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The (D)Evolution Of Television

When television was first invented and released to the public, watching programming on it was an event. Often, neighbors would visit just to watch whatever was being shown on the box in the living room.

Back then, of course, there wasn’t exactly much to watch. Now, as television has evolved, the amount of programming has increased, and with that the number of people watching each show has decreased.

Couple that with our busier lives and the occurrence of people watching television together has reduced dramatically. But it’s not from a lack of desire.

Social Web TV

Thankfully, the Web is helping bring this kind of social viewing back. According to The New York Times, social networks such as Facebook and Twitter, video chatting services like Skype, specially created Web sites, and streaming video locales such as Justin.tv are all assisting in a new interpretation of social viewing.

Which is good news, but it could be ever better. Surely online video is the perfect vehicle for bringing the idea of social TV viewing back to the mainstream.

Social Viewing Examples

There are a few examples of attempts to make social viewing the absolute center of the online video experience.

In 2008, CBS created its Social Viewing Rooms, virtual living rooms where people could sit around watching their favorite shows together, and commenting and discussing them as they played out.

And then last year saw Watchitoo launch with the promise of allowing groups of people to watch YouTube videos together in an informal setting on the Internet.

Conclusions

The problem is that none of these efforts have truly solved the problem or caught on in a big way. Which is a shame as humans are naturally social animals and need interaction while partaking in most activities. And watching TV is no exception.

The best examples of social TV viewing to date are the CNN broadcasts coupled with Facebook updates. But I get the feeling more is needed and more is on its way. The question is who will wrestle social TV viewing into submission first. My money is on Hulu.

From Geeks To The Mainstream

When I was growing up, video games and gaming were the domain of the geeky. And I was one of the nerds involved. But it’s an activity that has changed massively in recent times.

The release of the PS2 and then the Wii brought gaming into the mainstream in a big way, with new people of all ages casually dipping their toes into the water.

Casual Web Gaming

And the Web has sped the process up, with online gaming becoming a huge business. There are free MMOs which make money from advertising and micro-transactions, and games such as Farmville and Mafia Wars which are clogging up Facebook in a big way.

Most Web games are Flash-based, but online video hasn’t yet been properly utilized. But that could be all about to change, with Google set to bring interactive games to YouTube.

YouTube Video Gaming

As unearthed by BNET, Google filed a patent called ‘Web-Based System for Generation of Interactive Games Based on Digital Videos’ in February 2009. Details of the patent application were only recently revealed.

The patent concerns:

“The collaborative generation of interactive features for digital videos, and in particular to interactive video annotations enabling control of video playback locations and creation of interactive games.”

Which doesn’t sound like much, but which could be the beginnings of a whole new strand of online video: interactive gaming. By using text box annotations which pause a video and offer a link to other videos or parts of the site, YouTube could be the home of video gaming in the truest sense of the term.

This has already been done in a very simple sense, with this Easter Egg Hunt video a good example of the genre as it is. But Google probably has more complicated and involved uses in mind.

Conclusions

Why would Google want to get into interactive gaming? Because it’s a hugely popular part of the Web which opens up the possibility for interactive advertising opportunities. Viral video marketing is now as common as muck, but this could be the next evolution of it.

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Hulu On The Rise

Hulu has had a fairly rapid rise from being an also-ran to a competitor. The American public – who after all are the only ones allowed to access the service – has taken to it well enough for it to now be considered mainstream.

2009 has seen Hulu rise to the number two spot for video views in the U.S. and then cement that position with impressive growth. OK, so it’s a long way behind YouTube in number one but the chances of the Google-owned site being caught are zero.

Hulu In 2009

In a blog post designed to wrap up 2009 and look forward to 2010, Hulu CEO Jason Kilar details some usage stats, some of which are more interesting than others.

The number of people using Hulu monthly grew to 43 million over the course of 2009, which is a rise of 95 percent. However, the big rise occurred at the beginning of the year, with 41.5 million viewers tuning in in April. Since then growth has stalled apart from a spurt in October.

