Fox’s Eight-Day Delay

Fox recently instituted an eight-day delay between a show airing on television and being available to view online on Fox.com or on Hulu. The idea was to ensure only those who pay for the privilege get to watch these shows the day after transmission.

In reality, thanks to Fox only signing up one distributor before launch, the vast majority of people are being made to wait more than a week to catch up on the Web. Which most people who are very into their favorite shows just aren’t going to be able to do. Cue the obvious result of this doomed plan.

Viewers Respond… With Piracy

According to TorrentFreak, in the five days after the new authentication system was introduced, the number of downloads of both Gordon Ramsay’s Hell’s Kitchen and MasterChef more than doubled.

Sure, this isn’t the most scientific study ever conducted, but it’s clear evidence that people will very quickly turn to alternative sources when their first choice for viewing online is taken away. And the legality or otherwise of these sources isn’t a major concern for most individuals. After all, doesn’t everyone do it?

Conclusions

Who is the head honcho of Fox? One Rupert Murdoch, of course. And he really doesn’t like the impact the Internet has had on how we consume content. He’s already placed most of his newspapers behind paywalls, even though we can read the same news elsewhere for free, and now he’s trying to do the same with television.

It won’t work. It really is as simple as that. There will always be a way around the system, and this kind of move only serves to harm the networks.

I’m not saying piracy or file-sharing is correct or a good thing, necessarily. But it is what most people will do when they’re prevented from watching their favorite TV shows by legitimate means. The sooner Fox and others realize this the sooner they and their viewers will meet in the middle.

News Corp. Vs. Cablevision

News Corp. and Cablevision are currently locked in a battle over retransmission fees in the New York area.

Cablevision currently carries local stations owned by Fox and its owner News Corp. Proprietor one Rupert Murdoch Esq. But News Corp. is trying to up the retransmission fees paid by Cablevision, and that contract dispute has seeped over into the online video sector.

Caught in the middle is Hulu, which is co-owned by News Corp. as well as by ABC and NBC Universal.

Online Video Used As Weapon

As first noted by All Things D on Saturday evening, News Corp. had taken the unprecedented step of trying to prevent Cablevision customers from accessing its programming via either Fox.com or Hulu. Cablevision customers were instead faced with the following message:

Hulu’s PR rep stated:

Unfortunately, we were put in a position of needing to block Fox content on Hulu in order to remain neutral during contract negotiations between Fox and Cablevision. This only includes Fox content. All other Hulu content is accessible to Cablevision Internet subscribers. We regret the impact on Cablevision customers and look forward to returning Fox content to those users as soon as possible.

In other words, Hulu didn’t want to do this but was put in a difficult position by News Corp. bosses as they tried any means they could to disrupt Cablevision’s operations, thereby forcing the latter’s hand into agreeing to new terms.

Thankfully, News Corp. came to its senses after a few hours and lifted the ban on Cablevision customers wanting to watch shows via the company’s own website or Hulu. Mainly because customers were apoplectic with rage and expressed these views on the Web.

Conclusions

This shows how important online video has now become, because this is the first time access to online content has been denied due to one of these frequent contract renegotiations.

News Corp. acted out of line, obviously, but the FCC (Federal Communications Commission) is likely to pull the company up on this. Meanwhile, New York’s Cablevision customers should once again be looking forward to catching the next episode of Glee on Tuesday.

Ivi TV

Ivi TV is a new service from Seattle-based Ivi that launched just a couple of weeks ago. And lawsuits are already flying around all over the place.

The ivi TV app, which can be downloaded here, allows anyone around the world to watch the big U.S. networks (and some smaller channels too) live over the Internet for just $4.99 per month (after the 30-day free trial period ends).

Ivi TV effectively hijacks the live feeds of these broadcasts from cable affiliates in Seattle and New York and rebroadcasts them across the Web directly to people computers.

Although it sounds illegal, and will probably end up being judged to be so, ivi claims it is merely taking advantage of a loophole in the law.

Broadcasters Issue Lawsuit

As soon as ivi TV launched, several U.S. networks and channels issued cease-and-desist letters to the company. In response ivi then launched a pre-emptive lawsuit against the rights holders to try and secure a legal ruling that it isn’t breaking any copyright laws as they stand.

A week later and those same rights holders have issued a lawsuit aimed at taking ivi TV down. In all 14 affected companies have banded together to sue ivi, including those named in the title, MLB, Univision, Telemundo, Cox Media, and others.

The complaint, filed in New York federal court, accuses Ivi and its founder Todd Weaver of copyright infringement. Ivi is sticking to its guns and claiming the service isn’t doing anything illegal.

