Despite the attention cord-cutting has received, several recent studies suggest that consumers are in fact much too comfortable with their pay TV subscriptions to switch.
According to a survey conducted by PricewaterhouseCoopers, “The reluctance to opt out of pay TV subscriptions may be less about enthusiasm than about inertia,” reports Variety. “Nearly three out of four surveyed indicated they had no plans to change providers in the next year, and 59 percent hadn’t bothered switching providers within the past year, which PwC chalked up to complacency.”
Another survey of 2,000 online respondents by Digitalsmiths found that keeping customers could however be difficult. “Of the four-fifths who registered satisfaction, 38 percent said they would consider changing services within the next six months,” explains the article. “But rival pay TV services are likelier to benefit from that switch than so-called over-the-top apps like Netflix; 65 percent of those surveyed didn’t use those services at all.”
Rising fees was the main reason for dissatisfaction among the remaining one-fifth. Although nearly double the rate of inflation, pay TV fee increases still lag behind the price growth of a gallon of gas, a cup of coffee or pet food.
“You don’t often hear of pundits warning of a pending crisis because the cost of dog food is spiraling out of control,” Bernstein Research analyst Todd Juenger notes.
Cord cutting isn’t entirely out of the picture though. “Younger demos showed significantly less devotion to multichannel brands and more willingness to switch, particularly when it came to new features. Half of respondents ages 18-29 told PwC they were ‘likely to use the Web to satisfy their entertainment needs,’ which could bode well for the Hulus of the world,” the article states, warning pay TV providers from getting too comfortable.
“All attempts to attack The Pirate Bay from now on is an attack on everything and nothing,” the service stated on its Facebook page with the announcement that it has traded out its physical servers for virtual machines on cloud services.
“By hosting its infrastructure in multiple data centers and even multiple countries, the widely used torrent site says it will avoid being shut down by authorities targeting BitTorrent sites,” Ars Technica writes. “It has been the target of raids on previous occasions, and has suffered downtime because of the types of IT hassles that afflict most businesses. Moving to the cloud will help on both counts.”
In a related article, TorrentFreak reports that The Pirate Bay is now hosted by several cloud hosting providers in two countries, and providers don’t know they’re hosting the service. “All the important data is backed up externally on VMs that can be reinstalled at cloud hosting providers anywhere in the world,” notes the post.
Converting to the cloud also has IT benefits, such as avoiding going offline for reasons like broken power distribution units — a problem The Pirate Bay faced in the past.
“If one cloud-provider cuts us off, goes offline or goes bankrupt, we can just buy new virtual servers from the next provider,” a Pirate Bay spokesperson told TorrentFreak. “Then we only have to upload the VM-images and reconfigure the load-balancer to get the site up and running again.”
There are still ways for authorities to take The Pirate Bay offline despite the service’s claims. ExtremeTech also notes that installing a new load balancer is not easy or cheap.
Earlier this year, Apple controlled 72 percent of smartphone traffic and Android accounted for only 26 percent.
This week, the tables have turned and Android now holds the majority — even with the impressive traction of the new iPhone 5.
All of Apple’s phones (from the original 2007 model to the latest release) represent 46 percent of traffic. The new iPhone 5 has taken up three percent of North American mobile Web traffic, quickly surpassing the Galaxy S III at two percent.
Non-Samsung Android phones are responsible for 34 percent of North American mobile Web traffic. Samsung phones (almost exclusively Android) control 17 percent. In total, Android now accounts for 51 percent of traffic.
“We are right at the tipping point between majority iPhone and majority Android Web traffic,” VentureBeat writes. “That’s big news, and while it was likely to come for some time given the fact that Android out-sells iOS, it’s a milestone event. The question now becomes: How high will it go?”
Netflix rolled out second screen features for the PS3 a few weeks back that provide users with game console controls from their Android or iOS handset. The company is now looking to expand this offering to other devices, enabling users to control their TV apps and connected devices with mobile handsets.
“Our overall strategy around second screen control is that Netflix on TV devices is a great viewing experience, but Netflix on mobile devices makes activities like browsing, searching, rating and social easier,” explains a Netflix spokesperson. “We see our users doing this naturally today and are trying to support and optimize for that behavior.”
“It makes a lot of sense for the company to use phones and tablets as remote controls for the TV screen,” GigaOM writes. “Netflix’s catalog now consists of roughly 50,000 titles, which is hard to navigate and search on a TV or connected device. Tablets on the other hand in particular make for great programming guides, and the ability to beam a video with one click to the big screen could be a great addition to the company’s apps.”
