Hulu Plus Growth Plus

I wasn’t keen on Hulu Plus when it launched. I’m still not if I’m perfectly honest. It just doesn’t offer enough to warrant dipping your hand in your pocket. Except 1 million people disagree with me and are now subscribing to the paid portion of Hulu.

According to a Hulu Blog post, June 2011 was the best month for adding Hulu Plus subscribers, and the total of 875,000, when combined with those currently signed up for a free trial, means the 1 million milestone has been reached.

Not only that but Hulu CEO Jason Kilar claims the company is on course to make $500 million in revenue in 2011, or half a billion as he puts it. Which prompts just one question in my mind…

So Why For Sale?

If things are going so well, and in terms of growth and revenue they really are, then why is Hulu currently up for sale? Which, by all accounts, it is, even if it hasn’t officially been confirmed by the company or its current owners.

I can only assume News Corp., Walt Disney, Comcast, and Providence Equity want to cash out when the service is still growing and still capable of turning a healthy profit. Especially if the likes of Google, Microsoft, and Yahoo! get into a bidding war.

But it’s almost as though the current owners know something we don’t; that Hulu is about to stall or have its fortunes reversed by some as-yet-unknown development. A lack of new content, perhaps?

Conclusions

I’m a total layman in the field of business and big acquisitions and takeovers, so there are probably very good reasons why Hulu is on the market for a new buyer. But it seems strange to me that a healthy company heading a growing sector is being offloaded at this time.

Smart TV Sales

Two new reports from research firms show how popular smart television sets already are, and how sales are going to grow exponentially over the next five years.

DisplaySearch reports that a fifth of all television sets sold in 2010 were capable of connecting to the Internet and this this is helping germinate “a quiet revolution in TV viewing.”

Parks Associates, meanwhile, predicts that around 350 million Web-enabled devices, including smart TVs, Blu-ray players, and games consoles will have sold worldwide by 2015.

As people replace their television sets, they obviously gain the latest technology. But unlike 3D, which is being foisted upon us without any great demand, Web-enabled sets are actually wanted, with many people realizing how they could add another option to their TV viewing habits.

Too. Much. Choice.

The problem at the moment is too much choice and not enough organization or streamlining of what is on offer. As Jessi Hempel explains in this fascinating Fortune article:

“For the moment, all that promise translates into a proliferation of new boxes and services that are impossible to compare. Do I want an Internet-connected TV from Samsung or Sony, or should I just buy a separate box that hooks up to the Net, like that brick-size Logitech gadget that enables Google TV? What about the supercheap Roku box? Should I bother paying for Hulu’s new premium service or just get a Netflix subscription?”

“The result is a web TV experience that feels a bit like the Internet circa 1998, before publishing companies embraced the Net and Google arrived to help us find and instantly consume the stuff we’re looking for. What changed back then? Software, from search engines to specialized applications, helped make information more accessible — and it will do the same for entertainment.”

Never a truer word has been spoken about the development of smart TVs and online video. The sector does, at this time, feel like the Web did back in the day when it was just starting to take off. It’s exciting, yes, but it also needs making over before it becomes accessible enough for the mainstream to embrace it.

Conclusions

This leader could, of course, end up being Google. But I have a sneaking suspicion it will be a new or small company that finds itself with the right product at the right time, with everyone clambering to adopt it as the standard.

And until that happens, I’m afraid we’re all left peeing in the wind and hoping we’ve backed the right horse. Out of the dozens of them currently competing to sail past the post first.

Related Ad

Ad: Google TV Deals on eBay

Logitech 970 000001 Revue With Google TV US $94.99   Auction Ends: 27d 5h 15m Make it yours…

Sony NSZ GT1 Blu Ray Player w Google TV US $160.00   18 Bids Auction Ends: 3h 9m Make it yours…

Google Android 22 Internet TV Box HD 1080p HDMI WIFI Bluetooth 1GHz 512MB US $150.00   Auction Ends: 10h 20m Make it yours…

Google, Then Facebook?

It’s no surprise to learn that Google is top, by quite a margin, in terms of traffic referrals to video destinations included in the study. More than 50 percent of all come from Google, and that doesn’t even include YouTube, which TubeMogul hasn’t included in this research.

However, what’s more surprising is the fact that second on the list is Facebook, with 9.6 percent of all referrals coming directly from the social networking site. Facebook has leaped ahead of Yahoo!, the previous runner-up, in the last quarter.

