May '08 VideoNuze Recap - 3 Key TopicsMonday, June 2, 2008, 8:57 AM ET|
Looking back over two dozen posts in May and countless industry news items, I have synthesized 3 key topics below. I'll have more on all of these in the coming months.
1. Broadband-delivered movies inch forward - breakthroughs still far out
In May there was incremental progress in the holy grail-like pursuit of broadband-delivered movies. Apple established day-and-date deals with the major studios for iTunes. Netlix and Roku announced a new lightweight box for delivering Netlix's "Watch Now" catalog of 10,000 titles to TVs. Bell Canada launched its Bell Video Store, complete with day-and-date Paramount releases, with others to come soon. And Starz announced a deal with Verizon to market "Starz Play" a newly branded version of its Vongo broadband subscription and video-on-demand service.
Taken together, these deals suggest that studios are warming to the broadband opportunity. This is certainly influenced by slowing DVD sales. Yet as I explained in "iTunes Film Deals Not a Game Changer" and "Online Move Delivery Advances, Big Hurdles Still Loom" broadband movies are still bedeviled by a lack of mass PC-TV connectivity, no real portability, well-defined consumer behavior around DVDs and the studios' well-entrenched, window-driven business model. Despite May's progress, major breakthroughs in the broadband movie business are still way out on the horizon.
2. Broadcast TV networks are embracing broadband delivery - but leading to what?
Unlike the film studios, the broadcast TV networks are plowing headlong into broadband delivery, yet it's not at all clear where this leads. In "Does Broadband Video Help or Hurt Broadcast TV Networks" and "Fox's 'Remote-Free TV': Broadband's First Adverse Impact on Networks?" I laid out an initial analysis about broadband's pluses and minuses for networks. I'll have more on this in the coming weeks, including more in-depth financial analysis.
On the plus side, in "2009 Super Bowl Ads to Hit $3 Million, Broadband's Role Must Grow," "Sunday Morning Talk Shows Need Broadband Refresh" and "Today Show Interview with McClellan Showcases Broadband's Power," I illustrated some opportunities broadband is creating. On the other hand, "Bebo Pursues Distinctive Original Programming Model" and "More Questions than Answers at Digital Hollywood" explained how exciting new programming approaches are taking hold, challenging traditional TV production models. Broadcasters are in the eye of the broadband storm.
3. Advertising's evolution fueled by innovation and resources
Last, but hardly least, I continued on one of my favorite topics: the impact broadband video is having on the advertising industry. Over the last 10 years the Internet, with its targetability, interactivity and measurability has caused major shifts in marketers' thinking. With broadband further extending these capabilities to video, the traditional TV ad business is now ripe for budget-shifting. We'll be exploring a lot of this at a panel I'm moderating at Advertising 2.0 this Thursday.
In "Tremor, Adap.tv Introduce New Ad Platforms" and "All Eyes on Cable Industry's 'Project Canoe'" (from Mugs Buckley), key players' innovations were described along with how the cable industry plans to compete. Content providers are being presented with more and more options for monetizing their video, a trend which will only accelerate. Yet as I wrote in "Key Themes from My 2 Panel Discussions Last Week," many issues remain, and with so many content start-ups reliant on ads, there may be some disappointment looming when people realize the ad market is not as mature as they had hoped.
That's it for May. Lots more coming in June. Please stay tuned.
Categories: Advertising, Aggregators, Broadcasters, Cable TV Operators, Devices, Downloads, FIlms, Studios, Video Sharing
Topics: Adap.TV, Apple, Bell Canada, Canoe, iTunes, Netflix, Paramount, Roku, Starz, Tremor, Verizon, Vongo
HBO Wakes Up to BroadbandThursday, May 15, 2008, 10:32 AM ET|
HBO's deal with Apple to include its programs in the iTunes store has received widespread coverage in the last couple of days, particularly because it includes differentiated pricing for the first time.
Indeed, while it's a big story that Apple's Steve Jobs has finally consented to deviate from his "one price for all" approach - which NBC couldn't attain last fall - there is another angle on this announcement: the possibility that, at long last, HBO has woken up to broadband video's potential.
HBO's absence from the broadband scene has been noticeable. As the most profitable and acclaimed TV network, I've long thought that HBO had significant upside in pursuing broadband initiatives. Instead it has badly lagged Showtime and Starz, its two principal rivals in the premium network space, as well as other networks.
Showtime in particular has been quite innovative in both creating broadband-only extras for its programs, plus enticing user-involvement opportunities. For its part, Starz has been aggressive in pursuing Vongo, its broadband-subscription service, which continues to make inroads with numerous device partnerships.
