Netflix Initiates Owned Content Delivery Network

In an apparent move to assist in data transport cost reduction, Netflix announced its new content delivery network (CDN), called “Open Connect” in a June 4 Netflix blog posting. Netflix announced that it will provide data feeds at no cost to the location the ISP designates, or Netflix will deliver to common Interent exchanges for the IPSs to pick up.

Ken Florance, vice president of content delivery at Netflix wrote, “The world’s other major Internet video provider, YouTube has long had its own content delivery network. Given our size and growth, it now makes economic sense for Netflix to have one as well.” Florance writes that Netflix now delivers approximately 1 billion hours of TV programs and movies each month. Read more

Video: Transactional or Subscription?

According to a report from Parks Associates, consumers by and large prefer to pay a monthly subscription for film and video content from sources like Netflix and Amazon Prime rather than pay an a la carte transactional fee for more conventional “on-demand” content.

The Parks report measured usage and purchases over a six-month period. Those who used a subscription service spent approximately $50 on the average for their video subscriptions, while the a la carte users typically spent between $13-$25 per month on per transaction films.

The study went on to note that those households with a subscription reported streaming 2.4 movies per month on the average.  This is an increase of 60% over the 1.5 films per month measured in 2009.

The Parks reports says that the “all-you-can-eat style subscription” has proven successful, while cautioning that “proper monetization, content licensing and distribution costs” are potential areas of concern.

The Netflix price increase and altered retail model goes takes affect September 1.  It will be interesting to see if the behavior continues and increases, or if the source for content shifts.

UltraViolet Licensing

Digital media asset collecting can now take a giant step forward. The Digital Entertainment Content Ecosystem (DECE) launched  UltaViolet licensing on Wednesday. The licensing of content, technology and service providers was seen as the final step in getting the digital entertainment asset platform moving. Read more

ION TV to Air Starz Movies

For the first time, ION has acquired first run rights for films. In a deal with Starz Media, ION will run six films in its “Big Movie Weekend” starting in November.

ION Chief Operating Office Brandon Burgess said that the arrangement provides an outlet for independent content creators. The Starz-owned films are distributed through Anchor Bay Films and Overture Films, also owned by Starz Media.

In related news, ION’s prime-time numbers are encouraging. Total viewers is up 17% while the critical 18-49 demographic increased 12.5%. The movie roll out with Starz will run through 2013.

YouTube Adds 3,000 Movie Titles for Rent

YouTube announced May 9 that it will now offer more than 3,000 additional films from three major studios for rent, with some titles reportedly available the same day as the DVD offering.

The Google-based video service recently signed deals with Time Warner Inc.’s Warner Bros, Sony Corp’s Sony Pictures and Comcast Corp’s Universal Pictures, in addition to its previously announced partner Lions Gate Entertainment.

YouTube has been offering movies for rent since early 2010, but its content was limited to catalog and independent fare. This announcement is a significant step in the video giant’s evolution from user-generated content to studio-produced fare.

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Warner Brothers Offers VoD Via Facebook

Warner Brothers announced last week that it is testing a new program that will offer select movies for sale or rental through its public Facebook pages.

Warner Brothers rolled out the new service last week with the launch of a popular title. Currently, Facebook users who visit the official page of “Batman: The Dark Knight” can pay 30 Facebook credits (worth $3) to stream the movie. Facebook Credits is an alternative payment option supported by more than 150 games and applications on the social network.

Renters have access to the movie for 48 hours and can replay it as many times as they like. Warner Brothers said it will add other movies in coming months but did not release any additional titles, or how much it will cost to buy movies.

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New Channels from Sony

October 1 is slated to be a busy day for Sony Pictures Television, according to an article in the Los Angeles Times and sources familiar with the company’s expansion plans.

Sony Pictures Movies HD will launch on October 1 as the first wholly owned cable channel for Sony in the United States. The channel will be devoted entirely to movies. Observers note that Sony has had great success internationally with channels that they own. The channel will draw content from the large Sony-owned film library. Multi-video program distributers will have access to another high definition (HD) channel featuring films.  Sources indicate the the channel will not compete in the same arena with networks like HBO, Showtime, Starz! and the new Epix channels, but with the HD channels Universal HD and MGM HD.  The perception being that distributers want more HD content that can be offered outside the “premium channel” level.

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