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.
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.”
Janus Friis, co-founder of KaZaA, Skype, Joost and Rdio (with partner Niklas Zennstrom) is working on a new online video subscription service that will be available soon in the UK.
According to GigaOM, Friis has been “assembling an A-team of media and Web technology experts to launch a site that seems destined to replicate the model behind their music subscription site Rdio in the video space.” Offices have been set up in Santa Monica and Europe.
From the follow-up Q&A: Vdio (Vee-dee-o) is in closed beta for the UK and is privately funded, while the assembled team’s experience comes from companies such as Netflix, Microsoft, TV Guide and Napster.
A spokesperson for Zennstrom’s VC company Atomico confirmed that Zennstrom is not involved in the project.
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.”)
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.”
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.
According to Miramax CEO Mike Lang, the future of the home entertainment industry and movie production rests in cloud-based digital locker UltraViolet.
Warner Home Video and Sony Pictures Home Entertainment are among the studios rolling out sellthrough titles this fall, which are capable of being stored on UltraViolet and then played on various compatible devices.
“As an industry, we really have to believe it,” Lang said in a Q&A session at MIPCOM in Cannes. “We really don’t have choice. If the home entertainment business as we know today, in terms of the transaction business, goes away, that’s not good for anyone in this room.”
“Lang said failure to reinvigorate the sellthrough model could adversely affect studios’ ability to finance movies going forward,” explains The Hollywood Reporter. “Sales of DVD/Blu-ray Disc/electronic sellthrough movies have historically affected whether a title was profitable or not.”
Lang suggests the digital transaction model has not always been clear to consumers, especially in terms of compatibility with all the available devices and different ecosystems. He points out that Netflix has been so successful due to its ease of streaming on multiple devices such as Blu-ray players and game consoles.
The Miramax exec believes the studios need to partner with tech companies and retailers moving forward to develop a cohesive strategy. “I don’t know how many people use photo sharing software, but that is 90 percent cloud-based,” he said. “Ninety-five percent of the software industry in the world is now through cloud-based transactions. I’m hopeful that the movie business gets there.”
Microsoft is getting a boatload of new content for its Xbox video service intended to help it serve as a digital media hub. The company has struck deals with Comcast, Verizon, HBO and others.
Verizon and Comcast will be joining AT&T’s U-Verse to provide content, although while Verizon will include live video TV and video on demand, Comcast is testing the waters with its VOD library only. HBO Go streaming access will provide HBO original programming and movies from Warner Bros., Fox Searchlight and Universal Studios. Bravo, EPIX and Syfy are among the cable networks that will be available. Xbox’s international content will include the BBC, Channel 4, Channel 5 and LOVEFiLM in the UK; Antena 3, RTVE and Telefonica in Spain; and Televisa in Mexico.
But how do you get to the movies, TV shows, games and music that you want? Microsoft hopes you will command your Xbox with voice control, motion control and a Windows smartphone.
“This is incremental stuff but it’s still interesting. A source who’s played with the new service says it’s genuinely cool. Just as important, given that Microsoft has sold some 50 million compatible machines, it has (potential) leverage to do some really interesting stuff,” reports All Things D. “This is where Google TV would like to be, and it’s why Google is out pitching content guys for a relaunch this fall.”
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.
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.
Hollywood studios are responding to the 40 percent drop in home entertainment sales by recognizing that the future may heavily rely upon ramping up Internet delivery businesses.
According to the Los Angeles Times: “Across Hollywood, a quiet revolution is brewing that’s about to transform living rooms around the world… In the next few years, the growing number of consumers with Internet-connected televisions, tablets and smartphones will face a dizzying array of options designed to make digital movie consumption a lot more convenient and to entice users to spend more money.”
“It’s now critical that we experiment as much as possible and determine how to build a vibrant market for collecting digital movies,” says David Bishop, president of Sony Pictures Home Entertainment division.
Studios may be eager to change, but have yet to determine how it can be effectively accomplished with a uniform approach. As a result, the immediate future will most likely see an expanded but confusing selection of options for consumers.
The article looks at some of these potential options including premium VOD, cloud computing, UltraViolet’s “virtual locker,” new offerings from Apple’s iTunes and sharing movies via Facebook.
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.”
