New Direction: Apple Pulls The Plug on TV Rentals from iTunes

  • There has been a fair amount of recent press regarding changes to Apple’s TV rental offerings. Peter Kafka, reporting for The Wall Street Journal, writes: “Apple has completely removed customers’ ability to rent shows from iTunes; the remaining options are to buy individual episodes or in some cases a ‘Season Pass’ for a year’s worth of shows.”
  • Apple spokesman Tom Neumayr says people prefer buying TV shows instead of renting, which not surprisingly may be more in line with the needs of customers interested in Apple’s cloud initiatives. “iTunes in the Cloud lets customers download and watch their past TV purchases from their iOS devices, Apple TV, Mac or PC allowing them to enjoy their programming whenever and however they choose,” Neumayr said.
  • According to a Fox statement: “After carefully considering the results of the rental trial, it became clear that content ownership is a more attractive long-term value proposition both for iTunes customers and for our business. To further enhance the value of ownership, we are working with Apple to make content available within their new cloud-based service.”

Media Set-Top Boxes: Make Web Viewing More Like TV and Less Like PC

  • In his Wall Street Journal “All Things D” Personal Technology column this week, Walt Mossberg reviews three set-top boxes: the $100 Roku 2 XS, the $99 second-generation Apple TV and the $199 Boxee Box from D-Link.
  • “The intent of the three products I tested is to do what a computer can, but in a simpler, cheaper and more TV-like manner,” he writes, “with easy setup, clear onscreen menus and small, simple remotes.”
  • Mossberg endorses the Apple TV for those who use iTunes or who own an iPad or iPhone. Apple’s AirPlay allows you to wirelessly stream content to your TV. For others, he likes the simplicity and price point of Roku, which also has a game function. Mossberg suggests Boxee is a bit too complicated and rough around the edges, but might be a good choice for techies.
  • Bottom line: “To watch Internet video easily on a TV, either Roku or Apple TV is the best choice for average consumers.”

iTunes on Movie Share Upswing: Report Credits AirPlay and iPad

  • The recent IHS Screen Digest Media Research report indicates that Apple’s iTunes held the number one spot for movie electronic sell-through (EST) and Internet video on demand (iVOD) with 65.8 percent of the market in the first half of 2011. The Zune Video Marketplace was second with 16.2 percent, while Walmart’s Vudu came in third with 5.3 percent.
  • The research suggests much of Apple’s success can be traced to AirPlay which allows you to stream wirelessly to other devices including TVs.
  • “IHS believes that the ability to stream media from Macs or iOS devices to an Apple TV or third-party AirPlay receiver has prompted users to buy more movies from iTunes — presumably so they can AirPlay them to somewhere else,” reports Ars Technica.
  • It should be noted that Amazon spent this period shifting its strategy to streaming video on demand (SVOD), which IHS ranks in a separate space from iVOD. According to the article: “Amazon still saw a small bump from 4 percent in the first half of 2010 to 4.2 percent a year later, showing that users are still sticking by Amazon’s ‘old’ service.”

Pay TV Subs Continue to Decline: Consumers Turn to Web

  • As the monthly costs for pay TV have risen from $11.97 in 1986 to $49.70 this year, consumers are looking for inexpensive Web alternatives like Netflix and
  • Three of the past five quarters have seen an overall decline in pay TV subscriptions, according to SNL Kagan.
  • “Barclays Capital analyst James Ratcliffe predicts that as young people who now rely on Internet-TV alternatives age, penetration of pay TV among occupied homes gradually will decline,” explains The Wall Street Journal. “He sees it dropping to 79 percent by 2018 from 89.5 percent now, although he predicts the pay TV industry won’t lose subscribers in an absolute sense until 2016.”

Judge Rules Against MP3tunes: Hollow Victory for Record Labels?

  • While a judge has ruled against MP3tunes and founder, Michael Robertson, for copyright infringement, the details of the ruling may provide online music locker businesses like those from Google and Amazon with a better legal foundation.
  • A key finding is that users, not MP3tunes, had the ability to determine which files were placed in their lockers.
  • Also, it was determined that DMCA does not require one to investigate potentially infringing activity without a specific complaint from copyright holders.
  • “The news is even better for Google and Amazon,” according to Ars Technica. “Those companies’ music locker services do not even offer the broad sideloading functionality that has caused Robertson legal headaches. So if Judge Pauley’s reasoning survives appeal, Google and Amazon will be on solid legal ground. Indeed, those companies may even want to start thinking about whether they’ve been too cautious. For example, they might save a lot of money by taking advantage of the deduplication part of the ruling.”

