“We’re in an arms race,” Public Knowledge CEO Gene Kimmelman told the Senate Commerce Committee at a hearing to explore the prospects for broadband video. It’s “no surprise, content companies bulk up” as Fox wants to do with its $80B bid for Time Warner, which was rejected by the company but disclosed today. Following Comcast’s deal to buy Time Warner Cable, and AT&T’s with DirecTV, “consumers are between a rock and a hard place….They started the ball rolling and as we’ve seen from today’s stories, we don’t know where it’s going to end.”
Representatives from Comcast and AT&T indirectly debated with execs from Dish Network, the WGA, and Kimmelman over whether online video providers have to fear mergers or need strong net neutrality rules. Committee Chairman Jay Rockefeller (D-W Va) ended the proceedings by arguing for municipal broadband to provide a low-cost option for poor residents. He also said that he invited Netflix CEO Reed Hastings, who declined to show. “I can’t figure [it] out because I’m trying to help them, I think. But he didn’t want to be here.”
Dish says that later this year it plans to introduce a low-priced online video service that will include live streams of ESPN, and could be threatened by the union of the two largest cable companies. “Comcast doesn’t necessarily want us to succeed because we’re competitors,” says the satellite company’s Deputy General Counsel Jeffrey Blum. “We are very concerned that a combined Comcast and Time Warner Cable will have an incentive and ability to stifle our service.” Read More »
Web-Connected TVs In 49% Of U.S. Homes
A study shows the technology continues to gain ground in the U.S. But adoption curves always flatten, which means companies like Neflix will have to seek other ways to grow. Deadline's David Lieberman explains.
There’s encouraging and discouraging news for just about everybody in the TV ecosystem from Leichtman Research Group’s latest study of emerging video services. The survey of 1,211 households shows that nearly half (49%) have a Web-connected TV, up from 44% last year and 38% in 2012. And people are using the capability. Some 24% of adults watch an Internet-delivered video on their TV at least once a week, up from 17% in 2013 and 13% two years ago. The changes were “spurred by Netflix’s decision in the third quarter of 2011 to focus on streaming video, coupled with the proliferation of connected TV devices, smartphones, and iPads and tablets,” says principal analyst Bruce Leichtman.
That’s a problem for pay TV companies. Netflix’ popularity is growing among non-subscribers — including cord cutters. About half (48%) of people who don’t pay for cable or satellite TV do take Netflix, a leap from 29% in 2012. On the flip side, the percentage of Netflix subs who also buy cable or satellite service fell to 80% from 85% in 2012 and 88% in 2010.
Yet the data also point to potential challenges for Netflix. About 80% of its 35M domestic streaming users watch on a connected TV set — a percentage that has held steady for years. That’s fine as long as there’s been growth in the number of homes with smart TVs, or with sets connected via dedicated streaming devices … Read More »
About 58% of adults who use the Internet watch comedy videos, up from 50% in 2009, the Pew Research Center found in a July survey of 1,003 adults. But I was surprised to see how popular serious fare has become on the Web. Some 56% said that they watch How-to videos followed by Educational (50%, up from 38% in 2009), Music (50% vs. 32%) and News (45% vs. 43%). Genres with smaller audiences include Animation (28% vs. 22%), Political (27% vs. 30%), Sports (27% vs. 21%), and Ads (15%, no change). What about porn? About 12% of respondents admitted that they watch, up from 7% four years ago, although Pew acknowledges that the figure may be skewed by “a reluctance to report the behavior among some adults.” The survey also found that 31% of adults upload their own videos, a big increase from 14% in 2009. About a third of them — 11% of adults — do so in the hope that their clips will go viral. The most popular subjects among those who post: friends and family doing everyday things (58%), themselves or others doing funny things (56%), events including concerts and sports (54%), and pets or animals (45%). Just 23% offer “intentionally staged, scripted, or choreographed videos.” Pew says that social network sites including Facebook have made it relatively easy to post. But what it calls the “growing online video culture” took off as smartphones became popular. … Read More »
It just might if it frightens them enough to accelerate their efforts to make people pay for broadband based on how much they use — the same way they pay for electricity or water. ”This isn’t just a side show,” independent analyst Craig Moffett says. “This is THE central issue defining the value of the cable industry going forward.” And the pricing model could rock streaming companies including Netflix or, perhaps, Sony. It would be “a material risk” to Netflix’s prospects if a Sony-Viacom agreement leads to usage-based pricing, Bernstein Research’s Carlos Kirjner says. Read More »
About 14% of all households have a streaming media device, twice the number that had one two years ago, research firm Parks Associates says today. But the most interesting finding in its new report on trends in connected TV is that relatively tiny Roku handily beats the mighty Apple among people who own a streaming video media device. Some 37% go with Roku vs 24% who “primarily use” Apple TV, the company found in a survey of 10,000 U.S. broadband households early this year. The company expects worldwide sales of 330M connected TV devices — including smart TVs, gaming consoles, Blu-ray players, and streaming video media devices — in 2017, twice the number it says likely will be sold this year. Even though more TV sets will include Internet connectivity, Parks’ Barbara Kraus says that people will still buy separate devices including ones from Roku, Apple TV, and Google’s $35 Chromecast because they “offer innovations such as streaming video at low prices.” But with the average price for these devices likely to plummet, manufacturers and service providers will have to pick up the slack with “new and recurring revenue streams in advertising and content placement.”
