Posts for 'CBS'

  • CES Takeaway #1: Broadcast TV Networks Were Missing In Action

    (Note: Each day this week I'll be writing about one key takeaway from CES 2011.)

    Broadcast TV networks were conspicuously absent from the buzz of last week's CES 2011, even through one of the main themes of the show was enhanced video viewing through connected devices. Aside from a deal giving boxee the right to sell CBS episodes, and an expected, forward-looking announcement that Hulu Plus would soon be available on Android-powered devices, broadcast TV networks didn't participate in any of the excitement around new connected and mobile devices.

    Their absence was both a missed opportunity, and also a clear illustration of how backward-looking their posture toward connected devices is. At a time when the entire CE industry sees the big prize of untethering video viewing from the living room, while creating boundless opportunities for new interactivity and higher engagement, the broadcast TV networks and Hulu have taken exactly the opposite approach, choosing to block access to their programs by connected devices, even though these programs are already available online.

    I've previously written about the folly of broadcasters trying to force an artificial distinction between computer and TV screens (here and here with respect to Google TV), noting that their motivation for doing so is the pot of gold they see in retransmission consent payments from pay-TV distributors. But while those payments are a bonanza, they shouldn't come at the price of non-participation with connected devices. Indeed, three key things broadcasters risk by shunning connected devices emerged at CES last week.

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  • VideoNuze Report Podcast #81 - Dec. 10, 2010

    Daisy Whitney and I are back this week for the 81st edition of the VideoNuze Report podcast, for December 10, 2010.

    This week Daisy and I focus on Google's video efforts from two perspectives: first, whether it should pay CBS (and other networks) to allow Google TV to access their programs, and second, what are the implications of its acquisition of Widevine, announced last Friday.

    On the former point, as I argued in "Google to Pay CBS? Unlikely." I think it's a big stretch to believe that Google, which is a search engine, is going to start paying content providers like CBS, to direct traffic to them. Certainly that's not what it does online, and there's little reason to believe it will start doing so with Google TV.

    Meanwhile, the Widevine deal underscores how far Google has come in prioritizing copyright protection. It wasn't that long ago when YouTube was a rogue copyright infringer and yet that didn't deter Google from acquiring it. With Widevine and multiple other Google video initiatives, the company is extremely well-positioned to play a bigger role in the distribution and monetization of Hollywood content in 2011.

    If you want to learn more about Google, and also other key online/mobile video trends and predictions for 2011, then join me for a complimentary webinar I'll be hosting with The Diffusion Group's Colin Dixon next Wed., Dec. 15th at 11am PT/2pm ET. We'll demystify 2011 and leave plenty of time for audience Q&A.

    Click here to listen to the podcast (12 minutes, 17 seconds)

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  • Google To Pay CBS? Unlikely.

    CBS CEO Les Moonves said this week that Google TV is not going to get CBS programs for "zero dollars," suggesting that if the company were to unblock access for the device, it would only happen when Google is willing to pay. I've learned to never say never, but in this case I think the scenario where Google pays for CBS and other broadcast networks' programs similarly being blocked from Google TV is very unlikely.

    When Moonves says "I'm not sure what it is," (referring to Google TV) it makes me think he either doesn't understand the Internet, is being disingenuous, or both. As I originally argued a couple of months ago, in "Broadcast TV Networks Are Wrong to Block Google TV," the device is not hard to understand. It serves essentially the same purpose for content providers on TVs as the Google search engine does online and on mobile devices. A user wants to find a piece of content or an answer to a question or a product, he/she types a term into the search bar and a list of filtered results appears. Google has also enhanced Google TV's core search and discover functionality with a bunch of apps that help emulate the full Internet experience on TV; for now those are interesting, but not yet compelling or unique vs. other devices that do similar things. Over time they may be.

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  • VideoNuze Report Podcast #80 - Nov. 19, 2010

    Daisy Whitney and I are back this week for the 80th edition of the VideoNuze Report podcast, for November 19, 2010. Before getting started, congratulations to Daisy on the release of "The Mockingbirds," her first fiction book, for young adult readers. It debuted 2 weeks ago and is published by Little Brown. In addition to writing the book, Daisy has put together a clever social media campaign which has lifted the book's visibility. Congrats Daisy!

    This week Daisy and I discuss my post from yesterday, "Broadcast TV Networks Are Wrong to Block Google TV - Part 2" in which I laid out the case for why the networks are using a backwards-looking strategy in their decision to block their programs from access by Google TV and other browser-based connected devices.

