What UltraViolet has become today is a surprise to those who created it.
That’s according to Mitch Singer, the former chief digital strategy officer of Sony Pictures Entertainment and current president of the Digital Entertainment Content Ecosystem (DECE), the cross-industry consortium behind UltraViolet.
“I think the consumer ultimately has to decide what they want to do with the content, and what we’re finding with UltraViolet is a majority are streaming, and very few are downloading,” Singer said, speaking Aug. 27 during a panel about the future of TV content. “When we started UltraViolet, we thought it was going to be a download model, and a lot of technical planning within DECE was for common file formats for downloading, so consumers could access their content across devices by downloading. Within the last four years, streaming has completely taken over. It’s about access, not downloading.”
UltraViolet — the buy once, play anywhere cloud-based content service backed by every major studio, minus Disney — has been the studios’ attempt to react to and monetize changing consumer behaviors, and while gains have been made, it’s been slow going, Singer said. He pointed to statistics showing that by 2017 electronic sellthrough growth will only be 6% “and that’s not a very good forecast.” Singer expected more out of digital by this point.
“I think when people forecast future growth they base it on what they see in the marketplace, and today’s marketplace isn’t a great consumer proposition,” he said. “We still see a lot of proprietary platforms out there, trying to capture the consumer, and it’s [because of that] we see consumers finding other ways to access content. We’re moving toward it slowly, but we need to make sure consumers have access to a huge amount of content, whether it be TV or movies.
“The big screen isn’t going away,” Singer said. “People will be able to view content on the big screen and mobile, but the acquisition experience needs to be easier. The impulse buy we have with DVD at the checkout line at Walmart doesn’t exist yet with digital.”
He said increased storage capabilities, better cloud services, easier access across platforms and devices, and the ability to easily track what you own, all are needed if digital is going to be a true replacement for physical.
“The future of disruption is going to be very, very interesting. We haven’t seen the huge impacts yet.
Disruption was one of the main themes that emerged during the panel. Seth Shapiro, governor of interactive media for The Television Academy, pointed to several times technology has been disruptive to the status quo. FM radio was considered disruptive when it was introduced. TV was fought off for a decade for disrupting radio. VHS was a nightmare at the time for the studios. iTunes was considered destructive of the music business, he said.
“A lot of these things are really difficult to fight, and you’re better off not [fighting],” Shapiro said. “The stupidest thing the music industry did was not going along with Napster when they could have. It could have been the universal music service. They could have saved themselves a lot of pain.”
Fred Bucher, group VP of marketing for Time Warner Cable Media, said that while it’s true there are a lot of disruptions in the content marketplace today, “there are also some core principles, truisms if you will, that are going to govern the way decision are made,” he said. “What was true 50 years ago is true today, and it’ll be true 10 years from now: People follow great content.”
TV, VHS, DVD sellthrough, and digital delivery have all been disruptive, Singer added. Just recently, subscription streaming TV service Aereo lost a Supreme Court battle against the traditional broadcasters.
“We see the way incumbents treat disruption all the time, and I don’t think it’s very productive,” Singer said. “The other way to look at disruption is to say ‘Let’s go with it, let’s look for new business models and technologies.’ That’s where the focus needs to be."
“When you’re faced with disruption, you have to adopt it because it’s not going away,” he added. “The motion picture industry has often been criticized for [lagging], but if you look at what’s going on in the industry, the moment we saw pay-TV and subscription services start to launch, even the launch of TV itself, the movie industry first fights, and then ultimately finds a way to monetize it.”
More than 59 million European households — 20% of the Euro pay-TV market — are projected to pay for subscription streaming video services by 2020, according to new data from Digital TV Research.
With the arrival of Netflix in six European countries as early as next month, SVOD subscriptions are expected to approach 18 million by the end of the year. In addition to Netflix, Amazon Prime Instant Video and other regional services underwritten by multichannel video program distributors represent a growing international SVOD market.
That tally was less than 2 million in 2010 when Prime predecessor Lovefilm Instant launched in the United Kingdom and Germany.
The report contends nearly 7% of Eastern European TV households (11 countries) will subscribe to SVOD by 2020, compared with almost 30% in Western Europe (15 countries).
Online television and video subscription revenue is expected to reach $1.6 billion this year, and top $5.5 billion in 2020. The United Kingdom will remain the SVOD revenue market leader, although Germany will be close behind.
