Wednesday, March 25, 2009, 8:42 AM ET|
Blockbuster and TiVo have announced that Blockbuster OnDemand movies will be available on TiVo devices. Though I'm all for creating more choice for viewers to gain access to the content they seek, in this case I don't see the deal creating a ton of new value in the market, as it comes 6 months after Netflix and TiVo announced that Netflix's Watch Instantly service would be available on TiVo devices and nearly 2 years after Amazon and TiVo made Amazon's Unbox titles available for purchase and download to TiVo users. It looks like the main differentiator here is that Blockbuster will begin selling TiVos in their network of physical stores.
The deal underscores the flurry of partnership activity now underway (which I think will accelerate) between aggregators/content providers and companies with some kind of device enabling broadband access to TVs. I believe the key to these deals actually succeeding rests on 2 main factors: the content offering some new consumer value (selection, price, convenience, exclusivity, etc.) and the access device gaining a sufficiently large footprint. Absent both of these, the new deals will likely find only limited success.
Consumers now have no shortage of options to download or stream movies, meaning that announcements along the lines of Blockbuster-TiVo break little new ground. To me, a far more fertile area to create new consumer value is offering online access to cable networks' full-length programs. As I survey the landscape of how premium quality video content has or has not moved online, this is the category that has made the least progress so far. That's one of the reasons I think the recent Comcast/Time Warner Cable plans are so exciting.
With these plans in the works, but no timetables yet announced, non-cable operators need to be thinking about how they too can gain select distribution rights. There's still a lot of new consumer value to be created in this space. Given lucrative existing affiliate deals between cable networks and cable/satellite/telco operators, I admit this won't be easy. However, Hulu's access to Comedy Central's "Daily Show" and "Colbert Report" does prove it's possible.
We're well into the phase where premium video content is delivered to TVs via broadband. Those that bring distinctive content to large numbers of consumers as easily as possible will be the winners.
What do you think? Post a comment now.
Friday, January 30, 2009, 9:42 AM ET|
The NY Times reported this week that YouTube is in talks with the William Morris talent agency about a possible deal to have some of its clients create videos especially for YouTube.
Nothing's confirmed at this point and who knows if an actual deal will result. However, if one does it would be a major strategy change for YouTube and I believe would create lots of new issues for the company to deal with. YouTube has always insisted that it is not a content creator; rather its goal has been to be a platform partner for premium video providers seeking to get the most out of the broadband medium.
The company has made significant progress on this front while recognizing that its vast collection of user-generated video will always be valued by its users but will be largely unmonetizable. Still, YouTube has been viewed cautiously by large media companies wary of its reach and disruptive potential. There's still lingering concern about why it took so long to get its Content ID system in place to protect its partners' copyrights (lest we forget the residual of that delay is the Viacom lawsuit that still looms).
From my perspective YouTube risks its credibility with its premium partners if the Morris deal happens. It is going to reopen the debate about what YouTube wants to be when it grows up: distribution partner or content creator. Other questions abound: Will the YouTube-Morris content compete directly with certain premium partners? Will the Morris content receive preferential promotional treatment? And how about the risk that data YouTube keeps about its premium partners' channels could be shared with Morris to help guide its content strategy? The questions go on. YouTube may feel it can finesse these questions and/or that its 40% video market share gives it leeway to push the envelope.
I've long thought that YouTube would find it irresistible to eventually get into the content business itself. The logic flows from precedent. For example, in the cable TV world, TCI was once the largest cable operator. It recognized the enormous financial leverage it enjoyed if it evolved beyond simply being packager of others' channels. As partner in channels in which it owned equity, it guaranteed them distribution, which in turn created viewership, ad and affiliate revenues and big-time value. In fact, TCI's content activities were so successful that it ultimately spawned a whole new company, Liberty Media, to manage its programming investments.
Similarly for YouTube, its access to millions of eyeballs creates a lot of temptation to have its own content properties, all the more so as broadband finds its way to the TV. No doubt YouTube has been pitched on this idea repeatedly over the years. But if it chooses to proceed this time it will no doubt hear concerns raised from its partners. Can it be a neutral, committed distribution partner while it also tries to build up its own content portfolio?
Further, there's the specter of Google and its potent monetization engine backing YouTube's content properties, which could also be viewed as competitive with its partners' ad sales efforts. Put all of this together and the potential Morris deal creates lots of new issues. If it comes to fruition it will be interesting to see how YouTube navigates them.What do you think? Post a comment now.(Update 2/3/09 - Since I posted this piece, sources close to the YouTube-Morris deal have reached out to me and explained that the deal will be similar to the Seth MacFarlane-Media Rights Capital deal previously unveiled on Google Content Network. They have also clarified the point I discussed above, saying that YouTube and Google will remain a platform for distributing content, but will not be involved in producing or taking an equity stake in it.
The deal suggests that the Hollywood community continues to think innovatively about how top tier talent can get involved with broadband video. In this case, Morris has a roster of big-name clients and relationships that could be married to the Google Content Network for widespread distribution. No doubt further deals will follow as the model gets further baked. More on this deal and its implications coming soon.)
Tuesday, January 20, 2009, 9:07 AM ET|
Adap.tv and EyeWonder, two key players in the broadband video and rich media ad space are announcing a partnership today, meant to further streamline ad sales and monetization for video content providers. The partnership follows on the deal I wrote about last week between Panache and MTV also highlighting these points.
