs (sometimes also called "Smart TVs"). Ed and Colin agreed that while there are already 20 million or more U.S. homes with these TVs, the ad opportunity is still relatively small, though it has enormous potential as these devices are adopted in hundreds of millions of homes globally over the next 5 years.

Ed has a strong perspective on this space as YuMe has a deal with Samsung and with LG to power advertising on their connected TVs. In the session, Ed discussed the experiences of 2 early advertisers, Toyota and State Farm. He also explained exactly where video ads are inserted today, how these units differ from typical pre-roll units seen online, and how the market is broadening to also include in-app advertising. Ed also describes 2 key challenges for the connected TV advertising space; consumer fragmentation and gaining developers' attention.

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