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Amazon Acquires LOVEFiLM Making Netflix's European Expansion a Lot Harder
Amazon announced this morning that it has bought the remaining 58% of European DVD-by-mail and online subscription service LOVEFiLM. Amazon
gained its stake in 2008 when LOVEFiLM acquired Amazon's European DVD rental business (Amazon also invested in LOVEFiLM as part of the deal). Given Amazon's position, the new deal, said to be worth around $320 million, was widely rumored.
Though the companies offered no insight in the press release as to what prompted the move, I think it can be interpreted as a bid by Amazon to make Netflix's expansion into the European market much harder. Netflix expanded into Canada last September with a streaming-only service and has continued to beef up the content selection offered there, even as stories have emerged that Canadian broadband ISPs' consumption caps can generate incremental fees for heavy Netflix users. Nonetheless, Netflix has been bullish about its near-term profitability expectations in Canada and executives have made no secret of the company's intention to expand further internationally, with Europe certainly in the bullseye.
Categories: Aggregators, Deals & Financings, FIlms, International
Topics: Amazon, LOVEFiLM, Netflix
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AdoTube Gets FreeWheel Certification
AdoTube, the online video ad platform, has secured Certified Partner status from FreeWheel, the video monetization technology provider. The companies have been collaborating since March, 2010. The certification means that AdoTube and its ad formats comply with FreeWheel's own criteria as well as IAB standards. Joint customers are able to take advantage of deep integration between the companies.
I last wrote about AdoTube in October, in conjunction with its "Polite Pre-Roll" which cleverly allows users to close out an ad when it begins playing, with period subtle reminders to follow. In research, the unit was found to have a 3.76% vs. 1.61% for standard pre-roll ads. This is an example of the more flexible and viewer-centric approach to video ads that is taking hold. As another example, YouTube recently unveiled its "TrueView" video ads, which offer more viewer control. And Hulu introduced early last year its "Ad Selector" option that allows viewers to choose which ads they want to see. No doubt more initiatives like these to follow.Categories: Advertising
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In Approving Comcast-NBCU, the FCC Blesses the Cable Model
Reading yesterday's FCC press release approving the Comcast-NBCU transaction, my main reaction was that rather than using the opportunity to try to force fundamental changes in the core cable business model, the FCC, through its key conditions, instead essentially blessed it.
Comcast - and by extension other pay-TV operators - must be delighted that their core packaging and pricing philosophies were basically untouched. Cable networks and studios should also be happy that their ability to monetize
through the monthly affiliate model remained intact as was their flexibility to monetize online (mostly). As a result, the large ecosystem of participants in the video ecosystem (e.g. talent, production personnel, etc.) should also be happy that their economic well-being won't be disrupted. Lastly, investors in the pay-TV ecosystem should also be happy; it's always a good day when the government chooses not to meddle in markets that are working pretty nicely from investors' perspective.
To get more specific, in the press release there are 7 key conditions under the heading, "Protecting the Development of Online Competition" that Comcast and/or Comcast/NBCU are required to follow. These relate to online video and I have listed them out below. After each one I have added my analysis/reactions.
Categories: Cable Networks, Cable TV Operators, Deals & Financings, Regulation
Topics: Comcast, FCC, NBCU, Netflix
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YouTube Charges $375K Per Day for Home Page Masthead Ads, Plus Other Fun Facts
The February edition of Fast Company magazine, which features a lengthy piece on YouTube, includes a number of interesting data points. One that caught my eye is that YouTube charges $375,000 per day for a home page
"masthead" ad (these are the rich media 970x250 ads that occupy the top third to half of the home page). According to the article, the home page generates an average of 45 million views per day (though it's not clear if that's U.S.-only or global). A companion article notes that the home page gets 18 million visitors in the U.S. only.
The ad running today, for Lexus's new CT 200h hybrid is a typical masthead implementation: graphics rich, with embedded video, and links to a series of original, branded videos (in this case "Darkcasting" vignettes). Last September, in "YouTube Gets Center Stage in Google's New 'Watch This Space' Ad Campaign," I noted that the premier brands that used the masthead unit in the previous month included Sony Pictures, Lionsgate, Showtime, NBC, Mattel, EA, T-Mobile, American Express and others. Each has its own creative execution that often extended far beyond what's typically seen in rich media display ads (my favorite example continues to be the Sly Stallone ad for the movie "The Expendables").Categories: Advertising, Aggregators
Topics: Fast Company, YouTube
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On-Stage Interview With Netflix's Content Chief Ted Sarandos, Next Week in Miami Beach
Please join me in Miami Beach next Tuesday, January 25th when I'll be doing an exclusive one-hour interview with Netflix's chief content officer Ted Sarandos at the annual NATPE Market conference. The session is sponsored by William Morris Endeavor. The NATPE Market conference runs from next Monday to Wednesday at the luxurious Fontainebleau Resort.
Ted is Netflix's point person for the company's lengthy list of recent content deals (e.g. EPIX, Disney/ABC, NBCU, Relativity Media, etc.) that have powered the popularity of Netflix's streaming service. Among the topics we'll discuss include how Netflix decides what type of content to pursue, how these deals are typically structured, how big Netflix's budget is for ongoing content acquisition, which connected devices are most popular for Netflix streaming use, which competitors he's most worried about, and what's on the roadmap for 2011 and beyond.