Particularly given the tough economy, video content providers are focused more than ever on maximizing the value of their inventory with the least possible amount of effort and cost. On the flip side, ad technology companies are trying to figure out how to cover more customer ground more cost-effectively. Inevitably these forces will lead to more partnerships, and likely some industry consolidation. Panache, Adap.tv, Tremor Media and others are among the companies driving the broadband ad market forward. I'll have more news on this front in the coming days.
What do you think? Post a comment now.
Monday, December 8, 2008, 8:03 AM ET|
Brightcove is unveiling "Brightcove Alliance" today, a wide-ranging ecosystem of technology, distribution and solution partners who have integrated with and/or are building applications on the the company's platform. Jeremy Allaire, Brightcove's CEO briefed me last week.
As he explained it, Brightcove 3, the recently released, latest generation of the company's platform, represented a new push on openness and extensibility which are the key requirements for building out an ecosystem. Alliance partner benefits include platform APIs, training, support and improved access to Brightcove's long list of content provider customers through pre-built integrations.
The company is announcing more than 80 partners today, covering just about every aspect of the broadband world. The press release includes supporting quotes from a dozen partners and customers and Jeremy added that many others expressed interest and will be included subsequently.
The only other large and formalized industry ecosystem I'm aware of is thePlatform's Framework program, which was announced last February and added to in September. It now totals over 60 companies and includes some overlapping names with Brightcove.
Having been involved in several alliance programs in the past, my take has always been that the litmus test for their success is whether they generate real revenue for partners. Too often what you get is the initial "Barney" press releases (i.e. "I love you, you love me") but little more in the way of actual new business.
Brightcove has two advantages to help it avoid a similar trap: (1) a lengthy list of existing customers who will likely welcome pre-integrated partner products and services that can be easily and inexpensively accessed and (2) a large group of partners, who, given the lousy economy, will be aggressive in pursuing Brightcove to identify customer opportunities. Brightcove should capitalize on both to expand its market position.
What do you think? Post a comment now.
Thursday, November 6, 2008, 9:58 AM ET|
Over the past several months Netflix has made a series of announcements related to its "Watch Instantly" feature. On the device side, there are new partnerships with TiVo (for Series 3, HD and HD XL models), Microsoft Silverlight (for Mac viewing), Samsung (for Blu-ray players), LG (for Blu-ray players), Xbox 360 and of course Roku. All allow Netflix Watch Instantly content to be delivered directly to users' TVs. Meanwhile on the content side, there have been deals with Starz, CBS and Disney Channel, with more no doubt yet to come.
Our household has been an enthusiastic subscriber to Netflix for years and I welcome the commitment that Netflix appears to be making to Watch Instantly. However, as I pointed out in May, in "Online Movie Delivery Advances, Big Hurdles Still Loom," Watch Instantly is hobbled by its limited catalog, now totaling around 12,000 titles, just 10% of Netflix's total catalog, even after including the recently added Starz titles.
The fundamental problem Netflix is bumping up against in building out Watch Instantly's film catalog is Hollywood's well-established windowing process. Studios have wisely and methodically maximized their films' lifetime financial value by doling out the rights to air them to a series of distribution outlets. These rights unfold in a carefully calibrated timeline and have become wrapped up in a thick layer of contractual agreements extending to all parties in the value chain. It is a system that has served all constituencies well, generating billions of dollars of value. It is also unlikely to change in any material way any time soon.
As such, Netflix, the "world's largest online movie rental service," as it calls itself, is increasingly discordant. On the one hand, growing the Watch Instantly service is crucial to Netflix's long term success in the digital/broadband era but on the other, it doesn't have the ability to offer a competitive catalog that meets consumers' online delivery expectations. So what to do?
My recommendation is for Netflix to incorporate the delivery of TV programming, via Watch Instantly, into its core value proposition. Specifically, Netflix should be making an all-out effort (if it is not already doing so) to secure next-day rights to deliver all prime-time broadcast network programs to its subscribers.
This strategy provides Netflix with many clear benefits and positions it well for long-term success. First, in these tight economic times, it dramatically expands the value of the Watch Instantly feature, turning it into both a bona fide subscriber retention tool to battle churn as well as a high-profile subscriber acquisition lever (not to mention an exciting pull-through offer big box retailers could use in their Sunday circulars to generate traffic).
Second, it is a clever competitive strike against four primary alternative ways whereby consumers can watch network programs on demand: cable-based VOD, a la carte paid downloads at iTunes/Amazon/others, free online aggregators like Hulu/Fancast/others and DVRs (though note the TiVo deal addresses this last option).
A comprehensive Netflix prime-time catalog compares well with each alternative. Against cable VOD it offers familiar, superior navigation plus a viable revenue stream for broadcasters while cable tries to get Canoe ready; against paid downloads, the obvious advantage of being a value-add service; against online aggregators, commercial free delivery; and against DVRs, the lack of consumer hardware purchases and persistent recording space limitations.
All of this should make Netflix a very appealing partner for the broadcast networks. They are getting hammered by ad-skipping, audience fragmentation, quality programming migrating to cable and an inferior single revenue source business model. The prospect of Netflix offering payments for their programs should be well-received. There may be concerns about programs' long term syndication value and also the potential enablement of a new gatekeeper. In better times these might be deal-killers; in this climate they shouldn't be.
Finally, there's the big potential long-term Netflix prize: if it can stitch together a large-scale network of compatible devices for Watch Instantly distribution, it could create a viable "over-the-top" alternative to today's multichannel subscription services (cable/telco/satellite). As I described in my recent "Cord Cutters" post, to really succeed, Netflix would have to eventually incorporate cable network programming. But if its reach is wide and its economics sound, that's within the realm of possibility as well.