    To their credit, the networks have actually been quite forward-looking in releasing many of their programs for free viewing on their web sites and on Hulu. But now, by creating an artificial distinction between computer-based and TV-based viewing of online-delivered content, they are violating one of the most basic rules of the Internet era: don't create friction between the product and the customer. While that may help them win retransmission consent deals in the short term, I believe that in the long term it will hurt them. Listen in to learn more.

    Click here to listen to the podcast (11 minutes, 43 seconds)

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    The VideoNuze Report is available in iTunes...subscribe today!
  • Broadcast TV Networks Are Wrong to Block Google TV - Part 2

    When Fox decided last week to block access to its programs by Google TV, it was no big surprise since its broadcast brethren ABC, CBS, NBC and Hulu had already done so. By speaking in a unanimous voice, the broadcasters have sent a clear signal that viewing their programs on TV, for free, via online delivery, is not to be. While they're happy to make Hulu Plus subscriptions available via connected devices, if you want to watch for free, you'll be restricted to computer, or limited mobile device-based, viewing.

    A few weeks ago in the first part of "Broadcast Networks Are Wrong to Block Google TV," I speculated on what was motivating the broadcasters to block Google TV, boxee and other browser-based connected devices. In the case of Google TV, it's tempting to believe they are looking to extract payments from Google to distribute their programs. Another possible explanation is that programs aren't monetized as well in online as they are on-air (the "swapping analog dollars for digital pennies" argument). Yet another explanation is that measurement of online viewing is not yet fully mature, so they're worried that if their audience shifts to connected device-based viewing, it would hurt their ratings points, and consequently their ad revenues. But none of these are broadcasters' main motivation.

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  • Broadcast TV Networks Are Wrong to Block Google TV

    Since word broke late last week that ABC, CBS and NBC are blocking access by Google TV to their full-length programs, I've been scouring the web and  speaking to colleagues, attempting to get some insights about what's going on here. Though I've heard plenty of free-floating concerns raised, I've yet to really understand solid reasons for why broadcast networks are doing this that can't be addressed somehow. Therefore, as best I can tell, for now at least, I think the broadcast TV networks are wrong to block access.

    The most obvious reason is that they're creating a false and meaningless distinction between screens. Whereas you can "go online" and freely access plenty of ABC, CBS and NBC shows at their own web sites, (and at Hulu for ABC and NBC), the networks have decided that if you're trying to "go online" via your Google TV, that's unacceptable. In an age where computer screens are getting bigger all the time - looking more like TVs - why exactly should this distinction matter?

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  • 6 Items of Interest for the Week of Oct. 18th

    It was another busy week for online/mobile video, and so VideoNuze is continuing its Friday practice of curating 5-6 interesting industry news items that we weren't able to cover this week. Read them now or take them with you this weekend!

    Networks block Google TV to protect themselves
    Yesterday news started breaking that ABC, CBS and NBC are blocking access by Google TV. There are numerous concerns being cited - potential disruption of advertising, encouraging cord-cutting, incenting piracy, diminished branding, unsatisfactory ad splits with Google, and general worry about Google invading the living room. Each item on its own is probably not enough to motivate the blocking action, but taken together they are. Still, doesn't it feel a little foolish that broadcasters would differentiate between a computer screen and a TV screen like this? For Google, it's more evidence that nothing comes easy when trying to work with Hollywood. I'm trying to find out more about what's happening behind the scenes.

    TWC Lines Up For ESPN Online Kick
    An important milestone for TV Everywhere may come as early as next Monday, as #2 cable operator Time Warner is planning to make ESPN viewing available online to paying subscribers. Remote access is part of the recent and larger retransmission consent deal between Disney and TWC. TV Everywhere initiatives have been slow to roll out, amid cable programmers' reluctance.  Further proving that remote authenticated access works and that it's attractive with a big name like ESPN would increase TV Everywhere's momentum.

    Hulu Plus, Take Two: How's $4.95 a Month?
    Rumors are swirling that Hulu may cut the price of its nascent Hulu Plus subscription service in half, to $4.95/mo. That would be a tacit recognition of Hulu Plus's minimal value proposition, largely due to its skimpy content offering. As I initially reported in August, over 88% of Hulu Plus content is available for free on More important, Netflix's streaming gains have really marginalized Hulu Plus. Netflix's far greater resources and subscriber base have enabled it to spend far bigger on content acquisition. Even at $4.95, I continue to see Hulu Plus as an underwhelming proposition in an increasingly noisy landscape.

