Walmart Takes On Vudu

Walmart acquired Vudu early in 2010 after previously trying and failing to launch its own movie and TV download offering. In a deal thought to be worth around $100 million Vudu became a subsidiary of the U.S.-based uber-retailer.

Around a year later Walmart pushed Vudu to the browser for the first time, complementing its availability across a huge range of Internet-connected devices (more than 300 at last count).

At the end of July Vudu was integrated into the main Walmart website in a big, bad way in an attempt to make it more mainstream. All of which appears to have paid off massively. So much so that Vudu can now be considered a big player.

Market Share Increase

According to IHS Screen Digest Research, Vudu’s market share under Walmart’s ownership has increased substantially, rising from one percent in the first half of 2010 to 5.3 percent in the first half of 2011. This has seen it jump above both Amazon on 4.2 percent and the Playstation Store on 4.4 percent.

No surprise which company and service is at number one, and by quite a margin. Apple iTunes currently has a 65.8 percent market share, and that only seems to be increasing. More surprising, possibly, is Microsoft’s Zune video marketplace at number two with a 16.2 percent market share, although now seems to be dwindling.

Conclusions

This is great news for Walmart, a bricks-and-mortar business which has struggled to make the transition to the Web. Vudu represents a huge success in this regard. I wonder how many of its new-found customers have sought alternatives after Netflix upped its prices?

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Content ID System

YouTube was absolutely awash with pirated movies and TV shows at one point, very early in its life. This is the reason various companies, most-notably Viacom, sued YouTube for a fortune. But Google voraciously cleaned YouTube up, and most media companies are now on board.

The Content ID system, which automatically detects the presence of copyrighted content when its digital fingerprint is provided, has helped immensely. But it’s not perfect, and some piracy is still occurring on the world’s most-popular online video destination.

Pirated Movies On YouTube

It has been claimed that at least 25 movies, including recent releases such as Cars 2 and Fast 5, were available to watch on YouTube in their entirety until the end of last week. Now, probably not, as the issue has been brought to YouTube’s attention and the site is no doubt doing all it can to rectify the situation.

How long these videos had been up is anyone’s guess, but 500,000 views for some suggests more than just a few hours. These weren’t great copies, however, instead having been recorded from a DVD or cammed from within a cinema. Which would indicate an amateur effort to say the least.

Still, with software enabling people to download videos from YouTube, this could have helped hundreds of thousands of individuals to avoid paying to see a film.

Conclusions

I’m not convinced this is a new issue, as has been suggested. Instead, I suspect this has been happening since YouTube disabled the video length upload limits for trusted users. From that point on any one of these people could upload a pirated movie to YouTube, as long as they were willing to risk being banned from the site.

Still, regardless of how long this has been happening, the fact remains that it has shown up some issues with Google’s Content ID system. It clearly isn’t a foolproof way of ensuring copyrighted material doesn’t make its way onto the site.

[Via PC Magazine]

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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]

Movie Piracy

Move piracy has been a problem for Hollywood for years, ever since home video became a dominant force and you could buy a hooky copy of the latest releases on street corners and in markets all over the world. These days DVDs have made it even easier, with people happy to sell you a copy of the latest blockbuster filmed by someone on their smartphone.

And then there is the Web, the latest villain the movie industry can blame for all its ills. Then again it does have the law on its side. Seemingly even when a company feels it is operating within the bounds of a legal loophole.

Zediva Shoots Blanks

Zediva is, for all intents and purposes, a DVD rental company. The difference is that rather than physically pass on a DVD for a customer to watch, Zediva plays it at its facility and let the customer watch over the Internet. Think of it as a DVD player with a really long cable attached to it and a customer sitting at the other end.

Zediva considered this as utilizing a loophole in copyright laws and believed itself to be immune. But the Hollywood studios disagreed and sued the company in April over the infringement of its public performance rights.

Last week saw a federal judge side with Hollywood, granting a preliminary injunction against the company. Zediva has already promised to appeal against the decision, but with a 1991 case involving a hotel streaming movies to individual rooms against it, the chances of the company succeeding seem remote.

Conclusions

As a layman this feels a little unfair. Zediva has bought a copy of the DVD, and the customer has paid for the privilege of renting it out. Does the fact they’re watching it over a long distance rather than in their front room mean it’s any less legitimate than Blockbuster or Redbox? It would appear so.

[Via CNET]

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Original Web Programming

There is an intriguing trend emerging whereby Internet companies are no longer merely buying up content that has already aired on television but also producing and/or financing their own original programming to air exclusively on one service.

In March Netflix announced it had won the bid (against the likes of HBO and AMC) for House of Cards, a new drama serial starring Kevin Spacey and directed by David Fincher. And now Hulu has joined the ranks, although its series isn’t either as highbrow or expensive to make as House of Cards.