Monthly streams have grown to 924 million, a 307 percent increase from last year. This is impressive, as it indicates that viewers are watching more streams each per month. Those who use Hulu clearly love it.

Content has more than doubled, with content partners having increased from 130 to 200, with Disney/ABC being the biggest catch. And the number of advertisers has swelled from 166 to 408.

And In 2010…

2009 was certainly a good year for Hulu. However, 2010 brings with it new challenges.

There’s a big chance Hulu will (at least partly) switch to being a paid-for service. All the signs are pointing towards it, with three execs involved with Hulu having intimated as much. Advertising revenue may have increased but obviously not enough for those at the top.

Then there is the international roll-out which has also been hinted at very strongly. The U.K. was/is meant to be the first port of call for the company but no concrete plans have yet emerged to that end.

Conclusions

I have my doubts whether 2010 will prove to be as good a year for Hulu as 2009 was. Any move towards requiring subscriptions will see viewers abandon the service, and all the good work of the past two years will be lost.

Then there is the chances of the competition outdoing Hulu at its own game, with YouTube and Apple both eyeing opportunities to offer premium programming, for a price.

Netflix The Player

Netflix has, partly by accident and partly by design, put itself in a great position to be the premier choice for video streaming.

Its core business is still DVD rentals by-mail, but its ‘Watch Instantly’ feature, which started as nothing more than an additional draw for would-be subscribers, could provide an assured future for the company.

Indeed, it could make the company an attractive acquisition target for big players such as Google and Amazon over the next few years.

Watch Instantly

Netflix’ ‘Watch Instantly’ is available on a range of devices, from the computer, obviously, to games consoles such as the PS3 and Xbox 360, the Roku box, and TVs and Blu-ray players.

Netflix has already started to push the streaming side of its business more strongly, and subscriptions that offer streaming only, with the DVD-by-mail option removed, could be close to reality.

Acquisition Target

According to Video Business, this makes Netflix a possible acquisition target. With a growing customer base (up 28 percent over the past year) and an impressive customer retention rate, both Google and Amazon could come sniffing around.

In a note to investors recently, Susquehanna Financial Group analyst Marianne Wolk wrote:

“Netflix has a video offering that users love. We see a multi-year window of opportunity for Netflix to build a larger, more significant presence in the digital video market.”

Hollywood Spanner(s)

There is one possible spanner in the works. For Netflix to truly become a streaming video behemoth it’s reliant on consistently fresh content from Hollywood movie studios. And that is far from assured.

Netflix Chief Content Officer Ted Sarandos told Bloomberg:

“We have to fight against their fear that we’ll destroy the ecosystem. We’re not destroying anything. We’re creating a new opportunity.”

This is patently true, because whether the major movie studios like it or not the world is going digital. If it fails to embrace those companies making businesses from streaming then it only opens the door for piracy to reign supreme instead. And then it won’t see a penny.

BBC iPlayer

The BBC launched the iPlayer on Christmas Day 2007 after six months in beta. In that short time, the iPlayer had already been improved substantially, with streaming options added as well as download options, and operating systems other than Windows supported.

Since then, the iPlayer has grown in leaps and bounds.

This year saw a semi-relaunch with downloads for Mac and Linux users, and HD content added to the already impressive line-up of content. The iPlayer also migrated to a number of other devices, including the PS3, the Wii, and the iPhone.

The BBC has marked the iPlayer’s second birthday by releasing detailed stats for the service in 2009.

Most Watched Shows

Top Gear takes the crown, with the top two spots on the list of the most-watched shows. Episode 1 of Series 13 was streamed an impressive 1.6 million times, with Episode 1 of Series 14 managing 1.3 million streams.

Other notables include Nick Griffin’s appearance on Question Time, David Attenborough’s Life, and the first episode of David Tennant’s last story arc as Doctor Who.

