There’s an online TV storm a brewin’

March 27, 2009

I wrote earlier this week about how Hulu is now streaming as many views as Comcast does via VOD. But what I didn’t take time to include is the dark side of online TV shows. The fact that many networks are pulling down some of their top shows (e.g., The Mentalist and It’s Always Sunny in Philadelphia.), and how the ads on these wildly popular shows are not all selling.

So I took the time to compile all the evidence that an online TV show storm is brewing and did an analysis for Forrester clients that was published earlier in the month. The great news is that Forrester recently recognized its 10,000th Twitter follower and to celebrate, they let him choose a Forrester report to make available to all of Forrester’s Twitter followers. This individual (@jpthomp on Twitter) chose my report about the coming online TV show backlash. That means good things for all of you, go to the following link to register to get a copy of the report (thanks, jpthomp!). http://snipurl.com/emg3g 

When you get a hold of the report, you’ll see that I envision a lot of experimentation with online show availability throughout the rest of this TV season and possibly even throughout the rest of the year. And with online TV shows failing to sell out their ad inventory, some naysayers inside the major networks are going to be arguing for much more aggressive anti-online measures. We think it will take some time, but online TV can be brought back around again as the recession matures and as executives realize that online TV is not a separate kind of TV, it’s simply the extension of existing TV experiences across multiple platforms. In the report, we sum up the call to action this way:

OUR PLEA: INTEGRATE ONLINE TV INTO THE TOTAL VIEWER EXPERIENCE

If you expect us to end with a summary of all the reasons that online TV shows are the future of TV and a plea to preserve this threatened species, prepare to be disappointed. We said online TV was the most important thing to happen to the video industry not because it was the future of TV in and of itself but because it would help move us quickly into the future of TV, something Forrester calls OmniVideo; this is a state in which consumers can watch TV shows and movies on any platform they want, controlling what, when, and where they watch. In this future, not only will consumers be satisfied, but producers and distributors will make more money than they do today. That’s why we now plead with the industry to quickly learn from the mistakes they’re going to make in the next few months and get back to fully supporting online TV shows — not as a separate business but as an integrated consumer experience that complements and enriches traditional TV.

Check out the report yourself, see what you think. Let’s buckle our seat belts and see what happens over the next few months.

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Hulu breaks 300 million view barrier

March 26, 2009

This week, Hulu released comScore’s latest VideoMetrix chart that shows the site broke through the 300 million views in a single month barrier. This barrier is significant for a few reasons: 1) it’s higher than I thought it would be, so I’m humbled; and 2) it’s roughly the same number of streams that Comcast does each month in its onDemand system. To illustrate both points, let me quote myself from last October when Hulu reached a meager 150 million views:

This is phenomenal, it’s precisely the year-end target I had for Hulu in December. Now I have to ratchet that up to 200 million. To go from 0 to 200 in under a year is remarkable. Consider that in its best months, Comcast VOD streams 300 million video views. That’s a big number. Hulu will be at the level some time next year. Without having to invest in VOD servers the way Comcast did. (See my original blog post for more.)

Let me reproduce the VideoMetrix chart (source: comScore, February 2009) so we can do some analysis.

comScore Video Metrix February 2009

Quick note for those new to this kind of stuff, “aHulu (Hybrid)” refers to the fact that some portion of Hulu’s views come from its syndication partners like AOL and MSN. That means any Hulu views that occurred there are not counted there, instead they count back at Hulu. We don’t have any solid estimates of what portion of views are coming from Hulu.com itself vs. its syndication partners, but I have a hunch it’s shifting more toward Hulu over time as Hulu has attempted to brand itself more aggressively.

Looking at this chart, we can do some fun math (I know, not two words you’re used to seeing together). We can see, for example that the average viewer is watching Hulu about 16 minutes a week, far ahead of everyone but YouTube (which accounts for the lion’s share of the Google Sites line). That means the average viewer might watch a show every other week, which indicates the beginning of a habit. Hulu beats everyone else in minutes per stream, at 6.7 minutes, comapred to 3.5 for both Google and CBS. That’s obviously because Hulu people are watching full-length content. Most interesting, though, is the fact that Hulu now accounts for 5% of all online video viewing minutes. The only other site that has more than a single percent of viewing minutes is YouTube, which accounts for 29% of viewing minutes.

Yes, YouTube still rocks the house. But Hulua is clearly the second most important US online video provider. 

