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.




NewsCorp.: TV shows to stay on iTunes

12 09 2007

Following last month’s decision by NBC Universal to end supplying iTunes with download-to-own TV shows, speculation had grown over the future of other contracts coming up for renewal.

NewsCorp. prez Peter Chernin yesterday confirmed that the company has no plans to take its shows off iTunes, but has called on Apple to be more flexible about its approach to pricing.

“Right now we have a perfectly good relationship with Apple,” Chernin told Reuters. “But let me say this, we’re the ones who should determine what the fair price for our product is, not Apple.”





Online TV: mind the gap(s)

8 09 2007

Warner Bros. has finally relented to pressure from Walt Disney Co.’s ABC network and granted on-demand streaming rights for shows it produces for the latter, the strongest suggestion yet that the nets are sensitive to consumer feedback over why some shows are offered for online catch-up, while others aren’t.

Under the terms of the two-year deal, ABC will stream Warner-made shows via ABC.com and keep all ad revenue during the first year. In year two, Warner retains all revenue and gets to offer the same shows on a download-to-own basis, for on-demand streaming and as DVD box sets. Is it just me thinking that ABC ended up with the better side of the deal?

Since its launch in September 2006, the player has streamed all or part of 134 million episodes, ABC data shows. ABC was the first U.S. broadcast network to offer its prime time shows for free on the ad-supported player.

The most interesting part of the deal, however, is that in year two, all of the shows offered by Warners will continue to be branded in ABC’s colours, with viewers given pointers back to ABC’s site.





Paid online video: Google throws in the towel

11 08 2007

Google has conceded failure in its attempts to monetise video downloads and ended its 19-month experiment to offer paid programming, reports the Washington Post.

Google has been offering a range of video on a download-to-rent or download-to-own basis since January 2006, with titles ranging from US $2 to $20 and viewable only through a downloadable player.

Google’s decision to close the retail part of its video site indicates the company had less success selling content than attracting advertising spending, which accounts for 99 percent of revenue, said the New York Times.

“The current change is a reaffirmation of our commitment to building our ad-supported monetization models for video,” Google spokesman Gabriel Stricker said in an e-mail to Bloomberg.

Visitors to Google’s sites watched 1.8 billion clips in May, accounting for 22% of videos viewed in the U.S., according to online measurement firm ComScore. However, the vast majority of these were via YouTube.





CinemaNow broadens repertoire

26 07 2007

CinemaNow, the movies and TV downloads service, has added more than 6,000 music videos and live performances licensed from record labels SonyBMG, EMI and Sanctuary Records — all of which will be made available from the company’s WatchMusicHere.com site. Music videos will be available for purchase on a download-to-own basis for $1.99. Select live performances and long-form videos will be available for purchase on a download-to-own basis from $9.95 – $14.95 and on rental basis from $2.99 – $3.99, all in the WMV format.





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.