Facebook has done amazingly well, and its ability to compete and beat the likes of Yahoo and Bing shows how social search is becoming very important. However, Google by itself beats everyone else combined.

Newspapers, Games Consoles

The full TubeMogul report includes lots of data, but apart from the Facebook result the most compelling is the news that newspapers upload more videos than broadcast, magazine, or online media properties. Though these are more likely to be short video clips, newspapers also top the number of minutes streamed.

Also gaining in this way are games consoles, with the likes of the Wii, Xbox 360, and PS3 leading in terms of average viewing time. While videos viewed on current-gen consoles are watched for an average of 2:45 minutes, videos viewed on online video sites only have an average of 2:27 minutes.

Which suggests the leanback viewing experience helps prevent people from switching off. At least for an extra 20 seconds or so.

Conclusions

This research shows the state of online video, and that state is a healthy one. Facebook is gaining a foothold in the sector at an alarming rate, and newspapers are finding success by changing from old to new media.

Cable Cord Cutting

Millions of Americans pay out thousands of dollars every years for cable services, both basic and premium. For this huge outlay of cash they receive up to 500 channels, most of which are full of crap that very few people deem worthy of watching.

The cable companies have a monopoly of sorts: you only get to watch the channels that broadcast decent programming if you also put up with, and pay for, the channels that pump out unwatchable nonsense 24/7.

There is, however, an alternative. Which is online video on demand, which puts the control back in the viewers hands. And all it takes is for that cord to be cut.

It’s Real, Accept It

There have been a few stories regarding cord cutting this year. In April, a report suggested that one in eight households would be cutting the cord during 2010. In June, Nielsen branded cord cutting nothing more than “a myth”. And in September, Verizon CEO warned cable companies not to ignore the trend as it’s very real indeed.

Now, a new survey by Wedbush Securities analyst James Dix backs up the findings of that first report from six months ago.

2,500 people were questioned: 7 percent have already given up their basic cable service, while 12 percent have given up their premium cable service. Households with annual incomes of less than $50,000 were the most likely to have cut the cord, with 8 percent having done so compared to the 3 percent of household with annual incomes of more than $100,000.

Looking to the future, a whopping 21 percent of the $50k or less group expect to cancel their basic cable service in the year ahead. Interestingly, only 2 percent of those who have already cut the cord also canceled their Internet connection.

Conclusions

The facts are clear: cord cutting is real and is happening right now. And with people being averse to cutting their connection to the Web it is this path most will head down in order to replace their entertainment needs. Legally or otherwise.

It’s time for the cable companies to lift their heads out of the sand and actually pay attention to what is happening. Then maybe we can all agree on legitimate ways for viewers to obtain the services they want, how they want them, and for a fair price.

[ Via The New York Post]

Metacafe Survey

Every single piece of analysis conducted over the last few years has suggested online video is growing, and in a supremely fast and aggressive manner. And a new survey on behalf of Metacafe continues this trend.

Regular Viewing Habits

Viewing online video has become a strong, regular occurrence for many people. 13 percent of respondents watch every day, with 50 percent watching every week. 60 percent watch every month, with 76 percent of those questioned watching online video at all. All of these figures are up from 2009.

Of the 50 percent who watch online video every week, the average time spent doing so is 4.6 hours, which equates to around 40 minutes per day. This increase in the occurrence and time spent watching online video is unsurprisingly being driven by the young.

Online Video Vs. TV

38 percent of those questioned are interested or very interested in connecting their computer to a TV in order to view online video on a big screen. Which is good news for the forthcoming connected TV platforms such as Google TV and YouView.

However, interestingly these same people state that online video isn’t, on the whole, interfering with their regular viewing on broadcast TV. Which is good news for the big networks which seem to be getting increasingly worried about their market being tempered by the growth of online video.

I think it will eventually happen, but maybe not as soon as we had thought it would.

Online Video Advertising

As the move to the Web does take place, advertising is likely to increase. But video sites have to be careful not to go over the top.

The Metacafe survey suggests that most people are currently happy with the level of online video ads, but it wouldn’t take much for this situation to change. I don’t think viewers ever want to see TV levels of ads being played before, during, and after online video content.

Conclusions

The online video sector is obviously is a healthy state at the moment, and only likely to get even healthier.

