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.

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

November 19, 2008

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?

It appears Netflix streaming will go HD with Xbox 360

October 29, 2008

The details are still coming together, but while I was busy at the Forrester Consumer Forum, this little tidbit came out, as trumpeted by Gigaom via the New York Times

Yes, I knew that the new UI for the Xbox 360, due out in late November, was going to feature Netflix streaming. That wasn’t news. But the interesting bit is that apparently, there will be HD movies as part of the deal. Reactions are quite positive so far, from the tweets I’m reading on Twitter. UPDATE: It appears Netflix has plans to roll this out to all its non-PC streaming platforms, not just Xbox 360 — read this post at CNET for details, including the high bandwidth requirements.

And I have to say that while this is a good move, and a relatively easy move, it’s more of a symbolic victory than anything else. For Netflix, the symbolic victory comes in being able to say it will be streaming HD quality movies to the TV not the PC (Hulu.com already streams hundreds of movies to the PC), something that cable companies charge much more for. For the Xbox 360, it will finally elevate the device’s chances of breaking through as a gaming machine to a home entertainment machine. When you add up how many people have watched video on the Xbox 360 — Microsoft says its about 30% of it’s 14 million Windows live customers, or more than 4 million people — that makes it more important than TiVo or the Apple TV in terms of the number of people it’s reaching, as I’ve said before. So going this next step makes sense.

But the move won’t push either company into new revenue or subscriber growth mode. Instead, it will confirm existing subscribers and remind them why they have already signed up in the first place. That’s always a worthwhile goal, especially in a recession, but a modest one.

It’s the long-term effect I’m interested in and I suspect that’s what Netflix is positioning for. Today, when you want to watch a movie, what are your top 5 choices? How different will that list be in two years? Maybe the better way to ask it is, where did you get the last 5 movies you watched? For me, without straining too hard to recall, it’s probably:

  1. Hulu.com streaming (watched bits of John Carpenter’s The Thing just yesterday while eating room service)
  2. Netflix by mail
  3. DVD rental from Hollywood video (it’s like, 2 mins away)
  4. Netflix streaming to Roku box
  5. Little bits of a movie my daughter was watching on ABC Family.

Here’s what’s not on my list even though I have these options: Apple TV, Xbox 360, premium movie channels, or cable VOD. What’s your five? Go on, surprise me:

Samsung adds Netflix to latest Blu-ray players

October 23, 2008

We’re witnessing the one dramatic change in the world of physical media. Now Samsung has joined LG in making Blu-ray players that also stream Netflix movies and TV shows. This Netflix strategy is the little engine that could:

  • People first said it was weak because the content was so second-string. Netflix has recently fixed that by adding Starz and some Disney movies. 
  • Some complained that a dedicated $99 box from Roku (though priced to sell), wasn’t enough to move the market. However the LG Netflix/Blu-ray player showed that there was real depth to the strategy.
  • The deal with Microsoft’s Xbox 360 to put Netflix content in the game console proved there’s a true multi-platform play there.
  • Now Samsung’s entry shows that this is going to become a big deal across multiple players in the CE and computing world.

Lessee, Netflix 4, everybody else, 1.

With Steve Jobs again this week referring to the Apple TV as a “hobby” in order to downplay previous expectations, this leaves Netflix clearly in the driver’s seat when it comes to over-the-top delivery to the TV. Maybe not in volume yet, but it will.

The biggest issue here is what this means for cable. Netflix has set its sights not on Blockbuster or even on iTunes, but on Comcast, Cox, and Time Warner. The Netflix solution pulls content automatically from your DVD rental queue, provides an easier-to-use interface than VOD, and now has as much good content as a typical VOD system, this makes cable cord-cutting that much more possible.

This Netflix move could prove to be the most important wildcard of 2008. Now if only there wasn’t a recession hanging over these Blu-ray players

Are you Netflixing your TV? Will you? Do tell.

More on Blu-ray in a recession – forecast down 25%

October 23, 2008

According to this article from Jacqueline Emigh at BetaNews, Parks Associates (technically a competitor, but a respectable one so I’ll give them their props) has reduced its forecast for standalone Blu-ray players this year to to 4.3 million globally or 2.2 million in the US.

