Hulu: thin on content, high on usability

Online Video Watch gives its verdict on the Hulu private beta over in this post. The service scores highly for ease-of-use and discoverability of content, but poorly for the extent of the content offer itself.

However, that may be about to change, says the Hollywood Reporter, revealing that Warner Brothers Television is in discussions with Hulu, which will likely see a selection of its catalogue added alongside that from Sony and MGM, as well as Hulu co-founders NewsCorp. (Fox) and NBC Universal.

In related news, paidContent offers a pretty blunt assessment of NBCDirect.com, a new TV downloads service which offers content for seven days from broadcast and viewing for 48 hours once first played.

Apple to halve cost of iTunes TV downloads; supplier rebellion brewing?

Apple is planning to cut the cost of TV downloads via its iTunes service from US $1.99 to just 99 cents, reports Variety.

The move would create a single price point for both audio and TV downloads, which Apple believes will drive consumption for the latter category, which remains completely dwarfed by equivalent music track downloads. Given Apple’s success in dominating the digital downloads sector, any changes to pricing could prove an adrenalin shot to sales of TV downloads.

It’s reported that pricing for movie downloads will likely remain unchanged and there hasn’t been any comment on price points for the recently-launched TV downloads offer via the iTunes U.K storefront, where shows sell for double the existing equivalent price across the Pond.

Reuters builds on Variety‘s coverage, suggesting that other TV networks may be emboldened by NBCU’s move, with a Gartner analyst even speculating that video content may all but disappear from the iTunes service.

News Corp., Time Warner, Viacom and Walt Disney Co. all have contracts with iTunes. One of them is due to expire by the end of this year, and another by next year, according to industry sources, the report adds.

In related news, Apple and partner record labels are to go before the European Commission on 19 and 20 September, to defend accusations of price-fixing across the Eurozone.

NBCU blows out iTunes TV downloads deal

NBC Universal, the biggest supplier of TV shows to iTunes, will not be renewing its two-year deal offering downloads via Apple’s digital entertainment storefront when it comes to an end in December, The New York Times reports. In a tit-for-tat response, Apple then announced that it would cease offering NBC TV shows from September.

While both companies declined to discuss the exact reasons behind the decision, it’s believed that NBCU had grown increasingly uncomfortable with Apple’s rigid pricing model, which offers just two price points for download-to-own video titles: US $1.99 for TV shows and $9.99 for movies.

NBCU’s 1,500-hour catalogue accounts for as much as 40% of TV show downloads via iTunes, including titles such as The Office and Heroes which play particularly well to online audiences.

Proving that Apple is mostly expert when it comes to managing ‘bad’ news (something TiVo also excels at), its revelation that a new generation iPod is on the way more than offset the blow, sending its shares up 6% on a day’s trading.

In related news, NBC Digital Entertainment yesterday announced that it will stream free episodes of Late Night With Conan O’Brien, when the series returns for its new season on 13 September.

iTunes TV downloads launch in the U.K.

Apple iTunes users in the U.K. are now able to access a range of download-to-own TV shows licensed from ABC/Disney and Viacom at £1.89 a pop (double the equivalent of the U.S.), the first time the service has been extended outside the U.S since it created a watershed moment for online video in late 2005.

The initial content offer is pretty thin at just 28 U.S. series, many of which in the case of ABC-licensed content have already been offered on Channel 4’s 4oD service, albeit at higher rates. The lack of any U.K.-produced titles could be perceived as a tad culturally imperialist – not to mention a lack of riches.

In the U.S. iTunes users have been downloading an average of one million TV episodes each week (50 million have been downloaded to date); meanwhile two million movies have been downloaded via the service so far. But this still pales into insignificance vs. performance of audio titles: 13 million single tracks and just under a million full album downloads every week.

Whether this latest development will play to Apple’s business model of driving hardware sales (eg video iPods, Apple TV) through offering a compelling range of software (TV and music) remains to be seen. In any event, it’s a big move for the U.K. market which can only serve to stimulate overall demand for licensed, downloadable TV and movies.

