Five things I’m thankful for in the world of video

That’s right, it’s the end of the year which means it’s time to start generating lists of things. Top 10 this, top 5 that, yada, yada. I thought I’d get a jump on the end of the year lists by doing a Thanksgiving list. As we pass the potatoes around the table tomorrow, let us all remember to be thankful that:

1) Hulu for the Holidays has us covered. Sure,  Hulu.com is great because it helps us keep up with such heartwarming and touching family favorites as Fringe and The Sarah Connor Chronicles, but it has gone far beyond that with its new Hulu for the Holidays campaign that introduces us to [actually] heartwarming movies we may have forgotten. Last week it was Rudy, A League of Their Own, and Call of the Wild, today’s featured movie is A River Runs Through It (in which one-time heartthrob Robert Redford simultaneously directs and passes down the mantle of screen idol to Brad Pitt). I would embed the clip for your immediate enjoyment, but, alas, due to rights issues this one is not viewable outside of Hulu.com.

2) Netflix went off the matrix. When I say matrix, I don’t mean the movie, I just mean the PC-based Internet. With Netflix off the matrix and on my $99 Roku box, my family actually enjoys watching Netflix streaming movies. It used to be I had to lead the kids to the PC and say, “look what you can do with Netflix!” They would blink once or twice and then say, “Dad, if I wanted to use the PC, I would watch YouTube or play Webkins.” Not anymore. We now have a queue of about 50 movies ready to play in the living room at any time. All of them family friendly, except, whoa, hey, who put Risky Business in there? I’ll have to check with my wife on that one. What does Tom Cruise have that I don’t? [Don't answer that...]

3) Tina Fey is alive. As I reported yesterday, Nielsen says we watched 4.5 hours of TV a day in Q3 of this year. While that was attributable to the Olympics and the election, I think about 10 minutes of every day was probably spent watching Tina Fey. If she wasn’t doing her dead-on Sarah Palin impression she was talking about it with David Letterman; if she wasn’t being delightfully nerdy on 30 Rock, she was joking about it with Rachel Ray (btw, Tina Fey and Rachael Ray makes for a great rhyme, try it). And notice that all of her shenanigans, including CNN’s coverage of said shenanigans, are online for us to see on demand, over and over again. Do you ever get enough of her Palin-Clinton skit? Too funny.    

4) You didn’t have to go to YouTube Live. What? a YouTube event that is live? You mean you have to sit there and experience it linearly? You can’t just jump to the next related video as soon as you’re bored with the current performance? Hmmm. Why was this a good idea? The best headline on this one goes to the San Francisco Chronicle, “YouTube Has Real Party for Self-Made Stars.” Don’t get me wrong, I’m a fan of YouTube. It’s enormous — it delivers 25% of all the online video minutes American experience each day. But the whole point of YouTube is that it’s a massive filter. You don’t have to watch what you don’t want to watch. YouTube Live was not that. Luckily, I was able to catch up later by watching the highlights on, you guessed it, YouTube.  

5) We’re not this guy. By “this guy,” I’m referring to my friend, marketer and social web practitioner, John Johansen (pictured here in his Halloween costume), who accepted a challenge from me to live an entire week without any video at all. None. Zip. Nada. And he opted to take this challenge during Thanksgiving week. That means no movies, no catching up on episodes of shows while visiting family. No football on Thanksgiving Day! Could you do it? Bet you couldn’t. Be thankful I didn’t challenge YOU!

Americans watch more video than ever before, says Nielsen

This is one of the predictions of OmniVideo — with more ways to watch video, people will end up watching more. I have gone on record saying that the average adult will watch five hours of video a day in 2012, a 25% over the four hours people watch today.