    Viacom Hires Superstar Lawyer to Handle YouTube Appeal
    Viacom is showing no signs of giving up on its years-long copyright infringement litigation against Google and YouTube. This week the company retained Theodore Olson, a high-profile appellate and Supreme Court specialist to handle its appeal. While most of the world has moved on and is trying to figure out how to benefit from YouTube's massive scale, Viacom charges on in court.

    Verizon to sell Galaxy Tab starting November 11th for $599.99
    Verizon is determined to play its part in the tablet computer craze, this week announcing with Samsung that it will sell the latter's new "Tab" tablet for $600 beginning on November 11th. The move follows last week's announcement by Verizon that it will begin selling the iPad on Oct. 28th, which was widely interpreted as the first step toward Verizon offering the iPhone early next year. Apple currently owns the tablet market, and it remains to be seen whether newcomers like the Tab can break through. For his part, Apple CEO Steve Jobs said on Apple's earnings call this week that all other tablets are "dead on arrival." Note, if you want to see the "Tab" and learn more about how connected and mobile devices are transforming the video landscape, come to the VideoSchmooze breakfast at the Samsung Experience on Wed., Dec. 1st.

    One-Third of US Adults Skip Live TV: Report
    A fascinating new study from Say Media (the entity formed from the recent merger of VideoEgg and Six Apart), suggesting that 56 million, or one-third of adult Internet users, have reduced their live TV viewership. The research identified 2 categories: "Opt Outs" (22 million) who don't own a TV or haven't watched TV in the last week and stream more than 4 hours/week, and "On Demanders" (34 million) who also stream more than 4 hours/week and report watching less live TV than they did a year ago. Not surprisingly, relative to Internet users as a whole, both Opt Outs and On Demanders skew younger and higher educated, though only the latter had higher income than the average Internet user. This type of research is important because the size of both the ad-supported and paid markets for live, first-run TV is far larger than catalog viewing. To the extent its appeal is diminishing as this study suggests poses big problems for everyone in the video ecosystem.

  • Is Apple Planning to Pair 99-Cent TV Show Rentals With Its $99 iTV?

    Bloomberg is reporting that Apple is in "advanced talks" with CBS, Disney and Fox about making available TV programs for 99-cent rental. The programs would be offered within 24 hours of when they aired and once rented, the viewing window would be just 48 hours. It's not clear whether the iTunes rental model would be targeted only to Apple's "i" devices, or if it would be more widely available. If the program deals happen, could it be that Apple is planning to pair availability of 99-cent rentals with the unveiling of its $99 iTV device at its rumored Sept. 7th keynote event?

    In my earlier post, "Pondering the (Potential) Impact of Apple's New iTV Device," I speculated that the iTV device would have little impact on the pay-TV ecosystem, since major cable TV networks and pay-TV providers will resist Apple's attempts to reinvent their business models. However, I suggested that Steve Jobs could have a trick or two up his sleeve for the iTV's launch. Sure enough, 99-cent broadcast TV rentals, announced just weeks prior to the Fall TV season kickoff, would be a very good trick indeed.  

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  • For Broadcast TV Networks, Google TV is Friend, Not Foe

    Reading this morning's WSJ story, "Google TV Is a Tough Sell Among Would-Be Partners," you get the impression that broadcast TV networks are viewing Google TV as a potential disruptor of their business models. While the networks should take time to fully understand Google's new product, plus assess additional work being asked of them (e.g. enhanced metadata) and how their programs will be incorporated in Google TV's UI, on the whole, broadcast TV networks should view Google TV as beneficial, not disruptive, to their digital distribution efforts.

    Broadcast networks are right to be concerned about what effect viewing on any new digital device will have on their on-air business models. I've written often about my concern that the networks' web sites and Hulu's "ad-lite" approach was threatening to their on-air economics. However, more recently the networks (and likely Hulu) have been increasing their digital ad loads. ABC for one has said that digital delivery profitability is already on a par with "DVR economics" (accounting for ad-skipping by DVR households), and more ads will only further enhance digital's ROI. Certainly ABC's decision to make its programs available on the iPad is evidence that proper monetization, along with a coherent windowing approach, can yield incremental views and profits from distribution to new devices.

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  • CBS-Comcast Deal Underscores Importance of Subscriptions

    Yesterday's 10-year retransmission consent deal between Comcast and CBS further underscores the importance of subscription revenue streams in addition to advertising. Under the deal, CBS is rumored to receive between $.50-$1.00 per subscriber per month from the biggest cable operator in the U.S., putting it in the top tier of cable network compensation. When combined with other deals CBS has previously struck, plus additional ones it will likely conclude in the future, CBS has laid firm claim to the same "dual revenue" (monthly payments + advertising) business model as cable TV networks have long enjoyed.