Legal Positioning

Ivi’s argument is that ivi TV is protected by merely re-transmitting the broadcasts without modifying them in any way. And as long as the company pays the appropriate fees to the U.S. Copyright Office, which can then be paid to the networks, it is doing nothing wrong.

Weaver said:

“Broadcasters fought against cable companies, then joined them. Broadcasters then fought against satellite companies, then joined them. Now it is our turn. History has a habit of repeating itself — and it is unfortunate they cannot learn from that and realize we strongly support broadcasters and their program suppliers, helping them monetize, increase their eyeballs, and ultimately get paid.”

“Ivi is not another Pirate Bay or Napster trying to gain from others’ works. Rather, Ivi wishes to work with content owners in helping them to realize new revenue streams and reach more viewers from around the globe.”

The problem is that history tells us ivi TV won’t last long. iCraveTV was shut down in 2000, and RecordTV followed suit in 2001. Both were offering services similar to ivi TV and both were sure they were protected by the law. They weren’t.

Conclusions

Weaver spent three years developing ivi TV, so he’s either really stupid or super-confident that it’s operating legally. I just cannot see ivi TV coming through this unscathed. Which is a shame because the service could provide a template for the next stage of online TV.

[Via PC World]

Netflix has already announced its iPad app, with Hulu expected to do the same soon. And the networks are also getting in on the act, with ABC, NBC, and CBS offering shows up for streaming.

Video On iPad

Apple is confident that video will form a large part of what iPad users will gain from owning the device. Its decision not to support Flash was a controversial one, although hardly unexpected. But that doesn’t seem to be harming the iPad much, if at all.

In the ‘Videos‘ section of the guided tour of the iPad, Apple states:

“There’s nothing like watching video on iPad. The high-resolution display brings your favorite HD movies and TV shows to live like no device has before. When you hold it in your hands, it feels like your own personal big screen.”

Which is an unequivocal boast. But as well as iTunes and YouTube, other video sites and services are now coming on board the iPad Express.

Netflix & Hulu

Details of Netflix’ iPad app have already leaked. It means that Netflix subscribers who also own iPads will be able to stream all ‘Watch Instantly’ content to the mobile tablet device via Wi-Fi or 3G.

Hulu is widely expected to follow suit with its own iPad app in the near future. However, unlike the Netflix app, Hulu’s is likely to only be available to people willing to pay for it via a monthly subscription. Which is then expected to become the basis for a wider Hulu subscription model.

ABC, NBC, & CBS

The Wall Street Journal claims ABC will have its own free iPad app paid for by adverts. Content will be very similar to that on ABC.com. Lost and Grey’s Anatomy are amongst the shows that will be available to watch.

Meanwhile, CBS and NBC are thought to be working on iPad-optimized versions of their Web sites, which will utilize the new HTML5 standard rather than Adobe Flash. The New York Times reports CBS shows will be available from day one, with NBC catching up by the end of April.

Conclusions

It seems Apple’s insistence on trying to blacklist Flash out of existence is working. But more than that, networks and content providers seem to be embracing the iPad in unprecedented numbers. So maybe the iPad will change the world after all.

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X-Men Origins: Wolverine

The X-Men franchise is one of the biggest right now, with a new raft of spin-offs planned and all the movies doing fantastically well at the box-office, regardless of their quality.

The latest movie in the series, X-Men Origins: Wolverine, starring Hugh Jackman, was due for a 20th Century Fox release in May. The film cost around $100 million to make and was on the movie studio’s big hopes for 2009.

Wolverine Leaks

And then tragedy struck, at least for Fox. The film leaked at the beginning of April, a full month before release. It was a shorter cut with most of the CGI missing. However, the copy was DVD quality and was downloaded a staggering 4.1 million times before the movie went on general release.

Fox did all it could to prevent the pirated copy spreading but by then it was fighting a losing battle. One that puts the usual leak within 24 hours of a movie being released to shame.

The FBI and MPAA proceeded to investigate the crime (of the century, obviously), and to try and pinpoint the origin of the leak.

FBI Arrests Someone

Now, eight months after the event, the FBI has arrested a suspect. Gilberto Sanchez, 47, was arrested in New York on Wednesday suspected of being the original uploader of the leaked copy of X-Men Origins: Wolverine.

Sanchez’s indictment show that he is accused of uploading the film to Megaupload.com under the alias of either ‘theSkilled1′ or ‘SkillyGilly’. No word yet on how Sanchez is supposed to have obtained the early production copy in the first place, though.

A Fox spokesman told CNet:

“We’re supportive of the FBI’s actions. We will continue to cooperate with law enforcement officials to identify and prosecute those who illegally steal our creative content.”

