BBC iPlayer

The BBC iPlayer has shone like a beacon since its full launch almost two years ago in December 2007. The catch-up TV service lead the way not only in the U.K. but around the world, with Hulu being its big-name opposite in the U.S.

Rather than rest on its laurels, the BBC carried on improving the service despite already providing millions of streams to viewers. The current iteration of the iPlayer service is more user-friendly and easy-to-use than any Web application or online video site.

RTS Judges’ Award

Last week saw the iPlayer praised to the highest degree when the BBC won the Judges’ Award at the 2009 Royal Television Society Innovation Awards. Jeff Henry, chair of the awards, said:

“There have been great British innovations – the steam engine, the gas turbine, radio waves, jet engines and arguably video games. Even the inventors of Viagra. But seriously, the role of honour of great British innovation now has a proud new addition,”

“For all the hard work, commitment and belief shown by the BBC and its staff, with particular recognition of Anthony Rose’s contribution, the RTS Innovation Awards proudly presents the Judges Award to the BBC iPlayer, proving that it is not just a gift for Christmas, but for life.”

Being placed alongside such great inventions as the steam engine and radio waves is pretty unbelievable. But the iPlayer may well prove to be as innovative and important as those inventions in years to come for what it represents – a world where online television is the norm rather than niche.

IPlayer Wii Channel

The BBC topped off an already great week by unveiling its plans to launch a dedicated channel on the Nintendo Wii games console. The service has been available on the console for a while through the Web browser, but a dedicated channel should be much more accessible and user-friendly.

All Wii owners in the U.K. with a Broadband connection will be able to use the Wii iPlayer. From Nov. 18, the BBC iPlayer can be downloaded for free from the console’s online shop.

Conclusions

The iPlayer is a fantastic service that continues to improve and be added to more devices in order to gain viewers. And the RTS award for innovation is wholly deserved.

The only thing that the BBC now needs to do is launch the iPlayer internationally. Whether that’ll ever happen, and whether if it did it would be free, are questions that I personally cannot answer. But I can hope.

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Roku and Netflix

Roku started out relying on Netflix’ ‘Watch Instantly’ streaming service as the be all and end all of its content offering to buyers of the $99 box. But since launching in May 2008, other content channels have been added, including Amazon Video-on-Demand and MLB TV.

Netflix soon moved on to a host of other set-top boxes and devices, including the Xbox 360, Internet-enabled televisions, and hybrid Blu-ray players. And it’s now adding a new one to its line-up in the shape of the Playstation 3.

Netflix On PS3

Netflix announced it would soon be available on the PS3 console the day after I speculated as much. The news comes right on the back of the company’s latest earnings report where more platforms were promised and a move into international territories was also teased for the future.

Netflix has until now had an exclusive deal with Microsoft but the move to the PS3 brings that to an abrupt end. From November, PS3 owners with a Netflix subscription will be able to stream Netflix’ ‘Watch Instantly’ through their Sony console.

Roku Line-Up Increased

Roku, meanwhile, is busy trying to persuade more people to buy a Roku box.

It’s introducing two new boxes in an effort to increase its potential demographic. According to CNET, the current box will be renamed the Roku HD Player, with the Roku HD XR Player priced at $130 boasting a faster Wi-Fi connection and a USB port. For those on a budget, the Roku SD Player, with no HDMI option, will retail for just $80.

Roku is also launching the ‘Roku Channel Store’ next month which will see more of both free and paid-for options available. According to Ars Technica, these will include Revision3, TWiT TV, Mediafly, Motionbox, and blip.tv.

Conclusions

Netflix surely cannot fail with its roll-out to other devices, and the PS3 is a great one with its huge installed user-base. While Roku seems to finally be getting its act together after a slow start, with a wider range of boxes to suit all tastes and budgets, and a new channel line-up.

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MySpace Music is now carrying music videos from all its partners – the big four major record labels and a host of independents. This is setting up a mighty bloodbath between MySpace and Vevo, the YouTube-backed music video-only site launching soon.

Music Video War

To say music videos are a popular part of the Web is an understatement. The chance to choose which videos to watch and when, rather than being beholden to MTV and other music channels, their playlists, and their “lifestyle” programming, is clearly appealing.

YouTube has realized music videos are such a big part of online video that it’s backing Vevo, the Hulu-for-music due to launch soon. There is also Muzu.tv, Vidzone on the PS3, and a number of other music video ventures in the mix.

MySpace Music Plus

MySpace Music has been a part of the social networking site for a couple of years but it really only became a big player last year when an overhaul saw backing by the major record labels and the streaming of full songs and even albums directly on the site.

But until now video hasn’t been a part of the equation.

