Netflix Pursues DreamWorks Animation, No Facebook Integration

  • Netflix is reportedly negotiating for exclusive streaming rights to DreamWorks Animation films.
  • The deal would replace DreamWorks’ contract with HBO (which runs through 2014).
  • DreamWorks reportedly has permission to end its HBO contract early. If it does, it could provide content to Netflix by early 2013.
  • If the deal goes through, it would mark the first time a major studio has licensed content to subscription VOD at the same time (as opposed to after) its pay TV window.
  • In related news (see LA Times link), Netflix will not be including Facebook integration anytime soon in the U.S. (although it will be integrated in Canada and Latin America). This is based on the 1988 Video Privacy Protection Act that requires peoples’ video rental information be kept private. Netflix feels that the law is ambiguous as it relates to Netflix/Facebook, but they’re not taking any chances.

Update: Apple Considering a Bid for Hulu Video Service

  • In the latest installment of the ongoing Hulu saga, Bloomberg reports Apple is “considering making a bid” for the online video service.
  • Apple would join Google, Yahoo, AT&T and others who have expressed interest (Microsoft has reportedly dropped out of the bidding).
  • With $76 billion in cash and securities, an expected $2 billion bid would not be too difficult for Apple. If so, analysts suggest this would give Apple a leading subscription service that would rival, if not surpass, the Netflix service.
  • “Part of the ecosystem of Apple’s future is to include more video,” said Scott Sutherland, Wedbush Securities analyst (who recommends buying the stock). “It’s something they are focused on.”

Scribd to Launch Subscription News Hub this Fall

  • Scribd — a Web site that lets users share reports, personal stories and recipes — revealed plans this week to launch a digital newsstand that provides a vast library of news to readers for a monthly fee, similar to the Netflix subscription service model.
  • The newsstand, named Float, is the latest in a collection of strategies that have attempted to make money from online news. Other news hubs include Flipboard, Zite, Pulse, News.me and Ongo.
  • Publications that are made available via Float will receive a share of the revenue after the subscription program launches this fall (although subscription fees and the amount to be shared with publishers have yet to be announced).
  • Float will introduce a free version this week featuring articles from 150 publications such as The Associated Press, People, Fortune, Salon and Time magazine (publishers participating in the free version will share in the advertising revenue).
  • Float will initially be available to consumers online and through an iPhone app, while Android and iPad versions are expected at a later date.

Blockbuster Targets Frustrated Netflix Subscribers

  • ETCentric recently reported on the backlash to new Netflix subscription rates (see “Nine Video Streaming and Rental Alternatives to Netflix”).
  • Most of the nine rental alternatives referenced in the earlier post are currently offering special introductory offers.
  • According to this related article however, Blockbuster is now offering a free 30-day trial specifically to disgruntled Netflix customers unhappy with the recent price hike.
  • If customers decide to switch, they’ll pay a comparable monthly subscription fee (Blockbuster points out that they offer video games and newer releases than Netflix).
  • Blockbuster’s special Netflix promotion runs until September 15.

Nine Video Streaming and Rental Alternatives to Netflix

  • As previously reported on ETCentric, Netflix announced plans this week to divide its unlimited-DVDs-by-mail and unlimited-streaming options into two separate plans.
  • The resulting 60 percent price increase (from $9.99 to $15.99 per month for both DVD and streaming), effective September 1 for existing customers, has raised some early controversy with Netflix subscribers and the press.
  • For those who may be looking to opt out of Netflix due to the new price structure, Geek.com has posted a helpful overview of viable alternatives including: Amazon Prime, Hulu Plus, Blockbuster by Mail, Walmart’s VUDU, YouTube Rentals, CinemaNow, GreenCine, Redbox and Google.
  • Amazon Prime, for example, now offers a streaming video service available for $79 per year (or $6.58 a month), while the growing library of movies and TV programs on Hulu Plus ($7.99 per month) is available on multiple platforms including PCs, game consoles, and set-top boxes.
  • VUDU works with computers, the PS3, Boxee, Blu-ray players and connected TVs. Its customers pay $2 for a two-day rental, while YouTube fans can pay $1.99 to $3.99 for streaming rentals. The company has partnered with Sony, Warner Brothers, Universal, Lionsgate and others to provide content via YouTube accounts on computers, Google TV, Android tablets with Honeycomb, and most Android phones.
  • Check out Geek.com for details on all nine options listed.