Meanwhile, online TV and transactional video rental revenue is projected to increase from $55 million in 2010 to $858 million in 2020. Digital sales movies and TV shows are forecast to top approach $1.4 billion in 2020, up from $89 million in 2010.
Earlier this year, a weak earnings report and wave of store closures had us thinking about the long, slow decline of brick-and-mortar game retail. Today, things look a little brighter, with GameStop reporting healthy sales growth along with an incredible factoid about its centrality to the modern console software market.
"Our hardware and software market share continues to expand and is now at an all time high as we go into the critical holiday season," GameStop President Tony Bartel said during an earnings call. “We continue to sell over one half of all PS4 and Xbox One titles.”
Let that sink in for a second: a single chain of gaming stores sells more individual Xbox One and PS4 games than all the big box stores, retail websites, and direct digital downloads combined. That doesn't sound like a business that's on the verge of collapse. Total, year-over-year sales growth of 25 percent for the quarter, including a 16 percent increase in new software sales, also sounds pretty healthy for GameStop.
Home entertainment veteran Tom Lesinski Aug. 20 announced he has launched a multi-media content production company called Energi Entertainment. Energi has signed a two-year “first look” development and production deal with Legendary Television and Digital Media — where Lesinski headed digital operations until last month.
While at Legendary, Lesinski and his team put together a development slate headed by “Dead Rising” at Crackle and the recently sold “Kelly and Molly” pilot script, as well as new projects including: Alexandra Milchan’s “Life Behind Bars,” “Pet Therapist” and the reboot of Syd and Marty Krofft’s “Electra Woman & Dyna Girl.”
Lesinski previously served as president of Paramount Pictures Digital Entertainment, where he founded the studio’s digital entertainment division in 2006. He was responsible for the worldwide management, development and distribution of all Paramount content across digital distribution platforms. The division developed more than a dozen original series during his tenure, including Jackass 2.5/3.5, “The Legion of Extraordinary Dancers” (LXD), an animated “Zoolander” series and “Burning Love.”
Prior to Paramount Digital Entertainment, Lesinski was president of worldwide home entertainment for Paramount Pictures. Before Paramount, he was EVP and GM of Warner Home Entertainment.
Anyone paying vague attention to the PC games market has long known that it's a space dominated by downloadable titles. Still, it's a bit astounding to hear a report estimating that a full 92 percent of PC game sales in 2013 came from digital downloads, as DFC Intelligence recently told British tech site PCR.
That may sound high, even to people who haven't bought a PC game on a disc for years, but it lines up with other numbers reported throughout the industry. Last year, Payday 2 publisher Starbreeze announced that 80 percent of its 1.58 million first-month sales came from downloads, for instance. And let's not forget the scores of PC games that are totally ignoring retail sales for 100 percent downloadable releases these days, from Dota 2 to Day Z.
Download-dominated PC gaming is a newer phenomenon than some gamers might realize. As recently as 2010, analyst firm NPD was estimating that downloads made up only 48 percent of all PC game sales.
China’s digital movie service You On Demand Aug. 18 posted a second-quarter (ended June 30) net loss of $793,000 — a marked improvement from a net loss of $3.3 million during the prior-year period, according to a regulatory filing.
The subscription streaming and transactional VOD service, with headquarters in New York and Beijing, has over the years secured high-profile content license agreements with Disney Media Distribution, Paramount Pictures, NBC Universal, Warner Bros., Miramax, Lionsgate and Magnolia, as well as a broad selection of content from Chinese filmmakers.
Yet the service generated just $183,000 in revenue in the second quarter, which was up from $51,000 in revenue during the prior-year period. These are hardly impressive numbers in a Chinese market where more than 700 million people are projected to watch online video content this year.
To help secure better connections in China, You On Demand recently appointed Weicheng Liu as CEO, replacing Shane McMahon, who remains chairman of the board. Marc Urbach is president and CFO of the company.
China remains a burgeoning movie-watching market, with theatrical sales expected to become the largest in the world in a couple of years. Social media sites such as Youku and Tudou have hundreds of millions of unique monthly users, but online digital distribution remains a challenge.
Lionsgate is launching a SVOD service in China this month. The service is a partnership with Alibaba, one of the country’s largest e-commerce sites, and includes the latter’s set-top boxes and connected TVs.
Dubbed “Lionsgate Entertainment World,” the service would also include transactional video-on-demand and electronic sellthrough, featuring the Santa Monica, Calif.-based studio’s catalog of movies and TV shows, including The Hunger Games, Divergent, “Nashville,” Rosemary’s Baby and “Mad Men,” among others.