But those are long-term issues. For now, while the recent CBS deal is a great start, Netflix should be working double-time to build out a full library of broadcast programs. It would dramatically improve Watch Instantly's appeal and value, while positioning Netflix well for the broadband era.
What do you think? Post a comment now.
Wednesday, October 1, 2008, 8:21 AM ET|
Welcome to October. Recapping another busy month, here are 3 key themes from September:
1. When established video providers use broadband, it must be to create new value
Broadband simultaneously threatens incumbent video businesses, while also opening up new opportunities. It's crucial that incumbents moving into broadband do so carefully and in ways that create distinct new value. However, in September I wrote several posts highlighting instances where broadband may either be hurting existing video franchises, or adding little new value.
Despite my admiration for Hulu, in these 2 posts, here and here, I questioned its current advertising implementations and asserted that these policies are hurting parent company NBC's on-air ad business. Worse yet, In "CNN is Undermining Its Own Advertisers with New AC360 Live Webcasts" I found an example where a network is using broadband to directly draw eyeballs away from its own on-air advertising. Lastly in "Palin Interview: ABC News Misses Many Broadband Opportunities" I described how the premier interview of the political season produced little more than an online VOD episode for ABC, leaving lots of new potential value untapped.
Meanwhile new entrants are innovating furiously, attempting to invade incumbents' turf. Earlier this week in "Presidential Debate Video on NYTimes.com is Classic Broadband Disruption," I explained how the Times's debate coverage positions it to steal prime audiences from the networks. And at the beginning of this month in "Taste of Home Forges New Model for Magazine Video," I outlined how a plucky UGC-oriented magazine is using new technology to elbow its way into space dominated by larger incumbents.
New entrants are using broadband to target incumbents' audiences; these companies need to bring A-game thinking to their broadband initiatives.
2. Purpose-driven user-generated video is YouTube 2.0
In September I further advanced a concept I've been developing for some time: that "purpose-driven" user-generated video can generate real business value. I think of these as YouTube 2.0 businesses. Exhibit A was a company called Unigo that's trying to disrupt the college guidebook industry through student-submitted video, photos and comments. While still early, I envision more purpose-driven UGV startups cropping up in the near future.
Meanwhile, brand marketers are also tapping the UGV phenomenon with ongoing contests. This trend marked a new milestone with Doritos new Super Bowl ad contest, which I explained in "Doritos Ups UGV Ante with $1 Million Price for Top-Rated 2009 Super Bowl Ad." There I also cataloged about 15 brand-sponsored UGV contests I've found in the last year. This is a growing trend and I expect much more to come.
3. Syndication is all around us
Just in case you weren't sick of hearing me talk about syndication, I'll make one more mention of it before September closes out. Syndication is the uber-trend of the broadband video market, and several announcements underscored its growing importance.
For example, in "Google Content Network Has Lots of Potential, Implications" I described how well-positioned Google is in syndication, as it ties AdSense to YouTube with its new Seth MacFarlane "Cavalcade of Cartoon Comedy" partnership. The month also marked the first syndication-driven merger, between Anystream and Voxant, a combination that threatens to upend the competitive dynamics in the broadband video platform space. Two other syndication milestones of note were AP's deal with thePlatform to power its 2,000+ private syndication network, and MTV's comprehensive deal with Visible Measure to track and analyze its 350+ sites' video efforts.
I know I'm a broken record on this, but regardless of what part of the market you're playing in, if you're not developing a syndication plan, you're going to be out of step in the very near future.
That's it for September, lots more planned in October. Stay tuned.
What do you think? Post a comment!
Monday, August 25, 2008, 5:08 PM ET|
Move Networks will officially announce tomorrow morning that Microsoft has joined its Series C round as a strategic investor. The $46 million round was unveiled last April and was led by Benchmark Capital. The two companies also recently announced that Move would be integrated with Microsoft's Silverlight media player. The curtain on this first example of their integration is going up momentarily as the companies have also announced they're powering the video feed from the Democratic convention at http://www.demconvention.com/.
With the convention video, Microsoft continues the momentum Silverlight generated during the just-wrapped up '08 Summer Olympics. Meanwhile Move burnishes its reputation for high-quality delivery gained through deals with ABC, Discovery, Fox and others. These two are natural partners.
Monday, August 18, 2008, 10:10 AM ET|
More news today in the fiercely competitive video management, publishing and delivery space. KickApps, a social media platform provider and Akamai, the leading content delivery network, have announced a partnership integrating KickApps's Video Player Studio with Akamai's Stream OS video management system. On Friday I spoke to Michael Chin, KickApps's SVP of Marketing to learn more about the joint offering's benefits.
I look at this deal as a front-end/back-end marriage, bringing together the two companies' complimentary capabilities as they seek to stake out new advantages in this market. KickApps, which has a roster of media companies, sports teams and others using its turnkey social media applications, has recently released its Video Player Studio, enabling customers to build on-demand customized video players for their sites.
Meanwhile Akamai's Stream OS has been focused on the back-end tasks of video management and publishing, such as uploading/storing/editing video and metadata, distributing video through managed RSS feeds, and controlling syndication through business rule creation and geo-targeting.
Michael sees the joint offering's key differentiators as comprehensive out-of-the box functionality, improved flexibility/time to market and integrated social media features (rating, tagging, commenting, etc.).
KickApps is also counting on financial benefits to lure customers. It uses pay-as-you-go CPM-based pricing vs. the typical platform license fee model used by others. Large media companies usually buy out their entire KickApps-generated inventory at an agreed-upon CPM, while smaller companies stick to an ad revenue share approach. Another financial lever in the deal is that KickApps has negotiated very favorable CDN pricing from Akamai, which gives it more pricing flexibility for customers.
