The six largest cable and satellite TV providers lost 580,000 customers in the second quarter. This marks the largest such decline in U.S. history.
The number of pay TV subscribers has declined in three of the past five quarters.
“Rising prices for pay TV, coupled with growing availability of lower-cost alternatives, add to a toxic mix at a time when disposable income isn’t growing,” explains Sanford C. Bernstein analyst Craig Moffett. “For younger demographics, where in many cohorts unemployment is north of 30 percent, and especially for those with limited or no interest in sports, the pay TV equation is almost inarguably getting less attractive.”
Netflix and Hulu provide lower cost options. Competition from AT&T and Verizon is also having an effect.
Providers are struggling to deal with the trend. Dish, for example, is re-positioning itself away from lower income customers. Instead, the company plans to focus on more expensive offerings to increase average revenue per user.
Similar to the approach Fox announced last month, Disney is negotiating TV Anywhere deals for ABC-TV shows with distributors. Access would require authentication with a cable ID.
Fox provides next day access to viewers who log in with cable IDs, and makes others wait for eight days to view content on Fox.com or Hulu.
Disney already has deals with Time Warner Cable and Verizon FiOS to access ESPN content using a mobile app.
“Our overall approach…has been to make deals that increase revenue while at the same time protect and respect the channel distribution value that we see today,” Disney CEO Bob Iger said. The company is looking to build authentication into future deals, which Iger explains would “allow access to our programming faster or in a more aggressive window if the customer is a multichannel subscriber.”
Time Warner CEO Jeff Bewkes announced the availability of Flixster Collections, a social movie portal that went into public beta this week.
The service, a revamped version of the Flixster product acquired earlier this year, encourages users to share what they’ve watched with friends.
If there’s something you want to see, for example, Flixster directs you back to Amazon, iTunes, Hulu and Netflix (as well as your hard drive, if you let it). There are also links for theatrical films, including reviews, trailers and ticketing services.
“You can also imagine how this will tie in to Ultraviolet, the cloud/locker system for video that Warner and a big coalition of movie studios and tech companies (except for Apple and Amazon) are pushing,” writes Peter Kafka in All Things D.
So far, Flixster Collections is available for PCs and Macs, but no mobile app yet.
Hulu will unveil an original documentary series on August 17. “A Day in the Life” is produced by documentary filmmaker Morgan Spurlock, and will be available exclusively on Hulu.
The half-hour show will follow the daily lives of celebrities, including business mogul Richard Branson and musician will.i.am.
Hulu is not the only online video site to venture into original programming. In March, Netflix announced an original series of its own: “House of Cards,” starring Kevin Spacey.
The series is Hulu’s largest and most ambitious original production, and will premiere as the service continues to court prospective buyers. Yahoo, Google, and Amazon are rumored to be potential bidders.
Rovi Corporation filed suit against Hulu last week, claiming that the video site infringes on its patents for electronic program guides.
Santa Clara, California-based Rovi provides technology that powers streaming services from Blockbuster On Demand and Best Buy’s CinemaNow. The company also licenses its technology to others such as Apple, Microsoft and Comcast.
The digital entertainment solutions provider claims that Hulu’s infringement “presents significant and ongoing damages to Rovi’s business.” The company is seeking compensation for lost license revenue and treble damages.
As previously reported by ETCentric, Hulu has been offered for sale by its owners (Disney, News Corp., NBC Universal and Providence Equity).
Amazon has announced a deal with NBCUniversal to offer Universal films online, in a move designed to step up competition with services such as Netflix and Hulu.
Amazon offers subscribers to its “Prime” program discounts on shipping of products, and free access to an online library of films. The service costs $79 a year.
Amazon announced an agreement last week with CBS that expanded its library to more than 8,000 titles. The NBCUniversal deal will grow Amazon’s library to more than 9,000 movies and TV shows (compared to Neflix’s 20,000).
Films such as “Eternal Sunshine of the Spotless Mind,” “Being John Malkovich,” and “Fear and Loathing in Las Vegas” are part of the deal.
In an effort to help emerging artists reach wider audiences, the Sundance Institute has partnered with online video outlets including Hulu, Amazon, Netflix, iTunes, YouTube and SundanceNow.