This comes as I’ve been writing about Blu-ray prices falling to $199 for the first time and the economy’s effect on home video overall. First of all, I’ll say that Forrester has never produced a forecast for standalone Blu-ray players so I’m not in a position to comment on the specific number, however it is interesting to note that this new forecast puts the Parks number in line with the Jupiter Research number from earlier this year. (Jupiter Research, as you may know, was a competitor until just a few months ago, we now are one family, which is great as they are some smart folks.) Jupiter had predicted approximately 3 million total Blu-ray homes in the US by the end of this year, on top of just under 1 million last year, which comes out to something north of 2 million in sales this year. So the new Parks numbers line up with the Jupiter numbers. I’m inclined to believe both. (It is important to note that both these numbers are far short of the projections Blu-ray manufacturers are working from.)

The most interesting question is whether PS3 will now have a more cannibalistic effect on standalone Blu-ray sales or less of one. 

The thinking goes like this: PS3s used to be the cheapest way to get a Blu-ray player, and it also happened to play games. However, now that Blu-ray standalone players are so cheap, that is no longer the case. Is it possible that people will postpone PS3 purchases in favor of a $199 Blu-ray player, thinking they can upgrade to the PS3 when the economy improves? or will they instead go from standalone players, spend a few extra bucks to get a PS3, and pat themselves on the back for getting a system that can do gaming and video?

I doubt either will occur, actually. Instead, people in the market for the PS3 will still get one, possibly with fewer accessories, but they weren’t in the market for a standalone player anyway so the effect is not cannibalistic. People in the market for a standalone Blu-ray player will do one of two things: either move downmarket to a $199 or $229 model or just postpone the purchase for next year, assuming that prices will only go lower. In the meantime, the upconverting DVD player they bought last year for $50 will do them just fine.

What are you going to do? Did you plan to buy a Blu-ray player or PS3? What will you do now?

Do you watch video on your Xbox 360 or Sony PS3?

October 21, 2008

In the recessionary spirit, I’ve been thinking through all the ways to get video to the living room and trying to decide which ones are the most economical. The Netflix/Roku box, at $99, is a solid option that performed well in my report at Forrester, but it’s only a piece of the home entertainment puzzle. 

Enter the videogame console. This is a trojan horse — in theory, these gaming systems end up in millions of homes and then one day, people wake up and find that they can also use them to watch DVDs or Blu-ray discs, and that they can download or stream video. Cool, right?

Could be, but isn’t yet. I recently spoke on a panel with the head of home video for Warner Brothers who shared research with the audience about how Blu-ray disc purchases (or attach rate if you want to be nerdy) for people with standalone Blu-ray players are twice as high as they are for PS3 owners. In other words, people with a PS3 are only half as into the Blu-ray player they have compared to other Blu-ray owners. 

The point I’m making is that videogame consoles are game machines. Period. All the other stuff has yet to catch on. Yet. What will it take to change that?

I recently sat down with Shane Kim, Corporate Vice President, Strategy for IEB at Microsoft to talk about the Xbox 360’s upcoming UI refresh, slated to hit November 19. Together with Christina DeRosa, General Manager, Xbox LIVE Marketplace, the two answered some of my questions about the future of video in the Xbox 360 world. Here’s what I learned:

  • Roughly 14 million Xbox 360 users are Xbox LIVE members, 30% of whom have downloaded or streamed video, whether for free or pay. 

That’s a good number — it means nearly 5 million people, far more than have an AppleTV or even a TiVo. My assumption, which I shared with them is that those 30% will spend no more than a third of their time and energy on video vs. gaming in Xbox live. Like good soldiers, they would neither confirm nor deny my assumption, but that means at most, 10% of content flowing over the net to the Xbox is video related.  

  • The entire online revenue for Xbox LIVE, including Xbox LIVE Marketplace, has topped $1 billion since its inception.

Apply my maximum of 10% to that $1 billion and it suggests a ceiling of $100 million in downloads and rentals sold via the Xbox 360. This is complete back-o-the-napkin modeling so don’t hold me (or them) to it. This makes Xbox the #2 digital download store next to Apple iTunes, though the Jobster has a comfortable lead if my estimate is close.

I’ve watched video on my Xbox 360, spending time with the HD version of Hunt for Red October. (A classic, btw, I always live for the moment where the Russian dialogue changes to English on the word, “Armageddon.” Powerful.) But I haven’t done so recently. (The house is in the middle of a remodel so I haven’t done the Netflix/Xbox 360 thing yet, but when I do I’ll blog about it.)

Tell me what you think: have you watched video on the Xbox 360 or on the more recently video-enabled Sony PS3? If so, what do you think? If not, why not and would you ever?