Sony / Sky JV brings go-anywhere TV to the PSP

Following news added yesterday that the European version of the PlayStation 3 is to get inbuilt TV receiver and DVR functions… 

Sony Computer Entertainment Europe (SCEE) and BSkyB have revealed further details of their joint-venture entertainment service for Playstation PSPs, first announced late last month.

Launching early next year, the Go! video download service will allow 2.3 million PSP owners in the U.K. and Ireland to watch Sky content on the move, reports the Financial Times. A collaboration with telco BT will also allow PSP users to make voice and video calls via their devices, as well as the ability to send and receive instant messages.

For the entertainment service, customers will be able to pick and choose from individual programmess offered by Sky, or subscribe to content packages like sports, entertainment, or animation, adds Wired.

BBC iPlayer: first publicly-released uptake stats; 4oD update

BBC iPlayer launched in beta a week ago today. According to this report, 100,000 users are up-and-running on the service.

paidContent says the BBC puts the number of users so far at 120,000; with a forecast of 500,000 registrations to the service during its first six months. Meanwhile, Channel 4’s 40D service will soon reach 500,000 users, according to The Guardian.

40D has so far recorded 2.5m unique users and 20m downloads of shows since the launch in December 2006.

In a possible hint at the forward roadmap for BBC iPlayer, Jeff Richards, vice president of digital content services at Verisign, which provided the peer-to-peer download technology underlying both the BBC and Channel 4’s services, said: “Over time, the iPlayer could be modified to allow users to embed video.”

iTunes video update

According to Tuesday’s press release, announcing music downloads had topped three billion, Apple has updated its numbers for the iTunes video catalogue. According to the statement, there are now 550 TV shows and 500 movies available for download.

Forecast: internet TV advertising to be worth $10 billion by 2011

Online video advertising is set to take 18% of all internet ad revenues by 2011, according to a forecast published last week by research firm Understanding & Solutions (U&S).

“There is an Internet TV ‘goldrush’ in progress,” says the company, “as mainstream broadcasters, cable networks and TV content producers move their content online alongside a new raft of legitimate ‘Webcasters’ (Internet Video and TV aggregators) like Joost, Vudu and Babelgum.”

“Globally, we estimate there are more than 20 billion videos being streamed across the web each and every month. In the US alone, active Internet video users are streaming an average of 55 videos per month – and this is just the beginning,” said U&S principal consultant John Bird.

“Online video is growing at around 200% each year and, going forward, television will be a primary driver. Major US broadcast networks are already reporting tens of millions of streams monthly from their websites, but to build sustainable revenues the industry needs to effectively engage with consumers to understand what works, it needs to establish re-transmission rights and develop audience measurement techniques.”

“Unlike music and film industries, which operate with paid-for content, television is predominantly a free-to-air market and lends itself to the Internet. The challenge for the industry will be in harnessing the power of the medium and developing the revenues through sponsorship, advertising, subscription and paid-for business models. Piracy and ‘free’ TV content on file-sharing networks will be an endemic problem faced by the emerging business, as has been the case for the music industry over the last 10 years.”

CinemaNow broadens repertoire

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.

Were content owners right to open the online stable door?

Barely a day after the 25th anniversary of the computer virus comes news that the BBC’s iPlayer, or at least the Microsoft-supplied DRM solution it has chosen to use (probably the most robust, widely available one out there) has been hacked. Hardly a surprise that something produced by Microsoft (or anyone else) has, but more worry for the BBC just 10 days ahead of its public launch of the iPlayer product.

The BBC has been characteristically stalwart and low-key its response: no official release on its press office site, but clearly a line against enquiry: problem, what problem? The iPlayer launch will go on.

DRM was made to be broken. Organisations like the BBC have already gone on the record about how its model is better lent to a world without restrictions, but given that it isn’t the sole owner of all rights invested in any production, this won’t fly (yet).