Michael believes that between the broader feature set and pricing advantages, the KickApps-Akamai joint offering will be well-positioned to appeal to customers of competitors like Brightcove, Maven (Yahoo) and thePlatform (Comcast), not to mention smaller players in the space who have narrower feature sets.
The KickApps-Akamai partnership continues to raise the competitive bar in this space. These are important, real differentiators the companies are using. That said, this space is very fluid, and in the coming weeks there will be at least 3 other companies which I've spoken to recently which will raise the bar in still other ways. This is a space that continues to evolve, as customer needs shift and their revenue pressures intensify. More news coming soon.
What do you think? Post a comment now.
(Note: Akamai is a current VideoNuze sponsor and KickApps is a former sponsor)
Friday, June 27, 2008, 9:11 AM ET|
Yesterday came a further positive sign that user-generated video may be elevated from the domain of karaoke-singing cats, faux-skateboarding accidents and exploding soda bottles.
That positive sign was MySpace, NBC and MSNBC's announcement of a new citizen journalism initiative dubbed the "Decision '08 Convention Contest." In it, MySpace users are encouraged to submit short videos answering one of three questions, "Why do you vote?" "Why are you the best person for this job?" or "How will you stand out in the crowd and get the scoop no one else can?"
The submissions will first be judged by a panel of experts from MySpace and NBC, with five finalists revealed for the MySpace community to vote on. Two winners will be selected, one to attend the Democratic convention this summer, and the other to attend the Republican convention.
To learn more about the contest and the motivations behind it, yesterday I spoke to Liba Rubenstein, MySpace's Manager of Public Affairs, who is essentially the product manager for the IMPACT channel, MySpace's hub for civic and social engagement. Liba explained that MySpace has used this type of contest frequently, and to much success. MySpace community members love getting involved and expressing their creativity. The two level judging process is meant to balance the experts' high editorial standards with members' passion and enthusiasm. Liba added that in particular MySpace and NBC are gaining insights about how to fuse traditional media with web 2.0. (And in a classic "doing well by doing good" vein, maybe NBC will discover the next Tim Russert in the contest.)
I like the Decision '08 contest for a variety of reasons. First and most importantly, it allows UGV to be directed to an important social use: increasing citizens' involvement in the democratic process. In this way it continues on what YouTube's YouChoose '08 pioneered by allowing its users to upload video questions in the recent primary debates. It may sound somewhat idealistic, but I really like the notion of broadband video doing its part to strengthen the functioning of America's democracy - even more so as we approach July 4th in this election year.
Further, I think the convention contest provides an example for how others outside the political realm might consider harnessing the creativity and passion of their members to use UGV in a directed purpose. One example that comes right to mind is in the education field. For example, wouldn't it be cool if educators uploaded UGV of themselves in action, explaining and demonstrating their proven teaching methods? I got a glimpse of some of this happening already, while doing a project last summer for the George Lucas Educational Foundation. There's no shortage of other examples.
There has been much hand-wringing about whether UGV can ever be monetized through advertising, a debate that will no doubt rage on. Alternatively, I for one would like to see more energy put into purpose-driven UGV projects like the MySpace-NBC convention contest. While I enjoy the cats, skateboarders and soda bottles as much as the next guy, I continue to believe the UGV medium can ultimately be so much more.
What do you think? Post a comment now!
Wednesday, April 9, 2008, 8:40 AM ET|
You'd have to have slept through yesterday to miss the big news that ESPN is now syndicating video clips from a cluster of its programs to AOL, its first-ever such deal. I interpret the deal as an extremely strong indicator that the "Syndicated Video Economy" (as I described this trend 3 weeks ago) is inexorable, even for the richest and most powerful video brands.
ESPN is one such brand. In 2007 it generated 1.2 billion video views from its own site, placing it in the top 10 of all sites. In January '08, ESPN generated 81 million views according to comScore, ranking it #9. And much of ESPN's broadband video (aside from what it shows exclusively on ESPN360, its online subscription service) is essentially re-purposed from on-air, likely making the margins on ESPN's online efforts insanely profitable.
Yet with the AOL deal, even the mighty ESPN has now capitulated to the lure of the syndicated video model. And the AOL deal is surely the first of many more deals to come. ESPN has likely come to the same conclusion as have scores of other video content providers, including the major broadcast networks: the future broadband video value chain is going to be more about "accessing eyeballs" - wherever they may live, at portals, social networks and devices - than about "acquiring eyeballs" by driving them to one central destination site. As the most stalwart proponent of the latter approach, other market participants should take heed of ESPN's strategy change.
The motivation behind video providers shifting from traditional scarcity-driven distribution strategies lies in the peculiar dynamics of the Internet: while audiences continue to fragment to a bewildering range of sites, they are simultaneously coalescing in a relatively small number of influential new brands such as YouTube, MySpace, Facebook and the traditional portals. Consider the comScore January stats again. The Google sites (dominated by YouTube) drove 3.4 billion video views or 42 times ESPN's video volume. A distant second was the Fox Interactive Media sites, including MySpace, which drove 584 million views, still 7 times ESPN's total.
These dynamics incent established video providers and startups in particular to get their video in front of all those eyeballs with more flexible business models. (For those interested in more detail on how the video distribution value chain is fast-changing due to these emerging players, I've posted slides from late '07 here. I'll have updated slides soon.)
The "Syndicated Video Economy" is creating both unprecedented opportunities and challenges for video providers. I continue to believe the future winners will be relentlessly flexible and willing to adopt new business approaches that keep them in synch with evolving consumer behaviors.
