Posts for 'FIlms'

Netflix announced this morning that it was removing the usage cap on its "Instant Watching" feature for unlimited plan subscribers. This feature allows subscribers to choose from 6,000 titles (and growing) to stream and view on their PCs. Up until now subscribers received an allocation of streaming hours based on their monthly subscription level (e.g. 17 hours if subscribing at $17/mo). Now the hours will be unlimited. It's a smart move for Netflix and a great value proposition for Netflix subscribers.

AP first reported the change yesterday and is depicting it as a preemptive move against Apple, which is anticipated to announce tomorrow that movie rental downloads will be available in iTunes. The price point is expected to be $3.99/download. This is a major departure for Apple's iTunes, which has, of course, stuck religiously to its purchase download model for both music and videos.

Others have also depicted Apple's move as a direct strike at Netflix, but I think this battle is illusory. Rather, I view Apple's introduction of rentals as clear competition for the likes of Movielink, CinemaNow, Amazon Unbox, XBox LIVE and other rental stores, but not a blow to Netflix. The value propositions are very different. That's because Netflix very wisely has made the Instant Watching feature a value add for its subscribers, not an incremental fee.

As a $16.99/mo subscriber myself, I love the fact that Netflix is unmetering Instant Watching, and am hard-pressed to see why anyone would drop their subscription in favor of Apple's rental model, unless they envision consuming a lot of movies on their iPods (now there's a slim segment of the population!).

From an economic standpoint alone, the breakeven is only 4+ movies, which is likely well below the monthly consumption of most of Netflix's full unlimited subscribers. And with Apple's rental model, users are still subjected to all the same online movie limitations all the other services have suffered from: no easy playback on TVs, lack of portability, viewing window limits, etc. Granted iTunes downloads enable watching on-the-go (vs. Netflix's streams), but I don't see that as a big differentiator. With Netflix you get the best of DVDs' advantages and now unlimited online delivery.

Now, if Apple were to pursue subscriptions, that would be a direct attack on Netflix. Yet even this approach might not be that successful. The fact is, Netflix has spent heavily on marketing over the years, and its strong brand awareness and 7 million subscriber base are quite meaningful advantages.

Online movie delivery, whether rental or owned, still has a long way to go to achieve mainstream success. Apple will certainly nudge the category forward, but not dramatically. Still, Netflix needs to remain aggressively on offensive to retain its leadership mantle. This is a category with lots of moves yet to be made.

Am I missing something? Post a comment and let everyone know!

Microsoft grabbed the early PR spotlight at the Consumer Electronics Show (CES), now underway in Las Vegas, announcing a variety of deals across the broadband video spectrum. The deals, announced by Bill Gates in his traditional night 1 keynote, reinforce Microsoft's intentions to play multiple roles in what Gates calls the "first true Digital Decade."

Here's a look at Microsoft's deals and why they matter:

NBCU 2008 Olympics on MSN, using Silverlight

Microsoft and NBC, which has the broadcast rights to the '08 Summer Games from Beijing, announced that MSN would be the exclusive partner for NBCOlympics.com including thousands of hours of live video coverage, and that Silverlight, which is Microsoft's "Flash-killer", would be used. As I mentioned in my "6 Predictions for 2008", the '08 games are going to be the biggest broadband video event yet. The deal gains MSN lots of traffic and Silverlight lots of exposure and downloads, not to mention serious validation as a live streaming platform if it executes well.

ABC/Disney and MGM content on XBox LIVE

In a further move to bolster the premium-quality content available in XBox LIVE (the content offering that accompanies XBox 360), Microsoft announced that both ABC/Disney and MGM would now be providing both SD and HD content. These moves bring XBox LIVE's catalog closer to parity with iTunes, while keeping up the competition with Amazon Unbox and other stores. Separately, Microsoft said that XBox racked up 17.7 million units sold during the '07 holiday season.(correction, Microsoft press release misstated this number. Holiday sales were actually 4.3 million units, bringing cumulative units sold to date to 17.7 million, thx Karl)

XBox users have been remarkable active purchasers and downloaders using XBox LIVE, and previous briefings I've conducted with XBox executives suggest that the initiative has been particularly successful with HD. Since Xbox is purchased primarily as a gaming platform, it serves as a great Trojan horse opportunity for Microsoft to gain broadband access to the TV. Meanwhile, XBox LIVE has served as the deal unit for Zune's library as well, so these moves are important to watch as they benefit Microsoft's efforts to dislodge iPod from its perch as the leading digital media player. Only disappointment here is no ad-supported counterpart was announced for ABC programs, leaving AOL as ABC's only announced broadband syndication partner, as best I can tell.

