Google Outmaneuvers Rival Hulu Bidders

The bids for Hulu are apparently all in and being mulled over by the company and its content partners. Four made the final cut, with three – Amazon, Yahoo, and the Dish Network – all hitting the $1.5 billion – $2 billion range for Hulu, Hulu Plus, and guaranteed rights to the content exclusively for two years. And then there is Google, which, according to AllThingsD, has rather more ambitious plans in mind.

What these ambitious plans actually are remains unclear, but sources are saying this is “a different acquisition, on a larger scale.” Which could mean a number of different things.

It isn’t even clear as to whether Google has entered a formal bid or has merely made a ballsy approach with an unwritten check in hand. Which may mean the whole process slows down from this point as Hulu decides what is in its best interests. Which may not be to take Google’s money, no matter how generous the offer.

YouTube + Hulu = Deadly Combination

The reason for this is that were Google to secure Hulu it would own a huge chunk of the online video sector. It already has YouTube, the most popular video destination on the Web, and adding Hulu and its longform content to its lineup would be a massive boon for the search giant.

Google knows that premium content is key, and that is where Hulu comes in. However, Hulu is owned (for the most part) by the same TV networks that are running scared of Google and its approach to offering up content for free and making money from advertising. Which could see them put a kibosh on any potential deal.

Can you imagine how powerful Google would become with both YouTube and Hulu under its wing? Too powerful for the networks, I’d suggest.

Conclusions

The Next Web predicts a Google/Hulu tie-up by Christmas, but I disagree. I think Hulu’s owners are more likely to take the safe option and sell to one of the other bidders. Unless, of course, these mysterious big plans are advantageous to the networks…

Netflix Loses Starz

The month of September started badly for Netflix, as Starz Entertainment announced it was walking away from negotiations to renew its contract with the former DVD-by-mail company which sees its future wholly in streaming content to customers via the Internet.

The two companies were discussing a new deal to replace the current one which ends in February 2012. But in order to “protect the premium nature” of its brand Starz has decided to walk away from any potential deal and take its football (in this case a back catalog of movies) with it.

That can only mean one thing got in the way of a deal being forged: money. Which, as we know, makes the world go round. But it’s not as if Netflix wasn’t willing to pay Starz a hefty wedge of cash for its content.

Starz Loses Its Head

According to The L.A. Times, Netflix offered Starz a whopping $300 million-per-year to renew the existing contract. That is more than 10-times the amount the company has been paying since the deal was first struck in 2008.

Two things which have happened in that time are important to note: Netflix has grown in popularity, gaining subscribers every quarter; and it has added more and more content in that time. The former made Starz demand more money, the latter gave Netflix the confidence not to cave to its demands.

Netflix CEO Reed Hastings has stated that Starz represents around 8 percent of content viewed at the present time, and will likely hit around 5 percent by the time the deal concludes. Which means other content the company is currently pursuing will be able to fill the void left when Starz moves on.

Everyone Loses

The sad thing is that everybody loses here. Netflix loses a content partner, Starz loses a potential $300 million of annual revenue, and Netflix subscribers lose the opportunity to watch that content quickly and easily. And all because of greed.

[Via PR Newswire]

Socialcam Startup

In the spring of 2011 Justin.tv launched a mobile sharing app that was designed to do for video what Instagram has done for photos. That being allowing smartphone users to share them with others across a range of platforms, social networks, and websites easily.

In the six months since the app made its debut it has become a major player in the market alongside the likes of BlipSnip, Viddy, and Vlix. So much so that Socialcam is being spun off from Justin.tv to be its own, independent entity housed in Founders Den in San Francisco.

Justin.tv co-founder and current CEO will be going with it and taking a small band of select engineers with him. Justin.tv will retain a stake in the new company, with additional funding and backers now being actively sought.

Ch-ch-ch-ch-Changes

Seibel is being replaced as CEO of Justin.tv by CTO Emmet Shear, who is charged with pushing TwitchTV (a live streaming video games portal launched in June) onto even greater things than it has already achieved.