A Day In The Life

Hulu is producing a new six-part series called A Day In The Life, which will see documentary filmmaker Morgan Spurlock (Super Size Me, 30 Days) spending 24 hours with various “fascinating people.”

The first episode features Virgin boss and billionaire Richard Branson, with future episodes seeing appearances by Will.i.am, Russell Peters, and Girl Talk (no, me neither). The series begins on Aug 17.

Spurlock said:

“As a filmmaker, I am always looking for new and exciting ways to reach an audience and to tell stories. When the opportunity to create an original doc series with Hulu presented itself, I jumped at the chance.”

The company has suggested this won’t be a one-off, with Charlotte Koh of the original content development team stating this is part of a “new Hulu initiative designed to support creatively and financially the work of independent storytellers like Spurlock.”

Hulu is currently up for sale, of course, so it seems a little strange that it has chosen now to get into the original production game.

Conclusions

Morgan Spurlock definitely has an audience and one which is likely to be switched-on enough to use Hulu. So it would seem to be a no-brainer for the company to fund his work and get original programming as compensation.

Could this be the start of a huge trend? One which will see the power of the traditional networks and studios somewhat dampened?

[Via AFP]

Streaming iTunes

Apple has been rumored to be launching some kind of streaming video service for two years or more, but nothing has ever been officially announced or even teased. And it still hasn’t, but there are new rumors for us to sink our teeth into and explore.

As great as iTunes is, it’s currently all about downloads. You buy content, you get to download and watch it. But streaming is the new black, with services such as Netflix and Hulu, and even Spotify (for music) all doing great business.

For Apple to remain on top it really needs to introduce streaming options to iTunes.

iTunes Replay

According to sources talking to AppAdvice, it could already be on its way to doing so. Internally codenamed iTunes Replay, the extension to the usual iTunes service will allow consumers to at least re-download movies or TV shows they have previously purchased, and possibly stream it as well.

Not all content will be eligible for iTunes Replay, with a logo indicating what is and what isn’t. This will be due to licensing issues, and depend which studios and content providers Apple has managed to secure deals with. For the same reasons most content will only be available for download five times.

This is merely rumor at this stage, but there does appear to be some truth behind the speculation. The streaming aspect is mired in hearsay, however, so I’ll only believe that when I see it.

Conclusions

Apple should have been on board and making deals for streaming content a long time ago but seems to have missed the boat in an unusual display of not seeing the future by Steve Jobs Esq.

Does iTunes Replay go far enough? Probably not, but it is at least a start.

WalMart Adopts Vudu

Vudu was doing pretty well(although clearly not well enough) as a hardware-based video platform before WalMart acquired the company early in 2010. Since then Vudu has been made available on 300-plus connected devices as the giant retailer seeks to make its acquisition pay.

Now comes phase two of that effort, with WalMart truly trying to send Vudu over the top to become a mainstream option and a household name. Where it will have to compete with Netflix, the current online video darling of the mainstream.

Vudu Goes Mainstream

WalMart has now integrated Vudu into its main website, with all the content available to purchase on Walmart.com. Rather than just copy and paste Vudu onto the site, the Vudu section looks and feels like the rest of the retailer’s main domain.

This is an important step for WalMart to have taken because it is clearly gearing itself up for the day when streaming overtakes DVD and Blu-ray sales. Which is a day approaching at a veritable rate of knots.

A WalMart spokesperson told VentureBeat:

“One of our key priorities is to provide one seamless shopping experience for our customers and to help them shop the way they live their lives today. This means we’re bringing together everything we are from our stores, our brand, and our footprint with the power of eCommerce, mobile technologies, etc. With VUDU now integrated into Walmart.com, we’re providing customers more access to enjoy digital entertainment in a variety of ways — on their terms.”

One thing to note is that only SD videos can be streamed through the site, with those seeking HD video having to revert to one of the devices set up to support Vudu.

Conclusions

WalMart must sense an opportunity here thanks to Netflix recently hiking its prices and the company possibly taking its eye of the domestic market as it seeks to expand internationally.

They may be two different entities competing in separate markets but WalMart would surely love to see Vudu become as integral a part of everyday life in the U.S. as Netflix now has. And who can blame them.

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Netflix Price Hike

There was huge outcry from Netflix customers last week when the company announced it was splitting the two sides of its business – DVDs-by-mail and streaming – completely, with the subscription plan which combined the two being dropped. In its place was an either/or choice, with streaming costing $7.99-per-month, and DVDs-by-mail also costing $7.99-per-month.

