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  • VideoNuze Podcast #218 - More Signs That Online Video is Coming of Age

    I'm pleased to present the 218th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia. Both of us have continued to observe signs of how online video is coming of age, and today we discuss some of them.

    We start with news that Comcast will begin selling episodes of "House of Cards" in its Xfinity online store. Putting aside the question of why someone would buy an episode for $1.99 when they could binge-view all 26 episodes in a month for $7.99, both of us thought it's noteworthy that the largest cable operator believes an online-only series is worth selling (and note too, the deal was done with Sony Pictures, and that Verizon also has been selling the series).

    Then there was the report that Disney might acquire Maker Studios, a pure-play online video / YouTube content provider. While Colin and I get a chuckle out of the idea that the Disney flag could fly over Epic Rap Battles and PewDiePie, we agree it would be a smart bet to gain reach into the all-important millennial segment.

    Then we turn to the $18 million investment by Warner Bros. in Machinima, an online video gamer-centric content creator also targeting millennials. The 2 companies already had a successful collaboration with the "Mortal Kombat: Legacy" web series. No doubt the new investment will spur more gamer-centric originals for distribution by Warner Bros.

    We wrap up by discussing just how important millennials are to the video's future. Recent data suggest this group is still pretty glued into the pay-TV ecosystem, but their behaviors are changing fast, in turn leading established media companies to focus on online video more than ever.


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  • Premium VOD is a Train Wreck Though It Just Doesn't Matter

    Yesterday marked the official launch of "Premium VOD" by DirecTV, a plan under which movies will be released just 60 days after their theatrical opening (half the usual time) for 48-hour rental by subscribers for $30. The first movie being offered this way, which DirecTV dubs "Home Premiere," was Sony Pictures' "Just Go With It" starring Adam Sandler. Three other studios, Warner Bros., Universal Pictures and Fox have already signaled their intent to release movies on Premium VOD with DirecTV and other pay-TV operators who have expressed interest.  

    Theater owners and the Hollywood creative community are livid about Premium VOD, which they perceive as paving the road to cannibalizing theatrical attendance which would in turn harm a movie's overall economics, creating a dangerous downward spiral. In addition, there's concern that if consumers switch to watching movies on the small screen then the creative license implicit in a big screen emphasis will get squeezed. While their concerns are completely justified, the good news for them is that Premium VOD will be lucky to achieve even minimal success. Instead it will more than likely end up being a short-lived experiment that will have virtually no impact on larger Hollywood dynamics. Here's why:

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  • Sony Pictures Taps Value of Archive With Thought Equity's Metadata Editor

    Major content providers are continuing to realize that new value can be mined from archives of long-form premium content by creating and indexing metadata in order to distribute shorter clips of key scenes. The latest example came this week as Sony Pictures Entertainment struck a deal with Thought Equity Motion to use its T3 Metadata (screen shot below) for its enormous catalog of entertainment content.

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  • iTunes Film Deals Not a Game-Changer

    In the last few days there's been a lot of attention paid to Apple's deals with Disney, Fox, Warner Bros, Paramount, Universal, Sony, Lionsgate, Imagine and First Look Studios giving iTunes day-and-date access to these studios' current films.

    As an advocate of the broadband medium, naturally I'm delighted to see studios put broadband distribution on a par with DVD release. The deals should rightly be interpreted as another step in the maturation of the broadband medium.

    However, these deals, in and of themselves, do not constitute a game-changing event for paid downloads of feature films. That's because until there's mass connectivity between PCs and TVs and much-improved portability, consumers' willingness to buy is going to be significantly muted. Consumers' inability to easily watch a feature film on their widescreen TV or easily grab-these- movies-to-go (as with DVDs) are a huge drag on the download value proposition, easily swamping its new convenience benefits.

    I believe that lack of mass connectivity between PCs and TVs is the last major hurdle to unlocking broadband video's ultimate potential. It is also the firewall that's preserving a lot of incumbents' business models (cable operators, broadcasters, etc.). No question, Apple and iTunes are powerful marketing partners for the studios, and their download revenue will certainly increase from its current modest base. But not even Apple's mighty brand (and certainly not its anemic AppleTV device) is enough to compensate for broadband's current deficiency.

    The good news is that there's a frenzy of energy directed at solving the PC-to-TV connectivity issue. Though no approach has yet broken through, I'm still betting it's only a matter of time until one does. When that happens, studios will reap the major benefits. Until then, these deals represent progress, but not game-changing events.

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