I can only imagine TwitchTV will eventually be spun off into its own company as well. After all, 8 million viewers watching 1 billion minutes of video every month would suggest there’s a future for this endeavor. Which leaves me to question whether the original Justin.tv is being hung out to dry?

So What About Justin.tv?

Justin.tv is one of a number of live streaming video companies which offer people the chance to effectively broadcast online as if they owned their own TV station. But it’s a market that seems to have reached a certain point and remained there, slowly flatlining.

While it’s still a popular destination, there is clearly some effort by the Justin.tv execs to move into other territories rather than risk losing momentum to the point at which they do a Joost. Because no one wants that kind of memorial.

[Via TechCrunch]

Google TV Coming To U.K.

Google TV may not have been a success in the U.S., with Apple TV outperforming it every step of the way, but that isn’t stopping Google from planning its next move. And it’s one that will see them hop across the Atlantic to arrive on the doorsteps of the British public.

According to Eric Schmidt, speaking in his keynote at the Edinburgh Television Festival, Google TV will launch in Europe in the next six months, and the search and advertising giant is already in talks with British broadcasters.

This is a necessary step if Google is going to avoid experiencing the same problems in the U.K. and Europe as it has in the United States. The major U.S. networks have all blocked their content from streaming through Google TV, proving their desire to remain in control but also their unwillingness to stare the future in the face.

Google TV Future…

Google, however, is looking to the future, and Schmidt claims that early failure (as perceived from the outside) will now prevent the company from moving forward with its plans. According to Reuters, he is confident that more partners will join the existing ones, saying:

“We’re absolutely committed to staying, to improving Google TV. I believe that they’re both [Sony and Logitech] going to be on board and I believe there are many more coming. Wait shortly for an announcement.”

The message is clear: Google isn’t going to kill Google TV off anytime soon. In the same way that Apple is viewing Apple TV as a hobby for the time being, knowing that its day will surely come, so Google is confident that connected-TV platforms are the future, and it needs to be involved.

Conclusions

There is a longterm battle shaping up here, not only between Google and Apple, but also between dozens of other smaller players all building their own connected-TV platforms. We won’t know who is going to win until the TV networks start playing nice, but Google is clearly not going down without a fight.

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Hulu Bids Incoming

The deadline for bidders to submit the figure they are willing to pay to acquire Hulu has reportedly been extended from until the end of the week. This is to allow potential buyers more time to study the financials of the company to ensure they stack up against the considerable asking price.

Hulu is looking for bids in the region of $2 billion, which would seem excessive when revenue has only just hit $500 million for the year and profitability is still some way off. There are also other questions being asked by those in the know, especially related to the longterm future of the business.

Future Failings

Hulu is nothing without content. Yes, it’s a well-known brand with millions of users in the U.S., 1 million of which have deemed the service good enough to pay the subscription fee required to receive Hulu Plus. But content is still king.

For Hulu the content all comes from the big media companies, and there are deals in place with the likes of CBS and NBC. But these aren’t deals that will run for ever, and in fact some are due to expire in just one year’s time. Even the longest is for less than five years.

When these do come to an end they will have to be renegotiated, and media companies have a tendency to display greed at these moments as they realize there is good money to be made in an online service that is actually working.

The new owner, whoever that may be, will have to be strong in order not to be bullied into signing one-sided deals. Unfortunately the content providers hold all the cards in such situations. Because they can, if they want, just threaten to walk away and take their ball content with them.

Conclusions

Whoever takes Hulu on is going to face some pretty serious challenges. But if they navigate these successfully then there is a good chance they’ll have bought wisely.

This element of risk does, however, increase the likelihood that a big player will be the eventual buyer, as the likes of Google and Amazon can afford to lose a couple of billion dollars. In the same way we don’t sweat losing $1 down the back of the sofa.

[Via Reuters]

Amazon Bidding For Hulu?

Hulu is up for sale, although most people don’t understand why its owners, Walt Disney, News Corp, NBC Universal, and Providence Equity Partners, want to sell what has so far been a successful venture and one that stands on the cusp of greatness as the online video sector grows ever larger.