“It’s another way for us to get content into the Chinese market with a great partner,” Jim Packer, president of worldwide television and digital distribution at Lionsgate, told Bloomberg last month. “We’re always exploring opportunities in China, it’s a growing content market, it’s a content market you have to be in.”
Meanwhile, a 2011 McKinsey & Co. report found that successful online video sites would need to expand their bandwidth; hire experienced online advertising salespeople, and license content that will would generate the largest audiences and advertising.
“The best-funded sites are therefore likely to pull steadily ahead, in what could be a winner-takes-all phase of the market,” analyst Alan Lau wrote.
You On Demand’s fiscal results suggest it will take more than content to lure users.
UltraViolet, the industry-backed initiative to spur physical and digital content sellthrough through a cloud-based ecosystem appears to be working — for digital content, anyway.
The NPD Group found that about 50% of registered UV users bought a digital movie in the past year, compared with 11% of non-registered users. Not only are UV users more likely to make an electronic-sellthrough transaction, but also just over half of those who had never made an EST purchase prior to signing up for UV have since made a digital purchase.
Justin Bailey, director of industry analysis for entertainment with The NPD Group, in an Aug. 11 blog, contends the home entertainment industry would be wise to direct consumers toward a physical/digital ecosystem (i.e. UltraViolet) rather than inundating the market with myriad digital-only platforms and deluding consumer response.
“It appears those who sign up in order to redeem a Blu-ray Disc or DVD code are discovering EST via retailers and then, in some cases, choosing to buy digitally rather than on disc,” Bailey wrote.
Indeed, 25% of all digital content purchases are made by UltraViolet users, compared with 15% by non-registered users. Notably, the NPD also found that iTunes users buy an average of seven electronic titles a year compared with 3.6 titles among non-iTunes users.
The NPD found that the consumers least likely to use UltraViolet are those who were already part of an alternative digital ecosystem. In other words, if a person was already buying EST through iTunes or Amazon Instant Video — and using the platforms’ cloud-based storage systems — they would be less likely to switch to UltraViolet or use multiple services.
Through the first half of the year, EST transactions increased 43% to $330 million, compared with $231 million from the previous-year period, according to DEG: The Digital Entertainment Group. While notable in its trajectory, the tally represented just 18% of packaged media’s $1.8 billion in sales.
So while physical transactions continue to erode — down 13% through June 30, Blu-ray sales rose 10% in the second quarter alone. This is important since most BD releases include UltraViolet access codes.
The NPD suggests home entertainment studios and distributors continue to increase EST awareness among disc consumers through UltraViolet so they won’t consider alternative channels.
At the same time, registering for UV and accessing titles from the cloud should be simplified through a starter kit or education video about the ease-of-access on all of their devices.
“People prefer to have their [content] collections in one place, accessible anytime, anywhere. In other words, equip EST buyers with a ‘why-go-anywhere-else’ mentality,” Bailey wrote.
Just another ho-hum day in court for Dish Network’s Hopper DVR as the United States Court of Appeals for the Ninth Circuit affirmed a lower court’s September 2013 rejection of the Fox Broadcasting Co.’s efforts to bar Dish subscribers from using two place-shifting features.
The ruling is the fifth consecutive in favor of the satellite operator’s Hopper DVR, which allows users to skip commercials on recorded primetime content, in addition to other features.
Specifically, the features — Dish Anywhere and Hopper Transfers — give subscribers the capability to remotely view a TV signal from a connected device (mobile phone, tablet or PC), or move or duplicate certain recordings made by the customer to an iPad without an Internet connection.
Fox since 2011 has argued that the Hopper violates multichannel video program distribution retransmission agreements, in addition to intellectual copyrights.
“Dish is pleased that the court has sided again with consumer choice and control by rejecting Fox’s efforts to deny our customers access to the Hopper features. Last year, the Ninth Circuit also rejected Fox’s attempt to block customers from using the AutoHop and PrimeTime Anytime features. We will continue to vigorously defend consumers’ right to choice and control over their viewing experience,” said R. Stanton Dodge, EVP and general counsel, for Dish.
Apple TV has begun offering bonus features with select studio purchases — a feature heretofore reserved for packaged media releases. The idea behind “Extras” is to generate consumer interest in purchasing — not renting — digital content.