If prosecuted, Sanchez faces up to three years in prison and a $250,000 fine. However, a similar case involving a leak of Hulk saw the suspect given six months house arrest and a $7,000 fine. He pleaded guilty.

Conclusions

20th Century Fox was always going to pursue this until it got a result. However, it should be noted that X-Men Origins: Wolverine still went on to make $375 million at the box office and that Hollywood had its most-profitable summer ever in 2009. That doesn’t make movie piracy right but it does suggest it’s less of a problem than it’s made out to be.

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Hulu As It Is

Hulu has been built on the tenet of providing free premium content over the Internet using an advertising based model to first cover costs and secondly generate revenue. And it’s been a pretty successful strategy, allowing Hulu to build a sizable audience.

However, the company is still expected to make a loss of around $33 million this year, despite revenue of $164 million. So naturally the thoughts of those at or near the top of the companies who own and control Hulu have turned to whether a different approach would prove to be better.

Hulu As It Could Be

There has been suggestions in the past that either instead of or as well as the current advertising-based Hulu there could be a subscription-based Hulu. In June, Jonathan Miller, News Corps’ man in charge of digital services, suggested this was a logical destination to be headed for.

Then just a few days ago, News Corps. chairman Rupert Murdoch and NBC Universal CEO Jeff Zucker stated that a subscription model and charging for content was being looked at. Although at that point it seemed to be more wishful thinking than anything, especially on the part of Murdoch who also wants to put his newspapers behind pay walls online.

Paid Hulu Already On Way?

Now, BusinessOfVideo claims to have it on good authority that far from being just an idea for the future, a subscription-based Hulu is already on the way. Sources report that internal beta testing of the system is happening now and the technical details are being worked out.

This is not imminent, with next year being mooted, but it looks like it’s definitely on the way, whether anyone wants it or not. The full details don’t seem to have been worked out yet so this could yet be a good move or a bad move for the company depending on how it chooses to play it.

Conclusions

While I personally prefer online video and television catch-up services to be free, I can see the advantages of a subscription-based model as well. And it’s the “as well” which is key because no one wants to see Hulu moved behind a pay wall lock, stock, and barrel.

However, were a paid-for Hulu (with a reasonable price tag) to be launched alongside the free one with new partners such as cable channels HBO and Showtime then that would tempt more companies online and help prop up the free version at the same time. Which means everyone would win. And even Rupert Murdoch would be happy.

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That 12 billion videos suggest a 45% increase on the same period last year, and shows a very healthy growth in online video. This is both from user-generated sites such as YouTube, and those providing streaming television, such as Hulu.

142 Million Uniques

Ars Technica reports that 142 million unique users watched video online in May, which counts for 74% of the total Internet users in the US, meaning 3 out of 4 people have watched some kind of video online.

The average user watched 85.3 videos during the month, with Google sites coming top of the pile. This includes both Google Video, and the Google-owned YouTube, which as a whole, accounted for 35% of the total videos viewed.

The Rankings

Second was Fox, with MySpace Video, while Yahoo! sites came in third. Hulu, with content contributed by both Fox and NBC, came in tenth, but this meant only 0.7% of the total videos viewed.

Online video continues to grow at a massive rate, with both illegal, and legitimate means of watching video on the Web rising in number on a monthly basis.

The site is currently in beta, and only open to about 18,000 users, but that hasn’t stopped the shit hitting the fan as the company today received a cease and desist letter from NBC, CBS and Fox over the copyrighted clips it is offering.

The letter, leaked by Silicon Alley Insider, claims that Redlasso has broken state and federal laws while causing the companies “serious and irreparable harm.” The companies are demanding an immediate ceasing of all the copyright infringements.

Fair Use?

Up to now, while Redlasso has admitted not having deals with any of the networks, it was working towards them. It also claimed that the clips being shared were covered under the Fair Use clause.

The service is free, with revenue from advertising being split between the company and the producers and owners of the content. Redlasso now has until May 29th to respond to the letter.

Redlasso Responds

What’s strange is that the service has just been covered on Techcrunch, who gave a thumbs-up to the concept. Unfortunately, throughout the interview, Redlasso never once mentioned the cease and desist letter.

In a statement Redlasso said:

“We believe that curtailing distribution through the Redlasso platform only exacerbates a flawed distribution model. We hope to develop mutually beneficially partnerships with the world’s major media companies, including many of those we’ve heard from today.”

A Question Of Control

The problem is that while companies such as NBC and Fox are slowly but surely venturing on to the Web and offering their shows, they still want to be ultimately in control of what is offered, and when through services such as Hulu.

