Streaming music service Spotify, which recently partnered with Facebook, saw its revenue more than quintuple last year. However, the British company still showed losses totaling $42 million, an increase from $26 million in 2009.
“Spotify’s performance has been closely monitored by the music industry, which sees it as a kind of litmus test for the viability of digital music by subscription, which pays labels each time a listener streams a particular song,” reports The New York Times. “That system brings in lower royalties per song than downloads, but with a large enough listener base could in theory bring in substantial amounts.”
Spotify subscriptions cost about $10 to $15 per month and includes an ad-supported free version. Daniel Ek, Spotify’s chief executive, recently announced that the service had reached the 2 million mark with paid subscribers, although there are believed to be more than 10 million total users.
CinemaNow — the online video service launched by electronics chain Best Buy in 2010 — has announced it will offer 1080p HD movies from Fox and Warner Bros. on personal computers. “Until now, only standard-definition movies were available from CinemaNow on the PC,” writes Carolyn Giardina in The Hollywood Reporter.
Thomas Gewecke, president of Warner Bros. Digital Distribution, indicates that CinemaNow is using Intel technology to make secure HD content available. “Intel Insider is a hardware-based security technology in second-generation Intel Core processors,” reports THR, “which is the fastest-shipping Intel product with more than 75 million units shipped to date.”
“The partnership with Intel and Best Buy’s CinemaNow to bring HD digital downloads of our movies to the PC will expand our reach to millions of devices in the U.S. and potentially more around the world,” adds Mike Dunn, worldwide president at 20th Century Fox Home Entertainment.
CinemaNow currently offers approximately 15,000 movies and TV shows.
Netflix has announced it will drop its controversial plan to split its streaming and DVD businesses, taking recent public outcry (and negative Wall Street reaction) into consideration.
“This means no change: one website, one account, one password…in other words, no Qwikster,” wrote CEO Reed Hastings on the company blog and via email to subscribers. Hastings also explained that the company is “now done with price changes.”
Ted Sarandos, chief content officer for Netflix, told an industry crowd at MIPCOM in early October that he was “very convinced” the proposed split was “good for the long-term health of the business. And the long-term clarity of the brand.” Hastings had also been quoted as saying the split would be necessary for improving the services in moving forward. “But,” added Sarandos, “we also hear our customers, and we want to make sure we react to that.”
Netflix’s stock was up 6.8 percent yesterday following the announcement, giving it a market value of $6.57 billion.
YouTube is reportedly putting up $100 million in advances to well-known personalities and major media companies to produce original content channels on on its video site.
The plans include attracting major advertisers and getting higher ad rates for professional video programming. Insiders suggest that YouTube hopes to launch the channels sometime next year.
The Wall Street Journal reports that agreements are underway with the likes of pro skateboarder Tony Hawk, Warner Bros., News Corp.’s ShineReveille unit, BermanBraun, Fremantle Media (“The X Factor”), “CSI” creator Anthony Zuiker, and others.
According to WSJ: “With its channels initiative, Google — which has been under pressure to turn YouTube into a profit center since buying the site for $1.6 billion in 2006 — is aiming to position the site for the rise of televisions and cable set-top boxes that let people watch online video in their living rooms, said the people familiar with the matter. More people are also watching videos on their smartphones and tablets, pressuring traditional cable and satellite operators to make content available on smaller screens.”
ComScore numbers indicate YouTube had more than 600 million unique visits in September.
Subscription-based music service Rhapsody has acquired Napster from Best Buy in a deal expected to be finalized the end of November.
“There’s substantial value in bringing Napster’s subscribers and robust IP portfolio to Rhapsody as we execute on our strategy to expand our business via direct acquisition of members and distribution deals,” said Rhapsody president Jon Irwin.
Rhapsody and Napster have the two largest music service subscriber bases and the acquisition could impact other music services such as Rdio, Spotify and MOG.
Irwin emphasized the importance of a strong subscription base: “This is a ‘go big or go home’ business, so our focus is on sustainably growing the company.”
“Apparently it takes more than Facebook sharing to win the subscription war,” comments Gizmodo. “Too bad I haven’t seen a Rhapsody or Napster song actually shared on Facebook.”
A comprehensive comparison between Netflix and other streaming services shows that, even after the recent criticism regarding the split of its businesses, “Netflix is still the champ, but only if you count both its the streaming and DVD mailing services.”
In his evaluation of current offerings, David Strom of ReadWriteWeb examined services such as Amazon Prime, Hulu Plus, Vudu.com and Justin.tv.
“Overall, once you leave Netflix you will find fewer choices and searching won’t be as easy to find something to watch,” he writes. “Netflix has a great search engine that won’t just look for movie titles but also check for actors and other principals involved in the movie itself, something the other services don’t do as well at.”