In order to take advantage of the second screen controls, Netflix viewers “need to be logged into the Netflix application on both devices with the same Netflix account, and also have their mobile phone connect to the same Wi-Fi network as the game console,” the post explains.
Google TV could be the next platform to get second screen support. The company has been working on its own second screen experience for Google TV apps.
Working with top advertisers like Pepsi and Capital One, media mogul Robert F.X. Silverman has launched Viggle, which aims to become the chief loyalty-rewards program of the entertainment industry.
The New York startup looks to connect television executives and advertisers with viewers who are increasingly using mobile devices while watching TV.
“The software ‘listens’ to a broadcast to confirm what’s on the tube,” explains Fortune. “Users can then play games and trivia related to onscreen events or a program’s sponsor. The app also awards points that can be redeemed for movie tickets, gift cards and other prizes.”
Unilever, NBC and DirecTV have all used the app to reach consumers. Viggle is expected to earn an estimated $10 million in revenue this year and make a profit in early 2013.
“Mark Gunheim, CEO of TV-measurement service Trendrr.com, says the concept’s potential is obvious because of the so-called second-screen phenomenon,” notes the article. “Around 86 percent of TV viewers now watch with cellphone or tablet in hand. The trend has touched off a race to find ways to co-opt those additional screens and generate more revenue.”
Despite competition from Yahoo, Microsoft, Zeebox and others, Silverman remains confident in his company. “You’re going to see Viggle everywhere,” he claims.
Even as Best Buy attempts to talk down the effects of “showrooming,” the company is looking to step up its competition with online retailers like Amazon by matching prices.
Around 40 percent of Best Buy shoppers leave the store empty-handed, and the company hopes to increase the close rate this holiday season. Details of the price-matching program have yet to be established though, and some products may be excluded.
While both Best Buy and Toys R Us deny the severity of showrooming, Walmart has embraced the trend.
“Let’s be the best showroom,” Walmart CEO Mike Duke says. “Let’s be the best place where customers want to go and get the experience.” The retail giant is working on a same-day delivery service for this holiday season, available to customers in select markets.
“Research on showrooming suggests that while only a fraction of shoppers use mobile phones in stores to compare prices, many do go home and check what competitors are charging online,” reports the Wall Street Journal. “A survey by retail consultancy AlixPartners this summer found that in the prior 12 months, 33 percent of respondents — and 43 percent of electronics buyers — bought something online after checking it out in a store first.”
Big chains have caught a small break as Amazon is now required to charge sales taxes in some states.
“Aware that they need to adapt aging business models to the realities of mobile- and computer-aided shopping, [big chains] don’t want to overreact or lose sight of what made them successful — that is, selection and service,” explains the article.
When that “check engine” icon lights up on your dashboard, you know something’s wrong. But other than that, drivers rarely take note of the hundreds of sensors in their cars that monitor the car’s health.
“That’s starting to change. Since 2010, the USC School of Cinematic Arts and BMW have been working on Nigel, a Mini Cooper outfitted with 230 sensors that creates a log of everything that happens in the vehicle, letting users see it all via an iPhone and iPad app,” reports Fast Company.
“Now USC’s Center for Body Computing is getting in on the Nigel project, looking at how the car could be used to monitor driver health as well as vehicle health.”
Currently, Nigel will keep track of milestones such as the 500th time you use the right blinker or whether you’re a lead foot on the pedals.
Dr. Leslie Saxon is the chief of cardiovascular medicine at USC Keck School of Medicine and the executive director of the Center for Body Computing. She says the Center for Body Computing is reaching out to sensor companies as it begins working with Nigel.
“One day, she imagines, a car’s pollution sensors, heart-rate sensors (maybe integrated into the steering wheel), GPS, and oxygen content sensors could all work together to tell drivers if, say, a certain polluted area of the highway affects their health — or if their heart rate goes up every time they arrive home or at the office,” the article explains.
Ford’s Silicon Valley lab is also working on new ways to utilize sensors and data that emerges from vehicles. “It may not be long before this data becomes available in some form to everyone,” suggests Fast Company.
NetZero, a 4G mobile broadband provider, is hoping to attract users to its hotspots by giving away free wireless data on its new Facebook app. Users with any NetZero subscription — even the free 200MB/month plan — can sign up to give Facebook friends free data.
“Its new Data Share program lets those who own the company’s WiMAX devices give away up to 1GB of data every month through Facebook, spread across five friends at 200MB each,” reports Engadget. “Apart from needing NetZero hardware in a coverage area, there’s no financial strings attached — neither the sender nor the recipient needs to adopt more than the free, 200MB per month they already have just for showing up.”
