Netflix Exec Describes Television World Without Ratings and Schedules

  • “It’s gonna look nothing like we’re seeing today,” said Netflix Chief Content Officer Ted Sarandos in a discussion of what TV will look like in five years, noting that Netflix wants to lead that transformation.
  • For one, the streaming service aims to make ratings irrelevant. Even though Netflix’s original TV show “Arrested Development,” coming in February, is expected to attract millions, Sarandos says the company won’t be releasing numbers.
  • He explained that ratings are irrelevant for subscription services that don’t have to sell audiences to advertisers. Moreover, the numbers create unreasonable comparisons of shows’ immediate success when audiences may discover the content over time, GigaOM writes.
  • Although Sarandos acknowledged the necessity for time schedules for time-sensitive content like sports or talk shows, he says Netflix will not create time schedules that reduces on-demand flexibility. This model could have reverberations among other pay TV providers.
  • “After all, if Netflix is successful with its no-schedule strategy, should other TV networks stick to the schedule as their viewing is shifting towards an on-demand world?” the post asks.
  • Similarly, Netflix will offer complete seasons of TV shows all at once. Viewers don’t want to wait for the next episode, and creators will be able to spend less time recapping in each episode.
  • Netflix also places value in personalization and has worked to fine-tune its recommendation feature. The company is taking it one step further with Just for Kids, a UI that separates children’s content. Sarandos says Netflix aims to one day use voice and visual recognition to “be able to pull up a user’s personalized recommendations as soon as that person walked into the room,” the post states.

Following Game-Changing Disney Deal, Netflix Talking with Other Studios

  • Netflix just secured exclusive rights to new Disney titles after their theatrical releases, and the streaming service hopes to make similar deals with other studios.
  • For the Disney deal, Netflix outbid premium channel Starz, and will get exclusive access for a specified time window starting in 2016, as reported earlier on ETCentric.
  • “The deal, estimated to cost Netflix $350 million a year, was seen as a major coup,” the New York Post writes. “It marked the first time a big Hollywood studio had picked a Web rival for that crucial pay TV window over a premium channel such as HBO, Showtime and Starz.”
  • Netflix content boss Ted Sarandos discussed the company’s content strategy at the UBS annual media conference in New York. He said Netflix is also talking with Universal to get movies, and suggests the service might even look into a deal with Warner Bros.
  • Netflix is trying to “accelerate the windows and get fresher content,” according to Sarandos. “Warner’s deal [with HBO] is up in 2014. This gives Warner the opportunity to do other things, to look at this.”
  • “Sarandos pointed out that Netflix was working with Universal to get movies on the streaming service that perhaps HBO didn’t want,” explains the article. “He cited animated film ‘The Lorax,’ as an example, saying that family programming was high on Netflix’s agenda but less so for HBO.”
  • That said, Time Warner owns both HBO and Warner Bros. so the likelihood seems slim, the article suggests.

Copyright Act Leads to Studios Censoring Legitimate Links to Own Media

  • A recent automated request has asked Google to take down links to legitimate sites that reference studios’ films in addition to other links that seemingly have no connection to the films.
  • Although Google has left many of the links up thus far, the appeal is just one example of the numerous Digital Millennium Copyright Act (DMCA) requests that Google has to sift through.
  • According to The Next Web, the request was sent by a company called “Yes It Is – No Piracy!” on behalf of several major Hollywood movie studios.
  • “Victims of the takedown requests include sites where the content is hosted legally (Amazon, CBS, iTunes, Blockbuster, Verizon on demand, and Xfinity), newspapers discussing the content in question (the BBC, CNET, Forbes, The Huffington Post, The Guardians, The Independent, The Mirror, The Daily Mail, and Wired) as well as official Facebook Pages for the movies and TV shows and even their Wikipedia entries,” the post explains.
  • While takedown requests for copyright violations are reasonable, these automated requests put unnecessary strain on Google, the article suggests. One such request from Microsoft asked Google to censor BBC, CBS, CNN, Wikipedia, the U.S. government, and even its own Bing links.
  • “We have no problem with companies asking Google to censor webpages in its search engine because they are either illegally hosting or linking to copyrighted material,” comments TNW. “That being said, automated requests that don’t get a final check from human eyes result in mistakes, and it’s frankly quite sad that Google has to sift through them all. Unfortunately, this isn’t the first time this has happened, and it likely won’t be the last.”