    The CBS-Comcast deal is more evidence of how dynamic the relationships have become between broadcast TV networks, cable TV networks, pay-TV operators and new distributors like Hulu and Netflix. The online/mobile/on-demand era has set off a scramble by premium content providers to lock in payments for their programming, while also remaining nimble enough to gain new distribution opportunities. Likewise, distributors are hungry for exclusive well-branded content.

    Consider what's happened in just the last 8 months:

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  • Sports Continues to be Shining Star of Online Video

    The final and streaming viewership numbers for the FIFA World Cup provide the latest evidence that sports are the shining star of the online video world for both free and paid viewing. Here's some sample data for recent free online sporting events:

    FIFA World Cup: (7.4 million unique viewers, 15.7 million hours viewed), (10 million hours viewed)

    2010 NCAA March Madness: (8.3 million unique visits to MMOD video player, 11.7 million hours of video and audio)

    2009-2010 Sunday Night Football: (2.2 million unique visits, 1M hours viewed, 29 minutes of average tune-in time)

    2008 Beijing Summer Olympics: (70 million video streams, 10 million hours viewed, 27 minutes of average tune-in time)

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  • 7 Quick Reactions to Hulu Plus

    Hulu unveiled its much-rumored subscription service this afternoon, dubbed "Hulu Plus." I haven't used the new service, but based on the explanation and the teaser video, here are 7 quick reactions:

    1. Is there consumer demand for Hulu Plus? - This looms as the fundamental question that will be answered as Hulu Plus rolls out. From CEO Jason Kilar's blog post, it appears that, at least initially, Hulu Plus is a bet on consumers having an appetite for a library of broadcast network programs since that's all that's been highlighted so far. Hulu identifies about 2,000 library episodes in addition to current seasons. Unless Hulu Plus really beefs up its catalog, it won't be long before the library holds few surprises for returning visitors.

    2. Hulu Plus lacks many of Netflix's advantages - It's tempting to think of Hulu Plus competing directly with Netflix, and to an extent of course they're after the same general target consumer. But Netflix has several very significant advantages: a brand that's identified with subscriptions and 14 million+ currently paying subscribers, a deep DVD library of 100,000+ titles (which has every single episode Hulu Plus will be offering), a streaming library of 17,000+ titles (offered at no extra cost to subscribers) and integrations with all the same devices Hulu Plus is touting (except the iPhone, which is coming soon). Further, Netflix has far deeper resources; it is a public company with a $6 billion market cap that spends $250 million/year on marketing and has publicly-stated commitment to obtain more streaming rights from Hollywood. With Netflix on one side and cable on another, it's unclear how Hulu Plus will expand its menu. I don't see Hulu Plus diminishing Netflix's rapid growth.

    3. Ads in Hulu Plus would be a big-time buzz-kill - I did a double-take when I first read this line in Jason's post: "Hulu Plus is a new revolutionary, ad-supported subscription product that is incremental and complementary to the existing Hulu service." Whoa - are there going to be ads in Hulu Plus? That will be a flat-out non-starter for many prospective subscribers. Yes, I know about ad-supported cable networks, but that's for first-run programming, not for library or catch-up fare. Hulu Plus must be an ad-free zone. Meanwhile, it's important that Hulu still prove the 100% ad-supported business model for its existing experience. With much in flux regarding ad loads there's new messaging Hulu will likely be rolling there too.

    4. Why wasn't Android or Google TV mentioned? - Is it a little weird that there was no mention of Android or Google TV in today's unveiling? I think so. Android is fast-gaining on the iPhone (surpassed by some metrics) and Google TV is poised to make a big splash in the fall. Why no mention? Is there an anti-Google bias at work?

    5. Hulu Plus adds more support for HTML5 - Hulu Plus is another boost for HTML5 and another small dent for Flash. By making Hulu Plus available on non-Flash supported Apple devices, the it seems the Hulu team has been willing to make the investment to diversify beyond Flash, which it has used since launch.

    6. Comcast must already be considering how it exits the Hulu joint venture - When the Comcast-NBCU deal clears, Comcast will inherit NBCU's ownership stake in Hulu. With Hulu Plus it's hard to see why Comcast will want to retain that stake. There's no discernible benefit to Comcast owning a minority position in a new over-the-top subscription service that whets the appetite of potential cord-cutters. It's one thing for selective NBC programs to be freely available for catch-up on, but a deeper library in a paid subscription service? No way, especially not as Comcast is trying to build value in its own TV Everywhere service.