The customers who weren’t happy with this were the ones who up to now have enjoyed both sides of Netflix’ business for a combined $9.99-per-month. And you really cannot blame them for balking at a $6 price hike or being forced to choose one or the other.

However, Netflix CEO Reed Hastings may have had good reason to make this change, at least according to Big Champagne CEO Eric Garland talking to CNET.

Hastings Vs. Hollywood

Garland claims Hastings knows exactly what he is doing, and knew there would be an initial outcry over the changes. However, he proceeded because he’s looking ahead into the future and trying to effectively force Hollywood’s hand into accepting Netflix and accepting video streaming are here to stay.

According to Garland, Hastings is “deliberately creating dissatisfaction.” First among the customer base and then among the studios. Which will eventually lead to a new solution being forged where all content is made available to stream online. At least that is what Hastings is gambling on.

At the moment Netflix‘ streaming offering is lacking in new, popular titles, with Hollywood so far insisting DVD and Blu-ray is still the way to go. But with Netflix growing in stature the company could have a big role to play in the future direction of how content is delivered to consumers.

Conclusions

It’s a compelling theory but still a theory nonetheless. But is does feel like it could have a basis in fact. Netflix is already huge in the U.S. and looking to expand aggressively overseas, both in Latin America and Europe. And the bigger you are the more influence you exert on others. Netflix could be positioning itself to be the king of online video streaming for the next decade.

Downloading Vs. Streaming

There is currently a huge disparity in the U.S. between the penalties for streaming copyrighted video as opposed to downloading copyrighted video. The latter is regarded much more harshly, which is why streaming has become so popular in recent years.

But the U.S. Senate is seeking to close what it calls the loophole which determines that streaming copyrighted material via the Web is somehow less damaging and less illegal than downloading copyrighted material over the Internet.

The Senate Says ‘Aye’

According to The Hollywood Reporter, at the end of last week the U.S. Senate Judiciary Committee backed moves to make illegal video streaming a felony in some cases. Those calling for a change in the law included the Obama administration, SAG, AFTRA, the MPAA, and the Directors Guild of America. The proposal will now go before the full Senate.

NATO (National Association of Theater Owners) President John Fithian said:

”To the technicians, designers, construction workers, and artists who support their families through their work in entertainment, there’s no difference between illegal downloading and illegal streaming – it’s all theft that hurts their work, their wages and their benefits.”

The big issue here is who exactly this change in the law would be targeting. Would it be the websites full of copyrighted material available to stream, other sites that link to these hosts, the people who upload the videos in the first place, or the people who do nothing more than press ‘Play’? Or all of the above?

Conclusions

There really isn’t any difference between downloading and streaming content these days, with high-speed Broadband meaning you can watch what you want when you want with no need to download it for the future. But until the confusion over who is liable is cleared up it’s difficult to get fully behind the bill.

The only problem is that creating yet another means of accessing online content risks fracturing the whole industry even further than it already is.

Moving To The Web

As soon as Napster was created Pandora’s Box was opened, never to be sealed again. Once music sharing over the Internet entered the mainstream there was little point fighting to contain the problem, but the major record labels tried to regardless of common sense.

That’s not to say the music industry should have just let people share music online illegally. No, it should have concentrated on offering alternatives, and building Web services into its business plans for the future.

The television and movie industries haven’t been quite as short-sighted, having had a few years to learn from the mistakes of others, but there is still a lot of work that needs doing.

Disney Accepting Change

Thankfully the signs are there that some of the major studios and industry players have accepted the need to adapt and are gearing up for a future where almost all content is digitally distributed over the Web.

Disney is the latest to suggest a willingness to change, with CEO Robert Iger recently saying the following at the D9 conference:

“There’s going to be displacement of consumption…the opportunities to be entertained in the home are so much greater today. We view Netflix positively. It’s a good provider for our content to be accessible on. We like Hulu for a number of reasons, and not just because we’re an equity partner. It keeps people honest.”

“Because of its brand strength … [Disney.com] has the ability to be a destination. We believe we have an opportunity to deliver content directly to consumers. Disney and Disney.com is being rebuilt. It will be monetized in multiple ways.”

Content isn’t going to be free, but then I would expect nothing less from Disney. The positive point is that the company realizes the future is already happening and there’s no reason to hark back to the past. Instead, offer up content on the Web and monetize it in any way possible.

Fractured Services

There is still one major problem inherent in these plans, which is that every company has its own idea of how best to proceed. Disney.com will soon become another service where people can access content on the Web, and in many cases it will be the same content that is also available elsewhere.

We really need one service, or at worst a handful of them, to reign supreme. That may seem anti-competitive but one central location with all content obtainable from it is arguably the only legitimate way piracy is going to be turned from a norm to a niche.

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