LG adds Netflix to TVs in a small step with big implications

January 5, 2009

Surely hoping to jump ahead of the CES announcement blizzard that is about to strike later this week, LG and Netflix have announced that LG is releasing the first TV sets that stream Netflix titles directly to the TV, without the help of a separate box (as is the case with the myriad solutions we have already discussed on OmniVideo like Roku, Xbox 360, and even LG Blu-ray players). See Brad Stone’s piece at the New York Times for some more reporterly detail. 

This is a big deal. LG wants to do this because it needs to keep TV prices from the gutter; giving people content that they already have access to — but on the more pleasing screen known as the TV — is a great way to keep prices up.

Netflix obviously wants to do this because in its plans for world domination, offering a service that can serve you across channels (with DVDs and online streams) is a great way to provide the best of the analog and the digital worlds. Even though our own research has shown that the recession is convincing nonsubscribers that they don’t need Netflix, moves like this one certainly reassure existing subscribers that they’re getting their money’s worth.

I make a big deal out of this because of the model change that it represents for both the manufacturers and the content providers. It circumvents cable, it puts CE makers in a new role of content acquirers, and it signals a new way of looking at devices: as conduits through which many services can be delivered. I call this the “many devices, many services” model. With that paradigm in place, expect rapid innovation in products and services. Even in a recession, perhaps especially so.

However, a note of context is in order. A big question I’m hoping to answer with surveys this year is how many people will own Net-connected TVs by the end of the year. It can’t be many. If you imagine that 10% – 12% of US households buy a TV each year, it’s hard to believe that even 10% of them (1% of total) will be Internet-connected. Mostly because there aren’t that many Net-connected TVs on the market. A few from LG, Samsung, HP, Sony, with more likely to be announced this week at CES. And they haven’t sold well to date because there wasn’t much to offer through them other than walled content gardens with a smattering of swimsuit videos and re-runs of Facts of Life

Which is why the next big thing I’m waiting to hear at CES (or if not then at NAB) is a Hulu-connected TV. I’ll let you know when it happens.

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Why I don’t use my Apple TV anymore

January 2, 2009

This is an important post, one that will set up a few more posts in the next few weeks. The small question is why I don’t use my Apple TV anymore, the big question is why the overall category of Digital Media Adapters (DMAs, as people in the biz call them) has failed to take off.

Let me start with the small question: Why has my Apple TV been unplugged for the last six months?

I was a very enthusiastic buyer for the Apple TV back when it debuted in early 2007 (so long ago, eh?). I had spent much of 2006 buying TV shows on iTunes. I have all the Battlestar Galactica episodes, Studio 60 on the Sunset Strip (short-lived though its witty repartee was), and the first two seasons of Lost. The Apple TV seemed the ideal way to bring those shows to the TV yet still have them on my laptop while traveling. I not only bought an Apple TV the week it was released, I publicly predicted that the Apple TV would likely sell a million units. 

Then something amazing happened. All the shows I was buying on iTunes became available for free via online streaming. I could spend less, watch more, all without managing precious hard disk space. I stopped buying iTunes episodes altogether. My Apple TV suddenly became a very expensive way to watch family photo slideshows. I tried to watch YouTube on it, but that’s terribly annoying (look for a new post later this month on the question of watching YouTube on the TV screen, I’m still waiting for an explanation of why we would want to do this more than once).

So I unplugged the HDMI cable from the Apple TV and moved it to the Roku box which we watch a ton more than we ever watched the Apple TV. Apple TV has not, to my knowledge reached my original goal of a million units. Though I believe they have sold between half a million and 800,000.

That answers the small question. Now for the bigger question: why is this category not taking off? I’ve addressed this question many times, starting with a whole Forrester report in which we found — using our convenience quotient methodology — that over-the-top set top boxes (what I prefer to call DMAs) suffer from some stiff competition. Namely,  your DVR and DVD player. If you have both, which 30 million households do, you can do most everything you would want to do with a DMA for a lot cheaper. 

But even that powerful duo of DVR+DVD is about to get challenged by an up-and-comer: online video, delivered to the TV set. That’s what the story of 2009 will be. And it’s already happening more often than you think. I have a whole Forrester Report planned on the topic, due in February, so I’ll share more data soon, but suffice it to say that about 5 million homes already watch online video on their TV sets a month. That’s much more than have bought or will buy a DMA. It also suggests the path that DMAs must take. More on that later. 

What do you think? Do you have much use for your Apple TV or other DMA?