It turns out my prediction may come true sooner than that, especially when you consider this piece today from Meg James at the LA Times. In it, Nielsen reveals that in the third quarter of 2008, the average adult watched 4.5 hours of TV a day. Now, admittedly, this was the quarter in which the Olympics happened, and yes, it was the run up to an unprecedented election, so TV viewing naturally rose higher than it would have been otherwise. But we should expect that once the dust from the election settles, TV viewing won’t revert to 4 hours a day, but will likely stay closer to 4.25 hours, continuing its climb to a stable 5 hours a day by 2012. In other words, I stand by my prediction, and am pleased to see that there’s already evidence that we’re willing to watch more than the record levels we already watch.

This is significantly more than we watched a decade ago. Given that the average TV home hase more than two people in it, the typical home has a television on for 8 hours and 18 minutes a day, up from 7 hours and 15 minutes a decade ago. This will only rise as people have more DVRs and more Internet-connected devices like the Netflix Player by Roku which give us more control over our viewing habits.

Yes, we are addicted to video and I’ll be measuring our addiction over the coming weeks with some blog posts about addiction. Get ready to face your demons. Or not — one of my hypotheses is that increased video viewing is not actually pathological. Sure, a few addicts will go overboard, but most of us are getting real value from video: we’re observing social norms, collecting news, receiving physiological stimulation, emotional expression, relaxation and distraction. We need these things. 

What do you get out of video?

Could you go without video for a week?

I’m in the process of investigating what TV addiction will mean in an Omnivideo world.

When you can watch what you want, when you want, where you want, certainly addiction will be easier to feed. But will it actually be worse? If the pitfalls of addiction include sitting numbly in front of the TV letting it wash over you, does it actually get worse or better when you can take a more active role?

So expect more from me in the coming weeks, including some notes with an interview with an academic who studies TV addiction. In the meantime, I hit up a friend of mine, Marketer and Social Media practitioner John Johansen of Austin, Texas, to see if he was up for an experiment: could he live for a week without a stitch of video? His answer: I can give it a try.

I was imagining he’d wait until after Thanksgiving, but not John, he jumped right in and started on Sunday. He has already blogged about it and it twittering using the Twitter hash tag #novideo. His early conclusion:

I am less than 24 hours into the trial and I’m reconsidering how simple this will really be.

Could you do this? Feel free to add to the conversation on his blog Original Comment, on my blog, or with your own twitter posts. I’ll summarize John’s experience and share with you my “how to tell if you’re an addict” quick quiz at the end of the week.

Good luck, John!

Blockbuster $99 set top box finally available

After a brief announcement a few weeks ago that was light on details, Blockbuster today announced it would sell what is calls the MediaPoint, a $99 video-on-demand set top box.

As you can see from the graphic, the slim box is made by 2Wire, a company that typically provides products and platforms like broadband home gateways to help TV service providers deliver media experiences to the home. 

The attractive pricing is required, of course, as the Netflix Player by Roku came in at $99 earlier this year and has made a splash, reaching what I estimate to be nearly 100,000 unit sales (not yet, but probably by year-end). 

Blockbuster is obligated to do the same. But they’ve gone one step further than Netflix in that you don’t actually buy the box.  You pre-pay 25 movie rentals and they give you the box for “free.” This counters the claim by any Netflix fans that the $99 box doesn’t come with free content like the Netflix box appears to. 

We spoke to Jim Keyes, CEO of Blockbuster back in October and he indicated the box wouldn’t be out in time for the holidays, but apparently he changed his mind. You would, too, if you had to endure announcement after announcement about how Netflix content was available through more and more devices, including PCs, Macs, LG Blu-ray players, Samsung Blu-ray players, the Xbox 360, TiVo, the Roku player, and eventually, your mother’s toenail clipper.

Some quick analysis: this is a good move, it is the right time, and the solution is deftly simple. In fact, I don’t know what would stop people from buying this box and placing it right next to the Neflix/Roku box. From one you get classic movies and TV shows, hours of fun for the whole family (including my kids who watch it nearly daily). From the other you get first-run titles, 25 of which you have pre-paid. Remember: if you wanted to rent 25 DVDs at Blockbuster, you would pay the same amount. This saves you the regular trips to the local store.