Piracy Surge: Fox 8-Day Delay Draws Negative Consumer Response

  • Since Fox implemented its 8-day delay of content availability on Hulu, downloads from BitTorrent for shows such as “Hell’s Kitchen” and “MasterChef” have increased 114 percent and 189 percent, respectively. Others are watching Fox shows on video sites including YouTube.
  • Moreover, the situation is creating negative consumer reactions as consumers are forced to find content elsewhere.
  • “One of the main motivations for people to download and stream TV shows from unauthorized sources is availability,” reports TorrentFreak. “If fans can’t get a show through legal channels they turn to pirated alternatives.”
  • The post suggests that some consumers have indicated they will be returning to their DVRs and may even dust off their VCRs in response.

Verizon Video: VOD Mobile App Launches for Android this Week

  • Verizon Wireless launches Verizon Video this week — a new version of its video-on-demand application for mobile phones, providing Android users with more than 250 current full-episode TV shows from ABC, NBC, CBS, MTV, Comedy Central, Disney Channel, ESPN, Cartoon Network and others.
  • Premium content is also available including live sports coverage from NFL Mobile, NFL RedZone, NBC’s Sunday Night Football and NFL network.
  • The 4G LTE and select 3G service will cost $10/month or $3 for 24 hours.
  • According to the press release: “Verizon Video updates V CAST Video on select devices and current V CAST Video subscribers will be prompted to update the app the next time it launches. After the upgrade, it will then appear under the name Verizon Video.”
  • The Verizon Video app is powered by RealNetworks.

Windows 8: Viable Solution for the New Post-PC Era?

  • For the first time in many years, Microsoft is facing a serious challenge to its Windows desktop monopoly — not in the form of any operating system, but in the new computing concept of “post-PC.”
  • “The worry is that upstart tablets threaten to drive the computer out of the home, taking the Windows operating system with it,” reports Ars Technica.
  • Microsoft has been in the tablet business longer than anyone, but it has always been an add-on to Windows. Windows 8 will give the company another opportunity to create something new — a full featured PC that not only works on the desktop but on a post-PC device as well.
  • Windows 8 will work with touch devices and not require a stylus. It will support real multitasking. It will run on power-efficient ARM processors. It will still have a huge legacy of software, including Office. It will support a myriad of hardware and accessories.
  • In short, it will be able to do everything the tablet can and much more. Ars Technica concludes: “Still, this tablet-as-a-PC model hasn’t worked well despite 20 years of trying. Microsoft’s decision to stick with it might look like a mistake — why would this approach start working now when it hasn’t before? — but signs suggest it might be more successful this time around.”

Flingo Sync Apps Provide the TV That Watches You

  • Flingo, a new San Francisco-based startup, says its technology can watch what you are viewing on TV and with your permission present you with relevant Web content.
  • “Any mobile app or Web page being used in front of your TV can ask our servers what is on right now,” says David Harrison, cofounder and CTO of Flingo. “For example, you could go to Google or IMDb and the page would already know what’s on the screen. Retailers like Amazon or Walmart might want to show you things to buy related to a show, like DVDs, or what people are wearing in it.”
  • Additionally, social sites such as Facebook or Twitter would be able to connect viewers to a TV show’s official page or stream.
  • A major TV manufacturer will build Flingo’s Sync Apps into their TVs, which will reportedly retail for less than $500.
  • Flingo has relationships with CBS, Fox and MTV.

BBM Music Service: Too Little, Too Late?

  • Research In Motion may roll out BBM Music, a new music service designed to work with BlackBerry Messenger, as early as this week.
  • RIM has nearly completed deals for the service with Vivendi SA’s Universal Music Group, Sony Corp.’s Sony Music Entertainment, Access Industries Inc.’s Warner Music Group, and EMI Group Ltd.
  • Subscribers would only get access to 50 songs but they can share them with other Blackberry Messenger users.
  • The service will reportedly cost less than $10/month and is not intended to compete with the likes of iTunes or Spotify. “Instead, the BlackBerry service is supposed to help younger users ‘customize’ their phones and share their songs with friends.,” reports The Wall Street Journal.