“Subscribers are not required to sign a contract, can join on a month-to-month basis, can cancel at any time, and can upgrade their data plan at will without facing overage charges,” the press release states.
New subscribers who purchase one of NetZero 4G Mobile Broadband devices — the NetZero 4G Stick or the NetZero 4G Hotspot — have the option of testing the service for free up to a year. The company is offering a promotional half-off sale for devices this month.
“The real dilemma is managing just who gets the data in the 4G provider’s first come, first served approach to the sharing link that hits friends’ social news feeds,” Engadget suggests.
A new report from TVB, the non-profit trade association of the U.S. commercial broadcast television industry, shows that cable’s original series summer releases were not watched as much as reruns on broadcast television networks.
“In a comparison of the Top 50 summer cable originals versus summer repeats on broadcast TV, repeat programming on broadcast television occupied the majority of the Top 100-ranked programs,” reports TV Technology. “Cable originals landed one position in the Top 100 and 32 in the Top 500.”
“Among its findings, the report indicates that the time-shifted portion of broadcast television’s same-day Top 20 fall premieres outpaced the total audience, both live and same day, of the majority of cable’s highest-rated original summer programming,” the article continues. “This indicates a reversal of the last several years’ trend in 2012.”
Advertising-supported cable saw year-over-year decreases in primetime daypart from both the summer and regular season of 2011/12. Also, cable’s major programmers with returning series had declines in performance.
“Understanding where viewership happens is a critical consideration toward determining the success or failure of an overall marketing plan, and that viewership is definitively and materially biased toward broadcast television,” says TVB president and CEO Steve Lanzano.
The same week hackers attacked six major U.S. banks, “CSI” creator Anthony E. Zuiker debuted his nine-part cybercrime Web series “Cybergeddon” with the hope of scoring 20 million hits — an ambitious goal for a Web series.
“Cybergeddon” is the most expensive Web series ever, costing $6 million. To cover costs, many Web series have partnered with corporations, as was popular in the early days of television.
Zuiker’s cybercrime series is available in 10 different languages across 25 countries. But there remains questions over whether “Cybergeddon” will be a hit. The most viral videos online are more often funny or strange (think “Charlie bit my finger”), not corporate-backed Web series.
Zuiker says Web series change the traditional content production process by cutting budgets and time frames.
“He sees Cybergeddon as a challenge to film studios to venture outside the theater, saying that storytelling in the digital age should be ‘built to the device,'” writes Slate. “In five years, he predicts, movie theaters will be like cigar bars, ‘a luxury most people won’t be able to afford,’ and he might be right.”
Netflix has essentially been the only online streaming video service and has therefore been able to make favorable content licensing deals. Now Amazon has come into the fray — making generous deals with content creators, which could put pressure on Netflix to ante up.
Amazon struck a deal with Epix that adds 3,000 movies to its Prime Instant Video service. Recently, it was learned that Amazon agreed to a pay-for-performance provision, demonstrating the online retailer’s willingness to spend big in this area.
“According to an executive directly involved in the deal, Amazon agreed to an earn-out provision payable to Epix over time if the number of subscribers to Amazon’s Prime Instant Video service rises above a certain threshold,” reports Reuters. “That comes in addition to a fixed upfront fee, the basis for most subscription video-on-demand deals up to this point.”
“This could be considered online video deals 2.0,” says Goldman Sachs media analyst Drew Borst. “After doing 1.0 deals mostly with Netflix and a few with Amazon, it dawned on the media companies that they may want to get a piece of any future growth too.”
DVD sales were previously a significant market for Amazon but demand has since dropped off, giving the company more reason to build out its streaming service to compensate. Pairing its video service with its Prime shipping program allows Amazon to subsidize the content deals with physical sales.
Netflix has a much larger user base than Amazon and pays around twice as much on content licensing — about two billion a year. However, Amazon pays more than Netflix on a per-subscriber basis.
On November 8, Rovio and Lucasfilm Ltd. will release “Angry Birds Star Wars” for iOS, Android, Amazon Kindle Fire, Mac, PC, Windows Phone and Windows 8.
“From the deserts of Tatooine to the depths of the Death Star — the game and merchandise will feature the ‘Angry Birds’ characters starring as the iconic heroes of the beloved saga like Luke Skywalker, Han Solo and Chewbacca,” writes The Hollywood Reporter. “The Bad Piggies, who just got their own game last month, will be transformed by the Dark Side and turn into Darth Vader and other bad guys.”