Monday, April 7, 2008, 1:05 PM ET|
Enabling managed syndication is becoming an imperative for video management platforms like Brightcove as customers increasingly seek to proliferate their content to multiple distributors. In particular, social networks like Bebo and others are prime syndication targets. They have huge and highly engaged users who can drive huge volumes of video streams.
However, syndication raises a host of new operational issues, which in turn creates an opportunity for companies like Brightcove to add value to their platforms. Issues include rights management, monetization, tracking/reporting, business model implementation and others. Syndication is an exciting new push for many, but is already starting to pay off. One recent example is CBS Television Stations, which now derives more than 50% of its total monthly streams just through its syndication deal with Yahoo.
(Note: Brightcove is a VideoNuze sponsor)
Thursday, March 13, 2008, 7:57 AM ET|
Hurray for TiVo and YouTube, which yesterday announced a partnership to allow certain TiVo users to watch YouTube videos on their TVs. While the actual number of homes which have the right TiVo model and have it connected to broadband numbers under a million, TiVo-YouTube shows there is still hope that the worlds of broadband video and TV will indeed converge.
Some of you will remember that in December '07 I wrote a post entitled "Broadband Video on TV is a Mirage" in which regrettably concluded that the mass availability of broadband video on TVs was nowhere on the horizon. In that post I wrote:
"The minority of consumers who will actually see broadband video on their TVs will either (1) shell out big bucks to buy a broadband appliance such as Vudu or Apple TV, (2) tackle the challenge of connecting their TVs via wireless networks (3) use a device built for another primary purpose, such as Xbox 360 or TiVo, to selectively augment their viewing with broadband-delivered choices or (4) use a service provider that has decided to throw in a few morsels of broadband video."
With the YouTube deal, TiVo continues to deliver on option 3, augmenting an already impressive array of broadband video available on select TiVo models. TiVo enhances its overall reputation for innovation (although still absent resounding market success or profitability), with a particular focus on broadband video. TiVo has previously offered up Amazon Unbox, TiVoCast, Music Choice, Home Movies, etc. Providing access to YouTube, the world's most popular video site, is another notable accomplishment for TiVo.
I continue to believe that whichever company cracks the code on how to deliver wide open broadband video access to the TV - coupled with a strong user experience - is going to hit it big. At the risk of looking too far backward, at the end of 2006 I conjectured that Apple's then still-to-be-launched Apple TV product could be a resounding success if it got the content strategy right (i.e. offering open broadband access and even focusing particularly on easy YouTube access through the device). Instead Apple TV has turned into yet another walled garden and to date has been a market failure. Apple continues to miss the open broadband market opportunity which is sitting right in front of it with a big bulls-eye plainly visible.
The TiVo-YouTube partnership will hopefully have the effect of accelerating the wake up call to other market participants that this gigantic opportunity awaits. Broadband video to the TV is a natural. It simply extends the cable/satellite model of the last 30 years: offering ever more video choices right to the TV.
As I've often said, as amazing as the growth curve has been for broadband video consumption over the last 5 years, even more amazing is that virtually all of this consumption has happened on the computer - a completely parallel world to the traditional TV viewing platform. Nobody could have imagined this level of consumer adoption for a non-TV viewing platform. So then look forward and imagine the possibilities when broadband video and the TV are fused for the masses.
Wednesday, January 23, 2008, 9:50 AM ET|
Yesterday TiVo and Comcast announced that their joint service offering, known as "Comcast DVR with TiVo" is now available to Greater Boston residents. The announcement comes almost 3 years since the partnership was announced. Multichannel News recently reported that Comcast has funded $24 million of co-development work to date. I have had the service since late October as part of the beta test, but the companies had asked me to stay mum until its official launch.
The first thing to know about this new service is that it really is familiar, lovable TiVo inside a Motorola cable set-top box. I am a long-time TiVo Series 2 owner, and as best I can tell all of the core TiVo features are available (e.g. Season Pass, Wish List, Suggestions) along with the inimitable TiVo blooping sounds effects. The box has a dual tuner so you can record one show while watching another. The navigation also incorporates all of Comcast's VOD selections, so all linear and VOD programs are considered in your searches. It's an HD-capable box, which can hold 15-20 hours of HD video. The peanut-shaped remote control is virtually unchanged.
What's not included are all the wonderful broadband features (e.g. TiVoCast, Amazon Unbox, Rhapsody, Music Choice, Photos, Home Movies, etc.) and network features (e.g. remote scheduling, whole house service). The absence of broadband content (CNET, The Onion, NY Times, etc.) in particular will be missed. TiVo has gradually been introducing this over the last couple years. I've written a lot about broadband-to-the-TV solutions recently, and TiVo's approach has been very solid. However, Comcast obviously wanted to retain strict control over what video gets pumped into the set-top box. I have discussed this "closed" vs. "open" mindset earlier - hopefully something that will change down the road.
The service itself has mostly worked well. There were some initial hiccups requiring the Comcast service techs to return to the house and for me to call in for service. There are a few small issues that have persisted. These include periodically getting a green screen which requires me to turn the box on and off. I can't continuously lower the volume or change channels by suppressing the appropriate button on the remote control (this is possibly a TV-specific issue). I also find the service just a little less responsive than my Series 2 box - my fingers have had to adjust their muscle memory somewhat when working the familiar remote control. None of these are deal-breakers, but I do intend to have Comcast come out a take a look one of these days.