As we’ve already seen with the $1 billion copyright infringement lawsuit brought by Viacom against Google and YouTube, companies will go to any lengths to protect their copyrighted content.

Time To Go Legit

While Redlasso may have been a brilliant service, and one which if legitimate would have proved massively successful, by playing with the big boys, and dismissing the need for copyright deals, it has been badly burned.

I really hope the company now puts its house in order, fights to get those much needed deals in place, and becomes the legal service that many bloggers have been crying out for.

However, it seems there is now an official Hulu channel on YouTube. It was started on March 3rd, but has only now been noticed by The LA Times.

March 3rd places the channel’s launch date just prior to Hulu launching publicly, after it’s trial beta version. So what is a Hulu channel doing on one of, if not the biggest rival it has?

Planned All Along

Hulu spokesperson Christina Lee told NewTeeVee:

“It was absolutely planned by Hulu. We know that there are opportunities to find audiences all over the web. These are short promotional clips and we’re working with NBC and FOX on this.”

Bizarre Yet Clever

It’s true that the clips are only short, but it still seems bizarre to advertise yourself on a rival service, with clips of Family Guy, Saturday Night Live, and The Office all appearing on the channel.

It may be bizarre, but it looks like it’s also a clever move. The channel was the 68th most-viewed channel on the whole of YouTube in April, with 4 million page views.

If only a small minority of those 4 million then click over to Hulu to watch a full episode of the show they’ve just seen a clip of, then Hulu gains a lot more than they’ve lost.

Now the details have been revealed by the big media.

The Financial Times reported (in its trademark salmon-colored pages) that Apple and 20th Century Fox, a entity held by Rupert Murdoch’s News Corp, inked a deal that would grant iTunes users the option to rent films produced by the studio.

The news of the impending partnership comes in anticipation of the consumer-centric conference to be held at Moscone West in San Francisco, California.

Share Prices Immediately Up

An immediate result of the announcement was the journey of Apple’s share price on the NASDAQ exchange north of $200 for a short while Wednesday. The stock fell to 198.95 by the closing bell, and today (as of 10AM EST) spends its first few hours in play at about $202.

Apple CEO Steve Jobs presumably welcomes very much the bullish attitude investors have portrayed as the company approaches zero hour and the head himself prepares (with classically specialistic attention paid to the minutiae of the his hallmark Keynote presentation in particular) for the Expo to take place from January 14 through 18.

Macworld Expo

Though Macworld Expos of years past have traditionally been points in time in which Apple (previously known officially as Apple Computer, Inc) has debuted new and/or refreshed hardware offerings and staples, next month’s event is likely to be spent by the Cupertino-based company promoting advances in software. 

Hence the chatter about the expected emergence of digital, over-the-Web video rentals.

Whether Apple can seduce production studios large and small in addition to 20th Century Fox will of course determine the likelihood of the storefront’s success. 

Video Not iTunes Strong Point

While iTunes music has sold at a brisk rate for the past couple of years, its video selection – comprised of feature films, television programs, and those clips once broadcasted by the MTV network – has shown to have a far less notable trajectory.

They do sell, mind you. The TV catalogue in particular has garnered considerable attention since its small (though ambitious) beginnings. Only, on the whole, they take a distant back seat to the storefront’s digital audio warehouse.

But there’s has been ample evidence as of late that the desire for on-demand Internet solutions has grown quite a bit. 

The sheer idea of iTunes movie rentals has stirred bloggers ever since Apple introduced its Front Row media software (and later its Apple TV set-top box) to formulate predictions as to when the Man in Black and Blue will “do things right,” as it were, and establish an alternative or partnership to/with Netflix or some other movie subscription service.

Clearly the answer to such inquiries is now writ large across the Net: the moment is soon to arrive.

Time Sensitive Distribution?

Unfortunately, if the Financial Times is eminently correct in its assertion that Apple will work with an arrangement that involves the time-sensitive distribution of film titles to iTunes users via its rental system-to-be, the debut to come in mid-January may well be met with mixed reviews. 

The “time-sensitive” concept has long lost its acceptance among consumers. Instead, the Netflix-like pay-per-month-and-keep-a-set-number-of-films-indefinitely has become the new norm.

Our own assumption as to what we can expect to arrive as an iTunes update next month is that the release will be met with begrudging disappointment (but acceptance still). 

Though Mr Jobs is tasked with pleasing the content providers as much as his own company’s customer base today, the fact that inconvenient compromises will have to be made by potential renters to satisfy their demands will mean any approval of the new move is bound to be less than wholehearted.

Paul Glazowski is a contributing author discussing the social networking world, his work can be found on Profy.com