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.
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.
Google previously announced a high-speed Internet service project in Missouri and Kansas. The Wall Street Journal now reports that insiders indicate Google may expand the project to include a phone and video service, with channels from Disney, Time Warner and Discovery.
Google has other ventures in the television business including its new Google TV software update and announced deals to produce around 100 free, ad-supported online YouTube channels.
A former Google product director said, “Internet companies like Google will be able to give you [the] same high-quality content” as cable and satellite prices and possibly at lower prices as more TVs connect to the Web.
Nothing has been confirmed about Google’s plans to expand the project to wider areas. But if the company follows through, it “could unleash a new wave of competition within the traditional TV business,” suggests WSJ.
Analyst Anthony DiClemente of investment firm Barclays Capital estimates YouTube’s revenues at $1.6 billion, which suggests the “site’s revenue has now synced up with the price Google paid for it five years ago,” reports AllThingsD.
Analysts debate the global percentage of Web video revenues YouTube has captured, but seem to agree that it “is finally a big business that makes serious money.”
Is the Hollywood channels strategy the next big step for YouTube to take on the traditional TV and cable networks?
“The big idea behind that one, after all, is to create stuff that advertisers will be happy to pay a premium for,” suggest the article. “But if YouTube is already generating $1.6 billion a year for non-premium stuff, why bother?”
AllThingsD suggests that the new “channel strategy is a big focus for YouTube, but it doesn’t mean the site is abandoning what’s already working.”
Forbes speculates that the rumored future Apple TV would create a demand for single channels, which could potentially break up the cable pricing monopoly.
Rather than paying for a package of a hundred channels, users would pay a la carte for content just as single-channel apps have become popular in the mobile sphere.
“Presumably, Apple wants to disrupt this market the same way the iPod and iTunes made it easier for consumers to buy music, and the way the iPhone is slowly moving the cellular industry to data plans over voice plans (see: iMessage, Facetime),” suggests the article.
Providers such as Time Warner Cable, Optimum and DirecTV already have apps for live streaming of channels. And ESPN, CNN and Major League Baseball have their own apps.
“[Cable providers] might consent to separate channel apps as long as each still requires an overall subscription…that would certainly put a crimp in [Apple’s] potential plans to revolutionize television,” explains Forbes. “And if Apple provides incentives for channels to go it alone, the fight could be massive.”
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.
Google is offering an update to Google TV that includes a streamlined UI, quick-launch bar for most-used apps, an app that can locate 80,000 movies and TV episodes via the Web or TV, and a new TV-oriented YouTube interface.
The Android Market looks to launch current and new apps specially optimized for television (access to the Android Market may prove the biggest step for Google TV).
YouTube is looking to create original content and become a “next-generation cable provider” by signing deals with media companies and celebrities.
However, the service has been hindered by TV networks that “continue to block Google TV from viewing Web sites that stream some of their shows that are freely available to personal computer browsers,” reports Forbes. “That’s a big turn-off given that other devices such as Apple TV, Roku, and many others offer access to more TV content.”
In a related post, GigaOM lists the more notable new features and includes a 7-minute video demo.
“The new version of Google TV isn’t really all that groundbreaking; rather, it’s what Google TV should have offered all along,” suggests GigaOM. “And that seems to be exactly what Google was aiming for with this release — not a big flash, but finally a solid base that can be continuously improved both through Google’s apps as well as applications from third-party developers.”
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.”
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.
By the end of the year, both the Wii and Nintendo 3DS will have access to TV shows and movies via the $7.99 per month Hulu Plus service (but only in 2D).
Hulu Plus joins Netflix in offering content on the Nintendo devices.
Also, the 3DS will get a software update at the end of November that allows 3D recording for up to ten minutes, and the ability to “stitch together stereoscopic images for stop motion animation that jumps out of the tiny screen at you,” suggests Engadget.
“With both Hulu and Netflix in tow, as well as the ability to create your own content, the 3DS is actually turning into quite a powerful little portable.”
Steve Jobs had plans for a full-fledged, integrated Apple TV, The Washington Post learned after reviewing the authorized Jobs biography by Walter Isaacson.
“He very much wanted to do for television sets what he had done for computers, music players, and phones: make them simple and elegant,” wrote Isaacson in the book, available today.
“I’d like to create an integrated television set that is completely easy to use,” Jobs told the author. “It would be seamlessly synced with all of your devices and with iCloud. It will have the simplest user interface you could imagine. I finally cracked it.”
Rumors have persisted that Apple might launch a television by the end of next year. Details have not been available, but if it “offered users a la carte programming with integrated Web surfing and access to Apple’s iOS platform, it could upend longstanding industries in telecommunications and entertainment,” suggests The Washington Post.
After months of bidding, Hulu’s owners — News Corp., NBCUniversal, Disney and Providence Equity Partners — have decided to stop its sale.
“Since Hulu holds a unique and compelling strategic value to each of its owners, we have terminated the sale process and look forward to working together to continue mapping out its path to even greater success,” explained the partners in a short statement. “Our focus now rests solely on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu.”
In a related TechCrunch post, it was suggested that media companies saw more value in retaining licensing fees than selling them.
Bidders were not willing to pay more for Hulu knowing that the costs for content rights would increase dramatically after the two year period being sold. (Google reportedly bid $4 billion, but wanted streaming rights for longer than the guaranteed “couple of years.”)
A new study from Nielsen shows that approximately 40 percent of tablet and smartphone owners use their devices on a daily basis while simultaneously viewing television. The figures jump to 70 percent for users who do the same several times a week.
Most of these viewers are primarily checking email, followed by surfing information and accessing social networks, suggesting strong potential for second-screen applications.
The study suggests users are accessing social networks more than websites with information related to the TV program. “Unfortunately, the study doesn’t break down if people are 1) participating or just listening to social conversations and 2) if the conversations are related to the TV program at hand,” reports Lost Remote. “But it’s probably safe to say that more viewers are more inclined to talk about (or listen to) conversations about a TV show than proactively look up expanded content about it.”
Successful second-screen apps should bring together “social conversations, expanded content and interactive (even synchronized) advertising,” suggests the article. “Compelling second-screen experiences, in theory, will move the needle more in the ‘related’ direction, making TV viewers more engaged overall.”
Netflix returned from MIPCOM last week with several new foreign TV shows it hopes will draw interest from its 25 million subscribers.
Programs include Norwegian gangster drama “Lilyhammer” starring Steve Van Zandt, French/German co-production “Borgia,” and the British supernatural drama “Being Human.”
The slate of foreign programming will join the remake of BBC drama “House of Cards” as Netflix turns to original, first-run drama series.
“Netflix has already committed to a second season of both ‘Borgia’ and ‘Lilyhammer,’ suggesting its taste for original and foreign-made fare is no passing fancy,” according to The Hollywood Reporter. “The company is also in a bidding war with Showtime and Hulu for the rights for the relaunch of cult comedy series ‘Arrested Development.'”
Netflix chief content officer Ted Sarandos points out the strategy is in response to customer demand, since TV shows account for 50-60 percent of total viewing on Netflix.
“We’ve moved very aggressively into this space,” Sarandos said. “The growing audience for these 1 hour serialized dramas is typically on pay TV: Showtime, HBO or Starz, those ones who are least likely to want to sell their shows to me on our (second-run) season-after model. So we have to develop the muscle to create and distributing these shows ourselves.”
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.