Categories: Aggregators, Events, People
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5 Items of Interest for the Week of Jan. 10th
Even though I was very focused this week on the CES "takeaways" series, there was still plenty of news happening in the online and mobile video industries. So as in the past, I'm pleased to offer VideoNuze's end-of-week feature highlighting 5-6 interesting online/mobile video industry news items that we weren't able to cover this week. Enjoy!
Level 3 fights on in Comcast traffic dispute
Level 3 is showing no signs of relenting on its accusations that Comcast is unfairly trying to charge the CDN for Internet traffic it delivers to Comcast's network. In an interview this week, Level 3 said it may use the "Open Internet" provisions of the FCC's new network neutrality rules to press its case. Level 3's challenge is coming at the 11th hour of the FCC's approval process of the Comcast-NBCU deal; it's not really clear if Level 3 is having any impact on slowing the approval, which appears imminent.
Comcast-NBCU deal challenged over online video proposal
Speaking of challenges to the Comcast-NBCU deal, word emerged this week that Disney is voicing concern over the FCC's proposed deal condition that would force Comcast to offer NBC programming to any party that had concluded a deal with one of NBC's competitors for online distribution. The Disney concern appears to be that the condition would have an undue influence on how the online video market evolves and how Disney's own deals would be impacted. While the FCC should be setting conditions to the deal, the Disney concerns highlights how, in a nascent, fast-moving market like online video, government intervention can cause unintended side effects.
YouTube is notching 200 million mobile video views/day
As if on cue with my CES takeaway #3, that mobility is video's next frontier, YouTube revealed this week that it is now delivering 200 million mobile views per day, tripling its volume in 2010. That would equal about 6 billion views per month, which is remarkable. And that amount is poised to increase, as YouTube launched music video site VEVO for Android devices. YouTube clearly sees the revenue potential in all this mobile video activity; it also said that it would append a pre-roll ad in Android views for tens of thousands of content partners.
Google creates video codec dust-up
Google stirred up a hornet's nest this week by announcing that it was dropping support for the widely popular H.264 video codec in its Chrome browser, in favor of its own WebM codec, in an attempt to drive open standards. Though Chrome only represents about 10% market share among browsers (doubling in 2010 though), for these users, it means they'll need to use Flash to view non-WebM ended video. There are a lot of downstream implications of Google's move, but for space reasons, rather than enumerating them here, check out some of the great in-depth coverage the issue has received this week (here, here, here, here).
Netflix usage drives up Canadian broadband bills
An interesting test of Canadian Netflix streaming showed that a user there might have to pay an incremental $12/month under one ISP's consumption cap. That would be more than the $7.99/mo that the Netflix subscription itself costs, leading to potential cord-shaving behavior. This type of upcharge hasn't become an issue here in the U.S. because even ISPs that have caps have set them high relative to most users' current consumption. But if streaming skyrockets as many think it will, and the FCC allows usage-based billing, this could fast become a reality in the U.S. as well.
Categories: Aggregators, Broadband ISPs, Broadcasters, Cable TV Operators, CDNs, Deals & Financings, International, Mobile Video, Regulation, Technology
Topics: Comcast, Disney, FCC, Google, Level 3, NBCU, Netflix, WebM, YouTube
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VideoNuze Report Podcast #84 - Jan. 14, 2011
Daisy Whitney and I are back this week for the 84th edition of the VideoNuze Report podcast, for January 14, 2011.
In today's podcast, Daisy and I discuss the 4 key CES 2011 takeaways that I've been writing about this week (all listed below). And as a reminder, next Wednesday, January 19th, I'll be participating on a complimentary webinar, "Demystifying CES 2011" in which we'll dive further into understanding the show's highlights. Enjoy!
Click here to listen to the podcast (14 minutes, 26 seconds)
Click here for previous podcasts
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CES Takeaway #4: Welcome to the Golden Age of Video Innovation and Consumer Confusion
(Note: Each day this week I've been writing about one key takeaway from last week's CES 2011. Today is the final installment. For those who want to learn more about key CES highlights, next Wednesday, January 19th, I'll participate in a complimentary webinar, "Demystifying CES 2011" with The Diffusion Group and ActiveVideo Networks.)
It's hard not to step back from CES 2011 and be genuinely impressed with the incredible level of technical ingenuity being brought to bear on the video industry. In a very real sense, we are on the front end of a "golden age" of video innovation, which is already producing tangible, positive changes in how we engage with video content of all types. That's the good news. The not-so-good news is that all of this innovation is also creating a golden age of consumer confusion and frustration, in which formerly mundane decisions can entail a mind-numbing level of complexity.
First the good news. This year's CES showcased how networking (technical, not social) - the same underlying characteristic that has driven the Internet - is now coming to video. Networking is enormously important because it dissolves the traditional constraints of content access, devices/containers and location. For example, whereas 50 years ago those with expensive encyclopedias or easy access to local libraries (the containers) had a decisive information edge, today all the world's information is available to anyone with an Internet connection. The idea of a fixed set of books, in a fixed location, accessible only to a privileged few, now seems quaint.
Categories: Devices
Topics: CES
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