Devices and Viewing Times

The iPlayer is now accessible on more than 20 devices. Computers are still the mainstay, accounting for 86 percent of requests. However, requests via the Wii and mobile devices have both risen in recent months.

Requests from iPhone users accounted for around seven percent of the total in October, with ‘iPlayer on Mobile’ being most popular late on weekday evenings and in the early morning on weekends. Which suggests a lot of people watch iPlayer in bed.

Conclusions

2009 has been the best year yet for the iPlayer, with streaming figures hitting close to 90 million in November. Whether the BBC can top this in 2010 while still improving the service remains to be seen. But as an avid user I certainly hope so.

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Canvas Emerges

Project Canvas emerged in the aftermath of Project Kangaroo, which the Competition Commission shuttered after complaints from Rupert Murdoch’s BSkyB and Virgin Media about the possibility of it creating a monopoly.

The BBC moved on to Project Canvas, a more ambitious undertaking, and one that has also been the subject of criticism from BSkyB and Virgin Media, the largest satellite and cable operators in the U.K.

But no matter, as Project Canvas has now cleared the first hurdle on its path to becoming reality.

BBC Trust Approval

The BBC Trust is the body which governs the BBC and everything it does. This is needed because the BBC is a publicly-funded corporation rather than a private, commercial company.

At the end of November it emerged that Project Canvas could be delayed until 2011 due to the notoriously laborious red tape at the BBC. But that now looks like being a pessimistic timescale as the BBC Trust has approved Canvas after nine months of consultation and review.

Proposed Conditions

The BBC Trust’s approval is merely a preliminary one at this stage. It is now holding a second round of consultation until February, and has set some conditions on the BBC’s participation in the venture.

BBC News reports the following conditions as having been proposed:

• The core technical specification must be published well in advance to allow manufacturers to adapt to the Canvas standard.

• Other content providers must have access to the platform.

• Any quality standards for internet service providers must be applied on a fair, reasonable and non-discriminatory basis.

• A Trust review, 12 months after its launch, will assess the effects Canvas has on the partner’s incentives to syndicate their content to other platforms.

• The platform must remain accessible without a subscription.

• The BBC must return for further approval if costs exceed those projected by more than 20% in any one year.

• The BBC must report on whether the proposed accessibility features, such as audio description, have been incorporated. The Trust will review the signposting of content and parental controls.

Conclusions

While this doesn’t mean Project Canvas will definitely see the light of day, it makes it much more likely. And that could mean Canvas set-top boxes on sales by this time next year.

The proposed cost is £200 and for that price it would seem to be a bargain, enabling a whole range of online TV offerings to be watched in the living room.

Physical to Digital

The move from physical media to digital is happening rather slowly. In fact, it could be classed as a lurch currently. However, there will come a point when it speeds up and becomes all-consuming, with more companies jumping on the bandwagon rather than risk being left behind.

Netflix looks like being one of the early movers. Built on the basis of delivering DVDs-by-mail, streaming now looks like being the main focus of its attentions in years to come.

Netflix ‘Watch Instantly’

Netflix introduced its ‘Watch Instantly’ feature a few years ago. It gives subscribers instant access to a wealth of movies and TV shows, all available to stream via the Internet.

It started as a computer-only affair, but Netflix has spent the last year or so getting the Watch Instantly feature added to a range of other devices. These include the Roku box, the Xbox 360 and PS3, and even Internet-enabled Blu-ray players and televisions.

‘Watch Instantly’ Future

At the beginning of this year, Netflix CEO Reed Hastings stated that the company is likely to offer a streaming-only subscription plan in the future. And in October, it was intimated that there could be an international roll-out of ‘Watch Instantly’ offered along those lines.

Now, Netflix has changed the order of tabs on its Web site to make ‘Watch Instantly’ the first option and the most prominent, with ‘Browse DVDs’ being bumped.

Although only a small change, it has huge implications as it makes Netflix’s position clear – that it wants to encourage more of its subscribers to stream rather than rent DVDs.