(Note, read the January 5 follow-up to this post about hacking the Apple TV to watch Hulu on it)


VUDU creates open development platform for TV

December 16, 2008

They say if you ask, you shall receive. Last week, I asked. I said:

So who is going to bring an open development platform to the TV in a commercially viable way? My money’s on Roku in the short run. Who else has the guts (or the financial imperative) to do this? One backdoor might be to create a TV set top that is truly DLNA compliant. Then people could create PC applications that feed DLNA content to the set top. I’ll keep my eyes on this for you. (For more on this, read my post called Joost’s iPhone App a Sign of Things to Come).

I asked and today I received. VUDU has debuted an open set-top-box development platform called VUDU RIA. At the same time, VUDU made sure to kickstart the application development process by building a bunch of apps to show how easy it is to provide Web-like experiences to their set top boxes. They have flickr, Picasa, YouTube, as well as many online video channels.

This is it, folks. This is what we all have been waiting for. Now if only VUDU could sell more boxes so that developers would have an incentive to fill the world with VUDU applications.

If you don’t understand why I’m so excited, may I direct your attention to the iPhone App Store. This is perhaps the most important decision Apple was ever dragged kicking and screaming to make. The iPhone App Store has created an environment where thousands of developers have innovated to provide consumers with experiences, content, and services that they value. All without having to cut deals with Apple (which would inhibit innovation). Yes, there are still issues with Apple’s random and arbitrary decisions about approving iPhone apps, but this genie is completely out of the bottle and flying high so Apple will have to cede more and more control.

VUDU wants to benefit from that scenario. They can imagine a world in which VUDU RIA becomes a default language for developing TV-based apps. Yes, they want other CE makers to adopt VUDU RIA. They’ve been smart about it — they have designed around a very limited set top box spec: 300 MHz processor with 128MB of RAM. That means a TV maker like VIZIO could design its first Web-ready TVs to that spec and immediately have content to offer buyers, without having to create a custom environment of their own and do content deals. They can simply plug into the dozens and hopefully hundreds of apps built in VUDU RIA.

Of course, they’re not the only ones with this vision. Intel and Yahoo demonstrated a TV widget language they want the world to adopt. But VUDU has a box and real apps, where the Yahtel approach is still an idea for now. And don’t forget Roku and Sling, both of whom I have written about who have a similar ambition.

This is the most important thing that will happen in TV in 2009. The battle of the development platforms. And notice that nary a single cable provider is on the list of combatants. Hmmm.


On the rising problem of “disappearing content” from online video sites

December 11, 2008

Gotta give some props to Greg Sandoval (pictured at left) at CNET News who did a great piece this week on the seemingly random removal of content from Netflix and iTunes. (see TV has license to kill movies at iTunes, Netflix | Digital Media – CNET News).

If you’ve been reading my posts lately, you know that “disappearing content” is par for the course. One of my most read posts in the history of this blog is my piece on Why CBS Pulled The Mentalist From CBS.com. I also briefly covered how Sony Pictures apparently pulled certain of its films from Netflix only when viewed through the Xbox 360 (you can still watch them elsewhere). 

I know it’s easy to start throwing snowballs at these guys for not understanding the power of the online channel. I have a few of those snowballs in my arsenal as well. But I have to confess, I consider these stops and starts a good sign.

What? That’s right, this is a good sign. Because if the corporate heavies had their way, none of these movies or TV shows would be available on Netflix, iTunes, CBS.com, the Xbox 360 (you get the picture) in the first place. The fact that they threw too much up there, then realized they didn’t quite have full permission to do so and have had to retrench is a sign that they’re experimenting. Importantly, the fact that they only pulled a few and didn’t just rip the whole thing down is also a good sign. Remember, danger lurks in darkness of media executives’ souls. They’d rather not do the right thing. But the dynamics of the market are forcing them to. Huzzah for us. 

Let them have their fits and starts, let them figure it out as they go along, as long as they keep moving forward.

Agree? Disagree? Feel free to weigh in.


Joost’s iPhone App a Sign of Things to Come

December 11, 2008

A relatively silent shot was fired the  first week of December which, though it was not at first heard around the world, will eventually change the way all media are distributed. Sound provocative enough? 

I‘m talking about Joost rolling out its iPhone application. This changes everything.

You might think I’m going to on and on about how mobile video is eventually the future, blah, blah, blah, but I’m not. Because it’s not. Mobile video will be a very nice complement to the TV and the PC. It will remain the third screen for as long as you can imagine. This post is not about the future of mobile video.

Instead, I’m talking about what I have been calling the “many devices, many services” model of media consumption in many of the speeches I give. This model follows nicely in line after the “one device, one service” model, which is best embodied in the iPod/iTunes or Kindle/Amazon combinations. This is a fine model, usually one that a new technology category will start with. But that model is quickly followed by a “one device, many services” model. This is the case with the Sony eReader, which, unlike the Amazon Kindle, has published an open development platform which allows any bookseller in the world to sell books into the eReader ecosystem. One device + many services. 