BT and XBox 360 Integration

Microsoft leveraged Xbox 360 for another convergence play, announcing with BT that the company's "BT Vision" IPTV service would be available for XBox 360 owners as an integrated service offering. This means that no separate set-top box would be required for BT Vision subs. Though the box won't roll out until mid '08, this concept has compelling upside for both sides and could be a nice blueprint for future IPTV deals. It eliminates set-top capex for BT, while providing strong marketing benefits to both parties, helping drive broadband/TV convergence on the back of the popular XBox gaming console.

Showtime, TNT and CNN with new apps on Mediaroom, Samsung supporting Extender

Elsewhere, Microsoft announced that Showtime, TNT and CNN would be creating new apps for Microsoft's Mediaroom IPTV platform, which it says is now installed on 1M set-tops globally. And lastly, that Samsung will support Extender for Windows Media Center, which means that HD content can be sent over wired or wireless-N networks from PC to TV. Extender hasn't caught on yet, but Microsoft is continuing to push it as a bridge device. I've yet to test it, but have that on my list of to-do's.

Taken together, these announcements from Microsoft show the company's vast resources allow it to play a role in all aspects of the broadband era - software, devices, services, content, gaming, etc. Less pronounced in these deals was the company's recently added online advertising prowess, which will soon be applied to broadband video as well. Stay tuned for news on this front as '08 unfolds.

Happy New Year and welcome to 2008!

With many of you taking last week off, a quick review of what you might have missed is in order:

1. iTunes-Fox download-to-rent movie deal rumors

The FT (reg. required) reported that Apple and Fox are close to announcing a deal under which Fox movies would be available for download-to-rent on iTunes. This would be a deviation from Apple's policy of download-to-own only. Call me a skeptic, but while some analysts think this deal is a big breakthrough, for me it's more of a ho-hum, for at least the following reasons.

Download-to-rent offerings have been around for a while (e.g. Movielink, CinemaNow, Amazon Unbox, etc.) and none have been grand slams. Admittedly none have enabled playback on an iPod. Yet, while many think iPod ubiquity is a killer advantage for iTunes rentals I disagree. It's one thing to watch a 30 or maybe a 60 minute TV show, but watching a 2 hour movie on an iPod? That's only appealing for a tiny minority of iPod owners. Further, while the rumored $2.99 or so price point is attractive, download-to-rent movies will come with the same cumbersome business rules (e.g. 24 hour viewing, window limitations, finite device sharing, etc.) that cause significant customer inconvenience. And DVDs, available for rental or purchase still offer superior portability and flexibility to any download model. Movie downloads' time will come, just not yet.

2. Wal-Mart Folds its Video Download Store

And speaking of download challenges, Wal-Mart decided to unceremoniously close its video download store less than a year since its launch. While it pointed its finger at its vendor HP, which decided to discontinue support for the technology underlying the Wal-Mart store, there are certainly other white label platform alternatives available if Wal-Mart had conviction about the download store's potential. It clearly didn't and so it folded its tent. More evidence of the challenges facing paid downloads.

3. YouTube's Top 2007 Videos Announced

Meanwhile over in YouTube land, the hits keep coming. YouTube released its top 10 list and the year's most popular video, with almost 23 million views, was "Battle at Kruger", which shows the fight to save a baby water buffalo from a group of lions and a crocodile. It's fascinating if you haven't seen it. Other top videos on the list were "Chocolate Rain", "Obama Girl" and "Leave Britney Alone", among others. If nothing else, this diverse group of videos shows that UGC is alive and well.

4. Queen Elizabeth and Roger Clemens Seek Out YouTube

And UGC wasn't for pure amateurs either. YouTube's reach was once again recognized as 2 celebrities, Queen Elizabeth and Roger Clemens posted videos serving their individual purposes. In a first for the 81 year-old queen, she posted her popular Christmas message on YouTube, augmenting its traditional broadcast. The Royal Channel - "The Official Channel of the British Monarchy" - also launched on YouTube.