Yet HBO has seemed contentedly disinterested in broadband. Between its hefty subscription fees and healthy DVD business, broadband has likely been seen as just a gnat buzzing about. HBO's lack of broadband interest is evident on its web site which has just a smattering of video clips and highlights, and it is fairly static, with little-to-nothing enticing for the broadband user.
In reality, broadband could have likely been adding real value to HBO's business. With the proper incentives, HBO's creative production partners could have easily come up with broadband extras that would have appealed to the diehard fans of its programs. In addition to their sheer programming value, these would have helped drive more fan loyalty and stickiness between seasons. That would help address HBO's churn rate during its off-season periods.
While HBO's iTunes relationship is a step forward, it's a small one. Contrast its approach to soon-to-be-corporate-sibling Bebo's programming model (which I wrote about yesterday), with its intense focus on community engagement and the different philosophies are evident. Of course HBO is a programming powerhouse and there's no arguing with its success. But for it to fully embrace broadband's opportunities, it would benefit from looking at what Bebo and others are currently doing.
Categories: Aggregators, Cable Networks, Indie Video, Video Sharing
Topics: Apple, HBO, iTunes, Showtime, Starz, Vongo
HBO, Showtime, Starz: 3 Different Broadband StrategiesTuesday, January 22, 2008, 9:59 AM ET|
The unveiling of HBO's broadband video strategy provides fresh evidence that the 3 major premium cable channels - HBO, Showtime and Starz - are pursuing 3 very different paths in navigating the broadband world.
These 3 channels have traditionally been tight-knit partners with cable operators who leveraged these channels' brands and programming relentlessly in marketing campaigns to gain new revenues and subscribers. But operators' high margin digital services (e.g broadband access, phone, HD, VOD DVR) have lately become the primary focus of cable marketers' finite promotional power. Somewhat mitigating this shift has been powerful original programming, especially from HBO (The Sopranos, Sex and the City, etc.) that has often made these "must have" channels for audiences, helping build powerful consumer brands in the process.
Broadband delivery further scrambles the relationship between these 3 premium channels and their cable operator brethren. For the first time, the premium channels can promote their services, and even deliver them directly to consumers, all without cable operators' involvement. This newfound flexibility has led to 3 very different strategies that I would categorize as "Be bold" (Starz), "Be incremental" (Showtime) and "Be aligned" (HBO).
"Be bold" - Starz has pursued the boldest broadband strategy, launching Vongo, a pure broadband-delivered subscription service several years ago. Starz has invested heavily in making Vongo a top-notch user experience, including hundreds of hours of additional content specifically for the service. Starz has marketed Vongo directly to consumers and through non-cable industry distribution partnerships (e.g. HP, AT&T, Microsoft, Toshiba, Samsung, others). Starz is very clearly trying to grow the market for its programming.
Starz has sought cable operator partnerships as well, I believe correctly arguing that Vongo can be priced and packaged in a way that provides new value for subscribers as well as cable operators. These efforts have been stymied to date as reluctant operators perceive Vongo as possibly opening the door for Starz and others to gain direct access to subscribers, while also creating possible confusion around operators' budding VOD services.
"Be incremental" - Showtime has focused its broadband efforts on new revenue opportunities such as selling episodes through aggregators like iTunes, and also offering innovative new programming and features that capitalize on broadband's ability to directly interface with audiences. Two perfect examples of the latter are the "Dexter" parallel webisode series and season finale producers' video I have previously written about.
Showtime's goal is to create valuable exposure for its programming to non-subscribers on the bet that actual sampling is the best way to drive new subscriptions (in the past sampling was limited to cable operators' offering "preview weekends"). Showtime's "be incremental" approach studiously avoids creating conflicts with its cable operator partners, while not limiting the network's ability to harness broadband's potential.
"Be aligned" - HBO's belated entry into the broadband world is intended to support its cable partners by offering access to HBO Broadband to only those viewers who are both existing HBO subscribers AND cable broadband subscribers. This "value add" positioning is comparable in some ways to Netflix's "Watch Instantly" approach. They are both focused on giving existing subscribers more, not creating a distinct service, a la Vongo, aimed at expanding the market. Further, by limiting HBO Broadband's geographic rollout, HBO is taking an additionally cautious approach compared with the others. The HBO message is clear: we're staying strongly aligned with our traditional cable industry partners.
Three premium channels, three distinct broadband strategies. Further evidence that we currently live in a world of vast experimentation, with market participants focused on different goals and different ways of achieving them. I expect plenty more of this to come, as all players gather data about what works and what doesn't.
What do you think? Post a comment and let us all know!
Categories: Aggregators, Cable Networks, Cable TV Operators
Topics: HBO, Showtime, Starz, Vongo
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