Archive for the ‘Visual Media’ Category

More Like “TV Somewhere”

May 21, 2010

Cable operators are getting more and more connected to the idea of “TV Everywhere”. This is the idea that is meant to address the predilection of viewers to watch stuff on any device, while preserving the profits that cable operators, show producers and networks make.  Comcast, Cablevision, TimeWarner and Cox are all either in testing of or planning to roll out some sort of intiative to allow viewing to take place on any video-enabled device.   They are, says the LA Times, holding on to this idea, rather than play dice with Apple, which would like them to agree to a 99-cent per episode plan. “Some feared that Apple’s proposition would wreak the same havoc [as iTunes did to the music industry]  upon the average $70-a-month cable-TV customer.” TV Everywhere, on the other hand is free, as long as viewers are already cable subscribers.  The problem is that these roll-outs have not been incredibly successful so far.  For one thing, the authentification process is cumbersome –  Comcast subscribers find that “ it takes 11 steps to determine which cable programs an online viewer pays to receive. Comcast is trying to simplify this authentication process to a single click.” And of the major networks, only CBS is included in these trials, since the others are committed to Hulu.

“While the cable industry sees TV Everywhere as a way to offer subscribers broad access to programming online, others see a far more sinister motivation: snuffing out free online TV. Their fear is that the cable industry is determined to maintain its control as television gatekeeper, locking out competition. ‘TV Everywhere is just a tactic to keep people paying,’ said Mike Vorhaus, president of Magid Advisors, a media consulting firm. ‘The cable companies want more customers. They want to build a wall and penalize us if we don’t pay.’”

There’s No TiVo Effect, But Cable May Be Headed to Dust Anyway

May 7, 2010

Advertisers fear TiVo and DVRs. And for years they have been saying that time shifting will kill off the 30 second spot.  Who will watch them when they can skip over them?  Some of us with time shifting devices rely on those spots so that we have time to take a bathroom break or do the dishes, but as it turns out, says a new study by Duke University, that even people who fast forward through commercials are exposed to them.  The study found that 95% of people still watch TV live, rather than recorded.  And even those who fast forward through commercials still watch the screen o know when the show resumes, and therefore see the ads – just a lot faster.  The study’s authors tracked purchases of new products, advertised products and store brands across 50 categories, as well as the viewing behavior of those with the DVRs. No matter how the researchers looked at it, DVRs did not affect what people bought.

 

Up till now, predictions that the rise of web video will replace cable, satellite or premium channel purchase have seemed pretty specious.  While they watch plenty of web video, most people really prefer watching TV on their TVs.  After all, over 90% of Americans have access to at least a basic for fee service. But those predictions may be coming into their own, if a recent study by The Yankee Group is correct.  The study found that one in eight American consumers will either scale back or completely eliminate their for-fee service this year.  Now, one in eight could not really be considered a surge, but it is likely a warning sign.  The reason, which should not be surprising if you’ve looked at your cable bill lately, is mostly financial.  Cable and satellite viewers pay an average of $71 per month, and they receive an average annual price hike of 5%, according to research firm Centris. For people who don’t watch sports (which can pretty much be exclusively seen on live TV) that might start to seem like a lot of money when there are alternatives out there.  A big question remains for many – why am I paying so much when I don’t get to choose the channels I get?  Eventually, the web is going to bring an element of choice to people who didn’t have any. At which point, either cable companies will unbundle their products, or start to lose subscribers. This does not mean, by any stretch, that people in any large numbers will be abandoning televisions – far from it, in fact.  More people have more TVs in their homes than they ever did before.  It’s still the viewing medium of choice. But 43% of American consumers  have their TVs connected to the internet connected via a Wii, PlayStation or Xbox.                   

“This is the key part of the equation,” says a Yankee Group analyst.. “Not just are these devices connected to the Internet, but they’re coming prepackaged with the capability to connect to rich video sources. That really becomes a competitor to pay TV service.”

Since the easiest devices to connect to the Internet tend to be video game consoles, and they tend to be owned by 18-34 year olds, Yankee Group expects that will be the group to cut their cords first.

“Just like with telephone land lines, it’s going to become hard to sell pay TV to anyone under 30.”

Consumers ditching cable might have something to do with the logic behind the subscription price for Hulu’s new premium service – because if you are already paying over $100 bucks a month for cable and internet connection, why would you shell another $10 for Hulu, to see some of the shows that you are already paying for on CATV or cable?  It really only makes sense for the cable-disconnected, or to those who are only getting the most minimal cable service.

ABC’s Free iPad App

April 26, 2010

We’ve been talking about the iPad primarily s an e-reader, but the advantage that it has over other e-readers is that it’s a full media consumption device.  So far, ABC is the only network to create a free app for watching its shows (with advertising).  And it has been, says the Wall Street Journal, a success.  In the first 10 days of the iPad’s existence, ABC’s app has been downloaded 205,000 times, which means that it was being used on about half of the iPads sold at that time. 650,000 episodes had been watched, and “several million” ad impressions were seen. Says the Journal, “the iPad app also includes links that let viewers buy episodes through Apple’s iTunes Store. The iPad app is part of Disney’s broader strategy of creating numerous legitimate — and revenue-generating — ways for consumers to access its content.”

Hulu Goes Freemium

April 26, 2010

The ad model is one way to generate revenue, and as has been suspected for quite some time, Hulu is about to test a subscription service starting in late May.  There will still be a free Hulu, the LA Times says,  for the five most recent episodes of shows, but a more comprehensive selection will be available for $9.95 a month.  Hulu has been under pressure from its owners, Disney, NBC and News corp  to start generating more than the $100 million in revenue it is making from advertising, and also to wean viewers off of the free model.