Some companies, such as Microsoft, have fallen out of the running, but the likes of Google, Yahoo, and DirecTV are still in. Also rumored are Apple and a new contender in the form of online retailer Amazon.

Amazon stands to gain a lot from acquiring Hulu. It would add content to its Prime subscription service and be a great selling feature were the company to release an Android tablet designed to compete with the Apple iPad in the near future. Which is pretty much guaranteed at this point.

Whoever grabs Hulu looks set to pay somewhere in the region of $1 billion to $2 billion. Which is a huge sum of money, granted, but still doesn’t justify the sale in the first place. And it isn’t just laymen such as myself who think so.

Why Sell???

BTIG analyst Richard Greenfield has argued the case for its current owners to hold on to Hulu and questioned why they are even considering selling at such an early stage. In a recent blog post [via The Hollywood Reporter] he argues:

“We find it very hard to fathom why any media company would want to give up ownership of such a unique asset at such an early stage of growth. Hulu appears to be the perfect weapon for networks/content creators to embrace so they can grow revenues and profits, even if the current multichannel ecosystem becomes unglued over the next decade.”

“Media companies should be going out of their way to retain ownership of Hulu and allow it to flourish. The bigger Hulu gets, the more dollars it can pay content creators on an annual basis. While that may be true if it is owned by a third-party as well, being invested in Hulu and sacrificing near-term profits for long-term value creation appears far too compelling.”

It does appear as though the current owners are seeking short-term gains while completely missing the opportunity Hulu offers them in the long-term.

News Corp. has actually indicated it may retain its stake in the company, but the others all seem to want to get out while the going is good. Which makes no sense whatsoever for a growing entity such as Hulu.

Conclusions

I’ve struggled to understand why the current owners of Hulu would want to sell at this stage, but they seem intent on doing so for whatever fatuous reason. Their loss is going to someone else’s gain, and I wouldn’t bet against Amazon emerging victorious in this colossal auction.

Amazon Instant Video Library

Amazon has recently penned deals with CBS and NBC which has helped push its digital video content beyond the 100,000 titles milestone for the first time. Unfortunately most of these titles are limited to Amazon Instant Video rather than Amazon Prime.

TechCrunch suggested this meant Netflix needed to Watch Out!, but at the moment Netflix is perfectly fine, thank you very much. The future may well see this situation change, however, which is likely why Netflix is expanding internationally and shoring up its U.S. business before Amazon has a chance to “flip the switch.”

Comparing Apples and Oranges

Some people seem to have got it into their heads, directly on the back of this announcement, that Amazon Instant Video is now beginning to rival Netflix, and that the latter should be looking over its shoulder for the competition about the stick a knife in between its shoulder blades. But this is nonsense.

Amazon Instant Video is an à la carte service whereby customers purchase individual titles for streaming. Which is more in line with what Apple offers on iTunes. Netflix, on the other hand, offers an all-you-can-eat service called Watch Instantly for a set monthly subscription. So we’re comparing apples and oranges here.

Amazon does have a similar service, Amazon Prime, which costs $79-a-year and includes other benefits. But there are only around 9,000 titles included in the Amazon Prime video library, which compares unfavorably to the tens of thousands Netflix offers.

Conclusions

Amazon can rightly be proud of the range of video content it now offers its customers. Amazon Instant Video is good competition to the behemoth that is Apple iTunes. But it’s no Netflix, and isn’t even trying to be.

However, were Amazon or Apple to decide they did want to beat Netflix by offering a cheaper all-you-can-eat service then they may be able to do so. After all, they now have the content in place and the lines of communication with those who own the content open.

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Mobile Video

Mobile video is a growing sector, with the number of people owning mobile devices capable of displaying video in high quality lurching ever upwards. As we all carry our smartphones with us pretty much everywhere we go content is needed to fill the gaps between taking calls and sending texts.

The question is whether anyone wants to actually watch movies or television shows on a screen that’s barely even a few inches in diameter? Google obviously thinks so, which is why it has updated its Android Market Videos app and rolled it out to smartphones.

