Verizon is planning to launch a standalone video streaming service for 2012 that would offer movies and TV shows via the Web, according to several people close to the plan.
“The phone company is talking with prospective programming partners about the service, which would be introduced outside of markets where it currently offers its broadband and TV package, known as FiOS, these people said,” reports Reuters. “That would make it available to some 85 million U.S. households.”
Verizon may be concerned about cord cutters and competition from Netflix, Amazon and Google.
“Verizon has been back and forth with programmers over the last two years exploring the possibility,” suggests the article. “While a lot of the discussion has been around fees, the programmers have also been concerned about the possibility of hurting their existing — and lucrative — relationships with the cable operators.”
Having its own streaming service would allow Verizon to grow its customer base and thereby lower its programming costs.
“News of the service will have added controversy in the wake of sister company Verizon Wireless’s plans to resell cable TV service for Comcast Corp, Time Warner Cable Inc and Bright House Networks,” points out Reuters. “Under that deal, announced last week, Verizon Wireless will pay $3.6 billion for valuable spectrum from the cable companies.”
Sony announced it has updated firmware for its Bravia LCD TV sets, enabling viewers to get tweets, post on Facebook and watch hi-def videos via YouTube HD.
Bravias have also added compatibility with a version of the Remote Keyboard application, previously available only on Vaio PCs and Xperia smartphones.
“Finally, you can now get live Twitter updates along the bottom of your screen and even use a Shazam like feature called Track ID to determine the names of songs, or their artists, that are played during your shows or commercials,” reports Engadget.
The press release emphasizes keyboard compatibility: “You can already use your smartphone or Vaio keyboard to control your TV and surf the Web — and now you can use other laptops too. From typing a Web address to searching for information about the latest movies, it makes entering text on-screen even easier than using your TV remote.”
The free update is currently available for those with compatible Bravia TVs.
Netflix subscriptions could end up costing consumers $28 a month instead of $8 if cable companies decide to add charges for Web streaming.
“U.S. providers like Time Warner Cable have weighed usage-based plans for years as a way to squeeze more profit from Web access, and to counter slowing growth and rising program costs in the TV business,” reports Bloomberg. “While customer complaints hampered earlier attempts, pay TV companies are testing usage caps and price structures that point to the advent of permanent fees.”
As online video streaming increases in popularity, Web data usage soars. Some companies have penalties in place for customers that exceed their monthly gigabyte allowance, while others do not.
Adding charges will not only help cable companies’ Internet revenue, but also possibly boost pay TV service by disincentivizing online services like Netflix and Hulu.
A Netflix spokesman told Bloomberg, “[The practice] is not in the consumer’s best interest as consumers deserve unfettered access to a robust Internet at reasonable rates.”
Wedbush analyst Michael Pachter believes Netflix cannot repair itself from the damage inflicted earlier this year after the streaming company raised prices on subscribers.
CNET reports that, “according to Pachter, by year’s end, Netflix will show a loss of 11 million ‘hybrid’ customers that previously rented DVDs and streamed video content. He said he believes that 7 million of those customers will have traded down to the streaming-only option, while another 4 million will have ‘quit the Netflix service altogether.’”
Shareholders also seem uncertain if Netflix can bounce back. “Over the past six months, the company’s stock is down 75 percent,” indicates the article.
Netflix has not given up, and believes things can be turned around. However, the company offered this honest evaluation: “If we are unable to repair the damage to our brand and reverse negative subscriber growth, our business, results of operations, including cash flows, and financial condition will continue to be adversely affected.”
In the wake of a devastating couple of months, the company is looking to rebound “brick by brick” with a strong rebranding, suggests a related Home Media Magazine article.
In addition to ongoing damage control, Netflix is working to increase its content selection, update its interface and improve user algorithms. These changes, the company hopes, will restore credibility after its recent 60 percent price increase led 800,000 people to unsubscribe.
Time Warner Cable is expected to add local broadcasting to its iPad streaming app in the New York City market. The app allows its customers to view broadcast programs on the tablet anywhere in their homes.
It will expand the local offering soon and extend it elsewhere by early next year, according to Rob Marcus, TWC’s chief operating officer.
The service will also include access to local newscasts and syndicated programming. “We’re moving towards delivering local programming, which is a little more difficult to do technologically,” Marcus explained to investors.
“Marcus reiterated that TWC believes it has rights to offer Viacom-owned networks on its app. The two companies are suing each other over the matter,” reports Media Daily News. “Cablevision has reached an agreement with Viacom, and offers its channels among the 300-plus it provides.”