The deals are not exclusive to any one platform, so films can be made available simultaneously on competing sites.
Films will be packaged under the Sundance name as part of its recently launched Artist Services Initiative. Marketing guidance will also be provided to filmmakers through the new Web-based program.
New Video will serve as the aggregation partner for online distribution, taking a small cut of the revenues. However, the online services will not purchase the movies, enabling the filmmakers to retain their copyrights.
Sundance hopes that the online initiative will provide an audience for films that typically do not find conventional distribution. First to be distributed: “Connected: An Autoblogography about Love, Death & Technology” by Tiffany Shlain and “On the Ice” from Andrew Okpeaha MacLean.
In the latest installment of the ongoing Hulu saga, Bloomberg reports Apple is “considering making a bid” for the online video service.
Apple would join Google, Yahoo, AT&T and others who have expressed interest (Microsoft has reportedly dropped out of the bidding).
With $76 billion in cash and securities, an expected $2 billion bid would not be too difficult for Apple. If so, analysts suggest this would give Apple a leading subscription service that would rival, if not surpass, the Netflix service.
“Part of the ecosystem of Apple’s future is to include more video,” said Scott Sutherland, Wedbush Securities analyst (who recommends buying the stock). “It’s something they are focused on.”
Microsoft has reportedly dropped out of the bidding for Hulu and would not continue into a second round, according to “a person with knowledge of the matter.” (Although the individual did not rule out the possibility of Microsoft re-entering in a later round.)
Google, Yahoo, AT&T and as many as eight other companies remain interested in the online video service.
According to Business Insider, Yahoo is willing to spend up to $2 billion if it can get content rights for the next four or five years.
It has been reported that Hulu plans to offer five years of access to content from its media company owners (Disney, News Corp. and Comcast’s NBC Universal), including two years of exclusivity.
Eric Schmidt, executive chairman and former CEO of Google, says his company is continuing to experience strong demand for invitations to the new social network, Google+.
As previously reported on ETCentric, the network allows people to share links and media with others they have divided into “circles” of relationships.
If demand continues, Google will be looking at applying the social “circles” relationships to its search functionality and YouTube.
On Hulu, which Google is rumored to be bidding for, Schmidt explained that if there were any sort of deal, Hulu’s current TV shows would complement, not replace, YouTube’s online-only content.
MediaMall, the group behind the popular PlayOn media software, announced this week a closed beta of an online service that allows users to record online video for later viewing (including offline).
PlayLater works similarly to a DVR, allowing “recording” of online video from sites such as Hulu, Netflix, Amazon and major networks.
Early reporting suggests playback of DRM protected files only on approved programs running on PC (using Windows Media Player), Android, iOS, Google TV, game systems, etc.
PlayLater is expected to eventually be available for $5/month, or $50/year.
CrunchGear reports: “Believe it or not, the term DVR is actually appropriate here. I’ve used the service and it actually records the programming and wraps the video file in a DRM-laced .plv container that’s only playable on approved programs.”
Google announced it has acquired Inglewood, California-based SageTV and the company’s multiplatform DVR technology.
SageTV integrates broadcast, Internet, Netflix and Hulu via its Home Theater PC (HTPC) software.
SageTV Placeshifter enables users to view TV from any high-speed Internet connection, similar to Slingbox.
Although details have yet to be announced, we may see SageTV functionality incorporated into Google TV.
From the SageTV site: “We’ve seen how Google’s developer efforts are designed to stimulate innovation across the web, and as developers have played a core role in the success of SageTV, we think our shared vision for open technology will help us advance the online entertainment experience.”
The Engadget post features the SageTV press release and a 4-minute video (created by user jaredduq).
The report indicates the total U.S. audience engaged in more than 5.6 billion viewing sessions during May, while 83.3 percent viewed online video.
Not surprisingly, Google’s YouTube was was the leading video site (again) with 147.2 million unique viewers, and an average of five hours spent per viewer on the site.
VEVO followed YouTube with 60.4 million viewers, Yahoo had 55.5 million viewers, and Facebook took the fourth spot with 48.2 million viewers.
Hulu had the highest number of video ad impressions at more than 1.3 billion.
The average length of online video content was 5.2 minutes.