And it’s no wonder, as while its mail-order business costs the company $600-$700 million annually, ‘Watch Instantly’ only costs about a nickel per movie. Which is quite a margin.

Conclusions

I don’t think Netflix is suddenly going to abandon its current business model, but it is slowly evolving it so that streaming is a bigger part of the overall strategy. How long until streaming-only subscriptions are offered? I’d certainly be interested.

[Via NewTeeVee]

YouTube Goes Long

YouTube began as a bit of a Wild West of online video, but soon settled down to become the number one site for short, user-generated clips in the world. Mainly under Google’s ownership and tutelage.

But it has recently been trying to add more professional, long-form content as well. Some old movies and TV shows are now available on the site, and in the U.K. it has recently inked a deal with Channel 4 to have its archive of programming added to the site.

However, while Channel 4 is happy to sell its wares to YouTube for advertising revenue (alongside 4oD), most content creators and television networks aren’t so ready and willing to license their content. At least not merely for a share of advertising revenue.

Cue alternative revenue models.

Revenue Options

In September we reported how movies could be coming to YouTube, offered on a $3.99 rental basis similar to the standard set by Apple iTunes.

Then just a few weeks ago we reported how TV shows could also be added to the mix, with YouTube charging $1.99-per-episode.

This wouldn’t be going against the grain as Hulu is almost guaranteed to be preparing to charge for some content, while Apple is thought to be considering a $30-a-month eat-all-you-can subscription plan.

Subscription Plans

And now, according to Reuters, Google’s vice president of content partnerships, David Eun, has paved the way for YouTube to start a similar plan.

He said:

“We’re making some interesting bets on long-form content; not all content is accessible to us with the advertising model.”

In which case YouTube would like to offer content partners the option which works best for them. So the ones who are happy to take a share of the advertising revenue generated on the site can do, with others being able to opt for alternatives.

As well as rentals and downloads, monthly subscription fees are being considered. Which would put YouTube in direct competition with Cable companies.

Conclusions

This kind of deal would make sense for content creators and television networks which can see the future is in online video but which doesn’t want to give up the right to make a ton of money on licensing content.

The danger for YouTube is trying to be everything to everyone. And the site could end up cannibalizing itself by not focusing on one particular aspect of online video. Which until now has been short-form UGC.

Let’s start from the beginning…

A couple of patents exist which relate to the technology that allows an application to autostart when a storage media is inserted into a device. The abstract of the patent describes it as follows:

“An autostart driver in the host device detects insertion of a storage media into a peripheral and automatically starts an application.”

According to XYHD this actually represents a ‘buy it now’ button on the remote control.

This patent is in the name of Peter Redford and Donald Stern according to PatentStorm.us. Peter Redford is the founder of TVI, a video on demand technology company.

He is also the founder of ZillionTV, an innovative web video start-up with a good idea that has run into some teething issues.

TVI filed a lawsuit in October 2009 apparently claiming ownership of these patents and stating the LG was using the technology without permission.

LG claims ZillionTV owns Patent

WebTVWire has obtained a civil complaint that was filed December 08, 2009, where LG contests that ZillionTV is in fact the owner of the patent, so TVI has no right to sue them. It states:

“According to the records of the U.S Patent Office, ZillionTV, not TVI, is the owner of the ‘863 and ‘532 patents.”

The complaint goes on to state that LG is in fact not infringed the patents at all, so presumably ZillionTV nor TVI have any right to sue LG, as the claims are invalid under U.S patent laws.

Bad News for ZillionTV

It has been asserted that if ZillionTV & TVI loses they will be forced to pay “legal fees incurred by LG, Panasonic, Sharp, Pioneer and others who were paying royalties to TVI”.

Whether the costs incurred will have to be paid by TVI or ZillionTV I am not sure.

ZillionTV is also being sued for not paying royalties for images they use in its GUI which indicates they may be cash strapped. Start-ups are typically short on cash and an expensive lawsuit could kill the company before it gets off the ground.