“Marcus went on to say there is some impetus to move ahead with TV Everywhere-type opportunity extending outside the home, where it has a deal with ESPN and some others, but ‘the process has taken a lot longer than we would have anticipated at the outset,’” suggests the article.
A recent survey of dedicated music demographics indicates access to music from services like Spotify, YouTube, Grooveshark and others significantly decreases the interest in purchasing across all groups except the least dedicated.
“Services like Spotify increase access, but also decrease spending in many situations. Which means less money from higher-returning formats like iTunes downloads, CDs, and LPs,” according to Digital Music News. “But free access also includes a range of other services, including YouTube, Grooveshark, and various freebie competitors. And all of these are sapping the juice out of higher-end impulse buying, once a music industry lifeblood.”
The recently released findings from NPD Group and NARM have already had an impact. “Following a study that claims that streaming music is damaging to record sales, a distributor representing more than 200 labels has withdrawn its entire catalogue from Spotify, Napster, Simfy and Rdio,” reports Huffington Post.
“As a distributor we have to do what is best for our labels,” STHoldings explained in a statement. “The majority of which do not want their music on such services because of the poor revenues and the detrimental affect on sales. Add to that the feeling that their music loses its specialness by its exploitation as a low value/free commodity.”
In a related All Things D story, Spotify announced it has new things on the horizon, but has yet to provide details. “In New York on November 30th, we are holding our first press conference to unveil the latest major development from Spotify — and a new direction for the company. The press event will be hosted by CEO and Founder Daniel Ek, along with special guests,” wrote the company’s PR unit.
All Things D speculates Spotify may be releasing a U.S. service to buy songs (already available in Europe) or an iPad app, but “it is courting the risk of overpromising” if these are the only developments to be announced.
Panasonic’s line of Viera TVs now ships with 12 embedded applications, including Hulu Plus and Netflix. About 120 third-party apps are also available for Viera TVs.
Just as PC users add apps to their computers, Viera owners are free to add content apps to their TVs once those apps go through quality-assurance testing by Panasonic.
The company says that more than 40 million connected TVs were sold by 2010, and 2013 projections suggest sales of connected TVs will outpace those of PCs.
“Panasonic also recently announced a new gaming app, PlayJam; a Bollywood movie/video channel, BigFlix; and the Viera Connect Market, whereby users can upload credit card information once and use it across a variety of apps, such as a demonstrated app in which users could buy 3D eyewear, among other consumer electronics devices,” reports Home Media Magazine.
Speaking at the GigaOM RoadMap conference this week, Pandora CTO Tom Conrad suggested that more than half of Americans do not pay for music each year, while 40 percent only pay about $15 annually.
“Conrad revealed that his company aims to monetize the vast majority of listeners who pay little or nothing per year for music,” reports TechCrunch.
“While there are opportunities to build businesses on the 10 percent who are willing to pay more, Pandora plans to focus on monetizing the majority via advertisements. Other music companies might be wise to target the non-paying segment as well.”
Pandora is working to expand across multiple areas, including “in the home, the television, the living room, the bedroom, even embedded above the ice maker on your refrigerator,” and in your car.
Conrad doesn’t feel threatened by Spotify’s success. “I see Spotify as largely complementary to what Pandora does,” he said. “Spotify’s CEO Daniel Ek says he thinks Spotify is the future of the record store, and that Pandora is the future of radio.”
Leichtman Research Group reports 44 percent of U.S. households with TVs have a DVR, up from 8 percent in 2005.
LRG also found that one-third of DVR households have more than one DVR, and 73 percent of digital cable subscribers have used VOD.
“On-demand TV viewing in the forms of DVR and VOD, as well as Netflix streaming, have significantly increased in terms of usage and popularity over the past few years,” said Bruce Leichtman. “Yet these on-demand TV platforms remain largely complementary to traditional TV services and viewing, with about 90 percent of all TV viewing in the U.S. still being via live TV.”
Additional LRG findings (on a scale of 1 to 10, with 10 being excellent): 80 percent of DVR owners rate the service 8 to 10, 62 percent of cable VOD users rate the service 8 to 10, 63 percent of Netflix subscribers rate the Watch Instantly feature 8 to 10, 20 percent of Netflix subscribers use Watch Instantly daily.
An increasing number of consumers are switching to digital content for movies, music and books. The approach has benefits, including convenience and cost, but may also be leading to a loss of rights and abilities we’re accustomed to as consumers.
Fortune writer J.P. Mangalindan expressed concerns that systems such as Amazon’s new lending library would change the meaning of ownership since users would be relinquishing actual ownership of content in favor of a rental model.
The ability to stream digital content online has led to the same kind of transformation. Services such as Spotify and Netflix have allowed users the freedom of streaming content anywhere, and have made subscribing to such a model affordable and convenient.