Participating studios include Disney (and Pixar), Fox, Paramount, Sony Pictures, Universal, Warner Bros., Lionsgate, Starz Digital Media and A24.
The updated version of “iTunes Extras” enables studios to refresh bonus material on consumer purchases for hundreds of titles going forward, including updated interviews with cast and crew, deleted and extended scenes.
Currently available for the Mac and PC, a version for portable media devices such as the iPad and iPhone is expected this Fall when Apple launches its iOS 8 operating system.
“It brings the consumer a whole new level to [a consumer’s] home video experience,” Mary Daily, president and CMO at 20th Century Fox Home Entertainment, said in a statement. “Apple is helping to take that digital experience to the next level. You now have a substantial amount of people who have access to additional content on the big screen in the living room.”
Indeed, the “Extras” feature enables users to select key scenes in movies, such as musical numbers in Disney’s Frozen or battle scenes in Warner’s 300: Rise of an Empire.
“We are all working together as an industry to make a good consumer proposition, and I think that’s a purchase proposition,” Mara Winokur, SVP of digital at Starz Digital Media, said in a statement.
In addition to interviews, “Extras” features art and still photography galleries from films such as The Grand Budapest Hotel; conceptual drawings from Monsters University; and behind-the-scenes with the voice actors in The Lego Movie.
Fox’s Rise of the Planet of the Apes features a special video: “Dawn of the Planet of the Apes: Building the Legacy.”
“With iTunes Extras, [Apple is] setting the stage again with the next iteration of digital movies,” Daily said.
A May study conducted by research firm Gfk found that 51% of Spain’s consumers in 2013 accessed pirated content, including movies, music and video games, resulting in an annual margin loss of $1.7 billion to content holders and distributors. Indeed, 84% of all digital entertainment consumed in Spain was pirated.
More than 70% of Spaniards said they access pirated content because it’s free and easy to do, according to the report. Another 59% acknowledged there could be legal ramifications but doubt anything will happen. And 20% believe piracy has no effect on the entertainment business.
Spain remains ensnarled in an economic slump, with unemployment at a staggering 26%, tops among European Union countries. With technological advances in digital distribution, piracy remains a crime of opportunity, according to the study.
La Coalición de Creadores e Industrias de Contenidos, a consortium of digital distributors in Spain that commissioned the Gfk study, is seeking federal and local government legislation aimed at curbing piracy and safeguarding the Spanish economy.
Indeed, pirated entertainment in Spain resulted in the loss of more than 25,000 jobs and 526 million euros in public money (illegal economic activity does not pay taxes, including Social Security) — up 6.4% from 2012, according to the report.
“The results obtained up to date in the fight against piracy are terribly poor,” Carlota Navarrete, managing director of La Coalición, wrote in the report.
Meanwhile, Canal Plus recently launched a subscription video-on-demand service called Yomvi (www.yomvi.com) based in Madrid. The service is offering unlimited streaming access to recent and catalog movies and TV shows for $14 a month.
The service, which is available in Spanish and English and touts a contextual recommendation software similar to Netflix, also offers new-release transactional VOD rentals beginning at 2.99 euros ($4) for standard-definition, and starting at 4.99 euros ($7) for high-definition (720p) and more for 1080p resolution.
“We encourage you to ‘train’ our system by showing it what you like best and find out about a lot of other movies and TV shows on the way,” reads a tag on the website.
Toronto-based Cineplex Entertainment will begin using Deluxe Digital Distribution’s on-demand service to encode content for multiscreen delivery, the companies announced.
Cineplex Entertainment operates both a chain of more than 160 theaters in Canada, along with an online store that sells discs, rents films and offers electronic sellthrough.
“The Cineplex Store is Canada’s one-stop shop for digital movie rentals and downloads,” said Pat Marshall, VP of communications and investor relations for Cineplex Entertainment. “Deluxe On Demand will help us deliver one of the widest selections of high-quality movie streaming to our customers’ devices.”
Deluxe has a catalog of more than 7,000 titles coded at high-bit-rates, up to 220 Mbps, allowing for optimal streaming and downloading.
“We are pleased to support Cineplex’s strategy of engaging customers at each stage of a movie’s life-cycle — from theatrical release to home and mobile entertainment,” said Todd Collart, SVP and GM of Deluxe Digital Distribution.
The U.S. might be out of the 2014 FIFA World Cup in Brazil, but viewers continue to watch the quadrennial event in record numbers across multiple platforms.
