VideoNuze Posts

Last Thursday I wrote about how the various connected TV devices are jostling for content deals, creating headaches for content providers and confusion for buyers. Following up that post, yesterday I highlighted holiday deals on Smart TVs which themselves are competing for attention with connected TV devices.

Now, to put a capstone on the discussion, I'm pleased to share a handy infographic that the good folks at Shelby.tv have created, comparing and contrasting 4 of the hottest and most affordable connected TV devices, Apple TV ($99), Chromecast ($35), Roku 3 ($100) and Roku LT ($50). The infographic summarizes key features of each, what content is available (with a nice Venn diagram showing overlaps), capabilities to watch from mobile devices and the web, key drawbacks to each, and which might be most appropriate as a gift this season.

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As online video adoption and longer-form viewing have grown, consumers have become increasingly interested in moving the experience to their TVs. This trend has certainly helped to drive interest in connected TV devices (e.g. Apple TV, Roku, Chromecast, etc.). But even as these devices have proliferated, TV manufacturers have promoted Smart TVs, which connect to the Internet and generally offer a handful of pre-integrated apps, most prominently Netflix, Hulu Plus, YouTube, Pandora and others.

Since connected TV devices are relatively cheap (Chromecast set a new low in 2013 at $35) and are easy to install, no longer must consumers be required to buy a whole new TV simply because they want to stream Netflix, for example. No doubt, this dynamic - combined with the saturation of HDTVs and the adoption of mobile devices for viewing video - all contribute to global TV sales being down in 2013 for the second year in a row, the first time this has ever happened.

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With the vast majority of online video views free and ad-supported, it's critical that online video advertising continues to grow and mature. At the recent VideoSchmooze event, we had a deep dive session on online video advertising featuring John Nitti, president of activation for ZenithOptimedia (who oversees $10 billion of client spending), Eric Franchi, co-founder of Undertone and Ashley Swartz, CEO and founder of Furious Minds, who moderated.

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There are a lot of wild headlines these days proclaiming the death of TV and the prevalence of cord-cutting. But in a session I moderated at the recent VideoSchmooze event in NYC, Bruce Leichtman and Craig Moffett, two of the top video analysts around, shared their current data, which systematically debunks these mythologies. For anyone interested in what's really happening in the video business today, the session's video is a must-watch.

Bruce and Craig believe that both technology and mainstream media are ginning up these mythologies because they make great headlines. In fact, both cited instances where their data said "x" but the media coverage ended up being "y." All of this underscores how important it is to read media coverage of the industry with a very critical eye.

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Netflix released new research on binge-viewing among its subscribers today, revealing that 61% of them binge-view at least 2-3 episodes every few weeks. The data adds yet more weight to the binge-viewing story line: in September Nielsen found that 88% of Netflix subscribers have watched 3 or more episodes in the same day (70% for Hulu Plus) while research from Piksel found 94% of viewers binging in one way or another. (caveat, there's some apples vs. oranges in comparing the data)

No other company has done more to promote binge-viewing than Netflix. Whereas the phenomenon started with viewers binging past seasons of shows like "Mad Men" or "Breaking Bad," Netflix has shrewdly capitalized by releasing all of its own original episodes at once, making binge-viewing a current season behavior as well. As a result, TV network executives must now ask whether their traditional approach of scheduling new episodes should be revamped.

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I'm pleased to present the 207th edition of the VideoNuze podcast with my weekly partner Colin Dixon of nScreenMedia.

This week we first discuss the prospects of a nationwide "virtual pay-TV operator" launching in 2014, as Viacom's CEO Philippe Dauman asserted will happen, in his remarks at the UBS conference earlier this week. Colin and I agree that if this were to happen, Verizon is the most likely candidate. Of note, the company has recently made 2 acquisitions (of upLynk and EdgeCast), through its Verizon Digital Media Services group, that could be very strategic in a virtual pay-TV operator play.

Colin is reasonably bullish that this this type of operator will emerge, but I still remain skeptical. Intel Media's flameout this year with its OnCue service underscores the challenges. We dive into further detail on the challenges and opportunities for virtual operators. (And note, Colin has a free white paper on 5 reasons why virtual operators will ultimately succeed)

Next we turn our attention to how fragmentation among connected TV devices is causing headaches for content providers and consumers, which I wrote about yesterday. Colin contrasts today's devices with buying a TV, noting how ridiculous it would be if some brands could access certain TV networks, and other brands accessing different ones. The TV industry would never have scaled in that case.

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Yesterday Aereo announced that it will not oppose the petition by the major broadcast TV networks (formally a "petition for a writ of certiorari") for a U.S. Supreme Court review of a ruling last May in Aereo’s favor. In that instance, the broadcasters were thrown for a pretty significant loss by Aereo when the U.S. Circuit Court of Appeals for the Second Circuit ruled preliminarily that Aereo’s business should not be halted due to alleged violations of the copyrights of broadcasters.  

Normally it is big news when two sides so diametrically opposed like Aereo and the broadcasters seek (or at least willingly accept) review from the Supremes. But in this case there may be less than meets the eye (at least from a litigation perspective - see below).

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This holiday season, connected TV devices are among the hottest items on consumers' wish lists. For content providers eager for a foothold in the "digital living room," surging demand is very good news. The bad news, however, is that due to fragmentation and proprietary approaches among devices, content providers are forced to allocate their scarce resources in a one-by-one development model.

This is highly inefficient for content providers and sharply contrasts with how the web's standards helped to drive massive scale years ago. Beyond the inefficiency for content providers, the resulting fragmentation of content availability undermines the scale required for successful video advertising and also creates confusion among consumers about which device to buy. Unlike the web where you can bring home a computer and get access to ALL content, when you get a device you only get a narrower subsection.

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