Some reporters are making a big deal out of how this competes with Blockbuster’s retail locations. I disagree. Anything that brings you closer to a brand is good news for that brand. It might change the way retail appeals to you — they might sell more products, including Blu-ray players and gaming systems — but it doesn’t mean the store goes away.

One last note: The one risk in Blockbuster’s approach is that it’s device-specific, whereas one of the geniuses of the Netflix strategy is that it’s multiplatform. Can BBuster do a deal with the Sony PS3? That device also has a hard drive, so maybe. But Blockbuster direct to the Net-connected TV would require a streaming model, which this isn’t. So some settling of business models is likely to occur as they contemplate streaming, portable video player integration, and adding HD content. All in all, this is a good move for Blockbuster, as long as it is just the first of many advances.

Why CBS pulled The Mentalist from CBS.com

I’m catching up a bit here because I was traveling when this news item happened, but Download Movies 101 reported last week that CBS had mysteriously pulled full-length episodes of its surprise hit shows The Mentalist and Eleventh Hour from CBS.com, which of course means all of CBS’s syndication partners like AOL and Fancast are unable to show the episodes as well.

It’s especially confusing when it’s clear CBS is committed to full-length episode streaming. The site is full of hit shows like How I Met Your Mother which air full episodes online. Plus, CBS has recently extended certain full-length shows to YouTube.

It turns out that the fault does not fall to CBS, but to Warner Brothers Television. Not only is WBT behind the pull-down of The Mentalist and Eleventh Hour, but it’s also the source behind the removal of full episodes of Big Bang Theory, a hit comedy produced by, you guessed it, Warner Brothers Television.

Why does Warner Brothers Television hate us so much?

Maybe a better question is, why do they hate themselves so much? Remember, this is one of the entities that was behind the removal of Gossip Girl from the CW web site at the end of last season. Says one commenter on the Big Bang Theory fan forum:

If Warner Bros is really the culprit then CBS should renegotiate. This show barely made it a second season, and without people like me being able to catch up online, this show is toast. I really like the show but since I missed last episode, it kind of turns me off from watching any more of them since I missed out on what happened last episode. … It is nice that they have a recap and some clips, but not being able to see the actual show online when I miss an episode may make me turn it off for good. I did the same thing to The Office on NBC last year when they weren’t showing the episodes online. Now I don’t watch The Office at all.

 

Click to see full version and note how the good-until date is prominently displayed.

I want to riff on The Office for a moment because this is one show that does it right. Because there are no rules yet for how many episodes a network should put online or for how long they should remain online. The Office resolves this dilemma for viewers by showing you exactly which episodes are available, when they aired and for how long they will remain available. Brilliant. You give the audience the rules of engagement and they can’t complain when the shows disappear because you gave fair warning.

 

Fair warning, of course, is exactly what CBS (and Warner) did not give viewers of The Mentalist or Eleventh Hour. So what’s going on?

I’m convinced it’s renegotiation time. And that’s not just between CBS and Warner (who are parnters on so many things that it’s unlikely they are suffering a relationship breakdown). It’s also renegotiation season for producers and the actors. Remember the writers’ strike? One of the issues that strike focused on was what share of online streaming revenues should go to writers. At the time I briefly consulted an entertainment law firm that represents producers and actors who were wondering the same question. I have a hunch much of this is being done to push Warner and CBS to realize they would rather renegotiate quickly than let their popular shows languish. 

I could be way off on this, I’m not a Burbank insider so I can’t say what’s going on, but I will say this. Future TV deals are going to come with online rights completely sewn up. There will not be room for mid-season shenanigans in the future.

Apple MacBook won’t let you watch iTunes movies on some displays

This one is slowly bubbling to a frenzy. The new aluminum MacBook has turned up the heat on how aggressively it will protect iTunes video content from being output to an external display. In plain English, if you hook your new MacBook up to a display that is not DPDC-compliant, you will get an error message and you will not be able to play the movies you bought on iTunes. For technical details read this excellent summary from Ars Technica, always a reliable source. 