As expected, ESPN July 2 said the overnight ratings on Team USA’s 2-1 loss to Belgium in extra time was the highest ever for a soccer broadcast on the sports channel and ESPN2. WatchESPN, which allowed subscribers to watch the match live online, generated 1.5 million concurrent viewers.
Notably, the match still ranks third behind the 1994 World Cup final and that year's U.S. vs. Brazil knockout round match, which both included ABC network coverage and took place in Los Angeles.
Comcast reported that live streaming of the 2014 World Cup has already surpassed the Sochi Olympics. While the Olympics saw 7.8 million live steams from Xfinity TV customers, there have already been 9.2 million live streams of World Cup action online or on devices from customers through the first 18 days of competition.
There were 683,000 live streams of the U.S. vs. Germany match either directly through Xfinity TV Go or via WatchESPN. This has been the biggest live streaming event ever for Xfinity TV; surpassing the top streamed event of Sochi, the U.S. vs. Canada men’s hockey semifinal, by 63%.
Meanwhile, in a social media analysis conducted by online marketing firm Prime Visibility, the U.S. vs. Belgium game was the third most-talked-about World Cup game thus far, just below Brazil’s matches against Croatia and Chile. The U.S. game garnered more than 15 million social media posts with a combined Twitter reach of 1.6 billion users.
While the game ranked lower than the Super Bowl in terms of total social media mentions, the World Cup overall has been higher than the Super Bowl. The World Cup, which begins quarterfinal play July 4, ends July 13.
“Americans have demonstrated a very high amount of interest in the event, especially for a nation not known to care about soccer,” Dave Neuman, social media manager at Prime Visibility, wrote in a blog.
HBO June 30 began streaming the first episode of new drama “The Leftovers” for free on Yahoo Screen.
The series, which stars Justin Theroux, Amy Brenneman and Liv Tyler, among others, is about people in the fictional town of Mapleton, N.Y., who didn’t make the cut when 2% of the world’s population (140 million people) abruptly disappeared three years before.
Unlike similar made-for-TV apocalyptic premises, “The Leftovers” avoids monsters, aliens and supernatural forces, instead focusing on anonymous characters facing the inexplicable.
“'The Leftovers’ stands as testimony to how valuable it can be to focus on everyday things and everyday people,” wrote Alyssa Rosenberg in The Washington Post.
“Leftovers” was created by Warner Bros. Television for HBO and based on Tom Perrotta’s novel of the same name. The premiere episode aired June 29.
Since a soft launch last year, initial consumer adoption of UltraViolet in Australia reportedly is second only to the United States, according to Mark Teitell, GM of the Digital Entertainment Content Ecosystem, which coordinates UV rollout.
The cloud-based digital content storage system, which is backed by all Hollywood studios except Disney, has generated more than 160,000 registered accounts in Australia. That’s only trails the U.S. in per-capita UV adoption.
There were about 17 million UV accounts in the U.S at the end of the last quarter, according to Time Warner.
“UltraViolet is currently available in 10 countries around the world and there are nearly 18 million accounts globally,” Mark Teitell, GM of DECE, told Australia’s ApplianceRetailer.com.
JB Hi-Fi was the first Aussie retail chain to offer UV-compatible packaged media, with EzyFlix.tv becoming the first online retailer to offer the storage platform.
Meanwhile, the Aussie adoption rate could be challenged by the United Kingdom, where there are about 1 million registered UV accounts without any formal launch, according to the British Video Association.
Regardless, Teitell said UV represents a seamless way for entertainment retailers to develop a digital connection with consumers while at the same time enhancing packaged-media sales and curbing piracy. Establishing an online retail platform for UV can reportedly take from six to 12 months — a process Teitell said DECE can assist with.
“It’s not all that complicated but still takes a while to deploy,” he said. “They need to do a bit of technology integration into the centralized system we operate. Sometimes they are deploying digital services for the first time ever; they actually have to build a digital storefront.”
Teitell said retailers can offer UltraViolet as a means of enabling family members and friends separated by geography the ability to watch a movie simultaneously without resorting to piracy.
“They want to be able to watch it and have their sister in another city watch it. A lot of those things aren’t about money but what you can do with it. UltraViolet is kind of a legitimate way for consumers to have that,” he said.
blinkbox, the U.K. digital sellthrough platform owned by British supermarket chain Tesco, said early digital access to the fourth season of HBO’s “Game of Thrones” resulted in a 60% increase in sales compared with first-week sales of the previous season.