Netflix Announces Content Deal with NBCUniversal

  • On the heels of raising eyebrows regarding increased subscription rates, Netflix offered some good news yesterday when it announced it has renewed its licensing agreement with NBCUniversal.
  • The multi-year agreement includes TV shows such as “The Office” and “30 Rock” in addition to cable programs “Keeping Up with the Kardashians” and “Kimora: Life in the Fab Lane” (future seasons will be available on a one-season delay basis).
  • Streaming access to Universal films such as “Eternal Sunshine of the Spotless Mind” and “The Motorcycle Diaries” has also been added.
  • “The content buying spree has purportedly been pricey, but Netflix maintains that it will pay for the new shows it acquires rights to by gradually moving customers away from its mail service.”

Onkyo Launches THX-Certified 3D Blu-ray Player

  • Onkyo has announced a $599 Blu-ray player with THX certification and 3D capability (available in August).
  • The DLNA 1.5 certified player also handles WMA, MP3 and DivX HD files.
  • The BD-SP809 offers streaming service access through Netflix, VUDU, Blockbuster On Demand and Film Fresh.
  • Network connection is via the Ethernet port since there is no indication of Wi-Fi connectivity.
  • The player offers 1080p upscaling and features two outputs for simultaneously connecting a 3D TV and a 1080p projector.
  • Onkyo may face stiff competition from other 3D Blu-ray players that have Wi-Fi connectivity and expanded access to streaming services such as Hulu Plus, Amazon Instant, Crackle and Pandora.

Netflix Launches Unlimited DVD Rental Plan

  • In what appears to be a slight departure in strategy, Netflix announced it is offering an unlimited DVD rental plan for those who want to avoid streaming content.
  • Subscribers can now pay $7.99 per month for unlimited DVD rentals under the new offering.
  • Prior to this plan, Netflix subscribers had a choice of “$4.99 a month for one DVD out at a time (up to two a month) or $9.99 a month for one DVD out at a time with access to Netflix Instant.”
  • This model may surprise some, considering CEO Reed Hastings has been touting streaming delivery of late, highlighting the fact that subscribers were accessing more streaming content than physical media for the first time in his company’s history.
  • It may also be surprising to some since the streaming service recently became the largest source of Internet traffic and the company is planning to produce exclusive online content.

Insiders Say Netflix Not Interested in Acquiring Hulu

  • Netflix is reportedly not among the handful of companies currently considering a purchase of Hulu.
  • Sources “familiar with the matter” indicate Netflix was absent from the first round of bidding presentations that concluded last week.
  • The same sources also suggest that Hulu has no interest in seeing its biggest rival take it over.
  • Google, Microsoft, Amazon and Yahoo are reportedly still among the companies interested in the TV streaming service.

MediaMall PlayLater Serves as DVR for Online Video

  • MediaMall, the group behind the popular PlayOn media software, announced this week a closed beta of an online service that allows users to record online video for later viewing (including offline).
  • PlayLater works similarly to a DVR, allowing “recording” of online video from sites such as Hulu, Netflix, Amazon and major networks.
  • Early reporting suggests playback of DRM protected files only on approved programs running on PC (using Windows Media Player), Android, iOS, Google TV, game systems, etc.
  • PlayLater is expected to eventually be available for $5/month, or $50/year.
  • CrunchGear reports: “Believe it or not, the term DVR is actually appropriate here. I’ve used the service and it actually records the programming and wraps the video file in a DRM-laced .plv container that’s only playable on approved programs.”

Yahoo Study: More People Watching Online Video During Primetime

  • According to a new study by Yahoo, people are watching more and longer videos during primetime.
  • Back in 2009, online viewing declined as more people watched video on their TVs.
  • More consumers are watching Netflix and Hulu during primetime, but short clips still comprise 74 percent of video viewed.
  • Viewers are more likely (57 percent) to watch video when presented with a related article.

New MoviePass App Brings Netflix Model to Theaters

  • A new service called MoviePass is offering unlimited movie viewing in participating theaters for a fee of $50/month.
  • Access to 3D and IMAX movies will involve a $3 surcharge.
  • Using an HTML5 app, subscribers will be able to search for a film, check show times and purchase digital tickets.
  • A $30 “limited pass” offering is reportedly also being planned.
  • The service will launch its beta test in San Francisco this weekend.

