More Than A Game: What TV Can Learn From Twitch

One of the enduring frustrations of would-be TV innovators, famously voiced by Steve Jobs back in 2010, has been the inability to integrate live, linear and on-demand content into a single, easy-to-navigate platform. “The problem with innovation in the TV industry is the go to market strategy,” the late Apple CEO told the AllThingsD conference that year. “The TV industry has a subsidized model that gives everyone a set top box for free. So no one wants to buy a box..The only way that’s going to change is if you tear up the set-top box, give it a new UI, and get it in front of consumers in a way they’re going to want it.”

As discussed here in previous posts, the Federal Communications Commission is currently considering a number of steps to promote greater integration, from redefining who qualifies as a multichannel video programming distributor to mandating downloadable security for set-top boxes, but none of those steps — or even all Forza-Forizon-2-Twitchof those steps together — would solve all the problems or resolve all of the commercial and technical conflicts that make seamless integration so challenging today, and in any case could be years down the road.

There is one corner of the media business. however, where the integration of live, linear and on-demand content is actually happening today: games.

Over the weekend, the hugely popular site for live-streaming game play, Twitch, announced a number of new features during its first annual TwitchCon in San Francisco, including the ability to upload videos directly to the Twitch platform. Up to now, Twitch channel owners have needed to stream content first and then incorporate the archived stream into their channel as on-demand content. Now, users will be able to upload video directly to the platform without having to stream it first. Read More »

Competing With Free

The RIAA reported had some good news and some not-so-good news this week about the state of the music business. The good news is that while sales of CDs and permanent downloads continue to fall, revenue from paid-streaming subscriptions through the first half of 2015 was up a solid 25 percent from the first half of 2014, to $478 million. The not-so-good news is that the number of Americans actually paying for music subscriptions is growing much slower, up a sluggish 2.5 percent, or 200,000 subscribers, to 8.1 million.

Optimists noted that the first-half data did not include Apple Music, which launched June 30th, and that second-half numbers should be show faster growth. The New York Post reported this week, citing “music industry sources” that 15 million people had signed up for Apple’s paid-streaming service during the three-month free trial RIAA_paying_subscribersperiod, which ends Sept. 20th, and that roughly half those folks — 7.5 million — had not (yet) turned off the automatic payment feature the will soon turn them into paying subscribers. It wasn’t clear from the report, however, how many of those 7.5 million are in the U.S.

The optimists also note that while the number of paying subscribers was relatively flat, average revenue per subscriber was up 21.6 percent, to $118, perhaps reflecting a shift by consumers to more expensive services like Jay-Z’s Tidal.

Yet while growth in the paid-subscriber base flags, free, ad-supported streaming services like Pandora and Sirius XM continue to be hugely popular. Pandora claims to have 80 million active monthly listeners, only a tiny fraction of which pay for its ad-free tier. Due to licensing issues, Pandora is only available in the U.S., Australia and New Zealand, so the bulk of those 80 million users must be in the U.S. Read More »

Pay-TV Operators Eye Mobile Video To Reduce Subscriber Costs

AT&T officials offered some pretty eye-popping numbers this week on the impact of the DirecTV acquisition on the bottom line. Speaking at the Goldman Sachs Communicopia conference in New York AT&T CFO John Stephens said DirecTV pays $17 a month less per subscriber in content costs “on an apples-to-apples basis” compared to what AT&T has been paying per U-Verse subscriber.

AT&T is now working to “bring those prices in line” by moving everything to “the most efficient contract pricing in the house,” which is the DirecTV price. “So with 6 million U-Verse subscribers you can get your head around about $100 million a month,” in savings, he said, or $1.2 billion per year. “That’s sort of the easy math on iphone_TVhow you can conceptualize the scale” of the savings.

The math could soon get even easier for AT&T. “Right now we have 75 million smartphones and tablets and 50 million broadband locations that we don’t sell video to today,” Stephens said. “So we have 125 million locations we can take to the content team and say, let’s work together to sell something. It doesn’t have to be an adversarial situation, it’s here’s your growth and we built this integrated carrier model to take advantage of that.” Read More »

Apple TV Phones It In

Apple didn’t exactly “tear up the set-top box” to create the new Apple TV, as Steve Jobs once insisted was essential to any viable go-to-market strategy for any new entrant to the TV space. What it came up with instead is precisely what Jobs claimed no one would buy: another box, with another remote to clutter up the set-top and the coffee table.

Worse, as other commentators have noted, many if not most of the features and functionalities of Apple’s new set-top are already available on other devices from other manufacturers, generally at a lower price.

So, the new Apple TV is DOA? I wouldn’t write the obituary just yet.