Indeed, seasons 1-3 have seen a 47% increase in digital sales since the June 17 release — less than 48 hours after the conclusion of season 4’s broadcast run in the United States.
blinkbox was the first retail outlet (physical and digital) globally to offer season 4 of the popular HBO series. To jumpstart consumer interest in the new season, blinkbox partnered with Tesco to offer 1,000 Tesco Clubcard points and free pizza with every purchase.
A TV marketing campaign features dragons chasing golfers and a re-enactment of “Game of Thrones” depicting pugs as key characters.
On blinkbox Books, all seven of the "Game of Thrones" books include 100 Clubcard points with each purchase. The points can be transferred into vouchers to spend with Tesco online, in-store, on fuel or exchanged to get four times more value with Clubcard Boost.
“The buzz around “Game of Thrones” this year has reached a fever pitch and that’s translating into sales,” Adrian Letts, COO of blinkbox, said in a statement. “At blinkbox, we are passionate about offering a brilliant entertainment experience for customers and the combination of the latest titles with attractive offers powered by our relationship with Tesco is a great formula.”
The series is also available in the United Kingdom via Google Play, Amazon Instant Video, Xbox and Wuaki.tv. Season four is not yet available for sale in the U.S.
ABC News June 24 announced the launch of “ABC News on Apple TV,” a TV Everywhere app giving users access to live and recorded programming via desktop, mobile, tablets and connected TVs.
The app, which is targeted at a younger, tech-savvy user, offers live, multi-streaming video and on-demand content, entertainment news, hourly updates, original programming and video highlights from “Good Morning America,” “World News With Diane Sawyer,” “Nightline,” “20/20” and “This Week With George Stephanopoulos,” among other programming.
The 18- to 34-year-old demographic is the most likely to seek news and information via connected devices and not the living room television.
“ABC News on Apple TV” also delivers news updates and video highlights from nine major market ABC television stations across the country, along with 50 years of historical video footage from ABC News’ archives.
“Our goal is to put our users in control of their news,” Joe Ruffolo, SVP of ABC News Digital, said in a statement.
UKTV, the 21-year-old commercial broadcast joint venture between BBC Worldwide and Scripps Networks Interactive, June 23 announced it is bowing a TV Everywhere app — the first non-linear brand for the U.K.-based company.
Dubbed “UKTV Play,” the on-demand app will soft-launch this summer on PCs and Apple iOS featuring previews of upcoming shows and new acquisitions, in addition to catalog programming.
UKTV features 10 branded channels (“Gold,” “Dave,” “Drama,” “Watch,” “Alibi,” “Eden,” “Yesterday,” “Good Food,” “Really” and “Home”) featuring myriad programming targeting specific demos and genres. Some of the programming is available on Netflix, Amazon Prime and Acorn TV.
UKTV is a significant HD content supplier to BSkyB, the nation’s largest satellite TV operator.
“We’ve launched UKTV Play because data shows our viewers will find more programming and engage with our channels more regularly if they have a single destination for on-demand viewing,” Dan Fahy, director of commercial and business development, said in a statement.
Fahy will work with Emma Boston, manager of VOD; and Kim Morris, head of VOD, for the rollout of UKTV Play. The service will be built and managed by Ben Hine, director of operations and technology.
UKTV Play content will be compiled based on topic and real-life events, as well as featuring staff picks and boxed sets.
Notable shows include “Storage Hunters,” “Crackanory,” “Alan Davies: As Yet Untitled,” “Dara O Briain: School of Hard Sums,” “Inquisition,” “Raiders of the Lost Art,” “Crime Stories,” “Rescue Code One” and “Most Haunted and Ghost Adventures,” among other BBC shows.
Boxed sets include “Lizard Lick Towing,” “24 Hours to Go Broke,” “Black Ops” and “Museum Secrets,” among others.
There apparently is truth in advertising when it comes to broadband speeds in the United States, according to the Federal Communications Commission.
The government agency June 18 released its fourth annual report (since 2011) measuring third-party cable, satellite, fiber-optic and telecom broadband speeds in an effort to bring “greater clarity” and competition to the home broadband services marketplace.
“Consumers deserve to get what they pay for,” FCC chairman Tom Wheeler said in a statement.
And getting faster streaming speeds for video content over the Internet into homes is what consumers — notably Netflix, Hulu Plus and Amazon Prime subs — are looking for.