Comcast has priced the service at $2.95/mo, on top of its plain vanilla DVR service fee of $12.95/mo. I continue to believe that for consumers this proposition makes a lot of sense when compared with buying a standalone Series 3 box. It's a $3 delta over paying the monthly service charge directly to TiVo, but you avoid buying the Series 3 box (about $600 street price around $400) and potential maintenance and obsolescence issues. And it means one less box in your rack. The downside is the missing TiVo features described above.
If Comcast markets the TiVo service aggressively and correctly I think they can shift a lot of current DVR subscribers over plus add plenty of new ones down the road. It's a meaningful competitive advantage for a company caught up in a brutal battle with satellite and telco competitors. For TiVo, which has also done a deal with Cox (and others in the future presumably), it's a great shot at migrating itself out of the hardware business, into software and solutions.
Thursday, January 10, 2008, 9:39 AM ET|
CES 2008 broadband video-related news wrap-up:
NETGEAR® Joins BitTorrent™ Device Partners
Categories: Advertising, Aggregators, Broadband ISPs, Broadcasters, Cable Networks, Cable TV Operators, Devices, Downloads, FIlms, Games, HD, Mobile Video, P2P, Partnerships, Sports, Technology, UGC, Video Search, Video Sharing
Wednesday, January 9, 2008, 10:02 AM ET|
Among the many partnership announcements at CES this week, there are a number worth highlighting. Today I focus on the following three:
Viacom syndication - Viacom announced syndication deals for MTV Networks' stable of content with five leading broadband video sites: Dailymotion, GoFish, Imeem, MeeVee and Veoh. As those of you who have been following my previous posts know, I believe syndication is a critical engine in driving the advertising business model, which itself is the key to broadband video succeeding. As a result, I follow these syndication deals closely.
I've previously been critical of MTVN which appeared reluctant about syndicating its content when it launched its DailyShow.com destination site. However, with its recent deal with AOL, and now these five deals, it appears that MTVN does in fact believe syndication is the way to go. As one of the biggest cable network groups, MTVN is a key barometer for other networks' moves, so I view this as a real positive for the market.
Panasonic/Google - In this deal, Google and Matsushita announced that YouTube videos and Picasa photos would be directly accessible on new model Panasonic HDTVs launching in Q2 '08. Ordinarily I wouldn't be too excited about a deal like this, a permutation of which we've seen with other TV makers such as Sony.
Yet this one rises in potential importance because YouTube is not just the most popular video site - with 40% of all video traffic - but because Google is determined to turn YouTube into a platform for legitimate content distribution. This was underscored by the Sony mini-sode deal also announced this week, and the many partnerships YouTube has already struck with premium content providers. If successful (and there are many if's to be sure), YouTube would be far more than a scraggly collection of UGC. So, marry a broad-based premium video aggregator to HDTVs and you could see a new device/content model emerge.
BitTorrent device deals Netgear and D-Link - In a less publicized move, BitTorrent announced expanded deals with Netgear and D-Link covering a range of home networking products, with an emphasis on HD distribution. BitTorrent, which has been steadily legitimizing itself from its P2P file-sharing roots, has launched an aggressive SDK program called BitTorrent Device Partners, intended to permeate the market with its client software. BitTorrent also integrates easy access to its digital download store with these partners as well.
While I'm not very bullish about the market potential of bridge devices from companies like Netgear and D-Link, I do believe that P2P distribution has a real role to play in content distribution, especially for heavy HD files. I continue to see P2P as more of a "peer assist" play. To the extent that BitTorrent can continue getting its software into multiple devices, it gains validation and strengthens its potential to be a meaningful partner in the larger content distribution ecosystem.
Share your thoughts on these deals, and suggest others you think are noteworthy from CES!
Monday, January 7, 2008, 9:52 AM ET|
Microsoft grabbed the early PR spotlight at the Consumer Electronics Show (CES), now underway in Las Vegas, announcing a variety of deals across the broadband video spectrum. The deals, announced by Bill Gates in his traditional night 1 keynote, reinforce Microsoft's intentions to play multiple roles in what Gates calls the "first true Digital Decade."
Here's a look at Microsoft's deals and why they matter:
NBCU 2008 Olympics on MSN, using Silverlight
Microsoft and NBC, which has the broadcast rights to the '08 Summer Games from Beijing, announced that MSN would be the exclusive partner for NBCOlympics.com including thousands of hours of live video coverage, and that Silverlight, which is Microsoft's "Flash-killer", would be used. As I mentioned in my "6 Predictions for 2008", the '08 games are going to be the biggest broadband video event yet. The deal gains MSN lots of traffic and Silverlight lots of exposure and downloads, not to mention serious validation as a live streaming platform if it executes well.
ABC/Disney and MGM content on XBox LIVE
In a further move to bolster the premium-quality content available in XBox LIVE (the content offering that accompanies XBox 360), Microsoft announced that both ABC/Disney and MGM would now be providing both SD and HD content. These moves bring XBox LIVE's catalog closer to parity with iTunes, while keeping up the competition with Amazon Unbox and other stores. Separately, Microsoft said that XBox racked up 17.7 million units sold during the '07 holiday season.(correction, Microsoft press release misstated this number. Holiday sales were actually 4.3 million units, bringing cumulative units sold to date to 17.7 million, thx Karl)
XBox users have been remarkable active purchasers and downloaders using XBox LIVE, and previous briefings I've conducted with XBox executives suggest that the initiative has been particularly successful with HD. Since Xbox is purchased primarily as a gaming platform, it serves as a great Trojan horse opportunity for Microsoft to gain broadband access to the TV. Meanwhile, XBox LIVE has served as the deal unit for Zune's library as well, so these moves are important to watch as they benefit Microsoft's efforts to dislodge iPod from its perch as the leading digital media player. Only disappointment here is no ad-supported counterpart was announced for ABC programs, leaving AOL as ABC's only announced broadband syndication partner, as best I can tell.