Many question why an organisation like the BBC, with its unique market position, isn’t being braver about a tougher stance on this right now. The answer? It wants to make available the broadest possible content… now. It’s taken years for EMI to wake-up to the fact that DRM-free content via iTunes is possibly a bigger business opportunity; the music biz is years ahead of the curve in this respect.

Content licensors are right in their assertion that both they and the talent they represent should be justly rewarded for their efforts. It’s something that Hollywood talent unions are still wrestling with, with no easy solution ahead for either side in the negotiation.

The problem remains: everyone wants to own consumers, while consumers don’t particulary want to be owned. Time to dust off the business models (cue: social networks), appreciate we live in a plurocracy, but simultaneously devise profit-driven ideas which sit comfortably. True convergence can’t happen without it.

Mediaset launches online video service

The UK terrestrial broadcasters have generated a fair amount of press with their online video launches, but now comes the first major service from mainland Europe: Italy’s (or should that be Silvio Berlusconi’s) Mediaset.

The video portal will initially offer a selection of ‘best of’ TV series, news and entertainment content from Mediaset’s portfolio of terrestrial channels, with premium VOD to follow.

From September, three Serie A soccer matches will be offered each week, together with downloadable episodes of popular Italian and US TV series. 

There’ll be some web exclusive content as well as user-generated material related to the broadcaster’s programming.

Interestingly, given all of the hullaballoo about the extent of the BBC’s iPlayer offer, Mediaset’s interactive head Yves Confalonieri has ruled out the possibility of offering all its TV content via the portal: “the user doesn’t want all TV content on this medium,” he said.

The site currently attracts 6.5 million unique users per month, a figure Mediaset are banking on increasing with the new offer. The bulk of revenue is expected to be from advertising sales, rather than pay-per-view.

Mediaset is also looking at content syndication deals for third party sites, such as YouTube. Given the former’s recent acquisitions of Endemol and film distributor Medusa, it stands to have a significant edge over competitors.

Netflix stats

Netflix has disclosed that users have watched 5 million movies and TV shows since it launched its WatchNow online downloads service in January. The service was plagued by delays when initially offered, staggering rollout to 25K additional users per week. So far the service is used by 250K people a week, with a choice of around 2,000 titles.

The cost of online video-on-demand

4oD: not explicitly reported, but new media division – spanning other activity too – spent £34.6 million, up £11.5m on 2005. (Source: C4’s 2006 annual report).

60frames: the JV between Hollywood power brokers United Talent Agency and online ad agency Spot Runner. Start-up capital of US $3.5 million. (Source: Globe & Mail, 31 Jul 07)

Babelgum: €220 million [US$288m] (source: C21 Media [by subscription], 19 April 2007). Other sources suggest seed capital of €10 million [£6.78 million] from founder Silvio Scaglia, with a further €70 million pledged during the next three years.

BBC iPlayer: £4.5 million (source: The Sunday Herald [UK], 2 December 2007). Funded by licence fee.

BitTorrent: backed by US $20 million from  Accel Parners and DCM.

Break.com: Lionsgate has invested US $21million for a 42% stake.

Brightcove: US $81 million so far… Launched 2005 with $5.5 million funding from General Catalyst Partners and Accel Partners (source: company press release, 1 March 2005). Raised a further $16 million the same year, attracting investment from AOL, IAC/InterActiveCorp, The Hearst Corporation, and Allen & Company LLC (source: company press release, 22 November 2005). A further $59.5 million was sunk by a syndicate led by AllianceBernstein L.P., Brookside Capital LLC, Maverick Capital, Ltd.; the funding round also included investments from The New York Times Company, Transcosmos Investments & Business Development, Inc., as well as all of the company’s existing strategic and financial investors: Accel Partners, Allen & Company LLC, AOL, General Catalyst Partners, The Hearst Corporation, and IAC/InterActiveCorp. (Source: company press release, 17 January 2007).