Lucasfilm Engineers Explore Unlikely Echo Chamber to Capture Audio

  • Skywalker Sound, the audio division of Lucasfilm, sent sound effects engineers below the San Francisco Bay to record the unique sound chamber of the recently reconstructed Bay Bridge.
  • After clambering down ladders, stairs and a crawl space, the crew set up expensive recording equipment to capture the resonance of the concrete chasm. And then they fired blanks. And banged trap doors. And yelled.
  • “The pistol gives off a ‘full frequency event’ — that is, the sound covers the full range of audible frequencies, giving a complete impulse response,” Wired explains. “Back at Skywalker, the editors will use Altiverb to digitally remove the sound of the shot.”
  • “Then we can run whatever sound we want through that program, and it’ll sound like we’re in here,” says Casey Langfelder of Skywalker Sound.
  • “Each microphone they have, called mid-side mics, houses two units — a front facing element to capture the event, and a figure-eight shaped one that records stereo,” the article explains. “Because the sounds reaching the side mic have bounced off the surroundings, they helps give a sense of ambient space, says [assistant effects editor Benny] Burtt. Together, they allow the sound engineers to adjust the width of the sound, making it project a sense of space.”
  • The crew took advantage of the recording opportunity before the bridge was reopened.
  • “Now that we’ve recorded the Bay Bridge tunnel span, we can create an impulse response for it at each distance we recorded,” says Burtt. “Any time we need some sort of subterranean cave or super-echoey location, we can plug an effect into this and have the response without actually going back out to the bridge.”
  • “You never know where these sounds might wind up,” Langfelder says. “They could wind up on ‘Star Wars,’ or they could end up on other things… our library is always growing.”

Sony Connected TVs to Get Ensequence Technology for Contextual Content

  • The same company that brought enhanced NBCUniversal London Olympics content to Verizon FiOS TV customers is teaming up with Sony to provide contextual content for connected TVs.
  • Ensequence has signed a multi-year deal with Sony to create software for connected TVs using the automatic content recognition technology in Sony’s devices. Starting next year, all TV sets will have the software; additionally, the technology will be available to TVs made by Sony in 2011 and 2012 through a software update.
  • “The collaboration offers advertisers and programmers an easier, more scalable way to engage viewers directly with TV ads and shows, transforming passive viewing into active participation,” the press release states.
  • “Ensequence research shows that adding interactivity to TV increases programming ratings by up to 20 percent, brand recall by as much as 50 percent and intent to purchase by up to 40 percent,” notes the release. “In addition, viewer interaction and repeat visit rates exceed 30 percent and 50 percent respectively.”
  • Using the platform, advertisers can add clickable banners, landing pages, product request forms, coupons and surveys. TV show producers can also incorporate polls, trivia games, photo galleries, location-based check-in, social status updates and more.

Steam Takes on the Console Competition with Launch of Big Picture Mode

  • In a challenge to console makers, Valve has officially launched its “Big Picture Mode” for its cloud-gaming platform Steam, enabling users to play titles on their televisions by simply connecting their computers.
  • “Steam has been offering its users the option to put the service on their television since September in beta mode,” the Washington Post reports, “but the company has deemed it ready to lose that testing tag. The mode makes it possible to use almost all of Steam’s features including its Web browser, social network and — of course — its games in a way optimized for television screens.”
  • To promote the new mode, Steam has put the compatible games on sale. “All the sale titles have full controller support, which means that users won’t have to tote their mouse and keyboard to the living room,” the article notes.
  • “There are also quite a few partial support titles, such as ‘XCOM Enemy Unknown,’ ‘Hitman: Absolution,’ and ‘Call of Duty: Black Ops 2.’ Steam is very clear about which titles have full support and which do not,” explains the article. “Titles with partial support may need the keyboard and mouse during installation or for ‘limited interactions’ throughout the game.”
  • Because Valve has established itself in the gaming community, the company could move further into the console territory currently dominated by Microsoft, Sony and Nintendo. “Some see this step into the living room as a test for bigger things in the future,” the article suggests.