According to CNET, MySpace CEO Owen Van Natta announced the news at the Web 2.0 Summit in San Francisco earlier today.

MySpace Music Videos

A new MySpace Music video portal will contain thousands of music videos. Users will be able to browse by A-Z listings or follow recommendations from MySpace or their friends.

Importantly for MySpace the music videos will include links to Amazon and iTunes where users can buy the featured tracks. There will also be pre-roll, post-roll, and overlay ads on the music videos, ensuring this is a profitable venture for the site (and the labels).

Competition

This is very much the same model expected to be used on Vevo, but MySpace has got in there first. The competition between the two, alongside less well-known entities such as Vidzone and Muzu.tv, is likely to be healthy but I’m guessing there is enough room for all-comers in this sector of online video.

YouTube and Channel 4

YouTube has for a while now been moving away from user-generated content and trying to entice broadcasters into providing content via the site. It’s had mixed success but it has now nabbed a major broadcaster in the form of Channel 4.

Channel 4 was the first UK broadcaster to launch a video on demand service, doing so in 2006. But 4oD failed to get the attention it deserved and the BBC iPlayer snatched the limelight instead. 4oD has gone through some major changes since then and now rivals the iPlayer for user experience.

Deal or No Deal

However, Channel 4 is keen to have its programming reach a wider online audience, and so has teamed up with YouTube. A three-year deal between the two should do just that, and provide revenue as well.

For its part YouTube will gain full-length TV shows and also take a cut of the revenue. Although the financial terms of the deal have not been made public, YouTube is expected to take a 30 percent cut of all revenue generated by the Channel 4 programming.

4oD And…

4oD will continue to provide the premium catch-up service it does currently, but YouTube will gain 50 hours of current programming soon after it airs on Channel 4 as well as around 3,000 hours of archived programming.

This includes shows such as Ramsay’s Kitchen Nightmares, Brass Eye, Skins, Teachers, Peep Show, and the Derren Brown Specials which recently had everyone in the UK talking.

Channel 4 Speaks

Channel 4 said:

“Channel 4 was the first broadcaster anywhere in the world to make all its commissioned content available online and we’ve consistently pioneered in this field. This strategic partnership is another important milestone for us and we’re delighted to be combining the power of the ‘4’ brand and the appeal of our content with YouTube’s unrivaled reach and reputation online.”

“Making our programmes directly accessible to YouTube’s 20 million UK users will financially benefit both Channel 4 and our independent production partners and help bolster our investment in quality British content. It demonstrates our ability to strike dynamic commercial partnerships to help underpin our future as a commercially funded, not-for-profit multi-platform public service network.”

Conclusions

Unfortunately, this deal only applies in the UK. And although there are 20 million YouTube users in the UK it would have been nice to see the rest of the world welcomed to the party. Those international rights licensing agreements have got in the way yet again.

But in every other way this seems a great deal. Both Channel 4 and YouTube gain from it, and the real winners are viewers who now get to watch premium quality programming online, on demand, and for free.

Three Years Ago Today

It seems like just yesterday that the co-founders of YouTube sold the site to Google. In fact, it was a full three years ago that Google decided to ante up $1.65 billion for the fledgling online video site.

We found out just yesterday that Google CEO Eric Schmidt thought that price tag was around $1 billion out, with the site actually worth more like $600 million. But Google wanted the site so badly it was willing to pay a premium for it.

We’ve Been Acquired

Chad Hurley, now CEO of YouTube under Google’s reign, took time out today to celebrate the three year anniversary. In a blog post which referenced the video above (which shows Hurley and Chen minutes after agreeing the acquisition) he spoke of the past, present, and future of YouTube.

One Billion Views A Day

He also announced that YouTube now serves up “well over a billion views a day,” a quite astounding figure that even outdoes most estimates. There are few sites on the Web with these sorts of numbers, and it’s amazing that YouTube is now one of them.

YouTube now carries a new logo (as above) celebrating the one billion views a day. As Mashable points out, that figure equates to “at least 11,574 views per second, 694,444 views per minute, and 41,666,667 views per hour.”

Which shows why Google needed to get involved in the first place because it’s one of the few companies that could handle delivering that amount of data.

Revenue Vs. Viewers

There is, of course, one thing left out of these celebratory announcements, and that is any talk of revenue. Hurley and Chen are now focused on making YouTube as good a site as it possibly can be. But Google has to be more focused on turning it into a moneymaking business.

And that still isn’t yet the case, although Google has been making progress in clawing back some of its investment. Whether it’ll ever actually make its $1.65 billion back is another matter.

YouTube Is Go

In February of 2005, a site popped up on the Internet that would cause a massive shift in how video is served on the Web. It would ease the process, and provide a platform for video of all kinds, mostly user-generated content.