And it has only been in business for a year. I’m starting to regret boasting about the fact that I never saw Hulu as a YouTube killer the way some people did when it was first announced. While it’s not technically a YouTube killer (these numbers attest to that), it’s certainly a YouTube distractor since it actually has a model for making money from these views, which  YouTube does not. 

 


Economy watching: Comcast earnings waaaay up

November 4, 2008

Tracking the economy has been a thankless job lately. Things go down, you draw conclusions, things go up, you draw different conclusions, then things get all messy again and all bets are off.

But one thing will hold true in this recession: consumers love them some video, preferrably free video.

I wrote about this in a Forrester Report which I blogged about recently. Which is good for online video, and probably even good for cable generally. However, I did have some warnings to offer cable companies which are future oriented — that consumers will shy away from premium content packages and premium tech for the home (like multi-room DVR). Because of that, you won’t see the effect of the recession on this quarter’s earnings. So I may yet prove right in a way that affects cable’s financial performance. But for now, things couldn’t look shinier for one Comcast.

Betsy Schiffman captured this nicely at the Epicenter blog on Wired.com last week in what is definitely going down as one of the best titles ever:

Cockroaches and Comcast Will Inherit the Earth

Her clever reference to the fact that cockroaches are suspected of being able to withstand just about any devastation that we could wreak on the planet, may overstate the case for cable a tad, but only a tad if you consider that Comcast CEO Brian Roberts was able to report on beating earnings per share estimates by a full 4 cents, and seeing a 38% rise in profits over last year. 

The point here is that cable holds most of the right cards for surviving the digital video transition. As long as it plays them right. In the case of Comcast, one of those cards is very strong financing from their own operations. No need to go out to get cash in a credit-squeezed market. That’s a great hand to have right now as economic ups and downs continue their game of ping-pong.


Happy Birthday, Hulu.com! I knew you’d make it

October 29, 2008

It’s not really a birthday party, since this is only the anniversary of Hulu.com’s beta launch. Which is all the more amazing considering how far it has grown in a year — when half of that year was conducted in private beta. Since its official launch in March, Hulu can now boast that in September nearly 150 million videos were streamed.

This is phenomenal, it’s precisely the year-end target I had for Hulu in December. Now I have to ratchet that up to 200 million. To go from 0 to 200 in under a year is remarkable. Consider that in its best months, Comcast VOD streams 300 million video views. That’s a big number. Hulu will be at the level some time next year. Without having to invest in VOD servers the way Comcast did.

That’s right, folks, Hulu is here to stay. And <bashfully> I have to admit I called it. A year ago today, I published a report called Online Video Syndicator Hulu.com Overperforms At Beta Launch. I said:

Today Hulu.com, the NBC Universal and News Corp. online video joint venture, launched a private beta test that beats our expectations of what the company would achieve. It syndicates video, enables sharing, and does it all with top-notch content and a design flare reminiscent of Apple. If Hulu can keep expenses down, the company stands as a threat to competing online TV companies like Joost, as well as old-line cable companies and telco TV entrants.

Specificallly to cable companies, I warned:

itemCable companies and telco TV providers can begin the fear watch. By delivering a solution that advertisers want, syndication partners are happy to implement, and consumers will easily lap up, Hulu has assembled an experience directly comparable to that offered by cablecos and telco TV companies. Think about it: You have first-run TV shows, classic TV reruns, and movies from the back catalog. All you need is a pay-per-view option for new releases, and you might as well call Cox Communications, Time Warner Cable, or any of the rest and cancel your TV subscription while simultaneously opting for the fastest Internet connection they can possibly offer. That tells us what Hulu will offer next.

The warning is only stronger now as Hulu has even more content than it had back then and even more advertisers lining up to pay a premium on a CPM basis to participate. I hate to say I told you so…

Ironically, Comcast is a beneficiary of the Hulu experience since Hulu is the engine behind most of the content available at Fancast.com, Comcast’s online TV portal play. 

What about you? Are you a Hulu.com junkie yet? Are you doing just TV or have you browsed any of the hundreds of movies? I’m hooked on both. I’ve watched over 3 hours of video just on Hulu this week alone. That puts me squarely in the most engaged online viewer category and I have Hulu to blame.


Comcast offers free basic cable during digital TV transition

October 9, 2008

Okay, if you read the release you’ll see that it’s not free for everyone. You have to be someone who isn’t getting cable or satellite TV today and you have to sign up for either telephone or internet service from Comcast. But the point is, if you’re one of the 13 million homes Comcast says has analog TVs and no TV service today, you can avoid the hassle of upgrading your TV or getting a digital-to-analog converter box when the analog shutdown happens in February of next year.