Multiplatform News: Google Acquires SageTV

  • Google announced it has acquired Inglewood, California-based SageTV and the company’s multiplatform DVR technology.
  • SageTV integrates broadcast, Internet, Netflix and Hulu via its Home Theater PC (HTPC) software.
  • SageTV Placeshifter enables users to view TV from any high-speed Internet connection, similar to Slingbox.
  • Although details have yet to be announced, we may see SageTV functionality incorporated into Google TV.
  • From the SageTV site: “We’ve seen how Google’s developer efforts are designed to stimulate innovation across the web, and as developers have played a core role in the success of SageTV, we think our shared vision for open technology will help us advance the online entertainment experience.”
  • The Engadget post features the SageTV press release and a 4-minute video (created by user jaredduq).

Best of D9: All Things Digital Conference

Walt Mossberg and Kara Swisher of The Wall Street Journal hosted the D9 (D: All Things Digital) conference May 31 to June 2 in Rancho Palos Verdes, California. The annual event featured compelling interviews and demonstrations from an array of top media and technology executives representing companies such as HP, Twitter, AT&T, Nokia, Netflix, Disney, Adobe and many more.

The D conference was established in 2003 by columnists Mossberg and Swisher as an annual showcase for technology innovators and big names from the worlds of business, entertainment and occasionally politics. This year the title was “D9” (indicating its ninth year). The conference is known for hosting influential heavy-hitters and its somewhat exclusive nature. Typically, attendance is limited to about 500 guests.

ETCentric readers were quick to forward relevant news items and announcements that emerged during this year’s show. The following is a collection of links to articles and videos submitted by our readers, accompanied by their comments:

 

D9 Video: Eric Schmidt Highlights

  • Google, Apple, Amazon and Facebook are successfully exploiting global platform strategies.
  • Challenge working with entertainment companies since taking content from scarcity to ubiquity.
  • Also need to deal with disintermediation and piracy. On privacy, Google will remain a place where you can do anonymous searches. And committed to insuring you have control over information they have on you.
  • We’re seeing the consumerization of IT that will lead to the death of IT as we know it.
  • There are not sufficient resources to develop for more than the two largest players: Google and Apple.
  • Search is moving from link-based answers to algorithmically-based answers using artificial intelligence.
  • Concerned about a balkanization of the Internet, which will lead to an Internet per country.
  • If you’re concerned about security, use the Chrome browser and use a Mac.

 

Google Shows Off Its Groupon Killer, Launching Tomorrow

  • Video of Eric Schmidt’s demo of Google Wallet and Google Offers.
  • Google is not charging a processing fee but is taking a share of the offer.
  • Credit card companies are willing to upgrade the POS terminals to get benefits of higher security.
  • Lookout Groupon, LivingSocial, etc.!!!

 

Groupon CEO Andrew Mason on Google, Clones and Hubris – But Not on an IPO

  • CEO sees Groupon evolving in three phases so far: One – the Daily Deal, Two – Personalized Deals, and Three – a technology company where they become more integral to a person’s daily life (i.e. wherever they are and whatever they want to do, they can get a deal right now based on the inventory of available deals).
  • Could you use Groupon to sell media?

 

D9 Video: Microsoft’s Steven Sinofsky on Windows 8

  • 95 percent of how the world gets on the Internet is through Windows.
  • Windows 8 will be a “modern” rethink to enable PCs and tablets to satisfy “things they say are solved in an iPad” and still bring all the benefits of Windows.
  • Video demo of Windows 8 showing touch-based UI (can still use mouse too), live tiles.
  • Targeting 2012.

 

D9 Video: Fanhattan Demo

  • Free video discovery app Fanhattan launched at D9 this week.
  • The iPad app serves as a directory and discovery engine, sourcing reviews and ratings from Metacritic and Rotten Tomatoes, while organizing related content from the likes of YouTube, IMDb and Amazon.
  • Also shows pre-release version running on an Internet TV which is capable of creating a branded movie page in this case for Pirates of the Caribbean.
  • It connects to iTunes, Netflix, Hulu and the ABC Player to view TV and movies.
  • CNET review: “This free iPad app sounds simple–it finds stuff about movies and TV shows you want to watch–but the depth of the content, utility of what the site does, and clarity of the interface just puts this app on a different level than anything else I’ve seen.”