The Future of Gaming May Be Tablets from Amazon, Apple and Google

  • Nintendo sold an estimated 400,000 Wii U consoles on Black Friday and Cyber Monday. Rivals Microsoft and Sony are also expected to release new iterations of their popular video game consoles in the new year.
  • But even with strong launches, the new consoles “represent a rapidly decaying ecosystem,” writes Fortune contributor Kevin Chou.
  • “The eighth generation of game consoles we will see in the next 12 months will, over their life spans, sell in lower quantities than the generation that preceded them. That will be a first,” says Chou, who is the CEO of game maker Kabam. “The best guess, both from inside our company and from industry analysts, is the fall-off will be more than 30 percent. Much of the decline will be in the out years of sales, after the most loyal fans have snapped up early units.”
  • “If this happens, there will be a one-word explanation: tablets,” Chou continues. “There can be little doubt that tablets from the likes of Amazon, Apple, and Google are the new consoles.”
  • The typical gaming console release schedule is between five to seven years. Tablets, on the other hand, can be released every year as technology improves. Already, the latest iPad from Apple has a more powerful graphics processing unit than that of the new Wii U.
  • Also, the consumer behavior toward software has changed. Rather than coughing up $60 for a new game, customers are opting for freemium games on tablets and smartphones.
  • “This will be doubly true as more software companies adopt the iterate-and-improve development model of the tablet makers,” the post states. Rather than monetize customers up front, developers are drawing in consumers who will pay for updates over several years.
  • Lastly, gamers want convenience. Not only are tablets more portable, the sheer number of games available on mobile devices dwarfs that available on consoles.

Mobile Study Suggests Upgrade from 2G to 3G Helps Economies Grow

  • Mobile phone networks have proven to help economies grow, but a new study found that increasing coverage from 2G to 3G also has a notable impact.
  • “By increasing the flow of information, mobile phones improve productivity and efficiency, and open up new markets and new kinds of business all across the economy,” Quartz writes. “Now there is evidence that improving mobile Internet access helps economies, too.”
  • “The study by the GSM Association mobile trade group, Deloitte and Cisco, looked at 96 developed and developing markets from 2008 to 2011,” the article explains. “When a market experienced a 10 percent shift from 2G to 3G, GDP per capita growth increased by an average of 0.15 percentage points. A separate look into 14 countries between 2005 to 2010 found that a doubling of mobile data use led to an increase of 0.5 percentage points in per capita growth.”
  • “The fact that increasing high-speed mobile broadband data usage leads to greater average per capita income underscores the need for increased investment in wireless networks as well as for government policies to foster that investment,” says Dr. Robert Pepper, Cisco’s vice president of global technology policy.
  • Quartz qualifies the study’s conclusions, noting “the study’s sponsors have an obvious interest in promoting any evidence of a societal payoff from expensive wireless network upgrades.”
  • Today, 18 percent of all mobile subscribers use 3G, amounting to 1 billion global users, which is an increase of more than one-third over last year.

Online Retailers Compete with Amazon by Offering Same-Day Delivery

  • In select cities, same-day delivery is becoming more common as companies such as eBay and Walmart try to gain a competitive edge in online sales by sending out delivery couriers.
  • “Driving this proliferation is the desire to give consumers instant gratification with their online orders to drive sales, as well as giving customers another incentive to skip lines at their local retailer,” reports the Wall Street Journal. “Many of the companies are hoping to compete with Amazon, which has built a reputation for speedy, low-cost deliveries through its network of sprawling warehouses.”
  • For the eBay Now same-day delivery service, eBay hires people for $12.50 per hour to drive around San Francisco and New York, picking up products and delivering them to customers. The company only charges users $5 per delivery with a minimum order of $25. The company also offered a promotion that delivers the first three orders for free and adds a $15 credit to the first delivery.
  • Similarly, Walmart offers same-day delivery for $5 to $10, and the company is looking to expand into new markets next year.
  • The promising same-day shipping initiative Kozmo.com, which drew venture capital interest and a $60 million investment from Amazon during the dot-com boom, fell in 2001 after trying to spread to too many markets too fast.
  • “If we learned one thing, you have to take a careful approach to this, roll it out slowly and study the markets you go into first,” says Joseph Park, one of Kozmo’s co-founders who is now chief executive of online fashion retailer Bluefly.
  • For the time being, same-day delivery will be a money-losing venture, no matter how many companies join in.
  • “Retailers are clearly subsidizing this service to improve the customer experience,” says Needham & Co. analyst Kerry Rice. “Amazon created this monster and everyone has had to jump on board to compete.”

