NTCA's The New Edge » OTT

Boxee Adds a Second Target Buyer

Steve Fravel — Sun, 29 Jan 2012 16:42:23 +0000

Though Boxee has been targeting residential customers who are “cutting the cord” to conventional cable services and satellite subscriptions, it announced last week that it would add cable operators who may be considering eliminating program costs and shifting their focus to selling just high-speed Internet access.

According to Boxee representatives, the Boxee box will drive customers toward increasing the amount of bandwidth that they buy. Boxee claims that selling a larger “pipe” benefits the operator with a larger margin because the service does not include the program costs and line-up management.

Boxee has been selling a set-top-box (STB) that retails for approximately $180. According to Boxee, its STB creates a more manageable user interface and assists in organizing the over-the-top (OTT) content available via the Internet. This function opens the door to increased numbers of program sources beyond the typical connections to Netflix, Vudu, Hulu and so forth, allowing the customer a resource that eliminates having to find additional Internet-delivered content on his own.

The primary draw back for television customers is the lack of access to local broadcast channels. Adapting to that challenge, Boxee offers a live TV adapter for an additional $49. The adapter connects an antenna, either the small antenna Boxee provides, rabbit ears or a roof-top version, to the Boxee box.

While this may be a workable and economical solution for some distributors, poor quality antenna reception in some areas and a lack of access to some live event programming available by a conventional cable or satellite subscription may be more limiting to some subscribers.

Google TV Slowly Adding More Partners

Steve Fravel — Fri, 06 Jan 2012 19:16:51 +0000

LG Electronics joins Samsung, Sony and Vizio as a partner in the development of Google TV. This past October Google released the long awaited 2.0 version of the middleware to less than stellar reviews.

While the Google TV idea holds promise for combining content from the Web and from conventional television distribution, it remains to be seen if the addition of another electronics manufacturer and new chip sets can help propel Google to a wider and deeper market penetration. Logitech announced this past year that it was dropping out of Google TV development after developing the “Revue” box which reportedly created a $100 million loss for Logitech.

Google notes in blog postings that there are more than 150 individual apps built specifically for the Google TV platform with additional Android apps available to enhance the television experience.

It will be interesting to see what the Google TV partner companies demonstrate at CES 2012.

Frontier Evolves its OTT Video Aggregation Play

Jesse Ward — Mon, 07 Nov 2011 18:00:32 +0000

Frontier Communications announced today that it is expanding its OTT video play with the launch of TumTiki, an online video website that the telco is calling “the largest video library of any web destination site.” TumTiki offers access to more than 700,000 video titles from a combination of traditional broadcast TV and online sources. Of particular note, the service is available to all Internet users, regardless if they are Frontier broadband subscribers.

TumTiki features TV shows, movies and original web series. Major networks are on board such as ABC, NBC, Fox, Bravo, FX, Syfy, HGTV, AMC, National Geographic, Comedy Central and TBS. In addition to network content, TumTiki has a large selection of local sports and news from select local TV affiliate stations. About 90% of all videos on the site are free and ad-supported, with others available for purchase via a pay-per-view rental option through Amazon.com.

TumTiki is primarily a video aggregation site. Most of the content is housed on other sites, such as Hulu and Amazon. TumTiki provides the search interface and an embedded player to watch the content, meaning that viewers don’t have to leave TumTiki.com. This is an evolution from myfitv.com, Frontier’s initial OTT video portal launched back in February 2010.

“TV and movie watchers are very resourceful in searching multiple sites and services to find the content they want, but they are tired of constant searching. Consumers told us they would prefer an all-in-one browsing, searching and viewing experience. That’s makes TumTiki unique. Everything is readily available at TumTiki.com,” said Melinda White, executive vice president, revenue development, at Frontier Communications, “Giving viewers more control and personalization over their entertainment options is our focus at Frontier Communications. TumTiki offers high-quality, free and video-on-demand paid content, in a convenient web-based format.”

In addition to its content, TumTiki offers social features, enabling viewers to curate collections of videos with Facebook friends and earn TumTiki badges and points for watching shows.

Frontier has made an interesting foray into the online video realm. TumTiki is a free website that strives to provide added value to Frontier’s broadband customer, by aggregating video content into one, easy-to-use video search portal. At the same time, the website hopes to generate new revenue through advertising and video sales. It’s an interesting approach, but can it compete in the competitive OTT space? Time well tell.

For more, see this release.

TelcoTV Wrap-Up

Steve Fravel — Fri, 28 Oct 2011 19:36:30 +0000

NTCA Director of Policy Josh Seidemann delivered a keynote address illustrating the impact of rural broadband investment on the national economy.