Among ISP service tiers surveyed in 2013, the average advertised speed was around 21.2 megabits per second for downloads, which represented an increase of about 36% from 15.6 Mbps in 2012, according to the FCC.
The report found that cable, telecom and fiber optic services generally delivered the streaming bit rates advertised — when available. DSL services, however, generally underperformed in delivering advertised streaming speeds.
“While it’s encouraging to see that in the past these reports have encouraged providers to improve their services, I’m concerned that some providers are failing to deliver consistent speeds to consumers that are commensurate to their advertised speeds,” Wheeler said. “As a result, I’ve directed FCC staff to write to the underperforming companies to ask why this happened and what they will do to solve this.”
Meanwhile, New York-based Cablevision, which ranks atop Netflix’s monthly ISP speed index, delivered 100% or better of its advertised streaming speed 80% of the time during peak periods. About half the ISPs delivered about 90% or better of their advertised speed, and several ISPs delivered less than 60% or better of advertised speeds 80% of the time.
In addition, while most consumers are willing to pay for faster download speeds due to a disproportionate desire to download — not upload — video content, the government found that Verizon and Frontier Communications offer upload speeds (from 25 Mbps) more than twice that of the next ISP (about 10 Mbps).
This is the first time the FCC included the frequency of ISPs achieving their advertised streaming speed to consumers during peak periods. All ISPs, with the exception of Windstream Communications, were within 10% of last year’s streaming speeds.
The Little Rock, Ark.-based telecom delivered just 78% of its advertised streaming speed — lowest among all ISPs. Interestingly, Windstream and Frontier surpassed Verizon in Netflix’s most-recent ISP index.
“We expect ISPs to improve upon consistency over the course of the next year and we will focus on this issue in the future,” the FCC wrote.
The report shed little new light on the ongoing dispute between Netflix and major ISPs involving the subscription streaming pioneer paying for smoother streaming speeds in an effort to bypass network congestion.
Netflix CEO Reed Hastings has for several months spearheaded a well-organized public campaign lamenting the SVOD service’s agreements with Comcast and Verizon. While Netflix apparently sought out the peering agreements, it also considers them avoidable — with government regulation.
The ISPs counter that Netflix’s streams — which remain the dominant Internet traffic during primetime hours — can be congested by a variety of factors.
"Netflix's false accusations have the potential to harm the Verizon brand in the marketplace,” Randal Milch, Verizon general counsel, wrote Netflix earlier this month.
Wheeler June 13 agreed to find out further details surrounding the controversial “direct peering” deals.
“For some time now we have been talking about protecting Internet consumers. At the heart of this is whether ISPs that provide connectivity in the final mile to the home can advantage or disadvantage content providers, and therefore advantage or disadvantage consumers,” the chairman wrote.
Interestingly, Wheeler has advocated for priority streaming deals between ISPs and content providers for the last mile into subscriber homes provided they are commercially viable. Wheeler said he was motivated to act after receiving myriad emails, including one from “George,” who lamented that the ultimate loser in the battle between ISPs and third-party services was the public.
“To be clear, what we are doing right now is collecting information, not regulating,” Wheeler wrote. “We are looking under the hood. Consumers want transparency. They want answers. And so do I.”
Meanwhile, Netflix agreed to stop emailing subscribers blaming their fluctuating streaming speeds on ISPs. The move came after Verizon threatened legal action.
In a blog post, Netflix spokesperson Joris Evers said the email messages were part of an ongoing “transparency campaign” intended to solve network congestion. He said Netflix does not purposely select crowded broadband routes. The average Netflix stream is 2 Mbps, with some streams reaching 5.8 Mbps. Regardless, Evers said the campaign would end June 16.
“As part of this transparency campaign, we started a small-scale test in early May that lets consumers know, while they’re watching Netflix, that their experience is degraded due to a lack of capacity into their broadband provider’s network. We are testing this across the U.S. wherever there is significant and persistent network congestion. We will evaluate rolling it out more broadly,” Evers wrote.
Finally, Netflix shareholders, in a 53% to 47% vote, rejected a provision that would have split the chairman and CEO positions — both held by Hastings. The co-founder was re-elected to the board with 74% of the votes.
There were more than 1.2 million registered UltraViolet accounts at the end of 2013 in the United Kingdom — more than doubling the tally at the end of 2012, according to the British Video Association. The region saw 447 titles released on disc in the year with a digital copy available either via iTunes, Google Play or UltraViolet.