The key is to think about Apple TV not as a standalone device but as an extension of Apple’s ecosystem, particularly the App Store, to the living room. As was first reported by 9to5Mac, the new Apple TV shares many internal components with the latest generation of iPhones, and runs a full iOS core optimized for a 50-inch Ooyala-q2-2015-mobile-video-trendsscreen. The Apple TV’s new touch and gesture-powered remote is clearly designed to echo and evoke the iPhone’s familiar touch-driven UI. From a hardware and OS perspective, the new Apple TV is essentially an iPhone for the TV, capable of doing most of what an iPhone can do short of making phone calls.

While that may seem incidental, it will allow developers to create tightly integrated mobile and set-top experiences to a degree that hasn’t really been possible up to now on other TV apps platforms. With 44 percent of video plays now occurring on mobile devices, according to Ooyala’s latest Global Video Index report, tying mobile and set-top video together in a single, seamless platform is obviously critical, for content owners and marketers, as well as for consumers. At the same time, the integration will allow Apple to tap the creativity of millions of developers already familiar with creating rich experiences in iOS to populate the new Apple TV App Store. Read More »

Fair Use Ruling Could Boost Computer Vision

This post originally appeared on Smart Content News.

This week’s landmark copyright ruling in the “Dancing Baby” video case was a set-back for the studios and record companies in their efforts to police the use of their works on YouTube and other  user-generated content platforms. But it could prove a boon to the fields of computer vision and computer learning.

Let s Go Crazy   1   YouTubeIn a 26-page opinion, the federal Ninth Circuit Court of Appeals ruled for the first time that copyright owners are required to consider fair use before sending a take-down notice demanding that an allegedly infringing video be removed from a website. The lawsuit stemmed from a 29-second video posted to YouTube by Stephanie Lenz showing her toddler “dancing” in the family kitchen as the Prince song “Let’s Go Crazy” played in the background.

Universal Music sent a take-down notice to the website claiming the use of Prince’s music in the video was not authorized. Read More »

Will The FCC Finally ‘Tear Up The Set-Top Box’?

The FCC kicked off the second phase of a process this week that could, eventually, change how pay-TV service is delivered to the home and by whom. On Monday, the commission issued a formal notice seeking comments on a set of proposals developed by the Downloadable Security Technology Advisory Committee (DSTAC) for how to enable third-party retail set-top boxes to better interoperate with pay-TV services. DSTAC submitted its proposals last week and the FCC posted six-page summary of its report on Friday [note: the FCC’s IT system will be inaccessible  until Sept. 8 due to an upgrade, so links temporarily may not work].

The first phase of the process began in January, when the FCC convened DSTAC at the direction of Congress. As spelled out in the Satellite Television Extension and Locset-top_box_openalism Act Reauthorization law (STELAR) passed last December, DSTAC’s mandate was to “identify, report, and recommend performance objectives, technical capabilities, and technical standards of a not unduly burdensome, uniform, and technology- and platform-neutral software-based downloadable security system designed to promote the competitive availability of [pay-TV] navigation devices in furtherance of section 629 of the Communications Act of 1934.”

It did not go well. From the beginning there was disagreement within both the committee and the FCC as to the proper scope of the mission and the committee soon devolved into two opposing and roughly equal camps, with pay-TV providers and equipment makers on one side, and CE makers and technology companies, along with consumer advocates, in the other. In broad strokes, the first camp wanted to focus the discussion narrowly on the technical aspects of downloadable security, while the latter camp sought to focus the discussion more broadly on the goal of “promot[ing] the competitive availability of navigation devices” including security and non-security elements of pay-TV service. Read More »

Hulu’s Ad-Free Epics

Those looking for evidence that Hulu is getting ready to introduce an ad-free, premium-plus tier got a big helping of it Sunday when the streaming service announced a deal with digital movie network Epix after Netflix decided it would not renew its expiring, five-year old deal with the three-studio consortium.

The deal brings to Hulu films from Paramount, MGM and Lionsgate, including such recent hits as  “Hunger Games: Catching Fire,” “Transformers: Age of Extinction,” “Teenage Mutant Ninja Turtles,” “Star Trek: Into Darkness,” “World War Z,” and “Wolf of Wall Street,” marking a major expansion of Hulu’s movie offehulu_nocbs-1rings.

“Hulu already offers some of the best and biggest titles in television programming, but our subscribers have been asking us for more, and more recent, big movies. We
listened,” Hulu’s senior VP and head of content, Craig Erwich said in a statement. “Through this new deal with Epix, we are proud to now be able to offer a huge selection of the biggest blockbusters and premium films. This is a landmark deal for Hulu and it marks a huge expansion for our offering of premium programming.”

