August 1, 2011 – 12:03 am
Here's today's TVexchanger.com news round-up... Want it by email? Sign-up here.
Google TV Buyers’ Remorse
Despite having the deepest pockets of any company this side of Apple, Google’s patience for its over-the-top service, Google TV, must be straining. Last week, Logitech, one of the primary makers of the console that offers Google TV, said that the number product returns outpaced the amount it sold in Q2.
The company clearly feels there’s nothing else to do but to cut the price of the Logitech Revue from $249.99 to $99, reports SearchEngineLand’s Matt McGee. This is the second price reduction since launching last year, when it debuted at $300.
Google being Google, it has perhaps been held to unfair standards of how well it could conquer the OTT space. Still, the rollout of Google TV has been lackluster by any accounting. Observers will be watching closely later this summer when Google TV is upgraded to run on the Android 3.1 system. Google’s mobile growth has been impressive despite the challenge from Apple.
There will probably be some small boost from the upgrade, but don’t expect too much. Even though it will be more competitively priced than Apple TV's sleek $100 device, the main problem is that Google TV still doesn’t have a robust set of programming. So upgrade or not - or lower price - until Google can convince programmers to offer something different that no one else has, returns of Logitech Revue will still outpace sales for the next quarter or two at least.
Dynamic VOD Ad Duo
The merger between Comcast and NBCUniversal is certainly going to make the most of the promise of its multibillion combo - this time by partnering on dynamic ad insertion within its On Demand programming. The duo's dynamic ad insertion service, which allows for an ad to be easily changed at any time, has begun rolling out in several Comcast markets, with plans to expand to the majority of Comcast markets throughout the next several months. Chrysler and Kraft are the premiere advertisers.
VOD ads are primarily sold as pre-rolls about a month in advance, which limits marketers flexibility, B&C’s Jon Lafayette notes. The quick turnaround time should help make the system more attractive to media buyers. Mediapost’s Wayne Friedman adds that Comcast says programming on USA Network, E!, Syfy, Bravo Media and Oxygen Media that airs On Demand on Comcast Cable systems will be part of the rollout. Commercials running prior to and after a show (pre-roll and post-roll ads) will be subject to dynamic ad insertion. Later in the year, this will include mid-roll commercials -- those that run in the show.
If Comcast and NBCU can quickly grow VOD ad revenues, that will benefit another important player in the race to make TV ads more like online: Black Arrow, the software company Comcast has used to power its dynamic ad insertion.
TWC Subs Drop; No Worries
Time Warner Cable’s Q2 was pretty good as earnings reports go, but cable observers could hardly be faulted for focusing on one single negative metric: residential net video decreases grew 15 percent compared to last year’s period, to 130,000 from 111,000.
Aha! More evidence of cord-cutting, you say! Certainly, the numbers have been trending downward industrywide, as paidContent’s Staci D. Kramer points out that over the past six quarters one of the country’s largest cable operators has gone from 12,543,00 million residential video subscribers to just over 12 million—12,067,000, to be exact. That’s a drop of nearly four percent. In the same period, broadband subs rose 5.4 percent, to 9.7 million, from 9.2 million in Q210.
Warning against jumping to conclusions, Kramer adds that the cable industry is cyclical and the same kind of drop happened last year. “What is worth noting is that the numbers are higher this year over the same quarters last year, and if the same cycles hold true, TWC could be on pace to lose a half-million video subs this year,” she writes.
Naturally, TWC CEO Glenn Britt echoed those sentiments during the earnings call, saying, "To the best of our market research ability," Britt said, "the effect right now is very, very modest—and hard to measure because it is so small." Read the release. Seeking Alpha has the transcript of the call.
Fox Makes Hulu Wait
Fox Networks is changing the window for its online viewing: as of August 15, there will be an 8-day exclusive window for those with subscriber logins that can be authenticated, the WSJ’s Sam Schechner reported. So far, online subscribers to the Dish Network and Hulu Plus will be able to watch. Other agreements may be signed by the time the authentication plan is switched on. Hulu is partly owned by Fox parent News Corp., along with Disney and NBCUniversal. It will be interesting to see if the other Hulu partners follow suit quickly.
Until that happens, authenticated subs will be able to log in at either Fox.com, Hulu.com or Dishonline.com. Needless to say, the reaction across Twitter to the news that Fox would be holding back programming to this limited universe of pay TV subs was met with dismay. ReadWriteWeb compared the news react to what it saw when Netflix split its streaming video and DVD rental pricing plans.
Fox could be harming Hulu if there is a large user revolt where customers start cancelling subscriptions or boycotting the service entirely,” opined RRW’s Dan Rowinski. “The question for Fox is: what is more valuable, the extra eyeballs that see Hulu's premium advertisements or the subscription revenues of Hulu Plus? Essentially, it is the same question that newspapers have been dealing with in terms of pay walls for the last 10 years.”
From Fox’s perspective, it makes sense to put up something of a “paywall” around its content. Advertising simply won’t cover all the bills. And if viewers really want to watch, then they’ll continue paying their cable bills. Still, there is a risk that as users find over-the-top services increasingly attractive, they may be willing to look for work-arounds to the pay system and simply download episodes illegally. Nevertheless, Fox has calculated that’s a worthwhile risk to take. And if it can help train viewers not to expect the world for free, it just might work out.
But Wait. There’s More!
- Amazon, NBC Universal Sign Streaming Agreement – Home Media Magazine
- Wal-Mart Offers Video Streaming on Website -- WSJ
- Nielsen Will Use Set-Top Data in Local TV Ratings -- Mediabistro
- Feds: Man hacked into Bright House, sold info on Craigslist – Sun Sentinel
- Amazon buys LOVEFiLM IPTV developer Pushbutton – Rapid TV News
- Under-The-Hood Of Over-The-Top – Mediapost TV Blog
- IPTV remains a driver of broadband growth for KPN – ipTV News
- Jay Rolls is leaving Cox Communications to join Charter Communications as SVP/CTO – Multichannel News
- Boots on the Ground in Kansas City – Google Fiber blog
- Digital task force holds first meet – IndianTelevision.com
August 1, 2011 – 12:03 am