Clemens, who's been fingered in baseball's steroid controversy, saw fit to post his proclamation of innocence on YouTube. Clemens is adamant in his own defense, and clearly believes that reaching out to fans with video instead of the usual press release is more compelling.

Trivia question: whose video do you think drew more views?

Answer: It's not even close: 741,000 for the queen vs. 274,000 for Clemens.

5. MTV Delivers 1.2 Billion Streams in '07

MTV self-reported that MTV.com, VH1.com and CMT.com delivered more than 1.2 billion video streams in '07, an increase of 30% vs. '06. It also reported the top 30 music videos it streamed, and number 1 was Gimme More by Britney Spears. Broadband is offering MTV an opportunity to return to its brand roots as the go-to destination for music videos even as more and more of the on-air experience is dominated by non-music video fare. As I wrote a couple months ago, music videos are becoming a sought-after new revenue stream for labels and aggregators. We'll see more emphasis on music videos in '08.

A piece of news that emerged about Blockbuster courting mobile handset makers to make movies available strikes me as wrong-headed. And note this is from someone who's sometimes been accused of being insufficiently critical of even the most new-fangled video delivery concepts.

However, this idea stretches the mind too far. Watching a 2 hour movie on a mobile handset's tiny screen. How many people are going to be willing to do that? And to run their battery down for this pleasure? Not many is my guess. Not to mention that mobile content is all about short-form, bite-sized chunks. You know - you find yourselves with 5-10 minutes of downtime waiting for your plane, your kid or your coffee. So watch some news or sports clips. But a whole movie? Forget it.

These days people are so enthusiastic about broadband and mobile as opening up new market opportunities that they often focus too quickly on the technology-based, "Cool, we can really do this?" question, instead of the consumer-based, "Is there really a need to be filled?" question. My bet is that more of the latter and less of the former will lead to success. Hopefully Blockbuster will realize this soon and not waste too many cycles on this idea.

MGM is the latest studio to reach out to fans to help promote one of its films, the upcoming "Lions for Lambs". In a deal with Google/YouTube, the studio is sponsoring a contest in which users can submit a 90 second video on a topic they're passionate about. Entries are being accepted until Oct. 17th and the winner, who will have $25,000 donated to a charity of his/her choice, will be selected on Nov 9th.

This promotion follows the mashup competition Metacafe and Universal conducted this past summer around the studio's "Bourne Ultimatum" release. At the time, I noted that broadband is introducing a whole new element into the film marketing equation, opening up huge opportunities for creativity and fan involvement. As the tools continue to improve I expect we're going to see a lot more of these "UGC-assisted" campaigns.

Studios (and others) are going to continue to experiment with just how much fans are willing to be a part of the marketing machinery. Of course nobody knows, but my guess is that if the incentives are right, the promotions are fun and the stars are compelling, it's going to be a pretty rich vein for film marketers to tap into.

The Metacafe team posted a progress update on its "Bourne Ultimatum" mashup initiative, launched with Universal Pictures on July 23rd. To date, over 1,000 mashups have been posted, with the most popular ones highlighted on the site. Metacafe and Universal teamed up with Diffuse Media Group for the simple-to-use mashup tool.

These kinds of mashups are such a winning idea, it’s amazing to me that they still haven't gained a ton of market momentum. I think it’s just a matter of time, it’s so easy to execute.

Here, Universal provided a collection of scenes and music from the movie. Fans can express their enthusiasm by mixing them up as they please overlaying the music tracks provided. Especially for a franchise like "Bourne", where rabid fans eagerly await each sequel, allowing these folks to participate in the promotional buildup is a real win-win. Tomorrow, when "Bourne" opens everywhere, there will already have been tens (hundreds?) of thousands of people talking up the flick who have seen the mashups or created their own.

Compare this level of fan engagement and promotion to the traditional process of producing 1 trailer and then paying for expensive TV time to promote it. That model seems so yesterday by the standards of what broadband video and Web 2.0 are enabling.

Specifically, broadband is enabling a whole new element of the marketing mix to take root. And the possibilities for where mashups go from here are limitless. Consider: how about letting fans mix in their own voice-overs of certain scenes or mix in their own video clips or have the studio create contests to showcase and reward winning mashups (e.g. Matt Damon-signed, collector’s edition DVD for the winner and such). The list goes on.

I’m expecting lots of smart marketers are going to be increasing their mashup activity quite soon.