More than 1,800 people attended the 10th annual TelcoTV Conference & Expo this week in New Orleans, La. Attendance at the general sessions and track sessions appeared to be a major draw for most of those attending. Many were intently looking at ways that they might enhance or alter their video service to reduce or eliminate some of the cost.

The potential for cloud-based middleware and other cloud content management systems was a popular topic. How to add over-the-top (OTT) content via the set-top-box (STB) or other smart consumer equipment was also covered. Discussions concerning adaptive bit rate and multi-mode compression gave direction to new solutions.

Video is a major driver for broadband service adoption across the industry. Having a single bill for voice, data and entertainment remains a convenience that most consumers highly value. The multi-screen experience and consumption of content when, where and how the customer wants is clearly the direction most service providers will adopt to stay competitive in a fast changing environment.

Attendees listen to the general sessions on October 25.

The cost of content remains the most volatile and troubling element for service providers, especially the small companies that service the most rural or remote areas.

If I took anything away from TelcoTV this year, it is that there is reason to be optimistic in regard to the future of IPTV and the different forms and iterations it will take in its evolution.

"Multi-Screen TV: Show Me the Money" general session panel.

Not For Sale: Hulu

Steve Fravel — Mon, 17 Oct 2011 15:51:23 +0000

The Walt Disney Co., News Corp. and Providence Equity Partners said in a prepared statement, “Since Hulu holds a unique and compelling strategic value to each of its owners, we have terminated the sale process and look forward to working together to continue mapping out its path to even greater success. Our focus now rests on ensuring that our efforts as owners contribute in a meaningful way to the exciting future that lies ahead for Hulu.”

Recent stories and analysis of the “auction” for Hulu pointed out that given the low bids received, combined with the likelihood of Hulu growing into a more robust subscription service, it could suggest that keeping Hulu and Hulu Plus may be the better solution. Certainly once the million subscriber benchmark was crossed, it seemed that the better strategy would be for the current owners to maintain control of Hulu.

Dish Network, Google and Amazon provided bids for the service, with Google submitting the greatest dollar amount but tying its offer to several conditions. Dish Network appeared to have the inside track to gaining Hulu with the next highest bid. The owners and experts both seemed surprised at the low dollar amounts bid. Indications were that the winner might be getting the Hulu service and content for approximately $2 billion.

The owners are going to keep it and maintain control of the “next day” distribution of ABC, NBC and Fox programming. Had the sale gone forward, relinquishing control of the content might have been a crippling error.

OTT Prediction

Steve Fravel — Fri, 07 Oct 2011 14:22:28 +0000

According to a survey sponsored by MagnaGlobal, a U.S. media agency, up to 10% of U.S. homes could be using over-the-top (OTT) services as their primary video delivery in the not too distant future. In MagnGlobal’s estimate, by 2016 as many as 9 million homes could be using services available for free or at low cost rather than the traditional cable or direct-broadcast satellite (DBS) services.

In analyzing current and predicted broadband usage, MagnaGlobal points out that as of the second quarter 2011, more than 74% of all U.S. home had some form of Internet access available. Looking five years ahead, MagnaGlobal says that number will grow from current 85.7 million homes to 97.1 million. Of that number, 95.7 million will access broadband at higher bandwidth.

Netflix Splits into Two Companies

Jesse Ward — Mon, 19 Sep 2011 17:21:32 +0000

Via a blog post issued Sunday evening, Netflix CEO Reed Hastings announced that the company has decided to split into two separate entities: Netflix for its subscription-based online streaming service and Qwikster for DVD rentals by mail.

This decision comes on the heels of a recent price hike that had Netflix subscribers taking to industry blogs to voice their frustrations with the changes. Some subscribers also canceled their subscriptions, which led to a decline in stock price.

In the same blog post, Hastings issued an apology for the company’s strategic communications errors. “I messed up. I owe everyone an explanation,” he wrote. “In hindsight, I slid into arrogance based upon past success. We have done very well for a long time by steadily improving our service, without doing much CEO communication….But now I see that given the huge changes we have been recently making, I should have personally given a full justification to our members of why we are separating DVD and streaming, and charging for both. It wouldn’t have changed the price increase, but it would have been the right thing to do.”

Moving forward, each business will have its own distinct website and subscribers will need to manage their library queues and billing information via the separate portals.

In practical terms, Qwikster will be the same familiar Web interface and DVD service that existing customers are used to. However, DVD members will now be directed to visit www.qwikster.com. The company says the new website will be up and running in a few weeks. At launch, the company also plans to improve upon the site with a video games upgrade option, similar to its upgrade option for Blu-ray but directed at those customers who want to rent Wii, PS3 and Xbox 360 games. Other improvements are said to be forthcoming.