Bud.tv: backed by parent company Anheuser-Busch to the tune of US $30 to 40 million.

Dave.tv: Provider of video distribution and social networking platforms to content providers, founded in 2003. The company is currently backed by angel investors, including Applied Semantics co-founder Rex Wong, who is believed to have sunk at least half of the company’s initial $7 million funding (source: MarketWatch, 1 Aug 2006). Potential investors take note: the company’s site says “We are in the midst of seeking strategic or venture capital to facilitate our growth.”

ITV Broadband: £20 million (source: Digital Spy, 8 June 2007).

Hulu.com: NBC Universal / NewsCorp.’s JV, originally dubbed ‘Newco’: US $131 million (source: LA Times, 29 June 2007).

Joost: seed capital of US $45 million (source: Wikipedia, 29 June 2007). Backers include Sequioa Capital, Index Ventures – an early investor in Skype – CBS, the US media group, and Li Ka-Shing, the Hong Kong tycoon. Viacom, the US media giant, also has a minority stake.

Vmix: seed capital of US $5 million in 2005 (source: Marketwatch, 1 Aug 2006), plus further funding of $16.5 million in October 2007 (source: Vmix press release, 31 Oct 2007). Founded by former execs from Universal Music Group, Fox Studios, Apple and mp3.com. JK&B Capital and ATA Ventures joined existing investors Mission Ventures and Enterprise Partners in the latest funding round.

Vudu: founded 2004, launching summer 2007. Backed by US $21 million from Benchmark Capital and Greylock Partners.

Vuze: backed by US $13.5 million raised from Redpoint Ventures, BV Capital, Greycroft Partners.

Update 17 Dec 07

Recommended reading: Media and entertainment freelance writer Daisy Whitney has produced this excellent summary of going rates for online video advertising rates on some of the best-known sites.

BBC iPlayer revealed

The BBC finally took the wraps off its iPlayer, which will beta launch on 27 July. It’s a retrospective ‘catch-up’ service allowing users to browse through the last 7 days’ TV shows, as broadcast on the BBC’s linear TV channels, download these and keep them for up to 30 days (after which the DRM’d files ‘auto-destruct’) .

It enters the UK market as a time when other major broadcasters such as Channel 4 (4oD), ITV (ITV.com), Five (Five Download) and Sky (Sky Anytime) have already rolled out similar products — not to mention the online pushes from major US networks and new-breed content aggregators Joost, Babelgum, Jalipo and Veoh.

Judging by the BBC’s launch announcement, the first phase PC-only iPlayer is but a foretaste of things to come: syndication deals are to be put in place YouTube, MSN, Yahoo!, AOL, telegraph.co.uk, Blinkx, Bebo and Tiscali. There’s also a TV version in development, to be available first on the Virgin cable platform in the UK.

Other future developments include ‘series stacking’, whereby users can download multiple episodes from the same series to ‘binge’ on when they please; integration of the currently standalone BBC Radio Player; a/v streaming; versions for Mac and Vista users, plus mobile and portable devices; as well as accessibility toolkits for the vision and hearing-impaired (the latter perhaps a first from a major broadcaster?)

The BBC’s new media head Ashley Highfield predicts it’ll attract 1 million users within a year and will become the default way of accessing the BBC’s programmes on-demand. Jana Bennett, head of the BBC’s TV division, believes its promise will be most powerful of all by introducing users to new programmes, as well as familiar hits.

The service offers a staggering choice of up to 400 hours of TV programmes every week – all, true to the BBC’s public service ethos, without advertising.

Round-up of press comment:

iPlayer let viewers watch when they want, The Times (UK), 28 June 2007

BBC to let you download your favourite shows for free, Daily Mirror (UK), 28 June 2007.

BBC’s iPlayer to launch next month, Daily Telegraph (UK), 28 June 2007.

BBC iPlayer launch accelerated to July, PaidContent.org (US), 27 June 07.

BBC web downloads set to launch, BBC News (UK), 27 June 2007.