Its name, if you hadn’t already guessed, was YouTube. And it has grown in the last four years to become one of the biggest and most popular sites on the Web, with millions of people from all corners of the world visiting and using the site on a daily basis.

Google Come Sniffing

In November 2006 when Google decided to buy the site, it was only a relatively small success, and it had a bunch of problems. The main one, of course, was the amount of copyrighted material turning up on the site. Viacom got so annoyed with this that it’s suing for $1 billion.

Google paid $1.65 billion for YouTube, a figure which made most people do a double take. Many thought the sale would start the Web 2.0 bubble, and it kind of did, but no site has sold for quite that amount since, especially one which was still in its infancy.

Schmidt Comes Clean

Now it has emerged that even Google CEO Eric Schmidt thought YouTube was overpriced at $1.65 billion. In fact, he considered the site to be worth in the region of between $600 million and $700 million. Meaning Google paid around $1 billion more than it should have.

According to CNET, Schmidt revealed his thoughts on the matter in May during a deposition he gave as part of the Viacom lawsuit. He said:

“I believe YouTube was worth somewhere around $600 million to $700 million.”

“This is a company with very little revenue, growing quickly with user adoption, growing much faster than Google Video, which was the product that Google had. And they had indicated to us that they would be sold, and we believed that there would be a competing offer–because of who Google was–paying much more than they were worth.”

“In the deal dynamics, the price, remember, is not set by my judgment or by financial model or discounted cash flow. It’s set by what people are willing to pay. And we ultimately concluded that $1.65 billion included a premium for moving quickly and making sure that we could participate in the user success in YouTube.”

Conclusions

Clearly Google wanted YouTube and didn’t want anyone else getting hold of it. And they were willing to pay a premium for the site. Which they definitely did. But has that price now justified itself?

In terms of revenue, no, although Google is still experimenting with options for making money from YouTube, and so it could end up paying out. But in terms of getting millions of people visiting a Google branded site every day, yes, very much so.

YouTube and Warner Music Group have now forged a new deal which will see WMG having its own branded player and able to sell its own advertising inventory.

Warner Walks Away

It was late December 2008 when Warners decided to pull all its music videos from YouTube. It happened due to a breakdown in communications while the two parties were trying to thrash out a new licensing deal. The ones that had been in place for years were coming to an end.

As always, it came down to money. The Warner Music Group wanted a bigger slice of the revenue pie and YouTube was unwilling to deliver. Regardless of who was right and wrong, the incident helped no one in the end.

The Vevo Factor

Talks have continued on since then, and a deal has been rumored for a few months. In the meantime, YouTube has inked new deals with the other three major record labels, Sony, Universal, and EMI.

The last nine months has also brought news of a new venture called Vevo, which is best described as a Hulu for music videos. Vevo will see many music videos disappear from YouTube only to reappear on a separate, YouTube-backed site.

Warner Welcomed Back

Yesterday saw YouTube finally confirm it had settled the argument and signed a new deal with WMG. All the record label’s many music videos, including by artists such as Green Day, REM, Madonna, U2, Red Hot Chili Peppers, and Kid Rock will make their way back on to the Google-owned site.

Warner has managed to secure an arguably better deal than the other record labels by holding out for better terms. Details are still a little sketchy at this point but there will be a Warner Music Group branded player and the company will be able to sell its own advertising inventory.

YouTube will still take a cut but the margins are clearly going to be in Warners’ favor.

Conclusions

This is good news for all parties, as YouTube gets those all-important music videos back and WMG gets another revenue stream back. Viewers, of course, also benefit as they are no longer denied the chance to watch their favorite music videos.

The only question left is where Vevo sits in all this. While the other labels are moving away from YouTube to the new site, Warner now looks to be entrenched on it.

Netflix CEO Reed Hastings has now confirmed that an iPhone app will appear one day, but not before Netflix finds its way onto all games consoles, Blu-ray players, and Internet-enabled televisions.

From Mail To The Web

Netflix was formed in 1997 as a service delivering DVDs via mail to consumers across the United States. But its name suggests that even then its founder and CEO, Reed Hastings, was envisioning an Internet future for the company.

And so it came to pass. Netflix now enables its subscribers to watch over 17,000 movies and episodes of television series via their computers or one of a number of Internet-enabled devices and the ‘Watch Instantly’ service.

Netflix Devices

Netflix ‘Watch Instantly’ is available on a range of different devices. First came the Roku box, developed by a former Netflix employee, which has now added Amazon and other streaming partners to its line-up.

This was promptly followed by a hybrid streaming/Blu-ray player, a range of Internet-enabled televisions, and the Xbox 360. But while that little lot are an impressive set of devices, there are clearly many more out there.