You might wonder about that when you see how many people seem to prefer watching shows on tiny smartphone screens instead of an HDTV. But quality still matters according to a survey of more than 3,000 people in the U.S., UK, Germany and Brazil out this morning from tech company Avid. Some 65% of the respondents cited image and audio quality as the strongest “driver of viewer engagement,” the company says. Amazingly, the survey finds that nearly 72% believe that 11% of the average viewing time will come from Web services by 2017 — with a quarter saying that it will account for more than 30% of viewing time. That still seems far-fetched: it would indicate that Web video time would grow by a factor of 10 in just four years in the U.S. and Western Europe. Even if those estimates are overly optimistic, researchers have good reason to observe that the market “is at its point of inflection, and broadcast and studio executives see these new web-delivered services as revenue drivers, with 91% of respondents citing multi-screen delivery as a key source of growth.” Translation: It’s time to get serious about using VOD for catch-up viewing, streaming programs, and offering special content so mobile devices can be used as a second screen when people also are watching their TV sets. The study for Avid was conducted by research firm Ovum.
Traditional TV programmers should feel uneasy about some of the findings out today from consulting firm Deloitte’s seventh annual State Of The Media Democracy study. Only 64% of U.S. consumers ranked TV watching as one of their three favorite media activities, down from 69% in 2011 and 71% in 2010, the firm found in a November online survey of 2,129 people. Just 40% of 14-to-23-year-olds put TV among the Top Three. About 51% of TV viewers have connected their sets to the Internet — and another 16% have the equipment to do so. And there’s a sharp increase in the number of people who frequently watch shows on platforms where ratings aren’t measured, or where ads can be avoided. Some 21% (up from 11% in 2011) watch free online video services while 14% (vs. 9%) watch discs of previous seasons and 13% (vs. 4%) watch on a smartphone or mobile device. The number of people viewing shows from an online peer-to-peer network was up to 8% from 3% in 2011, and includes 16% of Millennials. Viewers also are distracted: Just 19% said that they always or almost always just watch TV when they tune in. But 27% said that they browse and surf the Web, 26% read email, and 23% either send text messages or use a social network. Here, too, the numbers are much higher among viewers under 30. The changing behavior … Read More »
Nielsen will begin measuring viewers who watch TV programming via broadband Internet connection, the company confirmed today. Long criticized by broadcast TV networks for what they believe is significant viewership that regular ratings miss or exclude, Nielsen said its research found that many homes that didn’t fit its “current definition” of a TV household — “that many of these homes still had TVs but were using a broadband source to view content.” As a result Nielsen will begin “including any home with a TV that can receive video via an external source” in its measurements. As Advertising Age noted, TV programmers “have howled” that because Nielsen has failed to recognize increased viewing over the Internet and via tablets, mobile devices and video-streaming sites like Netflix and Hulu. The networks believe that failure to measure those viewers has resulted in insufficient data to secure higher ad rates. However, Nielsen’s decision won’t include tablets like the iPad. Nor will they do anything to measure the viewing of ad-free content on Netflix where users watch whole seasons of shows in marathon sessions. Additionally if commercial breaks in a program viewed on Hulu or a network’s website don’t match the ones that supported a broadcast episode on the respective network, Nielsen is unable to provide a unified rating of all those views. At least not yet.