Added Epix CEO Mark Greenberg: “Hulu has become one of the most popular premium streaming services and Epix’s agreement is evidence of their understanding of the value that our blockbuster Hollywood films, deep library of classic film titles and original programming brings to consumers.” Read More »

Trouble By The Bundle

Stop me if you’ve heard this one before:

“We understand the temptation for the FCC to take credit for resolving this impasse, but their intervention had nothing to do with it. We were very close to a resolution well before Chairman Wheeler got involved. In fact, the FCC process actually delayed the resolution, because it added more issues to negotiate, which lengthened DISH’s service interruption, not shortened it.”

That was Sinclair Broadcasting doing its best impression of Comical Ali, a.k.a. Mohammed Saeed Al-Sahaf, the hapless former Iraqi spokesman, insisting that the FCC’s unusual and urgent intercession in the retransmission consent negotiations between Sinclair and Dish Network had nothing to do with the outcome.

comical_ali_nothing_to_seeDish and Sinclair had been negotiating for two and half months without reaching an agreement, Sinclair had triggered the nuclear option by yanking 129 local stations from Dish subscribers in 79 markets, but within hours of FCC chairman Tom Wheeler blasting the blackout and summoning the parties to an “emergency meeting” at the commission, mirabile dictu, all issues were resolved and the blackout was lifted.

Yet one thing had “nothing to do” with the other. Hmm.

The actual substance of the dispute between Dish and Sinclair was no laughing matter for the future of the pay-TV business, however, nor was Wheeler’s intercession, whatever its effect. Read More »

Broadband Rubicon Crossed? Cablevision, CBS Reach OTT Retrans Deal

Cablevision is boasting today of becoming the first cable or satellite provider to offer CBS’s OTT channel, CBS All Access, to its broadband subscribers.

The multiyear deal between the network and the MSO includes retransmission consent for CBS-owned stations and continued carriage by Cablevision of Showtime, CBS Sports Network and the Smithsonian Channel, in addition to CBS All Access.

“This comprehensive new agreement builds on our strong relationship with CBS and ensures that every Optimum customer gets the highly popular CBS content they want across multiple platforms and screens,” Cablevision EVP of programming Tom Montemagno said in a statement. “As the first distributor to agree to provide tony_sopranoCBS new Internet services, Cablevision continues to expand its portfolio of next-generation offerings, connecting customers to the programming they value when and where they want it.”

For those who have paid attention to Cablevision in recent months the CBS deal is no big surprise. The MSO has been drifting away from the traditional pay-TV model since it introduced its “Cord Cutter” package earlier this year that included broadband service and an over-the-air antenna for tuning in broadcast channels. It was also the first operator to offer Hulu to its broadband subscribers and was a launch partner for HBO Now. But the CBS deal represents the first time that Cablevision — or any other MVPD — has licensed an OTT service as part of a broadcast retransmission deal.

I’m not sure other cable ISPs would see that as something to boast about. Read More »

Cracking The OTT Ice On Live Local Sports

What a difference a spin-off makes. Barely a week after Major League Baseball’s 30 team owners approved the spin-off of BAM Tech, the streaming technology arm of MLB Advanced Media, reports surfaced that the league is drafting deal papers with Fox Sports to extend authenticated in-market streaming rights to Fox’s 15 regional sports networks (RSNs) beginning with the 2016 season.

Like most major sports leagues, MLB controls streaming rights for all of its teams’ games and game-related content. The league sells a high-end package of out-of-market games through, but only the Toronto Blue Jays currently offer in-market streaming. The league and U.S. RSNs, led by Fox, have been negotiating Franklin_Gutierrez_hitting_HRover in-market streaming rights for years, but the league’s insistence that all streams be hosted by MLBAM –officially to ensure stream quality — has long been a roadblock to any deal because it would require Fox’s pay-TV affiliates to share subscriber information with the league during the authentication process. Under the deal now being finalized, according to the reports, Fox will handle authentication and fans will be able to access the games through their local RSN’s website, via the FoxSportsGo app, or through their service provider’s TV Everywhere app.

As part of the deal, Fox will still be required to use BAM Tech as its primary streaming technology vendor, and to pay a rights fee to MLB equal to around 4 percent of the team’s overall media deal. Read More »

Comcast Antes Up For a Peak At New Media Data

This post originally appeared at Smart Content News.

That $45 billion Comcast did not get to spend on Time Warner Cable seems to be burning a hole in its pocket.

On Monday, Comcast announced it would invest $200 million in BuzzFeed at a valuation of $1.5 billion, giving the old-line cable MSO entree to BuzzFeed’s more than 200 million unique monthly visitors, including 82.4 million in the increasingly elusive 18-34 age group.