Another upside to Netflix is the ability to use devices such as the iPad or TiVo box to stream movies. While of the services enable streaming to your Windows or Mac Web browser, they’re not all compatible with other devices.
“So while you might be upset about paying for two bills for your video rentals from Netflix, unless you are willing to spend more time searching for content, you are probably better off sticking with the service for the time being, at least until the others catch up with their content licenses,” Strom concludes. “Or if you already have a cable TV subscription, investigate whether it offers something similar to Comcast’s Xfinity and see what their coverage is there. Ironically, that might be your best alternative to Netflix after all.”
Amazon’s launch of the Kindle Fire tablet may have an impact on Netflix, since the new tablet will make it easier for users to watch streaming video content via Amazon.
“With its $199 price point the tablet could sell like crazy this Christmas,” reports Forbes. “Users will be encouraged to buy Amazon Prime in order to speed their Amazon purchases and Prime just happens to come complete with Amazon’s streaming video service.”
The decision for consumers between Amazon Prime and Netflix will likely be based on pricing and variety of content offerings.
Amazon Prime beats Netflix on price, set at $80 a year ($6.67 per month), while Netflix streaming costs $8 a month.
Netflix, however, has more variety of content with 51,000 titles currently available for streaming, compared to Amazon’s 11,000.
Amazon may soon be able to compete in this regard with added content from Fox and CBS deals. Netflix has similar deals with Fox and CBS and a new DreamWorks Animation deal, but it will lose movies from Sony and Disney with the loss of Starz.
Both companies may press Hollywood to license more content for streaming, but continuing to pay more for films could potentially break Netflix, while Amazon has other sources of revenue to cover costs.
Spotify has been drawing a great deal of media attention this week, more so than the growing number of other streaming music services.
Since the company announced its partnership with Facebook at the recent F8 event, Spotify has gained more than one million new users, despite the public outcry from those who question limiting the service’s signup to Facebook users only.
In response to concerns regarding Facebook’s media-sharing philosophy, Spotify released a new update that enables users to access the Facebook app without sharing their listening habits, reports Digital Trends. This may be good news for subscribers not happy with the recent announcement regarding Facebook integration — and could potentially serve as a model for how others offer access to services via social networking.
In related news from The Hollywood Reporter, Spotify recently released a radio feature in the U.S. that has long been available to European users. Radio will be accessible on the desktop client, but not on the Spotify mobile app. The add-on is reportedly in no way a Pandora killer, due mainly to its lack of mobility and attention to detail.
Additionally, Digital Trends reports that Spotify may be having a significant impact on music piracy. Illegal downloads in Sweden have reportedly dropped 25 percent since Spotify launched there in 2009. “Here in the U.S., Spotify isn’t the only option — and it may not even be the best, depending on user preference. Pandora, MOG, Rdio, Grooveshark — the list goes on,” indicates the article. “We don’t yet have numbers to show how these services are affecting music piracy in the U.S. But we’d put our money on them having a similar effect as Spotify is having in Sweden.”
American consumers cumulatively watched about 2.5 billion minutes of online ads in August, according to a new report released by comScore.
The report indicates that 86 percent of U.S. Internet users watched at least some online video content last month, and more than half of that content was accessed via YouTube.
Also worth noting: Facebook, already the largest photo site on the Web, was the third largest video site in terms of unique viewers.
The rankings “find Facebook retaining third position in August, with 51.6 million unique viewers, trailing VEVO in second (with 62 million) and Google Sites (i.e. YouTube) at 162 million,” reports TechCrunch.
According to comScore, video ads accounted for 13.4 percent of all videos viewed — and Hulu generated the highest number of video ad impressions (996 million in August alone), compelling figures for advertisers when you take into account that Hulu does not allow you to skip over videos.
Hulu has proven successful with providing TV content online (the service is second only to YouTube in terms of viewer engagement), but the video platform has yet to effectively break into practical social offerings. That may change with its new Facebook app, which strives to make the Hulu experience more social.
The new app will enable viewing of content directly within Facebook, will allow you to see what your friends are watching (with approval), and will provide options for having conversations about shows and leaving comments.
“The coolest part? As you’re watching Hulu content, be it a full show, clip, or film, you can leave comments on particular moments within the video. Oh yes. SoundCloud-style,” reports TechCrunch. “And, naturally, once you leave a comment on a particular moment, you can then blast it out to friends to let them know how clever you are — on both Hulu and Facebook.”
Hulu Plus users can access their entire library in Facebook. And you can elect not to share what you watch with friends, via the share settings or privacy settings on Hulu or Facebook.
TechCrunch is enthusiastic about the app: “We welcome you, Hulubook. Facebulu.”
Dish Networks has announced its Blockbuster Movie Pass service that will offer streaming video; DVDs, Blu-ray discs and games by mail; and a satellite subscription service with on-demand movie channels.