    7. Hulu gets credit for a well-executed launch - Stepping back, the Hulu team deserves credit for keeping its subscription under tight wraps and executing a solid launch. There have been no shortage of rumors, but to my knowledge there haven't been any specifically identifiable leaks in the Hulu ship. That's a big accomplishment, especially when you consider how many people must have had knowledge of the plans. The launch includes a well-articulated CEO message, a nicely-done sizzle reel (that is in Flash, which makes it not viewable on the iPad or iPhone!), several device integrations and a roadmap of add-ons, and a slow-rollout plan that will generate excitement among early adopters.

    There are still many unknowns about Hulu Plus, but for now this is plenty to chew on.

    What do you think? Post a comment now (no sign-in required).
  • Here's What Fox, NBC and Hulu are Doing with Increased Online Ad Loads

    Get ready to see more ads in TV programs viewed online. Following my exclusive 2 weeks ago about ABC doubling the number of ads in its iPad app, and soon on, the same increased ad load is happening with Fox's and NBC's online programs, and in my opinion, likely with Hulu as well. Here's what I've learned:

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  • AT&T's 3G Network is Falling Short for Premium MMOD iPhone App

    Two weeks ago I noted that the premium "March Madness on Demand" iPhone app, which allows live streaming of all MMOD games would be a big test for AT&T's 3G network, which has been repeatedly criticized for lack of capacity. Based on reports I've received from several friends who have been using the app both on AT&T's 3G network and on WiFi, it appears that AT&T is indeed falling short, with video quality highly inconsistent or video just plain unavailable (see iPhone screen grab below). Granted it's a small sample size, but they've tried it repeatedly and the pattern is pretty clear.

    AT&T's network should come under further pressure as the field narrows and audience sizes surge. On a positive note, one friend took note of how incredibly cool it was to be eating lunch at Panera Bread watching live hoops on his iPhone (note, he was on their WiFi at the time). Mobile video is definitely here. On the flip side, I've watched a fair amount of various games online and I have to say I've been somewhat unimpressed by the quality of the streams. Last night's Cornell game (my alma mater) was a perfect example - full screen was highly pixilated and plain unwatchable. Even in standard size there were many stalls and the stream couldn't keep up with camera switches during fast-break coverage.

    What have your experiences been like? Post a comment now (no sign-in required).
  • March Madness on Demand iPhone App Will be Big Test for AT&T's 3G Network

    College hoops bragging rights won't be the only thing on the line when the NCAA March Madness men's basketball tournament kicks off next week. Also under the microscope will the performance of AT&T's 3G network, since CBS Mobile announced earlier this week that its new $9.99 premium iPhone app will offer live streaming of all the tournament's games over AT&T's 3G, EDGE and Wi-Fi networks. As with last year there will also be a free "lite" app that will offer on-demand clips only.

    Presumably AT&T, CBS and NCAA have modeled how many concurrent streams could be requested under different penetration rates for the app and feel comfortable with AT&T's ability to support these in a quality manner. Let's hope for their sake they got the math right. I continue to hear iPhone users expressing frustration with dropped calls and 3G availability, particularly in Manhattan (in fact I've resisted getting an iPhone for this very reason). AT&T does seem to be getting more confident in its 3G coverage though; just last month it approved Sling's SlingPlayer app for use on its 3G network. In that case, I thought that because few people would likely buy the $29.99 app the stakes weren't that high for AT&T. MMOD is a different story; if AT&T's 3G network fails there will be a horde of angry hoops fans banging on its doors.

    What do you think? Post a comment now (no sign-in required)
  • New "NCAA Vault" is More Evidence of Archived Assets' Value

    This year's "March Madness" men's college basketball tournament is just around the corner and in addition to the now-customary live streaming of the games (and this year an iPhone app for additional streaming), a new feature was introduced last week: "NCAA Vault" - a video index to every single moment in "Sweet 16" history for the last 10 years. NCAA Vault is powered by Thought Equity Motion, a technology provider that partners with media companies and rights-holders to digitize, deliver and monetize video assets. Last week I spoke with Thought Equity's CEO and founder Kevin Schaff to learn more about how the Vault works and the background of the deal with the NCAA.