“BuzzFeed has built an exceptional global company that harmonizes technology, data and superior editorial abilities to create and share content in innovative ways,” BuzzFeed_BadgesNBCUniversal CEO Steve Burke said in a statement. “They reach a massive, loyal audience and have proven to be among the most creative, popular and influential new media players. We are pleased to be making this investment and for our companies to partner and work together.”

The BuzzFeed deal comes one week after Comcast unveiled a similar $200 million investment in Vox Media, valuing the parent of SB Nation, The Verge and at roughly $1 billion.

Comcast is also reportedly planning to launch a new digital video service called Watchable that will focus on original, unlicensed content and made available to Comcast subscribers with an X1 set-top box. Read More »

Retransmission Discontent

Last week’s meltdown among media company stocks seems to have subsided for now, but not before wiping out $60 billion in market value. Shares of Viacom fell 17 percent between August 4 and August 11; Discovery Communications and 21st Century Fox each fell 13 percent; Disney shares dropped by 11 percent; Time Warner by nine and Comcast (NBCUniversal), CBS and Starz all fell by mid-single digits.

Media CEOs complained, and many analysts concurred, that the sell-off was overdone, and that neither the actual earnings news that triggered it nor the underlying fundamentals of the business justified such a drastic repricing. It certainly wouldn’t be the first time that the market overreacted to events in the short term.

FCC_buildingIn fact, the stampede out of pay-TV stocks last week felt more like the release of pent-up anxiety among investors than a reaction to any particular bit of news. It began when Disney issued a small downward revision to its earnings forecast for its ESPN unit, which it blamed on “modest subscriber losses” from cord-cutting. The adjustment was a small one, but Disney chief Bob Iger has been among the most outspoken media CEOs in arguing that cord-cutting is a limited and manageable phenomenon, and that ESPN is well-positioned to profit from changes in the pay-TV business. If even Disney couldn’t paper over the impact of cord-cutting on ESPN, investors seemed to conclude, then maybe the problem really is as bad as we feared.

Similarly, ratings woes on linear TV channels are not new. But when Viacom reported a 9 percent drop in ad revenue from its cable networks investors seemed to take it as confirmation that even well-established media brands are losing pricing power in the advertising market. Read More »

Cheap TVs: Last Week’s Plunge In Pay-TV Stocks Could Have Lasting Effect

This post originally appeared at Smart Content News.

Last week’s meltdown among media stocks left many Wall Street professionals scratching their heads.

Objectively speaking, the earnings news that triggered the sell-off, first from Disney and followed by Time Warner, Discovery and Viacom, was sobering but hardly catastrophic. Disney made a modest downward adjustment to its full-year forecast for its cable unit, led by ESPN, from “high single digits” to “mid-single digits” due stock-arrow-downto continued subscriber losses among pay-TV providers. Viacom reported a 9 percent year-on-year decline in advertising revenue, driven by falling ratings for its cable networks, but its net income for the quarter actually beat Wall Street estimates.

Yet it was enough to start a stampede that wiped out more than $45 billion in market value across seven pay-TV companies.

Some of those losses are likely to be recovered over the coming weeks and months as investors get a grip on themselves and the companies trim spending to boost EPS. But the massive selloff could still have a lasting effect on the sector.

The abrupt selloff, well beyond what the fundamentals of the stocks would justify, seemed to reflect a dramatic shift in market sentiment regarding valuation benchmarks and appropriate share-price multiples for media companies as investors focus on structural changes in the pay-TV business.  Resetting those assumptions to pre-meltdown levels might require some restructuring of the sector. Read More »

ESPN Gets Caught In Transition

Back in October, ESPN, along with Turner Sports, renewed its broadcast and digital rights deal with the National Basketball Association through 2025 for $2.3 billion, more than twice the price of the previous deal, even though the old deal still had two years to run.

With prices skyrocketing for sports rights and new 24-hour sports competitors from Fox and NBCUniversal circling hungrily for deals that would put them in the game, locking up the NBA for another decade — even at twice the price — seemed to pencil out at the time. It was the last such major deal ESPN would need to nba_espnnegotiate for several years, having recently locked up long-term deals with Major League Baseball, the NFL, the college football playoffs and four of five major college sports conferences, thus putting a cap on its major cost-driver until at least 2021.

”We believe at the end of the deal it will feel inexpensive,” ESPN president John Skipper said at the time. ”It’s hard to imagine.”

After this week, it’s even harder to imagine.

As with any asset, locking in a price when prices are rising is a good strategy. Locking in a price when returns are falling, not so much. And for ESPN, the return on pricey sports rights are starting to fall. Read More »