AOL, Hulu, Yahoo, and Google’s YouTube are among the companies that provided so-called “newfront” presentations to advertisers this year — sales pitches urging them to divert to Web video platforms some of the billions that they plan to spend on conventional TV. Some major advertisers including GM and Samsung Mobile have said that they expect to do just that this year. But while that’s made this upfront season interesting, “we think it is still too early for online video to be meaningfully disruptive to TV,” Barclays Equity Research analyst Anthony DiClemente says in a report this morning. He notes that most viewers still flock to TV much more than the Web: The average person spent 153:19 hours a month watching the tube in Q4 — with another 11:44 hours going to time-shifted TV — according to Nielsen data. But they devoted just 4:34 hours watching Web video, and 4:20 watching videos on mobile phones. Things are changing slowly. Monthly television watching was down 46 minutes from the average at the end of 2010, more than made up by the 1:17 hours added to timeshifted TV. But Web videos were only up 11 minutes, and there was no change in video viewing on mobile phones. What accounts Read More »
It’s a shame that the general public usually can’t read industry reports from Bernstein Research’s Craig Moffett. When he’s on, which is frequently, his stuff is as thought provoking and engagingly written as anything you’d see in The Atlantic or The New Yorker. So I’ll consider it a public service to summarize his compelling effort this morning to bust one of the tech world’s most fervent beliefs: that that some company — perhaps Google, or Apple, or Netflix — will topple the pay TV oligopoly by offering cable programs or channels, possibly a la carte. Microsoft recently backed away from its dream of offering a cable-like service through its Xbox game console. Others will also give up, Moffett says, because the problem isn’t that Comcast or DirecTV are ignoring consumer demand to break up the expanded basic package. Six companies — Disney, News Corp, NBCUniversal, Time Warner, CBS, and Discovery — account for 90% of all viewing hours. They demand that their channels be sold in packages, ”and only that way,” Moffett writes. Didn’t the music industry try to do much the same thing with CDs before it had to back down and sell individual tunes for 99 cents? Yes, but the music industry had to respond to Napster offering songs for free. The danger of that happening to TV channels “is nothing like what the music industry faced ten years ago (at least, not yet),” Moffett writes. Read More »
Nobody delivers the pro-broadcast network message more effectively than CBS Chief Research Officer David Poltrack. But he was far more bullish than usual today at his yearly industry forecast during the UBS Annual Global Media and Communications Conference. He says the broadcast networks are in for a great 2012 with ad sales up 7.3% — and not just because of the quadrennial effect. Even without the impact of political spending and the Olympics, broadcast sales would be up 5%, he says. That’s partly due to a pickup in the economy. “We remain confident that we’re on the road to recovery,” although he isn’t so sure about the pace, he says. The biggest drag on the economy, he says, is government spending cuts. ”This is also what is keeping the unemployment rate so high,” he says.
But he also expects broadcasters to begin winning back some of the $1.6B in ad dollars that have migrated to cable. He says that the move toward cable was largely driven by the growth in the number of channels, and that “has run its course.” Meanwhile, technologies that encourage time shifting — including DVRs and VOD — disproportionately help broadcasters. DVR time shifting has helped boost the major networks’ audience share to 45% from 43%. For example, Modern Family gains 8M viewers from time shifters — that’s the largest playback audience — while NCIS gains 5M. He’s also encouraged that viewers are starting to accept ads on VOD; CBS saw 70M VOD views of its primetime shows … Read More »
The Financial Times is reporting that Google’s YouTube site is negotiating with the Hollywood studios to participate in a pay-per-view site that will be online by year’s end. That puts it in competition with Apple, Hulu and Netflix in trying to corner the market on streaming film and TV shows. It’s an important battle because studios are reeling with the flattening of DVD titles, revenues where studios keep 80 cents of every dollar, and use that windfall to cushion all its flops. Google plans to charge about $5 for top titles. All this happens while Blockbuster prepares for bankruptcy.
Stéphane Richard, the new CEO of France Télécom and its consumer arm Orange, has held informal talks with Rupert Murdoch about his buying its movie channels. Murdoch does not own any pay-TV channels in France, although Fox channels such as National Geographic are available there.
Orange Cinéma Séries is a bouquet of five channels available on TV, the internet and mobile phones. The movie channels and sister Orange Sports channels have attracted 800,000 paying subs between them. I would imagine Murdoch’s more interested in the sports channels than the movies. He’s always talked about sports being the battering ram for pay-TV. France Télécom, which is open to remaining a minority shareholder, wants somebody to share the cost of soccer rights with.
Richard has told the Financial Times that he wants to close the deal within a few weeks, freeing up France Télécom to concentrate on its core telephony business.
Orange launched Orange Cinéma Séries in November 2008, offering five channels: Orange cinemamax, for HD blockbuster; cinehappy, a family channel; cinehoc, for action films; cinenovo, for independent films’ and cinégéant, for classic films. It’s had an exclusive pay-TV deal with HBO (John Adams), and partnerships with US studios including Warner Bros, Disney and MGM, premiering shows such as Glee.
Insiders are telling Deadline that the Bloomberg report claiming final broadcast network holdout CBS is joining Hulu as soon as this fall on a non-exclusive basis are “overblown”. Yes, there are talks going on between CBS with Hulu which already includes NBC, Fox, and Disney. And, yes, Big Media loves to collude. And, yes, trading in CBS options surged 4-times the norm on the news. But my insider say CBS “definitely won’t join a free Hulu. Only Hulu ‘plus’ if it’s a good deal.” Said another insider, “we’ve been talking to them and continue to talk to them but there is nothing immediate happening.” Hulu also is in talks with Viacom and Time Warner for a paid subscription service.