Vevo Claims to Pay Highest Royalty Rate of Any Music Video Service

  • Vevo has reportedly paid the highest royalty rate of any music video service, giving back $200 million in revenue to the music industry since being founded in 2009, explains The Hollywood Reporter.
  • According to Vevo president and CEO Rio Caraeff, “Vevo would pay more royalty revenues in 2012 than its first two years as a company combined — or $100 million, as he told Billboard earlier this year, with over $150 million in revenue in its second year in business,” THR reports.
  • “As artists and industry execs alike continue to criticize services like Spotify and Pandora for their royalty payments, the sums given back to artists on the short end of the very long tail of the Vevo spectrum appear to be significant at first,” the article continues.
  • Internet radio service Pandora reported that it would pay $10,000 to more than 2,000 artists in the coming year; 800 artists are expected to earn $50,000 or more.
  • These payments, however, don’t go directly to artists but are distributed by SoundExchange among sound recording owners and performing musicians.
  • “

So an artist like Drake, whom Pandora claimed would receive performance royalties of nearly $3 million a year, would only actually receive $1,278,450 as the performing artist, since SoundExchange distributes 45 percent of net royalties to the performing artist of the sound recording,” explains the article. “The label would get $1,562,550, as the owner of the recordings, and other musicians would receive $142,050, or 5 percent.”

DreamWorks Releases Open VDB Software with Eye on Industry Standard

  • DreamWorks Animation spent years developing specialized software, which it used heavily in “Rise of the Guardians,” a $145 million animated film released in November. Now, the studio is giving away its software for free in hopes that it will become a standard format.
  • “The software, known as Open VDB, allows animators to more easily create ‘volumetric’ effects, such as smoke and other amorphous materials,” the Wall Street Journal explains.
  • “DreamWorks executives didn’t say how much they spent developing the software,” notes the article. “They released it in hopes it would be adopted as an industry standard and integrated into commonly used software platforms. This would increase its utility for DreamWorks even if it gave competitors access to an element of the company’s tool kit, according to studio executives.”
  • In “Guardians,” childhood legends like Santa Claus and the Easter Bunny fight for children’s innocence against a villainous boogeyman Pitch. The Sandman character “Sandy” expresses thoughts and emotions with swirls of sand. DreamWorks’ Open VDB software was used to create the complicated animations of shifting shapes for Sandy’s dreams, as well as the nightmares Pitch transforms them into.
  • “As technology at studios like DreamWorks grow increasingly sophisticated, ‘visual effects are becoming integral to the performance of a movie,’ said Lincoln Wallen, chief technology officer at DreamWorks.”
  • While giving away software is not unheard of in the entertainment industry, it is a first for DreamWorks, and the company only plans to do so selectively.
  • “There’s other stuff that we’ve developed in house that we’re like, ‘No, you’re not getting that,'” says David Prescott, the visual-effects supervisor for “Guardians.”

How Netflix is Using Big Data in Effort to Become the HBO of Streaming

  • Netflix wants to be the first “real” network of the Internet by taking HBO’s original content strategy and applying it to the Web.
  • “Netflix doesn’t just want to compete head-to-head with the established television networks with exclusive content,” reports Wired. “It wants to do it by using something that traditional networks don’t have: Access to your viewing habits and preferences. It knows who watches what and it’s making huge bets that their algorithm will help it determine which shows will be hits.”
  • “We know what people watch on Netflix and we’re able with a high degree of confidence to understand how big a likely audience is for a given show based on people’s viewing habits,” says Jonathan Friedland, head of communications at Netflix.
  • The company reportedly paid more than $100 million for exclusive rights to the first two seasons of “House of Cards,” outbidding HBO and AMC.
  • “But Netflix’s pursuit of original and exclusive content is a bit different from HBO,” the article states. “Netflix doesn’t own the shows that will premiere on the service. Instead the company is licensing the the content for a set amount of time.” After two seasons, “House of Cards” could be bought up by other networks who outbid Netflix. And if the show flops, Netflix can’t simply stop after one season.
  • The streaming service still dominates Internet traffic, but is looking for ways to keep ahead. However, “…by delivering an entire season at once, the company would be putting all the power in the hands of viewers and could destroy ‘Event TV,'” Wired writes.
  • “It’s going to change the way people look at television,” Friedland says. “By putting all 13 episodes out on the same day giving everyone the opportunity to watch it at their own pace is going to be a major moment. We put the consumers in charge of their own experience. It’s going to be an interesting time.”

Murdoch Shutters The Daily: Will Failure Impact Tablet-Based Publishing?