There are many angry posts going around online, including on Apple’s user forums where people are, appropriately, miffed that they can’t watch content they’ve paid for on legitimate devices (notably, projectors and older TVs, anything that requires a conversion from a digital to an analog or non DPDC-compliant digital signal).  My favorite comment on the user forum was from Al Knowles, who said:

Same problem here as well. I guess they want to be sure we HAVE to buy an
Apple TV.
Not gonna happen.
I’ll buy DVD’s at my local retailer before that happens.

Talk about drastic measures! As easy as it would be to flay Apple for this one. I have to point the finger at the people behind this: the movie studios. They are certainly the ones forcing Apple to do this, since Apple has created a very open platform for video that requires downloading entire files in order to view them. Files which the industry fears are then subject to offline manipulation and sharing. This is in contrast to Netflix streaming, which never lets a complete copy of a movie make it onto any device. 

The industry fear is obvious: you’ll rent an HD movie on iTunes, connect it to your DVD recorder instead of your TV and output a permanent copy for your library archive. Or worse, you’ll then make copies for all your friends. So they figured they can just rely on technology to prevent you from connecting to an unapproved device. The rub comes when you find out how many “unapproved” devices are still legitimate — at least from a consumer’s perspective. And in the end, it’s the consumer’s perspective that will determine whether people turn to alternate means to scratch the video itch. And yes, under alternate means I am including piracy.

What about you: bad call for Apple? Is this just the big, bad movie studios? Do you think Apple will have to relent in response to user outcry?

Did Sony block its movies from Netflix’s Xbox 360 player?

Interesting little fight brewing in the obscure world of online movie streaming. It seems that when Netflix agreed to send its streaming movies to the Xbox 360, at least one of Sony’s movie studios (Columbia Pictures, according to this Engadget report) took issue with that. 

Whether this was malicious on the part of Columbia Pictures is open for debate. If this were a Sony strategy, it would be likely that all Sony Pictures Home Entertainment content would drop out as well, but it hasn’t. Official word from Netflix suggests that this is normal in the course of licensing content — the original licenses probably didn’t include specification of all the possible outputs for Netflix. It’s reasonable to assume that there’s some renegotiation likely to occur.

Whether this was something Sony did on purpose or whether it was a coincidence (the timing is suspect because today was the launch of the new user interface for the Xbox 360, including prominent display of the Netflix streaming option), I don’t think this will stick. For two reasons.

1. The public sentiment is already turning sour against Sony. Without evidence that Sony was acting out of malice, the gamer/movie viewer community is already moaning and complaining loudly. Just read any blog comments on this topic to find plenty of Sony vitriol to go around. It’s almost as bad as the political season we just went through.
2. Sony doesn’t really work like that. It would be very unusual for Sony’s video game unit to be able to exert such specific pressure of a subsidiary of the Sony Picutres side of the house. I won’t offer specifics here, but suffice it to say that Sony is not ruled by one point of view. It’s a house of many different views and I find it unlikely that this would be part of a master conspiracy to punish people for having an Xbox 360. Think of it this way: Sony doesn’t prevent you from watching Sony DVDs on Samsung DVD players, right?

Maybe I’m just a nice guy. Do you think I’m wrong? Is this a nefarious plot? Or just awful timing for a rights negotiation to come up?

Om Malik tackles web video’s dirty secret: It doesn’t always work

Interesting post from Om Malik on GigaOm yesterday pointing out one of the problems with online video that people like me who believe online video is the game changer that VOD and iTunes could never be often gloss over. After trying too hard to find and finally watch a jerky, freezy 60 Minutes interview with Barak Obama, Om rightly says:

There are too many points of failure when it comes to web video. These problems are only going to increase in the near future as more and more of us are going to watch more and more video online.