Indeed, the trade group said 233 titles released in the U.K. last year included UV functionality — the industry backed (with the exception of Disney) digital locker platform, according to Cue Entertainment, which cited data from the BVA’s annual home entertainment yearbook.
The surge in registered UV accounts (and digital copy) is due in part to the fact that just 285 titles were released on disc with digital copy in 2012, compared with 142 in 2011 and 77 in 2010.
Meanwhile, a planned March consumer launch of UV in the region was postponed by the industry, according to IHS. UV is currently offered in Australia, New Zealand, France, Germany, Austria and Switzerland, with launches in Belgium, Holland and Luxembourg expected in the first half of the year.
There were 17 million registered UV accounts in the United States at the end of the first quarter.
IHS analyst Thomas Nash said UV registrations in the U.K. give the platform a household penetration rate of around 4%. While not directly comparable, in 2009, some two years after the Blu-ray Disc format first launched in the U.K., there were around 750,000 households with a BD player, representing 2.8% market penetration, according to IHS.
“Despite some early poor user experiences, the digital locker proposition is a future proof concept that should fit well with U.K. movie fans. Yet, for some U.K. consumers, UV remains a convoluted proposition with many unnecessary obstructions, especially in an age where consumers are accustomed to ease of access to their purchased content,” Nash wrote in a March market analysis.
Meanwhile, digital sellthrough generated revenue of £126 million in 2013, which was up 27% from 2012 — a percentage up just 3% from 2011 despite an influx of early digital releases.
IHS said iTunes continues to dominate digital sellthrough in the UK with 85% market penetration, followed by Xbox Video, PlayStation’s Sony Entertainment Network and Google Play.
In an age of digital media and smart technology, U.K. supermarket giant Tesco is using old-school physical discs as a means of introducing consumers to Internet-connected devices such as Blu-ray Disc players, tablets and mobile phones.
It’s a retail strategy domestic retailers could easily adopt.
Hertfordshire-based Tesco operates 3,300 stores in the UK employing 310,000 people, representing about half of its global retail footprint. With the bulk of the United Kingdom’s £1.6 billion packaged video market generated at supermarkets, Tesco remains the No. 1 home entertainment retailer.
With plans to launch 650 new Tesco stores, in addition to refurbishing 200 other locations in the U.K. this year, the retailer is eying packaged media as a crossover appeal with consumers familiar with discs; yet intrigued by digital distribution.
“We are selling more and more consoles with Blu-ray, so our focus has been to push them as home entertainment units and bundle them with Blu-ray discs,” Stephen Owusu, home entertainment category buying manager at Tesco, told Cue Entertainment.
While video games and movie discs each generate about 40% in revenue, followed by 20% in music CDs, Owusu says focus groups indicate strong consumer demand for packaged media.
Indeed, ongoing consumer demand for packaged media in the U.K. resulted in satellite TV operator BSkyB earlier this year launching an online movie store that includes a disc in the mail with each digital purchase.
Tesco in 2011 was the first British retailer to embrace cloud-based storage of movies and TV shows — ahead of UltraViolet. Dubbed “Online Movies at blinkbox,” the platform enables consumers to access in-store DVD and Blu-ray Disc purchases online via the PC, tablets, PlayStation 3, and select connected LG and Samsung TVs.
With an 80% ownership stake in blinkbox, Tesco now sells and rents digital movies, including new and catalog titles, starting at 99 pence.
Owusu said that while Tesco is attuned to rapidly evolving changes in digital distribution, including marketing a branded “Hudl” tablet, related apps, and soon a branded smartphone — doing so at the expense of physical media is not an option.
Tesco stores now combine physical media with digital in a “connected technology department,” staffed by personnel versed on both sides of the digital divide.
“Our customers don’t think in terms of digital and physical, they just want content, however and whenever they want it. We don’t want to push customers in one direction, so we will not ram digital down customers’ throats when they go into shops but we will make sure we are ready. So, however customers want to consume content, we will be there,” Owusu said.
The executive said that in addition to major new releases, direct-to-video titles continue to outperform at retail. A major selling point is packaging, including box art. Tesco has seen double-digit growth in sales of direct-to-video titles.
“With mid-tier titles most people browse the range and because it will be the first time they come into contact with the product, the packaging is fundamental to their choice,” Owusu said.
“There is not a strategy to go in and take physical products out and replace them with digital or reduce the store space. We are working at 100mph to get the digital proposition right but physical product remains a vitally important part of the mix.”