GigaOM raises an interesting concern: “Apart from our simple human need to own and collect physical objects, however, there’s also the way that renting changes our legal relationship to the content we are consuming. Amazon has shown the downsides of this in the past by actually deleting copies of e-books from people’s Kindles remotely after a complaint by the rightsholder — and those were copies that people had actually bought, not rented.”
If we move closer to a streaming, rental-style model for all content then perhaps consumers would eventually prefer a short-term license to use content over actually owning it. But what if Netflix or Amazon decide to change their terms of service? “What if companies decide you no longer have the right to watch certain TV shows or read certain books?”
Television’s future remains murky as content providers and cable companies get ready for battle, and streaming services continue to gain momentum.
“But change is going to come, and amid news that Google is interested in entering the cable TV business and continued rumors that Apple will be releasing its own branded television set, we also have to wonder what’s going to happen with streaming services like Hulu and Netflix,” reports Digital Trends.
The article suggests it is the cable companies that have the most to worry about (those that control the last model). “Forget applications having a say in all this: The real war is going to be fought between cable networks and the content providers that want to move on to a new format.”
“Farther off, I think [YouTube] will challenge Hulu first. Netflix is more like a library. Google is a beast and you have to keep an eye on those guys,” TalkPoint CEO Nick Balletta says. “They have the muscle and cash to weather the storm.”
Balletta believes adoption of connected TVs will take root by late 2012, and before then we’ll see significant fragmentation before we can truly cut the cord.
Media companies and well-known personalities are lined up as YouTube gets ready to produce original content for 100 online video channels.
Sources indicate Google is dedicating $100 million to the initiative, aimed at transforming YouTube into a next-gen cable-like platform for specialized video channels.
“The Internet search giant on Friday said it had signed major deals with Hollywood to bring professional, high-quality programming to YouTube that could help it increase the time viewers spend watching videos on the site and attract more advertisers,” reports the Los Angeles Times.
The company is also launching a software update to Google TV, designed to integrate with the new content.
“The partnerships that YouTube announced Friday with dozens of media companies, production companies and online-video creators will generate about 25 hours of new programming each day for YouTube.”
Michael Eisner’s digital studio Vuguru, Stan Lee’s POW Entertainment and television production company Magical Elves are a few of the early partnerships. Celebrity channels will feature personalities such as Ashton Kutcher, Amy Poehler and former NBA star Shaquille O’Neal.
Hollywood studios are starting to use Facebook as a direct-to-consumer platform for streaming films, possibly cutting out services such as Hulu, Netflix and Amazon in the process.
Universal, Lionsgate and Warner Bros. have distributed some 45 films via the Social Cinema app from Milyoni (pronounced million-eye). “What Zynga is to social gaming, Milyoni is to social entertainment,” reads the company’s website.
Miramax and Paramount have used similar apps to offer movies for Facebook credits on fan pages.
Rentals based on credits are running the equivalent of $3-$5. Facebook draws a 30 percent cut of transaction revenues.
Ad Age Digital suggests the studios’ willingness to offer rentals via social network sites “may reflect their desire to foster competition among online distribution platforms,” adding, “Miramax CEO Mike Lang said that digital monopolies were a greater threat to the film industry than piracy and that his studio had been aware of the importance of a competitive marketplace when doing deals with Netflix and Hulu.”
Google’s music download store is expected to link with Google+ within the next two weeks. However, the service may prove disappointing if the company cannot secure deals with the four major music labels.
Tentatively named Google Music, the service would follow in the footsteps of Spotify, which earlier this fall linked with Facebook to promote its music service.
The Google+ integration would allow users to recommend songs to Google+ contacts, who could then listen to those songs once for free. MP3 downloads would then be available, most likely for 99 cents each.
Music labels have shown hesitation about the service’s propensity to allow piracy, in addition to the lack of revenue for record companies, as the music locker is free.
Peter Kafka interviews Peter Chernin in this interesting 11-minute video from the AsiaD conference.
“As News Corp.’s longtime chief operating officer, Chernin was instrumental in developing Hulu,” reports All Things D. “He explained why he wanted to build the video site — in part to compete with Google and YouTube — and why he thinks its studio owners should help it thrive today — in part to compete with Netflix.” Chernin also expresses his thoughts on purchasing Yahoo.
Chernin knew IPTV would be big, but didn’t want one dominant video distributor like YouTube. Thus, the studios got together to create Hulu, which today competes with Netflix.
Chernin believes online viewers will pay $2 per month for premium content. He talks about the future of video and creating something like a digital HBO.