He’s right, of course. You and I are watching an average of 56 minutes of online video a week. That’s only 3.5% of our total viewing minutes, but it’s rising. The longer you do it, the more likely you are to do it a lot. And once you start watching full-length TV shows online, forget it, you’ll blow right past 56 minutes into 2.5 hours-per-week land. 

People at Akamai have been warning me about this forever. They have their hands on 25% of all the web content in the world. And they see that more online video + more of it at HD (let’s admit, 720p) resolution will take network congestion to new depths. As rhapsodic as I wax about the potential of online video (and I need to confess, in our home we watch at least 10 hours of online video a week between Hulu, Netflix, YouTube, and a million viral videos my kids and my wife come across), it is true that it can be spectacularly bad.

Take last night, for example. I recently had been treated to an early preview of some movie trailers at a meeting with Paramount marketing execs. I came home to report to my family on the best of them, including the terribly tasteless but funny Dance Flick. So when the preview finally hit the web, they were eager to check it out. I wasn’t home to witness it, but I was told it was a disaster. The video stuttered and stopped so often that they didn’t come away thinking the movie was nearly as funny as I did, after watching it in large screen glory in a private conference room.

And that’s one of the issues hanging over us: when the video stops and starts, our brains don’t engage the content as fully. The benefits of the medium are lost on us. Advertisers don’t get the intended benefit, content producers suffer from the inability to reach us with their creative output. Oh, yeah, and it’s annoying.

What do you think? Are you generally satisfied with the quality of video you’re watching online? Does it work as well as you think it should?

My interview with Albert Cheng: The Father of Online TV

To call Albert Cheng a TV industry insider is a supreme understatement. As the Executive Vice President over Digital Media at Disney’s ABC Television Group, Albert not only has a front row seat inside the industry, many would say he occupies the driver’s seat. Yeah, I’m mixing metaphors there, but you get what you get.

In fact, in my writings and in the speeches I give, I typically refer to Albert Cheng as the Father of Online TV. And though you can practically hear him blush when I say it to him over the phone for the first time, all hyperbole aside, it’s an accurate description of Cheng’s role in the dramatic changes sweeping over the television industry today.

It all started in April of 2006. It’s hard to believe it has only been that recently that ABC, in what seemed like an out-of-nowhere move, announced it would test streaming of two of it’s hottest shows, Lost, and Desperate Housewives, online, for free. Yes, free. The rest, as they say, is history. Today, ABC.com streams well over 50 million videos a month and is likely to cross the 100 million threshhold sometime next year. 

After Albert and I participated in the same conference on online video recently, I took the opportunity to interview him in more depth about his own experience with TV and his expectations of the future of the medium. The full-length interview I’m keeping to myself for a future project that shall remain nameless for now, but I’ll share three important things I learned from and about Albert Cheng here:

 

1. Cheng learned about TV technology from the VCR

One of my favorite images of Cheng’s childhood is of him watching the CBS soap opera As the World Turns alongside his mother each day. It became such an integral part of their lives that he admitted to following the show right up through high school. Unlike the soap opera itself, his relationship with it finally ended. “I lost track of it once I went to college.”

Buried in all of this soap opera goodness, however, were the seeds of the future. “In those days my mom’s schedule got busier. She couldn’t watch her soap operas during the day anymore. So she recorded them on the VCR, every day.” It was an early form of time-shifting, one that was rare elsewhere. But thanks to the Cheng household’s commitment to As the World Turns, the VCR was used as aggressively as most people use a DVR today. “My mom watched her daytime soap operas in primetime,” concluded Cheng.

This was a secret Cheng learned about new TV technology: it can make people watch more than they otherwise would. “Our media consumption started to go up, for sure.” 