BT and XBox 360 Integration
Microsoft leveraged Xbox 360 for another convergence play, announcing with BT that the company's "BT Vision" IPTV service would be available for XBox 360 owners as an integrated service offering. This means that no separate set-top box would be required for BT Vision subs. Though the box won't roll out until mid '08, this concept has compelling upside for both sides and could be a nice blueprint for future IPTV deals. It eliminates set-top capex for BT, while providing strong marketing benefits to both parties, helping drive broadband/TV convergence on the back of the popular XBox gaming console.
Showtime, TNT and CNN with new apps on Mediaroom, Samsung supporting Extender
Elsewhere, Microsoft announced that Showtime, TNT and CNN would be creating new apps for Microsoft's Mediaroom IPTV platform, which it says is now installed on 1M set-tops globally. And lastly, that Samsung will support Extender for Windows Media Center, which means that HD content can be sent over wired or wireless-N networks from PC to TV. Extender hasn't caught on yet, but Microsoft is continuing to push it as a bridge device. I've yet to test it, but have that on my list of to-do's.
Taken together, these announcements from Microsoft show the company's vast resources allow it to play a role in all aspects of the broadband era - software, devices, services, content, gaming, etc. Less pronounced in these deals was the company's recently added online advertising prowess, which will soon be applied to broadband video as well. Stay tuned for news on this front as '08 unfolds.
Friday, January 4, 2008, 10:25 AM ET|
Yesterday's announcement by Netflix and LG Electronics that they are partnering to develop a new set-top box generated a lot of coverage. For me the deal shows at least 2 things. First, there is an endless reservoir of optimism concerning consumers' willingness to adopt standalone devices for broadband-delivered video. And second, that Netflix, which has been all over the board in the last couple years in trying to define a broadband delivery strategy, has seemingly made yet another misstep in this critical area.
Regarding the optimism about standalone devices, as many of you know, I recently wrote about this in a post entitled "Broadband Video on TVs is a Mirage" in which I concluded that these broadband appliances are unlikely to gain widespread market appeal. Though little information was revealed about the Netflix-LG box, for now, I don't see any reason to believe that this new box will be an exception to the logic I laid out in that post. At best I view standalone broadband appliances (e.g. AppleTV, Vudu, Moviebeam, Akimbo, etc.) as appealing to only a small sliver of consumers.
My logic applies to Netflix-LG as follows: how many people are realistically going to shell out $400 (assumed price) for a new box, plus spend the time involved to install it, when the principal benefit is to be able to watch a small subset (6K out of Netflix's current 90K catalog) of content Netflix already makes easily available on the robust DVD format? I'd say maybe 10% of Netflix's current base of 7 million, max. That would be 700K boxes TOTAL - hardly the kind of numbers that make a CE executive's eyes pop.
A greater issue is that this new box seems to represent just the latest in a pattern of dubious moves by Netflix, coupled with poor communications, regarding how it intends to gracefully migrate from its current DVDs-through-the-mail approach to succeed in the broadband era.
For the last two years Netflix has publicly appeared to jump from one broadband approach to the next. For example, yesterday's box announcement was accompanied by news that Anthony Wood, whom Netflix brought on board just 8 months ago as its V.P. of Internet TV, would be departing from the company, reversing Netflix's previous plan of developing its own box (which itself was an ill-considered idea).
The LG box approach continues Netflix's pattern of cloudy planning and communications. On a day that should have been all about articulating why this new co-developed LG box is, at last, the correct approach, Reed Hastings, Netflix's CEO seemed to veer completely off message in his remarks to the NY Times, stating that "We want to be integrated on every Internet-connected device, game system, high-definition DVD player and dedicated Internet set-top box. Eventually, as TVs have wireless connectivity built into them, we'll integrate right into the television."
Huh? If this "Netflix-everywhere" approach is instead the real strategy, then why put out the LG press release at all, much less specifically say in the first sentence that Netflix is "joining forces to develop a set-top box." If the company is really interested in an "everywhere" approach, then it should have announced a group of partnerships to validate Mr. Hastings's aspiration and stayed away from the notion that it would co-develop any particular model. A Netflix investor is left wondering, yet again, what is Netflix's real game plan, how it will allocate its finite resources and how it will leverage its brand equity to succeed in the broadband world?
My sense is that Netflix seems to have a bias that it needs to be intimately involved in hardware development, rather than partnering widely and relying on the market to sort things out. Netflix should follow TiVo's recent (and correct, I believe) approach in trying to "piggyback" on top of devices as they're deployed and gain market traction. Starz is yet another example of a content provider staying agnostic, correctly forming partnerships with various device manufacturers for its Vongo service, while steering clear of embracing any particular approach. While Mr. Hastings hints that Netflix wants to do exactly this in his remarks, the LG announcement undermines this strategy, if it can even be called that.
Netflix has assiduously built one of the best brands in subscription entertainment. Its task now is to leverage that brand in the broadband era. Regrettably, yesterday's LG announcement provides little evidence that the company has finally formed a winning plan. With competitors all around it, Netflix needs to get this right sooner rather than later.
Agree or disagree with my assessment? Post a comment and let everyone know!
Wednesday, December 12, 2007, 6:17 PM ET|
I was very happy to see news today of MTVN striking a big video syndication deal for its multiple networks' content with AOL Video.