Netflix iPhone App?

One device many would like to see Netflix on is the Apple iPhone. And it is going to happen, just not quite yet. Speaking to Reuters recently, Hastings said:

“[A partnership with Apple is] something that’s likely to come over time. But nothing in the short term. (With) movie watching, we are not focused on mobile yet, but (instead) on the TV, on Blu-ray and on the video game consoles. We will get to mobile eventually, including the iPhone.”

“Eventually we want to be on all the game consoles, all the Blu-ray players, all the Internet TVs. So we are working in parallel with all of those efforts. Currently our Xbox deal is exclusive and we haven’t characterized it more than that.”

Big Ambitions

Hastings clearly has big ambitions for Netflix, with a desire to get the ‘Watch Instantly’ service on as many devices as is humanly possible over the next few years.

The PS3 and Wii should probably be the primary goal because of the potential of games consoles for streaming Web TV content, but that exclusive Xbox deal with Microsoft is obviously a sticking point.

Conclusions

Hopefully, this move to more devices will coincide with a move outside of the States and the option to subscribe purely to the Web streaming service rather than having it included as a free add-on to the DVDs via mail core business.

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Music Videos On YouTube

Music videos are an integral part of YouTube. A quick glance at the latest viral video chart will tell you this much. This would seem to be a win-win situation for the Google-owned site, the record labels, and the artists involved. But that hasn’t always appeared to be the case.

Disharmony

On a large scale, Warner Bros. saw fit to remove its content from the site at the end of 2008 due to a breakdown in talks over a new licensing agreement.

While on a smaller scale, record producer Pete Waterman bitterly complained about the tiny amount of money he’d made from Rick Astley’s Never Gonna Give You Up, given a new lease of life and millions of page views thanks to the Rickrolling phenomenon.

PRS & YouTube Fall Out

PRS for Music, a U.K. specific organization which collects royalties for labels and artists, fell out with YouTube in March 2009. While in the process of renegotiating a licensing deal, YouTube suddenly removed all music videos covered by PRS off the site.

The reasons given were that PRS was demanding too much money and refusing to reveal which songs were actually covered. PRS for Music told a different story but suffice to say it was British Web users who ended up losing out.

PRS & YouTube Make Up

The issue has now been resolved, with MediaMemo reporting that Google and PRS had reached an agreement. Music videos will now be restored to YouTube and any new ones made since talks broke down will also be added.

However, it seems that rather than stick to the tried and tested pay-per-view agreement, YouTube has paid a lump sum to PRS which covers all music videos until June 2012. Neither side would reveal the amount of money agreed upon and all involved have reportedly had to sign a Non-Disclosure Agreement (NDA).

Conclusions

This is good for British Web users who have been denied the right to watch music videos on YouTube for six months. However, we don’t actually know which side capitulated and decided this win-win situation was too good to lose.

YouTube Revenue

I don’t think anyone can legitimately claim that YouTube isn’t a successful site, although Time magazine gave it a damn good go. With millions of users around the world and a brand name that would be the first mentioned by the vast majority when asked about online video, YouTube is as big a hit as some of its viral videos.

However, its current business model doesn’t seem to be bearing as much fruit as Google clearly thought it could when it paid $1.65 billion for the site. With the revenue from advertising almost wholly being consumed by bandwidth and associated costs, YouTube isn’t bringing in the big money as of yet.

Evolving YouTube

YouTube has made efforts to evolve in recent months, especially in trying to bring more long-form content to the site. Although it is still actively seeking short user-generated clips, it’s also been busy persuading movie studios and media companies to place content on the site, with only a modicum of success.

Now, according to The New York Times, YouTube could be about to make to biggest leap of all – starting to sell content as well as offering it for free and paying for it from advertising. Sony Pictures, Warner Bros., and Lionsgate are all thought to be in early talks to bring movie content to the site.

Streaming Movie Rentals

Talks are only at an early stage but if fruitful then movies from the three movie studios could soon be available to rent from YouTube. Older titles may be available for free and ad-supported while new films will be offered for around the $3.99 mark that Apple iTunes has made the standard.

Any such deal would make sense for both parties. YouTube would gain a valuable revenue stream and a chance to change its business model for good. While the movie studios are already looking to make content available online through a number of different legal outlets to stop the slide in DVD sales and halt the rise of illegal downloading.

Conclusions

At this point there is no guarantee this will actually happen but it seems likely. Consumers have shown a willingness to purchase streaming content online, as Apple and Amazon attest. And YouTube would be mad not to try and utilize its huge user base to generate more revenue.

So, everyone is a winner, apart from Epix, which is trying to set itself up as a kind of Hulu for movies. YouTube could beat it to the punch.

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