Before we move into the “many devices, many services” model, a quick interim step called the “many devices, one service” model flourishes briefly. This is best exemplified by the Netflix on LG, Xbox, Samsung, TiVo, and so on model. I love this model and have written about it copiously.

But what we will see next is what Joost has done by exploiting the iPhone’s application development environment. It has volunteered itself as a service on the iPhone, without Apple ‘s express permission. In other words, in the “many devices, many services” model, devices are built with open platforms that allow any (ergo: many) services to spontaneously connect, without doing a biz-dev deal. 

Oily Britney Spearks, Star Trek, Victoria's Secret, any guesses what target audience Joost appeals to?

Top Joost Picks: Oily Britney Spearks, Star Trek, Victoria's Secret, any guesses what target audience Joost appeals to?

“Many devices, many services” is the future of video. And it requires the use of an open platform and open protocols. Joost, which got its start as a P2P video delivery mechanism, has since opened itself to wider consumption by going straight IP. Once it speaks IP, Joost can easily be ported to any IP device, including the iPhone. Including the T-Mobile G1. And so on. It has been so successful on the iPhone so far that it’s regularly in the top 10 free applications on the iPhone App Store (see pic, today it’s #5, yesterday #2, it see-saws).

All we need now is a (commercially-viable) open development platform for the TV set-top box. We already see a rabid community of Apple TV hackers who are writing their own code to create an open platform out of the walled garden Apple built. (I’ll write more on that later in the month because I’m trying it out myself.) And Comcast and Cox and Verizon will take years before they consider an open platform — they’d rather charge you for everything you want to do, even if they only enable you to do it badly, which is the case with things like whole-home DVR.

So who is going to bring an open development platform to the TV in a commercially viable way? My money’s on Roku in the short run. Who else has the guts (or the financial imperative) to do this? One backdoor might be to create a TV set top that is truly DLNA compliant. Then people could create PC applications that feed DLNA content to the set top. I’ll keep my eyes on this for you.

In the meantime: Joost iPhone users. Are you using the app? Does it work as advertised? Satisfied? If not, this could slow down the proof of concent the “many devices, many services” model needs, so I hope not. Let me know.


Why Sling.com matters

December 8, 2008

It’s a question I’ve been getting from the press since Sling.com was first placed in private beta test. “Why is Sling trying to create a website when Hulu, Veoh, Joost and others have already cornered millions of visitors?”

It’s a sensible question, but it doesn’t take into consideration Sling’s ultimate strategy.  The first issue to raise is a simple one: this is not that expensive of a site to run. The content is hosted by the content providers (including Hulu.com) so there’s no cost there. The only money they give those people is the privilege of letting them keep the lion’s share of the revenue associated with the content Sling.com is passing through.

The real point to raise, however, has to do with Sling’s secret plot to take over the world. Yes, Sling has a secret plan: they want to make it easy for you to take content from anywhere and watch it anywhere. Diabolical, no?

First piece of their plan is letting slingbox owners — the few, the proud — access their slingbox content from any Web browser, rather than through a proprietary application. This is critical. This will mean you can check your slingbox from any IP device, including iPhones and T-Mobile G1 phones. Get it? That’s a critical feature to add.

The second piece is in enabling people to watch online content on their TVs. This is not for Slingbox owners, it’s for an even smaller group: Slingcatcher owners. But it’s a very smart step, one I’ll be writing about at Forrester in early Q1 as I consider all the ways you can put Hulu on your TV set. Because the Slingcatcher lets you share PC and online content to your TV, aggregating the best content on Sling.com just makes it that much easier for Slingcatchers to access the best of the Web on the TV. It’s a small step, but it represents big thinking. 

Big thinking because once Sling can show that it has the technology in its Slingcatcher and the content on Sling.com, it will then start calling Samsung and other TV and Blu-ray makers to say, “Hey, want an Internet-connected TV strategy that puts the best of the Web on your device quickly? Partner with us!” Sling licenses the technology, pre-connects Sling.com (through a proprietary UI) to the device, and boom, instant Internet-connected TV strategy without the hassle of knocking out content relationships. It’s the same motive that led both Samsung and LG to work with Netflix. 

It’s going to be the race to watch in 2009. I’ll be tracking it: who gets Hulu to the TV, then CBS, then ABC (because that will be the order in which it happens). And all of this makes it easier for you and I to watch what we want, when we want. See why Sling.com matters now?


Blockbuster $99 set top box finally available

November 25, 2008

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.