Launching October 1, the service will initially be available to Dish subscribers and offered to others at a later date.
Movie Pass will include more than 100,000 movies and TV shows by mail, 5,000 streamed movies to TV and 10,000 to computer, and 3,000 games by mail. Users will have access to 20 premium Dish movie channels and the ability to exchange discs in-store at Blockbuster locations.
Current Dish Network subscribers will pay $10 per month for the service, while new Dish subscribers will have an opportunity for a free introductory year.
While the streaming capacity of the Blockbuster Movie Pass is not yet that of Netflix or Amazon, users will have access to movie offerings through Dish movie channels about a month earlier than other services. Also, Movie Pass touts “one company, one bill and one connection,” something that Netflix no longer has after splitting its streaming and mail-in services.
Following last week’s F8 developer’s conference, and the news that Facebook is making a significant shift into media sharing, Wired offers an interesting take on possible missing elements to successfully sharing music via the social network.
“Yes, Facebook will facilitate legal music sharing — something the industry has been trying to do ever since Napster electrified (some would say “electrocuted”) the music business over 10 years ago,” suggests the article. “But as important as it is, Facebook’s music initiative is missing five key ingredients, all of which are within its grasp.”
According to Wired, the following are the missing ingredients…
True Music Sharing: Facebook should allow people to listen to each other’s music using whatever music service they want. Instead of using the service that the friend is using, you should have the option to select which platform you would like to use. They’ve started doing this (somewhat unfairly) for Spotify with a “play in Spotify” link in shared songs on other platforms, like Rdio.
Real-Time Group Listening: “Why didn’t Facebook music launch with the ability to join other listeners on a station in real-time, so that people can chat about what they’re hearing…?”
Music Tab in the Ticker: With all the new information coming to Ticker through automatic updates in Open Graph, it would be nice to have a music filter to separate music updates from other things like adding friends.
Apple: Apple, iTunes and iCloud were not included in the media system and would be beneficial to users.
Independent Developers: Facebook just needs to “stay out of the way” of independent app developers that build third-party players atop their catalogs — apps that could offer a range of interfaces, platforms, designs, features, and more to programs like Rdio or Spotify.
Turner is working with Google TV to launch apps giving users who authenticate they are pay TV subscribers access to full-length episodes of TBS and TNT shows.
Turner is already doing this on the Web and through iPad and iPhone apps. The broadcaster confirmed it will offer the new apps, but did not say when they’d be available.
The next version of Google TV is expected in a few weeks. “The second iteration of the platform will be based on Android 3.1 (a.k.a. Honeycomb) and have access to the Android Market,” reports GigaOM. “Dedicated apps as well as authentication features could possibly convince other TV networks to embrace the platform as well, but it’s unclear how this would be received by consumers.”
Consumer interest in Google TV had been initially tepid but is showing some signs of improvement. Logitech, for example, was forced to drop the price of its Revue set-top box from $250 to $99 in July, but then the companion box to Google TV “made a brief appearance in Amazon’s list of the ten best-selling gadgets last month,” indicates the article.
YouTube added several new tools for video creators this week, as part of its “ongoing goal to foster the creation of great video content,” explains the company’s Broadcasting Ourselves blog.
The first tool, currently in beta, converts 2D video content into 3D. YouTube admits you’ll get better results with a 3D camera, but this is at least an option for those without one.
Second, you can now upload videos longer than the current 15-minute limit allows, and the advanced uploader is no longer required for larger files. However, the feature is restricted to users with “a clean track record who complete an account verification and continue to follow the copyright rules set forth in our Community Guidelines.”
Finally, YouTube gives creators the ability to add effects and text using Vlix, and adds Magisto, which will automatically take your unedited video and create a short clip complete with music.
Netflix announced a partnership with Facebook to allow members to share what they are watching on Netflix with their family, friends and associates via the social networking site. However, this feature will NOT be available in the U.S. (only in Canada and Latin America) due to a 1988 law that makes sharing that information illegal.
The Video Privacy Protection Act (VPPA) was created to prevent “wrongful disclosure of video tape rental or sale records (or similar audio visual materials, to cover items such as video games and the future DVD format).” Congress passed the law after Robert Bork’s video rental history was published during his Supreme Court nomination.
“Unfortunately, we will not be offering this feature in the U.S. because a 1980’s law creates some confusion over our ability to let U.S. members automatically share the television shows and movies they watch with their friends on Facebook,” explains Netflix Director of Government Relations Michael Drobac. “The good news, however, is that some forward-thinking members of Congress have introduced legislation, H.R. 2471, that would allow you to make this choice… If you want the choice to share with your friends, please email Congress to urge them to pass this modernizing legislation.”
According to Wired, Netflix currently has 24 million subscribers inside the U.S. and only a million subscribers internationally.