[Via NewTeeVee]

ComScore May 2010

I think it’s safe to say online video is established. The new ComScore statistics for online video viewers show that 183 million people in the U.S watched online video during the month of May. That’s 84.8 percent of all Internet users in the U.S.

Vevo rose once again, proving how popular music videos are on the Web. While Facebook, becoming an increasingly important player in the world of online video, broke into the top 10 content properties with 245 million videos viewed on the site.

The two most interesting stories of the month, however, involve YouTube and Hulu.

YouTube All-Time High

Sitting pretty at the top of the stats as always is YouTube. But May 2010 was a particularly good month for the Google-owned site (and June’s going well so far too).

YouTube’s 14.6 billion videos viewed is a new all-time high for the site. And with those videos being watched by 144.1 million viewers, the videos-per-viewer threshold of 100 has also been broken. Each YouTube user watched an average of 101.2 videos during May.

YouTube is head and shoulders above everyone else in terms of every stat you wish to mention, and I don’t see that changing any time soon.

Hulu Viewers Flatlining

Things aren’t looking so rosy for Hulu. Sure, it came in second behind YouTube, and video views (of 1.2 billion) are up on April. But, as noted by Business Insider, the number of viewers has flatlined for around a year.

This means each Hulu user is watching more videos, but the service is not attracting any new users. Which must be rather worrying for joint owners NBC, Fox, and ABC.

Maybe this is the real reason the subscription package supposedly named Hulu Plus is on the way. Loyal users are likely to sign up and pay for their Hulu addiction, while the free service will still be there to (hopefully) attract new users.

Cutting The Cord

Cutting the cord is essentially the act of canceling your cable TV subscription in an effort to save money. And with the average cable bill coming to more than $100 in the U.S., canceling it is guaranteed to save money.

People who cut the cord are increasingly turning to online video to fill that new void in their life. And one-in-eight people are expected to either eliminate or scale back their TV services during 2010. Which would equate to more than 10 million households.

Nielsen Has Doubts

The research company Nielsen doubts these figures, and has data to back up its claims in an article titled ‘Busting The Cord-Cutting Myth’.

Nielsen claims that the number of households signing up for both broadband and cable service together has increased massively over the past two years, especially compared to the number of households just signing up for broadband.

The company also claims the shift to online video is limited to certain demographics, with young people, college graduates, and lower-to-middle income households dominating the cord-cutters.

A Growing Trend

OK, so I also think these numbers are a little high, but as it includes people scaling back rather than cutting the cord completely, they’re believable. And more tellingly, they show a trend just now beginning to form.

Maybe cord-cutting isn’t yet sweeping the world, but there are definite signs it is about to. The number of people watching online video is growing year-on-year, and as those number increase, TV networks are responding.

As can be seen by ABC’s increasing of its number of online ads, broadcast TV is serious about the Web; it’s just a case of getting all the elements in place so that the viewers tune in, and the company makes some kind of profit, whether via paid options (Hulu) or advertising.

Conclusions

As more and more premium content is licensed for the Web, more and more people will cut the cord. I firmly believe that is the case, and I think the data will show such a pattern emerging over the next few years.

Unfortunately that doesn’t appear to be the situation at the moment, with these factors playing a role in viewing habits.

Online Video

Online video comes in many forms. There is YouTube, with its mix of UGC and premium content. There are catchup TV services such as Hulu and the BBC iPlayer. There is the option to buy or rent shows from various source, notably Apple iTunes.

Then there are the connected TV services starting to show up, with Project Canvas and Google TV two of the biggest and boldest offerings.

However, the one thing all of these forms of online video have in common is the need for a Broadband Internet connection. And the faster it is, the better, as it means streaming is more fluid, and downloads less time-consuming.

The State Of Online Video

The importance of a decent broadband connection can be seen in the results of The State Of Online Video report from Pew Internet. 1,005 adults aged over 18 were surveyed and the results are pretty telling.

69 percent of Internet users (52 percent of the U.S. population as a whole) have watched online video in some form or another. However, the demographics show that age, income, and education influence the figures.

84 percent of those aged 18-29 have watched online video, between 30 and 49 it drops to 74 percent, and aged 50 and over it drops to just 53 percent.

In terms of income, it’s 78 percent of people with a combined household income over $75,000, 64 percent over $50,000, and just 46 percent under $50,000.

