TV nets face up to growing online competition

25 09 2007

Variety reports on the latest online video forecasts produced by market analysts Screen Digest: the U.K. market for online TV will be worth £181 million (US $362 million) by 2011, but growth of the online movies segment is predicted to be slower.

There’s no doubting that across the Pond, the competitive environment is really gaining traction, as observed by the Financial Times: in the two years since that watershed moment when iTunes first started offering download-to-own TV shows from Disney, all of the major networks have scrambled to not only beef up their own sites, but also to broker those all-important third party syndication deals.

In the last week alone, Walt Disney-owned ABC has agreed a deal to syndicate its shows, for free, via AOL. The net joins CBS, which has been aggressively pursuing its own syndication strategy for the past few months, while Hulu.com, the online video aggregator site JV between NBC Universal and NewsCorp. is due to bow next month.

Hopping back over the Pond to the U.K., the BBC, ITV, Channel Four and five all have online catch-up TV services: the BBC offers the broadest range and volume of hours, while ITV and Channel Four are increasingly bolstering their catch-up offers with back catalogue shows. Satellite broadcaster BSkyB is broadening its Anytime service, with different flavours of the catch-up service available both via broadband and Sky+ DVRs; the company’s recent pact with Sony will also see an extension of the service for Playstation PSPs.

The Screen Digest research referenced at the top of this post acknowledges that established players such as TV networks also face competition from non-traditional market entrants, such as Joost and iTunes. Significantly, it may be players such as Apple and Microsoft, which stand to gain the most if they can finesse their strategies to leverage consumer relationships through ownership of devices, such as iPods, or the world’s most uniquitous operating system.

Four predictions of my own:

  1. The last year or so has merely been about positioning and trying to establish which online video offers work, and which don’t. Note CBS is moving beyond merely offering full-length TV shows online and gradually ramping up 2.0 functionality: conversational content. 2008 will see the space grow up considerably. 
  2. Whether it’s aggregators or TV networks’ own sites, online video offers are principally restricted to ‘walled gardens’ of content, usually from the operating network or a select few content partners. This is wholly alien to the TV viewing experience: consumers don’t watch shows from a single network or producer. The walled garden approach smacks of protectionism and, over the fuller term, it won’t last for all but the smallest handful of players. The creation of Hulu.com is the first acknowledgement by two major players that hybrid partnerships such as thes, which broaden out the available content offer, are the way to go. YouTube is further evidence of a successful broad-brush aggregation model – albeit with some copyright complications.
  3. The market is already overcrowded: come further shocks to the world’s stock markets (an inevitability), watch the venture capital evaporate. Incumbent players looking to second or third round financing, against a backdrop of unproven business models (let alone profit) will shutter or consolidate. Viacom had better be hoping that it can pick up the assets of Joost for a song.
  4. Apple TV and Microsoft Media Center are the first two examples of mainstream PC/TV convergence: but neither has yet created a compelling enough content offer nor low enough price points to give the products a reasonable run at setting the market alight, beyond early adopters. Next gen games consoles from Sony and Microsoft will up the ante by gradually bolstering their IP-delivered VOD offers, but even these may struggle to break through beyond gaming loyalists. Either some boffin will come up with the cheapest and most elegant plug-and-play convergence-enabler – witness what Freeview set-tops did for the U.K. market – or new product categories, such as networked DVD player / recorders or DVRs will hit that magic tipping point of attractive pricing and mainline retail distribution.
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NFL seizes back control of its online video destiny

3 09 2007

The U.S. National Football League (NFL) has regained direct control over some of the most valuable online video out there by hosting material on its own site, ending a seven-year partnership with CBS Sportsline.

The NFL’s new approach gives it more say over the context in which its material is presented, as well as leverage when it comes to setting advertising rate cards. The move also rekindles the debate over whether walled gardens limited to the content of a single provider, or syndication via broader aggregators will win the day.

For certain genres of content — sport and new release movies as examples — restricted availability via a single destination will likely continue to work. But for everything else, TV shows included, it’s an approach which flies in the face of one of the most established consumer beahviours: the way in which they watch TV and that this is never limited to a single channel or network.

It’s the latter approach which informs emerging plays from the likes of Joost and Babelgum, with one current downside, neither has yet to sign up a breadth of content providers which make either service a destination in their own right.