  • The Daily, an iPad-only newspaper, claimed to be a “fresh take on the news you need to know,” providing content specifically designed for touchscreens. But Rupert Murdoch’s experiment in tablet journalism, which cost half a million dollars per week to operate, will stop publishing this month, potentially signaling trouble for tablet-centric publishing.
  • “As failures go, this one is pretty spectacular,” suggests ReadWrite. “News Corporation worked closely with Steve Jobs himself to get the world’s first iPad-only newspaper off the ground, having invested $130 million by the time it launched in February of last year.”
  • “The world’s second largest media conglomerate teamed up with the most valuable tech company on the planet to launch a product that attempted to reimagine news for the digital age. And it flopped.”
  • The publication’s demise was in part caused by the iPad-only focus. With limited Web presence and a strict paywall, attracting subscribers proved difficult. Also, Apple is something of a profit drain with a 30 percent cut from publishers’ subscription sales.
  • The format itself is also challenging. “Tablet-based magazines and newspapers might have more gee-whiz bells and whistles than print, but the Web can still be a faster, less clunky medium for publishing,” the article states. “Indeed, research suggests that readers prefer their tablets’ Web browsers to the meaty, slow-to-update and even more slow-to-evolve native apps that publishers have been eagerly developing since Steve Jobs first held up the iPad on stage in 2010.”
  • “Traditional publishers, many of whom looked to the iPad as their digital savior when it launched, have had mixed results,” the article explains, noting there are, however, other companies that are still experimenting with tablets, albeit on a smaller scale.

Staples and Mcor Partner to Bring 3D Printing Systems to Copy Centers

  • Currently, 3D printing is far from mainstream adoption, but a new partnership between retailer Staples and Mcor, the maker of the IRIS color 3D printing system, could make the technology more available to consumers.
  • The Staples Printing Division will roll out 3D printing first in Belgium and the Netherlands during Q1 2013 and then “quickly” expand to other countries, the company said. Fabbaloo suggests that the printers will likely only be located at central print shops initially, but eventually every Staples print center will have the equipment.
  • “Those with printable 3D models can merely upload them to Staples’ website, where they will be transformed into full color 3D objects with Mcor’s new IRIS paper-based 3D printers,” the post explains. “Printed models will be sent to your local Staples or directly to your address.”
  • “One issue facing Staples will be the influx of customers attempting to 3D print models that are in fact, unprintable,” the post continues. “Staples and Mcor should develop some process or filter that ensures the success rate of printing is high, otherwise the service could be in jeopardy.”
  • The Mcor IRIS device is based on paper printing and as Staples is a paper company, “it’s a totally natural fit,” the post suggests.
  • “The implications of this move are truly enormous, as it will go a very long way to opening up 3D printing for all. Staples is a massive brand with an astonishing capacity for advertising compared to any 3D printing company,” Fabbaloo writes. “Many more people will know about 3D printing as a result of this deal.”

Microsoft $899 Surface Pro Tablet Beefs Up Functionality and Features

  • Apple has been criticized for its premium pricing on its iPad tablets (the latest 64GB version costs $699), especially in light of cheaper competitors that have entered the market.
  • But consumers have been willing to pay that price for the rich user experience and sleek hardware. With the new Surface Pro offering from Microsoft, the question arises: Are Windows fans as willing to spend big bucks?
  • A more powerful version of the Surface RT tablet, the Windows 8 Surface Pro tablet costs $899 for 64GB, and that’s without a keyboard, Wired reports.
  • “Unlike the Surface with Windows RT, which runs on ARM-based chips and only serves up a stripped-down version of Windows, the Surface Pro runs a full-fledged version of Windows 8 Pro on an Intel Core i5 chip. One of the biggest differences: The Surface Pro will run existing Windows 7 applications,” explains Wired in a related article. “In addition to the Core i5 processor, Microsoft announced that the Surface Pro will have a 1920×1080 resolution, a full-size USB 3.0 port, and Mini DisplayPort for external display support.”
  • The tablet comes with a stylus and enables on-device note taking. It aims to be both a PC and tablet, but it’s uncertain if customers will justify spending more.
  • “Fuller-featured Windows 8 convertible/hybrid tablet-laptops like Lenovo’s new Yoga 13, start at $1,099. So it seems Microsoft is not really going after the iPad directly, but instead pushing a new, yet undefined category of device,” Wired writer Mike Barton states. “But the price has kept me looking at the $199 Google Nexus 7 tablet.”
  • “Compared with iPad and its rich app ecosystem, is the Surface Pro dead on arrival given its price?” asks Barton. “Will this new device category take off? Do consumers and business want a full Windows device in a tablet form — and will they pay a premium for it?”

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