In terms of education, 75 percent of those who have either graduated or been to college have watched online video, while just 57 percent of high school graduates or drop-outs have done so.

Conclusions

I don’t think there’s much of a mystery here. Those with fast Broadband connections – likely to be younger, wealthier, and more educated – are the biggest consumers of online video.

To remedy this, Broadband is going to have to become more widely available, and cheaper. Which it surely will over the next few years.

[Via NewTeeVee]

Online Video Infancy

It’s easy to forget how young online video still is. YouTube has only been with us for five years. While Hulu and the BBC iPlayer (the best catchup services either side of the Atlantic) have arrived on the scene even more recently.

This means the industry as a whole is nothing more than an infant, still sucking at the teat of Hollywood and broadcast television. But things are changing, with a definite feeling that online video is growing up and maturing just a little bit.

The Growing Medium

A recent YouGov poll commissioned by RealNetworks shows just how much online video has and is growing in popularity.

The results show that 46 percent of 18 to 25-year-olds now spend as much time watching online video as they do watching traditional TV. And 32 percent class computers as their preferred method for viewing content on.

However, move up a generation and things change. Just 20 percent of 36 to 45-year-olds spend as much time watching online video as they do watching traditional TV. And traditional TV is still by far the preferred medium.

Marili ‘t Hooft-Bolle from RealNetworks said:

“The research data confirms a trend that the industry has seen for some time now but the speed of change is surprising, even for those of us directly involved in online video. It’s still early days for online video but as each year passes the quality and breadth of online video content increases dramatically and the tools to access, manage, share and consume the content grow ever more sophisticated.”

“The ‘one-to-many’ broadcast mode of the traditional television platform is a model that serves some well but it’s clear that the one-to-one, on-demand online environment is taking over. Added to that, we now have video-capable mobile devices and pent up demand amongst their users. Online video is already a compelling experience and with the right tools, mobile video can also be easy and affordable.”

Mobile Video

Mobile video is mentioned as there is a huge gap between those who have an appetite for it and those who actually view it. 70 percent of respondents want to view video on mobile devices, but only 10 percent actually watch more than 10 minutes a week.

The problem (perceived or real) is that mobile video is both too expensive and too complex and time-consuming. Perhaps the Apple iPad and the new range of tablet devices being released will change this.

Conclusions

Online video is clearly growing, and at quite a rate. And with younger generations embracing the medium willingly, it looks as though the future is bright. All we need now is for the raft of connected TV platforms such as Google TV and Project Canvas to become reality and I think we’ll be all set for a revolution.

[Via Digital Spy]

Online Video

As much as those of us who write about online video would like to believe it is an ubiquitous and essential part of people’s lives, that isn’t quite the case yet. At least not a mainstream way, and when compared to traditional broadcast television.

Sure, YouTube is known and used the world over, but the Google site’s content is usually short and sweet. Which is why U.S. viewers currently only watch an average of 22 minutes of online video a week. Which compares to 30 hours of broadcast TV.

Still, things are changing. Slowly for now, but possibly speeding up in the near future.

In The Year 2020

According to a TDG report titled The Economics of Over-the-Top TV Delivery: How Television Networks Can Shift to Online Content Delivery, the next decade will see online video and broadcast TV change places.

TDG believes online viewing will rise to around two hours a day, all at the expense of broadcast TV. And the main reason for this will be the blurring of the edges created by connected TV platforms such as Google TV, Project Canvas, and all the others.

Connected TV Platforms

There are a multitude of connected TV platforms on the way. Including the newly-unveiled Google TV, the BBC’s Project Canvas, DivX TV, Vudu, and Boxee. And it’s estimated that half of all new TV sets sold in 2013 will be capable of connecting to the Internet, an essential element for these platforms to succeed.

With this in mind, it would seem highly likely that it’s these platforms that are going to drive online video into the mainstream. A fair proportion of people will buy a new TV over the next ten years, and they will likely connect their TVs to the Web in order to access online video.

As TDG explains, there will then be a blurring of the lines, with the idea of broadcast TV and online video being somewhat merged. In essence, you’ll be watching content on the TV in your living room, regardless of its origin.

Conclusions

The ultimate point of this report is to show how broadcasters can prevent being sidelined and left out of pocket by the shift to online video. In essence, they need to embrace the new medium, testing and eventually settling on a way of drawing revenue from it.

[Via NewTeeVee]