    Kevin explained that Thought Equity indexed all 150 of the Sweet 16 games' video with rich metadata for players, teams and highlights. This yielded a searchable database of 6,000 moments, which users of the Vault can tap into in a number of different ways. They can search by player, team, year, game or description of the play they're looking for. For more casual use, the  Vault also presents lists clips of great shots, blocks, plays and finishes, plus most outstanding players and current stars. In addition to being a standalone site, the Vault is linked to from the March Madness main site.  

    When you search for a specific play, it will load and when done, the remainder of the game will continue playing until you want to move on. I can say from doing this several times that watching a play quickly and addictively morphs into watching several minutes of the game itself. Below the video window there's a text description of each play in the game. If you scroll the list and begin clicking on different plays what you'll immediately notice is how fast the new video loads and begins playing. Kevin explained that part of the reason is because the system is simply moving to a new cue point in the existing video file (in other words a new video file hasn't been created). This is a similar technique other indexes use; still, I don't think I've ever seen a new clip load as fast as these do. It's comparable to the experience of changing TV channels.

    Thought Equity is very mindful of how, for some users, the Vault will be essentially a "stock video" database and so it has done several things to really enhance its value. Most important, it has created a Publishing Guide, which provides URLs to each of the moments so that writers and fans can search for incorporate links to just the plays they want. Conversely, if you're watching a video highlight and want to link to that moment, one click generates a URL for that clip. Thought Equity has even integrated the URL shortener, so that you get a Twitter-friendly URL to use. Finally, Thought Equity has created an API so that 3rd parties who want to integrate the database, or pieces of it, with their own services, can do so easily.

    Kevin explained that Thought Equity's model is to partner with media companies and rights-holders to license exclusive rights to their archived assets in order to create rich, searchable video databases. In the Vault's case, monetization is through advertising and CBS will sell the new high-value inventory. Thought Equity has worked with other media partners (e.g. Paramount, HBO, NY Times, BBC, etc.) with a monetization mix of advertising and licensing (i.e. the "stock" model). Over 10.5 million hours have been indexed to date with many more on-deck.

    From a user's standpoint, the Vault is another exciting example of how the combination of online video and indexing technologies opens up access to memorable sports moments. Consumer usage creates the ad opportunity, but equally interesting are the myriad professional uses of the video. For bloggers and others running sports-oriented sites, the Vault opens a ton of new upside. Last week I wrote about how is trying to create a similar Vault-like experience for movie clips; no doubt others will follow as the value of archived assets becomes increasingly apparent.

    What do you think? Post a comment now (no sign-in required).
  • VideoNuze Report Podcast #52 - March 5, 2010

    Daisy Whitney and I are pleased to present the 52nd edition of the VideoNuze Report podcast, for March 5, 2010.

    First up this week I discuss my post from this past Monday, " is Now Achieving 'DVR Economics' for Its Programs," in which I described how ABC is now generating roughly the same revenue per program per viewer in online as it is when its programs are watched in DVR playback mode. Albert Cheng, EVP of Digital Media at Disney-ABC had explained to me last week that ABC recently concluded that since online and DVR are both "catch-up" opportunities, it was more appropriate to compare them to each other than to on-air.

    Key to this logic is that ABC maintains a release window for its programs, with them being posted on the site 4-6 hours after broadcast. As a result, people who really want to see the program when it's first available still watch on-air (and may in fact re-watch online or via DVR). As long as there's an audience for broadcast, and online doesn't cannibalize it, the logic makes sense to me. Albert also explained that there's further upside in online through increasing the ad load, which is something ABC has experimented with.

    Daisy picks up on that point, noting that CBS's Anthony Soohoo told her in an interview for that CBS is considering moving to a full ad load online because the online and on-air experience are converging, which suggests to them that viewers would tolerate more ads. We dig into the interplay between online and DVR usage, which I think is increasingly going to be a key focus for networks in how they choose to monetize online viewing.

    Wrapping up, we review what some of the social media "listening" sites that are tracking the Oscar predictions are saying. Daisy appears officially addicted to following the online chatter.

    Click here to listen to the podcast (14 minutes, 41 seconds)

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  • The Fuzzy Math of Apple's TV Subscription Service Doesn't Add Up

    Yesterday's Wall Street Journal story, suggesting that CBS and Disney may participate in Apple's planned TV subscription service, caused was yet another tremor in the already chaotic video industry. Though Apple's plans are still preliminary, when I consider the numbers the Journal reported, the company's fuzzy math suggests incumbent distributors have little to worry about just yet.