Andrew Losowsky Examines Reading In Four Dimensions

  • Andrew Losowsky, books editor for The Huffington Post, has released “Reading in Four Dimensions” (available as a 99-cent Kindle Single) — a fascinating essay on the future of publishing and how the Internet has impacted the reading experience.
  • Many of us are publishing in new ways via Facebook, Twitter, blogs and more. Readers are interacting with these “works” in a kind of social reading environment, which changes the way stories are written and read.
  • Physical books will get better, but there will be fewer of them. Books do not change like Web entries that become features and can travel with you like a time machine that catalogues the thinking of that time.
  • The TechCrunch post includes a video interview with Losowsky that addresses key points from his essay, including “how print brings permanence to digital publishing, how the concept of ‘publishing’ has translated online and the value of paper books in our increasingly digital world.”

Google Acquires Motorola Mobility: Will Competition Really Increase?

  • If you haven’t already seen the flood of reports online (including a number of related stories on ETCentric), Google announced it will acquire Motorola for $40 per share in cash, or a total of about $12.5 billion. The deal has led to a great deal of speculation this week regarding the future of the Android ecosystem and other enterprises such as Google TV.
  • “This acquisition will not change our commitment to run Android as an open platform. Motorola will remain a licensee of Android and Android will remain open. We will run Motorola as a separate business,” stated Larry Page in the official Google blog. “Many hardware partners have contributed to Android’s success and we look forward to continuing to work with all of them to deliver outstanding user experiences.”
  • Page believes the acquisition will also serve as a buffer to anti-competitive patent attacks on Android: “Our acquisition of Motorola will increase competition by strengthening Google’s patent portfolio, which will enable us to better protect Android from anti-competitive threats from Microsoft, Apple and other companies.”
  • This deal raises a number of compelling questions (see thoughts by Robert Scoble, Peter Kafka and others in the related posts listed below), but first I have to ask: Can Google have its “open platform” and compete with its licensees too?

ESPN Takes a New Approach to 3D Production

  • Variety reports that ESPN remains enthusiastic about 3D technology, despite its slow adoption (and AT&T’s recent decision to drop ESPN 3D from its U-Verse TV service).
  • ESPN is pushing its 3D effort by focusing on combining 2D and 3D production (nicknamed “5D”), which the network says brings costs down substantially. 2D/3D production includes slower cutting and more use of robotic cameras. As the production crews gain more experience in shooting sports beyond HD, the equipment, camera placement and general approach continues to improve.
  • “Some innovations created for 3D have even made it over to the 2D side,” reports Variety. “For example, 3D cameras need to be closer to the action than 2D cameras, so the high 50-yard-line shots that are a staple of football coverage are problematic. To get closer, ESPN put a 3D camera on a 22-foot mast on a small vehicle that goes up and down the sideline.”
  • ESPN stands by the technology, explaining that Twitter feedback has been overwhelmingly positive. And some play-by-play announcers have even indicated they don’t want to go back to watching 2D.

Google+ Games: Should Facebook and Apple be Nervous?

  • The introduction of games to Google+ potentially threatens both Facebook (which also has games) and Apple (which takes a 30 percent cut versus Google’s 5 percent).
  • Google+ sees games as being core to their mission: “We don’t consider ourselves experts at making compelling games, but we can bring a lot to the party,” explains Bradley Horowitz, VP of Product for Google+. “There were some internal debates about whether Google was well-suited to have games in our repertoire and what is the value of games to the users. There’s tremendous value for users. They provide a way for people to connect, discover and interact with each other… We don’t see games contrary to our mission, or a diversion. We see them as being core.”
  • If HTML5 unifies the Web and mobile, it could become possible “for software to be written once and run across multiple devices.” And if Google+ games were to run via a browser on the iPhone or iPad, this could be an additional concern for Apple.
  • What do you think? Should Facebook and Apple be nervous?

Cord-Cutting: Record Numbers in Cancelled Pay TV Subscriptions

  • The six largest cable and satellite TV providers lost 580,000 customers in the second quarter. This marks the largest such decline in U.S. history.
  • The number of pay TV subscribers has declined in three of the past five quarters.
  • “Rising prices for pay TV, coupled with growing availability of lower-cost alternatives, add to a toxic mix at a time when disposable income isn’t growing,” explains Sanford C. Bernstein analyst Craig Moffett. “For younger demographics, where in many cohorts unemployment is north of 30 percent, and especially for those with limited or no interest in sports, the pay TV equation is almost inarguably getting less attractive.”
  • Netflix and Hulu provide lower cost options. Competition from AT&T and Verizon is also having an effect.
  • Providers are struggling to deal with the trend. Dish, for example, is re-positioning itself away from lower income customers. Instead, the company plans to focus on more expensive offerings to increase average revenue per user.