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5 Items of Interest for the Week of Oct. 25th
Lots more happened this week in online/mobile video, and so to make your lives easier, VideoNuze is once again curating 5-6 interesting industry news items that we weren't able to cover this week. Read them now or take them with you this weekend!
No Longer 'Must-See TV'
The WSJ reported this week that Thursday night TV viewership (live or recorded) among 18-49 year-olds is down 4.3% this season to 48.5 million, a drop of 2.2 million viewers. For this age group, the drop across all nights (live or recorded) is 2.7%. While the decreases have immediate implications on networks' ad revenue, the bigger issue of course is what the drops say about shifting consumer preferences. For example, I continue to hear anecdotes about users with connected devices now tuning in first to their Instant Watch queues instead of channel surfing or visiting their DVR libraries or VOD. The Nielsen data corroborates other data (here, here) about the decline of TV viewing, especially among young people, and is another reason why broadcast networks in particular should be embracing connected devices like Google TV, not blocking them.
CW Says Study 'Dispels Myth' About Aversion to Ads in Online Video
Speaking of networks and their online distribution, this week CW released some interesting new data that detailed extremely low abandonment rates for its shows consumed online, even with ad loads almost equal to those on-air. While it is too early to generalize, the data provides a very encouraging sign that networks may be able to achieve parity economics with on-air, even when they window their online releases for delayed availability. It's also an important sign that online video may be a firewall against DVR-based ad-skipping.
Comcast Launches Free Streaming Video Service Xfinity for All Digital Subs
In addition to releasing stellar Q3 earnings this week (albeit with a bigger-than-expected subscriber loss), Comcast also pulled the "beta" label off its Xfinity TV service this week, and relaxed its rules about who can gain access. Now any video subscriber, regardless of who they take their broadband Internet service from, can access XFTV.
Some began to speculate that it could be a precursor for Comcast allowing non-video subs to also gain access to XFTV. This is the concept I wrote about in over a year ago, in "How TV Everywhere Could Turn Cable Operators and Telcos Into Over-the-Top's Biggest Players." The idea is that TV Everywhere services like XFTV could be offered outside of Comcast's franchise areas to allow them to poach video subscribers from other pay-TV operators. It's still a fascinating concept, but nothing about Comcast's move this week suggests it's coming soon.
Insight To Bow 50-Mbps Internet In Two Markets
If you think all that Netflix and other long-form streaming is going to strain users' bandwidth, think again, as yet another cable operator/broadband ISP, 9th-largest Insight Communications unveiled plans for a speedy 50 megabit per second broadband tier. Big players like Comcast and Time Warner Cable have been offering this for a while already. It's still very pricey, but as some viewers shift more of their consumption to online and away from conventional TV viewing (see above), more bandwidth will be worth the price. Update - I missed this item, that over in the U.K. Virgin Media began taking sign-ups for a 100 Mbps broadband service. Net, net, last-mile bandwidth will keep expanding to meet increasing demand.
Promoted Videos hit half a billion views
Fresh evidence this week that YouTube is finding innovative ways to monetize its massive audience: the company's performance-based "Promoted videos" format achieved its 500 millionth view, just 2 years after being introduced. With Promoted videos, anyone uploading a video to YouTube (brand, content provider, amateur), can buy opportunities to have that video appear alongside relevant keyword-based searches in YouTube. It's a similar format to AdWords, and of course the video provider only pays when their video is actually clicked on. As I said recently, YouTube is becoming a much more important part of Google's overall advertising mix, while for many brands, YouTube's home page is fast-becoming the most desirable piece of online real estate.
Categories: Advertising, Aggregators, Broadband ISPs, Broadcasters, Cable TV Operators
Topics: Comcast, CW, Insight, Nielsen, YouTube
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The Battle Over Movie Rentals is Intensifying
News this morning of a $30 million advertising campaign being launched by 8 Hollywood studios and 8 cable operators promoting "Movies on Demand" is fresh evidence that the battle over movie rentals is intensifying. According to the press release, the 12-week campaign, dubbed "The Video Store Just Moved In" is meant to raise consumer awareness of the convenience and affordability of renting movies on cable.
Cable Video-on-Demand (VOD) has been around for a long while (in fact 20 years ago my summer internship for Continental Cablevision was studying the ROIs for VOD's precursor, "Pay-per-view"). What's new more recently is the growth of so-called "day-and-date" availability - which means movies are released to VOD at the same time as they become available on DVD. The other recent phenomenon is the widespread adoption of digital set-top boxes and other technologies which makes selection, ordering and delivery easier than ever.
Day-and-date availability is a key competitive differentiator for cable vs. other options, though on the surface it seems somewhat incongruous that studios are on board with this considering their desire to protect DVD sales (this was the key goal of the 28-day "DVD sale" window Netflix and Warner Bros. recently created). Yet Kevin Tsujihara, president of Warner Bros. Home Entertainment Group said that apparently research has shown that simultaneous VOD release doesn't hurt DVD sales. All titles Warner Bros. releases to VOD this year will have day-and-date availability.
The day-and-date advantage is evident at least vs. Netflix for the 9 movies the press release cited as the opening slate being promoted: "Precious," "New Moon," "Ninja Assassin," "Pirate Radio," "Astro Boy," "Bandslam," "Did You Hear About the Morgans," Fantastic Mr. Fox" and "The Fourth Kind." A search on Netflix for the 9 revealed that 5 are listed as "Short wait," 1 becomes available on Mar 20th, 1 on Mar 23rd, and 2 on April 13th (none are available for streaming). However, it's a different story for Amazon - all of the cable VOD movies are currently available for rental from Amazon (except "Mr. Fox") and for purchase. The Amazon rental price is $3.99 for each, whereas the rental price from Comcast (my service provide) is $4.99.
For now anyway, it seems Hollywood studios have decided that cable VOD and online rental firms get day-and-date access, while subscription services like Netflix wait longer (btw Redbox too is being pushed into the "wait longer" category). According to the NY Times article, this is likely because VOD and online rental give studios a 65% share of revenue vs. lower percentages for other outlets.
For consumers, the cable VOD option is likely the most convenient and instantly gratifying. There's no new box to set up or pay for as with Roku, TiVo or another, which would be needed to access Amazon VOD, for example, on TV. For those that haven't bridged broadband to their TV with such a box or a direct connection, on-computer viewing only would be a limitation in the experience. Still, while the day-and-date option is key for those consumers who just have to see a particular title right then, because it's a la carte, it's a far more expensive option than a monthly Netflix subscription, which starts at $8.99/mo. Convenience clearly has its price.
Consumers aren't monolithic though; there isn't one right or wrong model. Each viewing option offers pros and cons and consumers will choose which one, given the particular moment or circumstance, best meets their needs. With the battle for movie rentals escalating, the real winner here looks like the consumer who is being presented more choices than ever.
What do you think? Post a comment now (no sign-in required).
Categories: Cable TV Operators, FIlms, Studios, Video On Demand
Topics: 20th Century Fox, Armstrong, Bend Broadband, Bright House Networks, Comcast, Cox, Focus Featu, Insight, iO TV, Time Warner Cable
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