Hulu.com, the soon-to-launch online TV portal JV between NewsCorp. and NBC Universal (NBCU), promises to redress the balance, and even now it’s clear that at least one of the partners is re-thinking its distribution relationships with third parties, such as last week’s revelation that NBCU is to end its deal with iTunes. 





Online video: another one bites the dust

28 07 2007

For all the successes in the online video landscape, some offers from major brands have been spectacularly underwhelming and have either had the plug pulled or been left to quietly die.

ThisJustIn, the comedy site launched just six months ago and aimed at being a “brand extension and potential development pipeline” for HBO, has been axed by parent company TimeWarner, reports Variety.

The report states: “the site, which was a joint venture with AOL (and replaced that company’s existing comedy channel), never got off the ground. It suffered from what some visitors said was a confusing layout as well as a lack of marketing exposure.”

Apart from the absolute no-brainer that intuitive navigation should be a given, it also highlights the importance of on-air cross-promotion for any online initiative launched by a broadcast network.

Other famous casualties on the Road to Online Damascus include CBS’s Innertube and Annheuser Busch’s lame duck bud.tv.

The latter fell at at the first usability hurdle by being compelled to introduce an age verification system during registration, so complex that traffic plummeted. Even once in, users were subjected to such lacklustre content, they seldom came back.





Leslie Moonves: show me the money

23 07 2007

When it comes to multiplatform, Leslie Moonves of CBS has a simple solution: watch more linear telly. According to this report in Ad Age, Moonves is adamant that content monetisation comes from linear and linear only. He sort of has a point and not all at the same time: if you follow his argument that online metrics are a bit wonky, it figures (Nielsen’s more accountable system won’t be in place until 2011) — but then it’s hardly as if linear TV measurement is that accountable.

The report belies a broader point, simply that while an increasing amount of ad spend is moving away from ‘traditional’ media and on to the web — hence why every major network is beefing up its online services — a smaller proportion is going in to online video advertising. Madison Avenue remains years behind the curve when it comes to online video ads, usually farming such work out to the plethora of boutique agencies which specialise in the area; but the spend is still peanuts compared to overall budgets.

Advertisers and networks listen: the web is where < 35s are. Social networks are grabbing their attention in a way TV — until now, the pre-eminent medium — cannot compete with. It’s not the end of TV, it’s the beginning of searchable TV.





More online TV premieres

12 07 2007

US cable network Lifetime has partnered with Yahoo! TV to show full episodes of its new dramas A Side Order of Life and State of Mind prior to their boradcast airing. It’s an expansion of Lifetime’s earlier deals with Yahoo! TV, which saw sneak previews of Army Wives offered via the portal.

Other US nets which have experimented with online premieres include CBS, which streamed Jericho on Yahoo! and NBC, which offered Studio Sixty on the Sunset Strip via AOL.





Checkpoint Charlie for old and new media

12 07 2007

Reuters offers coverage of Allen & Co’s media conference in Idaho, where Skype and Joost founders Janus Friis and Niklas Zennstrom were this year’s star turn. “The time in the market is good for traditional media and digital to come together,” Mike Volpi, Joost’s newly appointed chief executive, told Reuters. “Technology has matured to a point where rights can be protected properly.”

Sling Media’s CEO Blake Krikorian was there too, impressing Wall Street types not just with his placeshifting gizmo, but also news of his first major content deals with CBS and the National Hockey League.





VOD a fillip for Xbox Live

5 07 2007

Good to see more content providers experimenting with reaching young audiences who may prefer to watch movies or TV via a games console, as profiled in this NY Times piece.

Xbox Live marketplace

The Xbox Live Marketplace offers around 2,000 hours of downloadable content: a mix of download-to-own, download-to-rent (US $2 to $6 for a 24-hr viewing window) and free. contentonce downloaded, can be viewed for up to 24 hours. There’s some HD content, as well as exclusive stuff: a premiere episode of South Park was downloaded 400K times, when offered.

Among Microsoft’s content partners on the service are Paramount Pictures, New Line, Warner Bros., MTV, CBS, A&E and ABC.

“It’s where entertainment delivery is headed,” says Anita Frazier of industry analysts NPD Group. “It’s a natural evolution for any of these boxes, whether it’s a computer or an Xbox or a PlayStation 3 or Apple TV to deliver a variety of content and whether it’s games or music or TV or movies,” she adds. 

Most interesting of all, Microsoft cites “double digit” growth of VOD revenues from the service, every month since introduced.