 

D9 Video: Hewlett-Packard CEO Leo Apotheker

  • WebOS will be available to other companies and enterprises for their own use.
  • Goal is to create an end-to-end ecosystem that figures out on a single device in the Cloud whether you’re doing enterprise or private work.
  • HP can create a large ecosystem of printers, PCs and tablets amounting to 100 million devices a year itself. They hope to interest others as well.

 

D9 Video: Reed Hastings Highlights

  • On Netflix’s virtuous cycle: the more content they get, the more members they get and they can pay more for content.
  • Consumers want all the new stuff but that’s very expensive.
  • At $8/month, they’re a compliment to the new stuff.
  • The news stuff will remain pay-per-view since has higher margin for content owners.
  • Can grow from 24 million subscribers currently to capture Internet TV and tablet viewers plus a share of the 5 billion active mobile phone users worldwide who like video.
  • Need to stay innovative.
  • Focus on talent density, which is the fewest number of talented people.

 

D9 Video: Twitter CEO Dick Costolo

  • Took three years to send the first billion tweets. Now sends a billion tweets every SIX days!
  • There are over 600,000 developers who have downloaded over 900,000 API tokens.
  • Will look to TweetDeck (recently acquired) as the professional UI.
  • Rolling out a native photo sharing app, relevance sorted search results and web intents which allows you to add a Twitter client into your website. 80 percent of advertisers using promoted tweets renew.
  • Advertisers are experiencing very high engagement rates (VW’s ad: 52%).
  • Focused on success of business, not IPO.

 

DARPA – The Coolest Agency You’ve Never Heard Of: Regina Dugan at D9

  • Regina Dugan’s DARPA t-shirt says “Impossible, Improbable, Inevitable” which describes the progression of their programs.
  • Developed Internet, GPS, stealth, night vision, UAV, MEMS technologies.
  • DARPA’s Mission is the “prevention and creation of strategic surprise.”
  • Encourages programs to have the big success.
  • So that means they can’t fear failure. Fear of failure is the limiting factor.
  • Talks about growth in need for cyber security, new computing architectures, explosive detection system.

 

D9 Tech Demo: Inkling

  • Inkling reinvents the college textbook for the iPad that is both interactive and social.
  • Rather than paying $200 for a book, you can buy it a chapter at a time for far less cost since the content is not re-sold like a physical book.
  • See impressive video demo.

Netflix Leads Downstream Internet Traffic in North America

A new report from Ontario-based Sandvine indicates Netflix video streaming content currently accounts for the single greatest source of peak downstream Internet traffic in the U.S. (recently reported as 29.7 percent, up from 21 percent last fall).

According to TechCrunch: “That puts Netflix above HTTP websites (18 percent), BitTorrent (11 percent), and YouTube (10 percent) as a source of downstream traffic during peak times in North America. (BitTorrent still accounts for half of all upstream traffic). As whole, ‘real-time entertainment’ (which is mostly video streaming, but also includes streaming music) accounted for 49 percent of downstream traffic in March 2011, versus 19 percent for P2P file sharing, and 17 percent for Web browsing.”

The Global Internet Phenomena Report: Spring 2011 from Sandvine also offers the following observations:

  • Real-Time Entertainment traffic is continuing its journey to network dominance, particularly in North America, where it represents 49.2% of peak period fixed access traffic. If this rate of growth is sustained, Real-Time Entertainment will make up 55-60% of traffic by the end of the year.
  • The continued growth of Real-Time Entertainment enables a seemingly contradictory conclusion: P2P Filesharing is here to stay, at least for the immediate future, as evidenced by the marginal drop in share from 19.2% of peak period traffic in Fall 2010 to 18.8% in Spring 2011.
  • The composition of upstream traffic on Latin America’s mobile networks has changed dramatically since the previous study. P2P Filesharing has supplanted Real-Time Entertainment to become the largest consumer of upstream capacity, accounting for 46.4% of uploaded bytes.
  • Europe’s networks reflect rapidly shifting user preferences. Levels of P2P Filesharing and Web Browsing traffic have changed dramatically since 2009, with no consistent trend appearing. Nevertheless, an important exception in this dynamic market is the Real-Time Entertainment category, which continues to grow steadily.

Related Bloomberg article: “Netflix Offers Streaming Movies on Google Android Phones” (5/12/11)