Hulu Makes a Profit

April 2, 2010

I started writing the Media Mash-Up shortly before the birth of Hulu, which seemed at the time like a major innovation. It’s now two years old, and its making a profit. The company says that it will make $100 million in net revenue by the middle of the year.  Last year, it generated $100 million, and turned a profit by the last quarter. Which is more than you can say for that other free video site, YouTube.  I think it’s a question of perception.  YouTube has trying to tout itself as a purveyor of long-form video, and has changed its interface, etc., but still, that’s where you go to see clips. Peter Kafka, in MediaMemo says that the downside for Hulu CEO Jason Kular is that “his network owners still aren’t entirely comfortable with the company’s model, and are worried that all the free programming that Hulu offers cuts into their existing businesses. Hence the push for a subscription plan, which… will include an app for Apple’s iPad (AAPL). “

The New YouTube

April 2, 2010

And this week saw that redesign of YouTube, which, by the way, still has the tagline “Broadcast Yourself”.  Its new interface is supposed to align it better with its owner, Google, being cleaner, and more focused on search. Says CNet, the site has been “has been tweaked for content owners as well. If a video owner has created other videos, these now show up on the top of the page without cluttering up the sides with a myriad of thumbnails and links. YouTube is also giving content owners a way to add branding, be it a profile picture or a logo above each video player–regardless of whether that user is viewing that video from a content owner’s channel page. The company hopes this will spur more subscriptions, and give users a better sense of who made it.” The site encourages conversation between the content owners and site visitors. People can now ask questions and have the person who uploaded the video comment under the Uploader Comments section. The best rated comment rises to the top.

But the real kicker for YouTube is that during their beta test, which started in January, users stayed on the site 7% longer. And that’s what every site aims for.

Reports of Cable TV’s Vitality Greatly Exaggerated

March 26, 2010

Maybe cable TV isn’t as alive as we think it is. Max Fisher of The Atlantic thinks it’s doomed. And he thinks that the FCC’s national broadband plan is going to sound the death knell.  Actually, he thinks it was doomed anyway, and this is just going to hasten its demise. As he says, it was never a good model, because you pay both the cable company to receive a channel, and the station itself through advertising.  Which, frankly, is exactly why the cable companies have been making money hand over fist for years, and so far the medium has been looking pretty frisky for something that’s on its death bed. Web TV, though, will give users a degree of control that they lack with the bundling system on cable. So far, the quality of streaming on the web has not met the quality of television, but that will change over time. In Mr. Fisher’s  vision of the future, networks, not having to fill 24 hours with programming will be free act “more like movie studios”, releasing programming when it was appropriate (the implication is that, in this utopia, all network programming would be of the highest quality). This new world would also be a boon to independent producers of TV shows.  Which it already is, but I guess what he means is that more people would actually watch them.

Google Tries TV

March 19, 2010

After it got finished mucking around with social networking (although I’m sure that story is far from over), Google decided it was time to get into an arena into which it has never gone before – television. In partnership with another newcomer to TV land, Intel, and Sony, Google TV will bring the web to television sets through new TVs and set top boxes.  The NY Times reports that this service could be in place as soon as this summer, when Logitech comes up with the peripheral devices that will make the whole thing possible. In addition, it is partnering with Dish Network to test a TV search service.  So Google will take it upon itself to master the convergence of the Internet and TV, an idea that has been gaining ground very slowly.  A study by Leichtman Research Group shows that slightly less than a quarter of US homes have some kind of web-to-TV connection and only 5% of adults watch Hulu or YouTube videos on the bigger screen. And the majority of those people are younger males who have some connection through gaming consoles.  Bruce Leichtman says,

Despite speculation that consumers are “cutting the cord” to cable, satellite or Telco video services and choosing to watch video exclusively online or through other alternatives, there remains little evidence of this being a trend. Emerging video services do not necessarily create either/or scenarios in decisions to subscribe to a video service or not. Rather, they create opportunities and trade-offs in how, when, what, and where to consume the increasing video entertainment options.

Still, Google TV faces a lot of competition in the web to TV space: Roku, Boxee, TiVo and Netflix, among other companies, are there already. (more…)

How Online Video Can Start Making Money

February 12, 2010

Of the 33 million videos that are viewed online (from comScore,  measured in December 2009), how much of it is actually produced content?  My guess is that about 95% of it is still stupid pet trick type user generated stuff.  Which is why it is still only garnering about $1 billion in ad dollars.  Matt Wasserlauf, CEO of BBE, a digital video company, has an interesting take on the development of content for this developing medium, which will ultimately be the focus of the TV Everywhere concept. The barrier, he feels, to unleashing the unlimited potential of online video is quality content, and a model to scale things like ratings and share. 

“In order for the creative community to produce future hit shows for the online medium, they must understand the metrics around success.  With common currency, the industry can scale in a way that TV has enjoyed since its ascent to the top of the media funnel.”

Networks Will Be the Big Winners of Overturned Campaign Laws

January 29, 2010

Last week the Supreme court overturned the campaign financing laws, allowing corporations and unions to donate to political campaigns.  Whether you agree with this decision or not, the one that’s certain from it is that networks stand to be the real winners in the decision. Crain’s says that a Needham & Co. estimate is that about $300 million in additional campaign spending will go directly to local TV stations.  And with the recent Republican win in Massachusetts, Needham predicts that political ad spending will be up 10%. “These two factors work together to create an arms race between corporations and unions, and the only weapons dealers are the local TV stations.”