2. How you watch depends on what you want to watch

Cheng lives a life of TV superabundance that he lives every day. “I have three televisions,” he begins, then with a pause, admits, “for a two-person household.” The largest television (65- or 70-inch, he can’t exactly recall) sits in the family room and is the center of their viewing life. There are two others in the home for specialized viewing – one in the home gym and one in the master bedroom. True to the lessons he learned at his mother’s side, he explains, “Our typical watching is predominantly time-shifted. It’s a combination of DVR and online.”

As I’m seeing more and more, where he watches depends on the show he wants to watch. “I choose shows for live viewing, then others that I record but prefer to watch on the TV.” He performs a kind of triage on potential shows. At the top are shows he has to watch on the big screen. “Even though Lost is available online [on his own network’s site, no less], I choose to watch it on TV.” For shows he wants to keep up with but doesn’t have to experience fully, he turns to the Web. “Online is a great way to keep up with shows I don’t have time to follow, but when I find a spare minute I can quickly catch up with.”

3. There’s a lot more to come in the future

In the long run Cheng proves he’s got what it takes to dream big. “I’m just going to put a flyer out there, this might be insane, but right now we see more and more 3D content for theaters and the TV.” I nod, thinking that I know where he’s heading with this. It’s the age-old maxim that in the end, all future predictions, when taken far enough, end up at the same place: Star Trek. With pervasive computers, matter replication, and clothing that doesn’t fit very well. I often end up there myself. In this case, I sense Cheng’s line of reasoning is headed straight to the holodeck made popular in the Star Trek: The Next Generation series.

“I’ll take it one step further and say there will be people who watch content in laser holographic 3D environments.” Bingo. “That would be the next theater level of entertainment, it eventually goes to the home, where you take virtual worlds and combine that with filmed entertainment. Then you get to 3D feel in a 3D world.”

I like that Cheng can think this big. I also like that someone with such unorthodox predilections is an insider with the power to lead us forward. Expect to see the mark of Albert Cheng on many a future video innovation.

Blockbuster’s Jim Keyes promises set top box

If you’re a faithful reader of this blog you know that just last week in Dallas I had Jim Keyes, CEO of Blockbuster on stage at our Forrester consumer forum. He gave a great speech with amazing detail. But one of the things he was clear on was this: Blockbuster wasn’t going to do a set top box this year. I pressed him on this in Q&A and he said that consumers weren’t ready for it — it was a case of “getting ahead of our headlights” to quote his exact colorful speech.

It appears that set top box question has been reopened. In a conference call with Wall St yesterday, Keyes said that a set top box would indeed be out by year-end.

Either Jim was playing hard to get last week on stage, or, rather, Blockbuster has seen the aggressive announcements from Netflix in the past two weeks and concluded that it cannot afford to let Netflix get too far ahead in this race.

If that’s his thinking, then I agree. We actually urged this kind of thinking back in our July report on the future of the set-top box. We said then that most of these boxes were doomed, but that they were important to invest in anyway. We wrote:

Even following our suggestions, the best that the most successful of these players will do in the short run is to sell 2 million boxes. Our money is on the Netflix/Roku box, as it has the fewest barriers to adoption and sufficient functionality to appeal to consumers’ desires — especially if it rapidly evolves to include more content and additional services. Without modifications to create more appeal and overcome major barriers, we expect the others will all fight to surpass a million — and most will do far worse. For those that do eclipse a million, is it enough to get the foothold they’re shooting for? Yes. But their mistake is in thinking that the foothold that matters is the device’s penetration. It’s not. It’s actually the penetration of the video service that the device features, as the ideal scenario for future take-up is one in which a viewer has a content subscription that is accessible from multiple devices.
source: Competitive Product Ranking: Picking a Winning Set-Top Box, 17 July 2008. 

That’s the key. It’s getting the Blockbuster service into people’s homes, much the way Netflix is doing with its multitude of announcements. So even if Jim didn’t tell us the whole truth, we’ll still approve of where he’s headed. Of course, we have no details on how he’ll do it. If he follows through on the subscription model he hinted at on stage, that will be intriguing. Stay tuned.