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Warning: Not All Cord-Cutting Research is Created Equal
When it comes to understanding cord-cutting trends, not all consumer market research is created equal. In my view there are two basic types. The first is speculative research that focuses on "potential" cord-cutters. The second is research that focuses on actual cord-cutters. For industry participants trying to get an accurate handle on this complicated topic, the second type is much more valuable.
The big problem with speculative research is that there's a massive difference between what people say they're considering doing (or even say they're planning to do) vs. what they will actually end up doing. In fact, it's a cliche this time of year to resolve to do certain things, though in reality we never will. How many of us said we'll get more exercise in 2011? Lose weight? Stop smoking? Save more money? And how many of us actually will? You get the idea.
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Topics: J.P. Morgan, Leichtman Research
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Another $180 Million Raised by Video Companies in Q4 '10, Capping a Banner Year
Private video-related companies raised at least $179.8 million in Q4 '10, bringing their total raised in 2010 to just over $750 million, according to public sources I track. Among the 22 companies raising funds the largest reported were by 3-screen video processor RGB Networks ($20M), which also acquired RipCode, a mobile video solutions provider in June 2010; Internet TV platform Verismo ($17M); and service provider software company BNI Video ($16M). Once again, the most popular categories for financings were software, content delivery and advertising-related; aside from $1M debt that Next New Networks raised, no new original video content companies were funded.
As the chart below shows, the Q4 total is a solid bounce-back from Q3's $100M (after excluding the $50M raised by Chinese video site Tudou). It further demonstrates the enthusiasm investors have for the online and mobile video sectors, which was driven throughout the year by positive news/research underscoring strong consumer adoption.
Categories: Deals & Financings
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Goodbye 2010, Hello 2011
With the holidays upon us, it's time to say goodbye to 2010 and to think about the year ahead.
As I described in my "Online/Mobile Video's Top 10 of 2010" post yesterday, it was a whirlwind year for the industry, with exciting progress on all fronts. 2011 is shaping up to be equally exciting as players in the ecosystem innovate and jockey for position.
In 2010 I wrote almost 500 original analyses of industry events, and aggregated over 2,000 news items from third-party sources on VideoNuze. In 2011 VideoNuze will continue to provide analytical, even-handed coverage of the rapidly evolving online and mobile video industries, and those industries that are impacted by the rise of viewing on these new platforms. Readers continue to tell me that VideoNuze is one of the few media outlets that delivers consistently thoughtful industry analysis, resisting the hype and piling-on that is all too common today. I know VideoNuze readers are busy and have lots of choices for what to read, so thank you for making VideoNuze a part of your day.
As the year winds down, I also want to say a big thank you to VideoNuze's sponsors and to the sponsors of the 3 VideoSchmooze events this year. Without them VideoNuze wouldn't be possible and so I'm very grateful for their support. As always, if you're interested in learning more about sponsoring either VideoNuze or VideoSchmooze events, please contact me.
VideoNuze will be on break until Monday, January 3rd, unless something big happens during the holiday week. I'll continue to post news and do some tweeting, but for the most part I'll be relaxing and re-charging my batteries. I hope you'll be doing the same.
Happy Holidays to all of you, see you in 2011!
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Topics: VideoNuze
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Online/Mobile Video's Top 10 of 2010
2010 was another spectacular year of growth and innovation in online and mobile video, so it's no easy feat to choose the 10 most significant things that happened during the year. However, I've taken my best shot below, and offered explanations. No doubt I've forgotten a few things, but I think it's a pretty solid list. As much as happened in 2010 though, I expect even more next year, with plenty of surprises.
My top 10 are as follows:
Categories: Advertising, Aggregators, Broadband ISPs, Broadcasters, Cable Networks, Cable TV Operators, Deals & Financings, Devices, Mobile Video, Regulation, Satellite, Technology, Telcos
Topics: 4G, Android, Apple, Google TV, iPad, Net Neutrality, Netflix, YouTube
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Starz's 2-Year Results Defy Warnings of "Cord-Shaving"
If you're looking for evidence that the pay-TV industry is imperiled by the rise of over-the-top services that are going to cause subscribers to cut the cord, a good early indicator of such behavior would be whether "cord-shaving," i.e. the reduction of services like premium channels, additional outlets and DVR services, is happening already. But a look at the premium channels Starz and Encore - whose content is fully available for streaming on Netflix - suggests no evidence of cord-shaving is yet occurring.
As the graph below shows, since October, 2008, when Starz announced that Netflix had signed a distribution deal for "Starz Play," total U.S. subscribers to the Starz and Encore channels have actually increased slightly from 49 million to 49.4 million. During this time period there's been relatively little fluctuation, with only a temporary dip in the 2nd half of last year that was probably more related to the channels being temporarily out of their Comcast deal, and therefore losing some of their promotional backing. Further, for the first 9 months of 2010, Starz's revenue was $929 million and cash flow was $305 million, up from the same period in 2008, when revenue was $826 million and cash flow was $220 million.
Categories: Aggregators, Cable Networks
Topics: Disney, Encore, HBO, Netflix, Sony, Starz
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Net Neutrality: Here Today, Gone Tomorrow?
Though the FCC passed new net neutrality rules yesterday, the fight is far from over. Republicans immediately vowed to block the rules when they take over the House in January, and threats of industry lawsuits flew. Even liberal supporters of net neutrality were unhappy that the rules didn't go far enough. While the rules are here today, whether they will be tomorrow is very much an open question.
While everyone agrees that a well-functioning Internet is core to American society and the economy, net neutrality's challenge from the start has been between those who believe in pre-emptive regulations because big ISPs can't be trusted, vs. those that don't see a sustained pattern of ISP misbehavior warranting proactive FCC involvement.
Categories: Broadband ISPs, Regulation
Topics: FCC, Net Neutrality
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Netflix CEO Hastings Defends Company's Lofty Stock Price in 2,000 Word Post
Netflix CEO Reed Hastings isn't being shy about his company's soaring valuation, posting a 2,000 word defense on the Seeking Alpha blog. The relatively unusual move comes in response to an earlier post by investor
Whitney Tilson explaining why the stock is due for a decline in 2011. The two men are friends and joint backers of charter schools. Hastings says somewhat tongue in cheek up front that his "desire is to increase (Tilson's) odds of making money next year so he can donate even more to the charter public schools that we both think are important to our country's future."
Categories: Aggregators
Topics: Netflix
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Hulu Pulls IPO Due to Lack of Long-Term Content Rights
The WSJ is reporting that Hulu has pulled its widely-rumored plan for an initial public offering next year due to lack of long-term rights to distribute its three broadcast TV network owners' content. The WSJ says the company may
look at other options to raise capital. Hulu's exclusive short-term distribution deals with owners ABC, FOX and NBC are the company's primary asset, and no doubt banks and other would-be investors closely scrutinized whether the rights would be extended.
As I wrote last April, from a content rights perspective, Hulu is getting squeezed from all sides. Pay-TV providers are ramping up their TV Everywhere rollouts and are trying to lock down online distribution rights themselves, sometimes as part of retransmission consent deals. The NBC rights in particular are subject to extra uncertainty longer-term as Comcast takes over the network. As the biggest subscription TV provider, which is rolling out its own online capabilities, Comcast has little incentive to support an online competitor.
Categories: Aggregators, Broadcasters, Deals & Financings
Topics: ABC, Comcast, FOX, Hulu, NBC, Netflix
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