Let’s back up for the people who aren’t as nerdy as I am (most of you) and don’t know what in the world I’m talking about (again, most of you). On February 17th of next year, television broadcasters will cease their analog over-the-air broadcasts in favor of digital broadcasts that use spectrum much more efficiently. Translation: that frees up gobs of space for more advanced video and communications services, the kind Google wants to provide to you. 

With this shutdown, analog TVs using rabbit ears will suddenly become blind. (A recent test of the shutdown in Wilimington, NC was either a modest success or a potential failure, depending on who you listen to.) That means between now and February 17th, there will be a lot of efforts to take advantage of this transition to:

  1. Sell digital TVs. This has been commonly perceived as the most straightforward way out of the problem. We tried to give our 36″ Sony analog TV away (nice one, too), but couldn’t convince people it would still work after February 2009. The fact is, if you get a digital TV, you can tune into a digital over-the-air signal, end of story. However, even with prices falling fast over the last two years, digital TVs are still going to seem expensive in an economy like this one (more on that later, I’m writing a Forrester Report about the economy’s effect on this market).
  2. Get people to upgrade to cable or satellite service. This is obviously Comcast’s goal. Little understood is the fact that if you sign up for Pay TV service, the question of digital vs. analog is settled for you: Pay TV providers can output their content to whatever device you want. Even my digital cable box has analog and digital outputs on it, making it ready for any kind of TV, even after February 17th. 

Seen in this light, it’s interesting to note that Comcast — in a position to make money from this transition — hopes to aggressively give its basic cable service away.

I recently spoke to Derek Harrar, GM and SVP of Video Services at Comcast about this plan. He’s an intensely focused guy, I guess you have to be when you’re in charge of video for the country’s largest cable company. I told him what I’ll tell you: This is a smart move for Comcast, a “path of least confusion” strategy. There’s already so much confusion out there on this topic that making it simple is a wise path. Let people keep their TVs, their remotes (since basic cable doesn’t even require a set top box), and only ask them to change phone or Internet service. Much simpler than getting a government voucher for a discount off a digital to analog converter box. (Call it food stamps for video — TV stamps?).


Fancast campaign offers new program “grid”

October 6, 2008

I love this take on the old programming grid. You know, the kind you used to look up in your newspaper each morning to see what was on that night? (Flashback: me, in my parents’ room, looking for the E section of the newspaper so I could see if the episode of Three’s Company on that night was new or a rerun.) 

Fancast’s take on it highlights all the reasons why online video is so successful. Instead of 6pm, 7pm, 8pm, and so on on the left side, the row headers read: “Mad Early,” “Whenever I Want,” even “During Work,” (not that anyone would condone such a thing, I’m sure). Not only is the campaign (via email and the Sunday New York Times) witty, but it’s practical — you can filter shows by meaningful categories or click on a show to read more or launch the player. I obviously chose Gilligan’s Island, and was rewarded with a picture of Mary Ann, who I pick over Ginger any day. Wow, that’s effective targeting, Fancast!

This is the kind of consumer-friendly energy that cable MSOs like Comcast (which owns Fancast) aren’t traditionally expected to manifest. But given the likelihood of cable cord-cutting in the coming years (see my post on that), it’s wise for Comcast to start building these consumer connections now.


Biggest LED screen in the world

September 29, 2008

I have been predicting an increase in public displays, some linear and out of your control — CNN in the airport, the Target in-store end-cap displays — and some you will be able to interact with. Today, while in Philadelphia, I saw an increase in something I didn’t predict, but that I want for my very own. 

It’s the largest LED screen in the world and it lines an entire wall in the entryway to the Comcast Center in Philadelphia (new headquarters of Comcast and the tallest building in Philly now). According to Engadget, it’s 87 feet wide and 27 feet tall. The picture quality is 5x that of HD. Check out the quality:

The fun part is that when it is off, it pretends it is a wall made out of wood. See the picture below for some effects Comcast’s video designers have played with to make it looks like the images, animations, and even the weather forecast, pop off the wall.

 

The videowall pretends to be...a wall

The videowall pretends to be...a wall

Raises all sorts of ideas for how a videowall might be used inside your home some day. Imiagine that the video image pretends to be a static wall and can carve out space to show videos, weather forecasts, and pictures of the kids at summer camp.