Android Market Videos App

The Videos app is the official video player for Android Market movie rentals. It previously only worked on devices running Android 3.0 (Honeycomb) but has now been updated and rolled out to smartphones running the 2.2 and 2.3 versions of Google’s mobile operating system.

Once installed the Videos app gives you access to all movies rented through the Android Market, which can be bought for as little as $1.99. Rentals can even be saved locally to view offline, but once playback has begun it has to be completed within 24 hours.

The Videos app also deals with other videos, including YouTube content and clips you have recorded yourself.

Conclusions

I’m not convinced people will want to watch a movie on their phone at this point in time, especially one they have paid good money to rent. A tablet with a reasonable-sized screen, sure, but a smartphone? Really?

Luckily the Android Market Videos app does more than just allow you to rent movies, so even those who aren’t keen on that usage will find some worth in downloading and installing it. Assuming of course their phone is running Android 2.2 (Froyo) or higher.

[Via TechCrunch]

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International Hulu

There has been talk of an international Hulu for as long as the U.S. version has existed. The U.K. appeared to be the first target for these expansion plans, but after several failed attempts to do content deals with the main British broadcasters Hulu decided to give up for the time being.

The problem was that the likes of the BBC, Channel 4, ITV, and Sky all had their own plans for moving their content online, with both for free (supported by advertising) and paid-for options. There are third parties such as SeeSaw but even they’re just muddying the waters to some extent.

In May of this year it was rumored Hulu could be coming to Australia soon, but no launch date or details of any content or advertising deals have been revealed.

Hulu In Japan

However, Hulu has officially announced its plans to move into Japan. The vague release date is currently “later this year,” and the company is withholding any more details on the product set to be launched in order to “leave something to the imagination.”

One thing is clear, however, and that is that Hulu in Japan will be purely a paid subscription offering, with a “large selection of premium feature films and popular TV shows” available on a range of devices for “one monthly price.”

This isn’t that unexpected. Although the U.S. has a free option there is no business sense in offering a similar deal to users in other countries. Hulu Plus costs $7.99-a-month and I would expect a similar price to be set for the Japanese service.

Conclusions

I find it a little strange that on the one hand Hulu is being sold off while on the other the company is expanding internationally and experimenting with original content. I guess the company is trying to make itself more attractive to its potential investors, although clearly nothing it is doing is enough to persuade its current crop of owners to hold on to Hulu for the longterm.

Will a Japanese operation and a partnership with Morgan Spurlock be enough to get Apple, Microsoft, Yahoo!, or Google dipping their hands in their pockets?

[Via The Hulu Blog]

Movieclips

I first covered Movieclips almost two years ago when it first launched in the U.S. with a healthy 12,000 clips. There were a few issues, such as a clunky user interface and slow loading-times, but ultimately the site showed a lot of promise.

Much has happened since then. First off, the number of clips has risen to 20,000. The site has also been improved beyond reproach and the ways and means of searching for the clip you want to see via the added meta-data have been expanded.

Unfortunately Disney is still not on board, which means Movieclips is still missing content from one of the major studios. Still, six out of seven isn’t bad. There’s also the little matter of a new round of funding worth $7 million and some even bigger news…

Movieclips On YouTube

Movieclips has landed a partnership deal with YouTube which brings its content to the Google-owned site. The hope is to provide for movies what Vevo does for music videos and Machinima does for gaming videos.

Movieclips now has an official page on YouTube and also features on the site’s Movies page. The clips are seen as an enticement to people to rent full films. Kind of like a try before you buy deal.

Movieclips has plans to expand from this point forward, both in terms of the number of clips available, and the range of content. We’re talking trailers, interviews with movie stars, and behind-the-scenes footage being added for good measure.

Conclusions

This deal is good for all parties. Movieclips gets exposure most companies would kill for, YouTube gets a premium new content-provider, and the movie studios get to control the clips being uploaded on the Web. And all three make money from sharing the revenue from adverts.

Oh, and we, as movie lovers, get to see high quality clips of the most memorable scenes from our favorite films for free. What’s not to love?

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