For “Angry Birds” fans still looking for Halloween costumes, you’re in luck. “Beginning October 28, merchandise ranging from Halloween costumes and apparel to action figures and collectible plush toys will be available at select retailers, just in time for the holiday shopping season,” notes the article.
“Both ‘Star Wars’ and ‘Angry Birds’ share the instant and irresistible appeal of hands-on fun,” says Colum Slevin, VP and head of studio operations for Lucasfilm. “People seem to instinctively know what to do when handed a lightsaber or a bird in a slingshot, so this is a natural combination.”
In the coming weeks, the companies will release video shorts to promote the game.
“At a time when jobs are top of mind in the national consciousness, the Interactive Advertising Bureau (IAB) has released a study showing that the ad-supported Internet is responsible for 5.1 million jobs in the U.S. and contributed $530 billion to the economy in 2011,” writes Marketing Land.
The number of jobs increased from just 1.015 million in 2007 and includes direct jobs in the ad-supported Internet (2 million) as well as the jobs that support those direct employees (3.1 million).
“This year’s study showed the Internet advertising sector represented nearly double the contribution to the U.S. economy in 2011, as compared to 2007. It accounted for 3.7 percent of the U.S. gross domestic product (GDP), up from 2.1 percent four years ago,” the post states.
Jobs were created all across the country, in part due to the fact that people can work anywhere over the Internet. While New York and California continue to carry the majority of ad-supported Internet jobs, other states have experienced growth, including Washington, Massachusetts, Illinois, Minnesota, Pennsylvania, Arkansas and Colorado.
Most of the job growth was in infrastructure, which grew 300 percent from 2007. Consumer services still remains the largest sector, increasing 229 percent to employ 885,000 people.
Companies like Etsy, eBay, Amazon, Square, Craigslist, YouTube and Kickstarter provided support to small businesses. “Very small businesses and sole proprietorships made up 375,000 full-time equivalent jobs,” explains Marketing Land.
In the wake of the $100 million Google invested in original YouTube content last year, the company is putting up $200 million to add another 50 channels. The money will be used to expand channels to France, Germany and Britain, cover marketing costs, invest in production equipment and even pay full production costs in some instances.
The channels are created by both smaller, online-only producers and major media producers like ESPN and Everyday Health.
“Other online video platforms — including Amazon.com, Netflix and Hulu — are also trying to compete for viewers by creating original content,” reports The New York Times. “But transforming from platform to producer has been challenging for all, including Google. And it is hard to argue that YouTube, or any other video platform, is on a path to soon replace television — whether for viewers, content makers or advertisers.”
Since the introduction of original content, YouTube has reported an increase in the hours viewers spend on the site, rising from three billion a month to four billion. Even so, content creator and advertisers aren’t yet betting heavily on online distribution.
“Though advertisers will increase their spending on digital video ads 46.5 percent to $2.9 billion this year, that is a small fraction of the $64.5 billion they will spend on television, according to eMarketer,” notes the article.
YouTube has focused on younger generations that have grown up online, acknowledging that older generations are less likely to switch over from TV.
The Google-sponsored original channels allow new content to get financial support as well as “bypass television’s frustratingly slow production schedule,” the article states. “Another contrast with traditional television is that it is much easier for video creators to get a start and gain a following.”
“Google and five publishers settled a long-standing legal battle over whether scanning university-library books and using snippets in search results can be done without the permission of copyright holders,” reports ReadWriteWeb.
“While the agreement lets Google continue its work, both sides deliberately avoided tackling the issue at the heart of the conflict: What does fair use mean in the digital age?”
Taking the debate to court would have put the fair-use doctrine at the forefront, “leaving open the possibility that a judge’s interpretation could give either side much less than they wanted,” suggests the article. “As a result, agreeing to disagree on their rights under the law apparently seemed like the wiser choice.”
“In terms of coming to an agreement on what was fair use, it was an agreement to disagree,” Andi Sporkin, the publishers’ spokesman told Wired. “We were able to get beyond that and establish business terms. Did we come up with a universal definition of fair use? No.”
“Fair use is an exception to the copyright law that gives authors exclusive rights over their creative works,” ReadWriteWeb explains. “In passing the limitation, Congress tried to balance the rights of copyright holders with the need of academia, critics, columnists, reporters and researchers to quote other works.”
Google claims its book scans fall under fair use because only portions of the book are available. Consumers wanting more are directed to where the hard copies are available.
Even after the deal, publishers dislike having whole books saved in Google’s database without permission. Also, the Authors Guild is still addressing the same copyright concerns with Google.
“Those opponents came to agreement last year, but a federal judge threw out the deal, saying the settlement gave Google more rights than those granted by Congress under the law,” the article states.
