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.
An increasing number of viewers are turning to rental programs for movies and TV shows, according to a report from Digital Entertainment Group.
DEG also reports that consumer spending on home entertainment has stabilized with an unexpected recovery to the disc-based business in the second quarter.
The report concludes that consumers spent $4.2 billion on transactional video services — disc rental, streaming and VOD — during the first half of 2011. These figures mark an 11 percent increase over the same period last year.
The report also mentions a 16 percent drop in disc purchases, with combined Blu-ray and DVD sales falling to $1.8 billion in the second quarter. However, rental — including streaming and VOD — was up 11.16 percent. (Blu-ray sales increased 10 percent, while demand for DVD declined.)
Netflix rose 45.7 percent in the first six months of this year, while kiosk rental (mostly Redbox) rose 39.8 percent.
The Hollywood Reporter adds: “Spending on Blu-ray Discs was up a solid 10 percent in the first half. DEG estimates that the number of U.S. households with at least one Blu-ray Disc playback device rose 16 percent in the first six months of 2011 to bring total household penetration to more than 31.6 million, making the format one of the fastest-growing new technologies in the home entertainment industry.”
The new Elite brand of premium LCD TVs is the result of a collaboration between Pioneer and Sharp.
Two LED-based LCD models (60- and 70-inch) are 3D, THX certified, claim a refresh rate of greater than 240Hz and feature full-array backlighting instead of edge lighting. They also feature online services such as CinemaNow, Netflix, VUDU and YouTube.
Elite TVs include a yellow sub pixel with the standard red/blue/green, that when added together, creates more than 8 million dots on the screen.
“But the feature that the company is most hyping is something called Intelligent Variable Contrast,” reports Electronic House. “Found only on the new Elite TVs, it automatically controls both the brightness and backlight to enhance color depth, brilliance and detail in dark areas.”
The 3D Elites will ship with active shutter glasses — MSRP of $5,999 for the 60-inch model and $8,499 for the 70-inch.
Philips announced it will be including streaming set-top and gaming functions in some of its new HDTV sets.
The Philips 4000 and 5000 series, which use the CloudTV platform of ActiveVideo Networks, can access cloud-based games streamed as MPEG files.
Both lines will include Philips MediaConnect, that enables wirelessly connecting the TV and PC.
Other features include NetTV (offering services such as Netflix, VUDU, Facebook, Film Fresh, Pandora and Twitter), V-tuner Internet radio and built-in Wi-Fi support.
The 4000 series features six screen sizes, ranging from 19 to 55 inches, while the 5000 series adds another 10 screens, from 40 to 55 inches.
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.
Lenovo’s ThinkPad Honeycomb tablet (starting at $480) will offer a stylus for taking on-screen notes, security features, detachable keyboard, Netflix compatibility and a variety of business features.
The new tablet is expected to ship by August 23.
Lenovo does not seem to be concerned with entering the Android tablet price war, since most of the other competitors are angling toward $400 and below. Instead, the company is positioning the tablet as a business-savvy device.
Digital Trends reports: “Lenovo is also launching a few accessories alongside of the ThinkPad. You can buy a folio-style case that has a built-in keyboard, which might mean the Asus Transformer might finally have some keyboard competition. Lenovo has been making some of the best laptop keyboards for several years, and if this keyboard can rival those it might be a game changer in the Honeycomb tablet war.”
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.
Netflix is reportedly negotiating for exclusive streaming rights to DreamWorks Animation films.
The deal would replace DreamWorks’ contract with HBO (which runs through 2014).
DreamWorks reportedly has permission to end its HBO contract early. If it does, it could provide content to Netflix by early 2013.
If the deal goes through, it would mark the first time a major studio has licensed content to subscription VOD at the same time (as opposed to after) its pay TV window.
In related news (see LA Times link), Netflix will not be including Facebook integration anytime soon in the U.S. (although it will be integrated in Canada and Latin America). This is based on the 1988 Video Privacy Protection Act that requires peoples’ video rental information be kept private. Netflix feels that the law is ambiguous as it relates to Netflix/Facebook, but they’re not taking any chances.
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.”
Scribd — a Web site that lets users share reports, personal stories and recipes — revealed plans this week to launch a digital newsstand that provides a vast library of news to readers for a monthly fee, similar to the Netflix subscription service model.
The newsstand, named Float, is the latest in a collection of strategies that have attempted to make money from online news. Other news hubs include Flipboard, Zite, Pulse, News.me and Ongo.
Publications that are made available via Float will receive a share of the revenue after the subscription program launches this fall (although subscription fees and the amount to be shared with publishers have yet to be announced).
Float will introduce a free version this week featuring articles from 150 publications such as The Associated Press, People, Fortune, Salon and Time magazine (publishers participating in the free version will share in the advertising revenue).
Float will initially be available to consumers online and through an iPhone app, while Android and iPad versions are expected at a later date.
ETCentric recently reported on the backlash to new Netflix subscription rates (see “Nine Video Streaming and Rental Alternatives to Netflix”).
Most of the nine rental alternatives referenced in the earlier post are currently offering special introductory offers.
According to this related article however, Blockbuster is now offering a free 30-day trial specifically to disgruntled Netflix customers unhappy with the recent price hike.
If customers decide to switch, they’ll pay a comparable monthly subscription fee (Blockbuster points out that they offer video games and newer releases than Netflix).
Blockbuster’s special Netflix promotion runs until September 15.
As previously reported on ETCentric, Netflix announced plans this week to divide its unlimited-DVDs-by-mail and unlimited-streaming options into two separate plans.
The resulting 60 percent price increase (from $9.99 to $15.99 per month for both DVD and streaming), effective September 1 for existing customers, has raised some early controversy with Netflix subscribers and the press.
For those who may be looking to opt out of Netflix due to the new price structure, Geek.com has posted a helpful overview of viable alternatives including: Amazon Prime, Hulu Plus, Blockbuster by Mail, Walmart’s VUDU, YouTube Rentals, CinemaNow, GreenCine, Redbox and Google.
Amazon Prime, for example, now offers a streaming video service available for $79 per year (or $6.58 a month), while the growing library of movies and TV programs on Hulu Plus ($7.99 per month) is available on multiple platforms including PCs, game consoles, and set-top boxes.
VUDU works with computers, the PS3, Boxee, Blu-ray players and connected TVs. Its customers pay $2 for a two-day rental, while YouTube fans can pay $1.99 to $3.99 for streaming rentals. The company has partnered with Sony, Warner Brothers, Universal, Lionsgate and others to provide content via YouTube accounts on computers, Google TV, Android tablets with Honeycomb, and most Android phones.
Check out Geek.com for details on all nine options listed.
On the heels of raising eyebrows regarding increased subscription rates, Netflix offered some good news yesterday when it announced it has renewed its licensing agreement with NBCUniversal.
The multi-year agreement includes TV shows such as “The Office” and “30 Rock” in addition to cable programs “Keeping Up with the Kardashians” and “Kimora: Life in the Fab Lane” (future seasons will be available on a one-season delay basis).
Streaming access to Universal films such as “Eternal Sunshine of the Spotless Mind” and “The Motorcycle Diaries” has also been added.
“The content buying spree has purportedly been pricey, but Netflix maintains that it will pay for the new shows it acquires rights to by gradually moving customers away from its mail service.”