    The Journal said that in "In at least some versions of the proposal, Apple would pay media companies about $2 to $4 a month per subscriber for a broadcast network like CBS or ABC, and about $1 to $2 a month per subscriber for a basic-cable network..." Let's assume the mid-points for both: $3/mo for broadcast networks and $1.50/mo for cable networks. With 4 broadcast networks (assuming NBC participates, which under Comcast ownership is itself unlikely), that would be $12 in fees/mo. Say Apple signed up 12 cable networks, that would be another $18 in fees/mo. Together the $30 in fees/mo equals what Apple is reportedly looking to charge consumers. And this package would only deliver 16 channels, which would induce few consumers to cut the cord. And by the way, there's zero chance that one of those 16 cable channels would be Disney's ESPN, which already gets north of $3/mo/sub in all of its existing affiliate deals.

    Given the broadcast networks' woes, it's within the realm of possibility that they would be enticed by the $2-$4/mo, considering it's above the $1/mo/sub that is often bandied about in retransmission consent discussions. Yet, Apple is supposedly talking about delivering the programs commercial-free, which means broadcasters' total revenue per month has to equal or exceed what they're already making per month for the plan to be interesting to them. With $60 billion/year in TV advertising revenue at stake, that's a big gamble for broadcast networks to make. Even the notion that consumers would pay for broadcast programs simply because they're commercial-free is speculative. Most research I've seen suggests the opposite consumer preference (they'd rather stomach ads in exchange for free content).

    An even bigger challenge for Apple is to get cable networks to play ball. Starting with my post over a year ago, "The Cable Industry Closes Ranks," I've continued to assert that, despite ongoing skirmishes, cable networks and cable operators are joined at the hip in their desire to defend the traditional multichannel subscription model. In the model, big owners of cable networks bundle smaller channels with bigger, more popular ones, and require that cable operators, telcos and satellite operators take these as a package. This is the backdrop for why consumers often grouse that there are lots of channels, but little on that interests them personally. Meanwhile, TV Everywhere is intended to preserve this model as online viewing expectations build.

    It stretches my imagination to believe that big cable network owners (Disney included) are going to allow Apple to cherry-pick which cable networks they want and disrupt the traditional model, especially at a time when cable networks want more, not less control. That cable networks would be willing to put Steve Jobs in the driver's seat of their digital futures is very unlikely. Analogies to the music business only go so far: remember, music companies were already under assault from rampant piracy and reeling under financial pressure when Apple came riding to their rescue. Cable networks feel no such urgency; they've been the brightest star in the media landscape as the recession has worn on.

    I've learned never to underestimate Steve Jobs or Apple. But based on what's been reported so far, Apple's subscription TV math seems very fuzzy and any service that emerges from it is likely, for the most part, to be non-threatening to incumbent distributors. And that's before getting to the issues of Apple being a closed system and requiring consumers to buy a proprietary Apple TV box to get their programs onto their TVs. In the budding 'over-the-top" sweepstakes, Apple is one to watch for sure. But there are a lot of variables in play here. It will be fun to see if Jobs has yet another rabbit up his sleeve.

    What do you think? Post a comment now.

  • 4 Items Worth Noting for the Nov 2nd Week (Q3 earnings review, Blu-ray streaming, Apple lurks, "Anywhere" coming)

    Following are 4 items worth noting for the Nov 2nd week:

    1. Media company and service provider earnings underscore improvements in economy - This was earnings week for the bulk of the publicly-traded media companies and video service providers, and the general theme was modest increases in financial performance, due largely to the rebounding economy. The media companies reporting - CBS, News Corp, Time Warner. Discovery, Viacom and the Rainbow division of Cablevision - showed ongoing strength in their cable networks, with broadcast networks improving somewhat from earlier this year. For ad-supported online video sites, plus anyone else that's ad-supported, indications of a healthier ad climate are obviously very important.

    Meanwhile the video service providers reporting - Comcast, Cablevision, Time Warner Cable and DirecTV all showed revenue gains, a clear reminder that even in recessionary times, the subscription TV business is quite resilient. Cable operators continued their trend of losing basic subscribers to emerging telco competitors (with evidence that DirecTV might now be as well), though they were able to offset these losses largely through rate increases. Though some people believe "cord-cutting" due to new over-the-top video services is real, this phenomenon hasn't shown up yet in any of the financial results. Nor do I expect it will for some time either, as numerous building blocks still need to fall into place (e.g. better OTT content, mass deployment of convergence devices, ease-of-use, etc.)