Andy Rendich, who has been working with the DVD service for 12 years, will take the helm as the new CEO of Qwikster.

In explaining the strategic decision, Hastings said that the online company needs to focus on rapid improvement as streaming technology and the market evolve, without having to maintain compatibility with its DVD by mail service.

“For the past five years, my greatest fear at Netflix has been that we wouldn’t make the leap from success in DVDs to success in streaming. Most companies that are great at something – like AOL dialup or Borders bookstores – do not become great at new things people want (streaming for us) because they are afraid to hurt their initial business. Eventually these companies realize their error of not focusing enough on the new thing, and then the company fights desperately and hopelessly to recover. Companies rarely die from moving too fast, and they frequently die from moving too slowly.”

Hastings hinted that the company will reveal substantial new streaming content in the next few months.

For more, see this blog post.

Apple Considers Hulu

Steve Fravel — Fri, 22 Jul 2011 17:40:06 +0000

Although the company declined to publicly comment, Apple is said to be in discussions concerning a possible bid for online video site Hulu. Last week, the owners of Hulu — Walt Disney Co., News Corp., Comcast and NBC Universal — confirmed that the ownership of Hulu was definitely in play.

A possible Hulu acquisition would provide Apple with a new subscription service featuring more video. Currently Apple provides video for it’s popular iTunes customers on an on-demand rental basis rather than a subscription. Comcast, Disney and News Corp. have built a program rights extension of five years into the sale, creating a strong potential alternative to Netflix.

Estimates are that Hulu will command more than $2 billion.

For more, see this Bloomberg News article.

Hulu Up for Sale, 1M Paid Subs within Reach

Jesse Ward — Mon, 11 Jul 2011 17:41:52 +0000

For several weeks now, the trade press has been buzzing with rumors that Hulu is up for sale. Last week Disney CEO Bob Iger confirmed that the three media companies that own the online video portal — News Corp., Disney and Comcast’s NBCUniversal — are “committed to selling” the site. Iger did not reveal when a sale would occur, but predicted it was inevitable.

Nearly a dozen companies are rumored to be actively involved in discussions with Hulu, including Amazon, AT&T, Google, Microsoft, Netflix, Verizon and Yahoo.

Google is predicted to be a front-runner. Although the Internet giant already has a vested interest in video through its YouTube division, Hulu would provide the company with something it does not have — access to Hollywood contracts.

Amazon may be the most well-suited as a Hulu buyer since its business model is based on selling and distributing content. In addition, Hulu CEO Jason Kilar is a former Hulu exec, bringing a certain level of familiarity to the deal.

Hulu reported in a blog post last week that is now has more than 875,000 paid subscribers, and it expects to exceed 1 million users for its $7.99 per-month service by the end of the summer season, earlier than the year-end goal the company initially set. Management expects total revenue of approximately $500 million in 2011.

In comparison, Netflix has 23 million customers and, according to Bloomberg, may generate $3.25 billion in revenue this year.

For more, see this All Things D blog post.

Entone Secures NECA Distribution Deal

Jesse Ward — Mon, 27 Jun 2011 17:03:01 +0000

Entone Inc., a provider of Hybrid TV and Connected Home STB solutions, announced June 22 that it has secured a deal with the National Exchange Carrier Association (NECA) to make its FusionTV solution available to the organization’s membership.

NECA, which represents more than 1,000 rural telcos in the United States, helps its members deliver high-speed, multi-use broadband services. The organization says that the FusionTV platform will enable its member companies and their broadband affiliates to offer video on demand (VoD) and other over-the-top (OTT) services on the TV.

“In today’s competitive landscape, our members are seeking more options to assemble innovative solutions to help them stimulate broadband take rates and provide value added services to existing broadband subscribers,” said Sal Talluto, NECA’s director of technology planning and implementation. “With Entone’s FusionTV, NECA’s members are able to deploy a high quality on-demand video service without the cost of deploying a full-scale IPTV system.”

According to Entone, the OTT edition of FusionTV that will be available to NECA members will allow them to offer their subscribers access to HD content from the Walmart-owned Vudu broadband VoD service, and a growing array of cloud-based services such as music streaming from Pandora, photo sharing from Flickr and Picasa, and social media from Facebook and Twitter.

“There are many compelling Web media services available to consumers today. It is paramount that operators embrace these services to remain competitive,” said Ameer Karim, vice president of Hybrid TV solutions at Entone. “With FusionTV, NECA members can now bundle a rich array of media services with their broadband Internet subscriptions. This is a great way to embrace OTT services while maintaining the primary relationship with the customer.”

For more, see this release.