Recently I praised Comedy Central's launch of TheDailyShow.com, but I took it to task for what appeared to be a destination-centric strategy, which was further supported by some executives' remarks. In this age of syndication, I thought that was a wrong-headed approach. Coupled with Viacom's misguided lawsuit against Google/YouTube, it felt like further evidence that MTVN was falling out of step with key broadband opportunities.
Today's news shows renewed hope that this may not be the case. I know these deals don't get done in a day, but I'd really like to see more syndication momentum from MTVN (and other content providers for that matter) to spread its content far and wide. Broadband Internet users don't expect to have to go to destination sites to get their favorite videos, they want them accessible where they already frequently visit. Hulu and CBS, to name two content providers that are solidly focused on syndication understand this, as do many others.
Thursday, November 29, 2007, 7:33 AM ET|
If you're sitting on a video archive and looking to monetize it more fully with an immersive broadband user experience, it's well worth checking out.
I have been very bullish on broadband's ability to create libraries of searchable segments carved out of longer-form programming. That's one of the reasons I was excited about Comedy Central's recent launch of TheDailyShow.com, which is packed with 19,000 clips from all of the show's episodes. However, Comedy Central 'fessed up that it took a team of 16 working double shifts over many months to create the site's clip library. This labor intensity shows that monetizing an archive has been a non-trivial pursuit.
And that's where Gotuit's solution comes in. Yesterday I got an update from Patrick Donovan, their VP of Marketing, about the XONtv deal.
First, to understand Gotuit (to which I am a minor advisor), the company has created an indexing work flow platform that allows entry-level staffers to quickly churn out clips using metadata guidelines developed by the specific content provider. Each segment has a title, a text description, a series of customizable preset attributes (or tags), thumbnails and time-code start/stop points.
One thing that's critical to understand is that Gotuit-powered clips are really "virtual clips." When a user accesses a clip, the Gotuit platform is making an XML call to the CDN to begin streaming from the original video file at the time-code starting point. So no new tangible clip asset has actually been created in the Gotuit workflow. That means that unlike TheDailyShow.com, which now has 19,000 new assets to manage (likely created using standard video editing software), with Gotuit, there are new no "assets", just files with metadata descriptors. Needless to say, this approach drastically simplifies ongoing management, especially for content providers with vast libraries. By following the metadata guidelines, playlists can be created which allow multiple entry points into each video segment.
XOXtv partnered with Gotuit as a service provider, shipping Gotuit 300+ hours of XONtv's video programming. Gotuit took about 1 1/2 weeks to crank out all the clips. At the XONtv site you'll see 13 "channels", each of which is then sub-divided into programs, "episodes" and the segments themselves. All content is in the clear right now, soon XONtv will be pursuing a subscription-based business model.
Other benefits of the Gotuit approach include no buffering, full-screen option, embedding, bandwidth detection and sequential play-out. All of this means a more immersive experience, driving more viewership and value. On the monetization side, Gotuit has integrated with a number of broadband ad management/servers, and obviously offers rich targeting against specific segments otherwise unavailable. Alternatively, as XONtv intends, paid models are also supported.
Gotuit can work as a service bureau for the content provider or license the platform and let the content provider use their own resources to index their video. (I happen to believe this would be a perfect off-shore project, with the right training). In either service bureau or license model Gouit charges an ongoing platform fee plus usage fees tied usually tied to video consumption. Beyond XONtv, Gotuit has announced deals with Fox Reality, SI.com, NHL.com and others.
The XONtv implementation is a great reminder of how broadband enables deeper user engagement, business model flexibility and re-use opportunities never before possible. Wrap a robust social/community-building suite around this and the value proposition for content providers becomes even stronger.
Monday, November 19, 2007, 10:16 AM ET|
Does TV programming beget broadband video programming or is it the other way around?
If you were expecting a simple answer, recent evidence suggests that none will be forthcoming. Step away from the relatively straightforward model of streamed or downloaded TV episodes, and the question of how original video content will be produced and distributed between broadband and TV is whole lot more complicated. Layer on the writers' strike and the world only fogs up further.
For those who see broadband as a pathway to TV, Quarterlife's deal announced last Friday with NBC to bring their new Quarterlife series to the network following its run on MySpace offers encouragement that Internet programming can move to the TV (bear in mind that Quarterlife was originally pitched as a TV series however).
Another example is TMZ.com, which has been successfully syndicated as TMZ TV this fall by Warner Bros. TMZ shows us that a brand that was created and built solely online can make the leap to TV. And just last week TV Week reported that Twentieth Television and Yahoo were close to a deal to create a new syndicated series based on popular broadband videos that they've collected.
On the flip side, there is plenty of evidence of opportunities for TV programs spinning off broadband programming, or existing TV producers with assets and skills pushing into broadband as a first outlet for their work.
Consider Sony's Minisode Network, with distribution on MySpace, Joost, AOL and Crackle. In an effort to squeeze more life out of its library of classics, in June Sony launched abbreviated versions, for broadband "snacking". This initiative is being closely watched as a model for how to repurpose existing assets to make them more palatable for attention-challenged online audiences.
And Endemol's recent deal with Bebo to produce "The Gap Year" series for exclusively for Bebo's audience shows that a successful TV producer is turning its sites on broadband as a first outlet.
All of these deals underscore broadband's disruptive nature - its ability to create new opportunities for incumbent players, and also for new entrants. My read is that most (though not all) broadband producers would love to make the leap to the TV. In the mean time, broadband offers a low-cost, interactive distribution path to experiment with more engaged audiences.
Many key industry players are now waking up to the idea that broadband is fundamentally re-writing traditional equations of how to extract value from well-produced video. But these equations are not yet well-understood. Some of the early deals, as outlined above, will be showing everyone the way.