    2. Blu-ray players could help drive broadband to the TV - Speaking of convergence devices, two articles this week highlighted the role that Blu-ray players are having in bringing broadband video to the living room. The WSJ and Video Business both noted that Blu-ray manufacturers see broadband connectivity as complementary to the disc value proposition, and are moving forward aggressively on integrating this feature. Blu-ray can use all the help it can get. According to statistics I recently pulled from the Digital Entertainment Group, in Q3 '09, DVD players continue to outsell Blu-ray players by an almost 5 to 1 ratio (15 million vs. 3.3 million). Cumulatively there are only 11.2 Blu-ray compatible U.S. homes, vs. 92 million DVD homes.

    Still, aggressive price-cutting could change the equation. I recently noticed Best Buy promoting one of its private-label Insignia Blu-ray players, with Netflix Watch Instantly integrated, for just $99. That's a big price drop from even a year ago. Not surprisingly, Netflix's Chief Content Officer Ted Sarandros said "streaming apps are the killer apps for Blu-ray players." Of course, Netflix execs would likely say that streaming apps are also the killer apps for game devices, Internet-connected TVs and every other device it is integrating its Watch Instantly software into. I've been generally pessimistic about Blu-ray's prospects, but price cuts and streaming could finally move the sales needle in a bigger way.

    3. Apple lurks, but how long will it stay quiet in video? - The week got off to a bang with a report that Apple is floating a $30/mo subscription idea by TV networks. While I think the price point is far too low for Apple to be able to offer anything close to the comprehensive content lineup current video service providers have, it was another reminder that Apple lurks as a major potential video disruptor. How long will it stay quiet is the key question.

    While in my local Apple store yesterday (yes I'm preparing to finally ditch my PC and go Mac), I saw the new 27 inch iMac for the first time. It was a pretty stark reminder that Apple is just a hair's breadth away from making TVs itself. Have you seen this beast yet? It's Hummer-esque as a workstation for all but the creative set, but, stripped of some of its computing power to cost-reduce it, it would be a gorgeous smaller-size TV. Throw in iTunes, a remote, decent content, Apple's vaunted ease-of-use and of course its coolness cachet and the company could fast re-order the subscription TV industry, not to mention the TV OEM industry. The word on the street is that Apple's next big product launch is a "Kindle-killer" tablet/e-reader, so it's unlikely Steve Jobs would steal any of that product's thunder by near-simultaneously introducing a TV. If a TV's coming (and I'm betting it is), it's likely to be 2H '10 at the earliest.

    4. Get ready for the "Anywhere" revolution - Yesterday I had the pleasure of listening to Emily Green, president and CEO of tech research firm Yankee Group, deliver a keynote in which she previewed themes and data from her forthcoming book, "Anywhere: How Global Connectivity is Revolutionizing the Way We Do Business." Emily is an old friend, and 15 years ago when she was a Forrester analyst and I was VP of Biz Dev at Continental Cablevision (then the 3rd largest cable operator), she was one of the few people I spoke to who got how important high-speed Internet access was, and how strategic it would become for the cable industry. 40 million U.S. cable broadband homes later (and 70 million overall) amply validates both points.

    Emily's new book explores how the world will change when both wired and wireless connectivity are as pervasive as electricity is today. No question the Internet and cell phones have already dramatically changed the world, but Emily makes a very strong case that we ain't seen nothing yet. I couldn't help but think that TV Everywhere is arriving just in time for video service providers whose customers increasingly expect their video anywhere, anytime and on any device. "Anywhere" will be a must-read for anyone trying to make sense of how revolutionary pervasive connectivity is.

    Enjoy your weekends!

  • VideoNuze Report Podcast #30 - September 4, 2009

    Daisy Whitney and I are pleased to present the 30th edition of the VideoNuze Report podcast, for September 4, 2009.

    This week Daisy shares more detail from her most recent New Media Minute, concerning what broadcast networks are doing this Fall with online video extensions of their shows. For example, CW is launching an original series in conjunction with "Melrose Place." ABC is doing a 3rd season of an "Ugly Betty" web series and a tie-in for "Lost." CBS is launching its first web series, via, with Julie Alexandria, focused on recapping highlights from various shows. Daisy notes that these efforts are focused mainly on marquee shows and when advertisers are already on board.

    In the 2nd part of the podcast we discuss my post from yesterday, "2009 is a Big Year for Sports and Broadband/Mobile Video." In that post I observed that many big-time sports, and the TV networks that have the rights to televise them have realized this year that broadband and mobile distribution are friend, not foe. As a result they've rolled out many different initiatives. We also touch on the various lessons other content providers can take away from what's happening with sports and broadband/mobile distribution.

    Click here to listen to the podcast (13 minutes, 54 seconds)

    Click here for previous podcasts

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