Warner Bros. is upping its status in the South Korean home entertainment market by offering select new-release movies on transaction video-on-demand — and not theatrically — through regional telecom operators.
While the Warner branded service, which launches Oct. 16 on KT Olleh TV and separately on LG U+TV), will offer traditional new movies and catalog in the retail window. It is also offering select new releases foregoing a theatrical release.
As a result, romantic comedy Blended, starring Adam Sandler and Drew Barrymore, will be available on VOD but not in theaters. The title has generated more than $126 million at the global box office, including $46 million domestically.
Other titles include Clint Eastwood’s Jersey Boys, which has generated nearly $62 million globally ($47 million domestically), and adult comedy Tammy, starring Melissa McCarthy, which has generated $97 million globally ($85.5 million in the U.S.) since its July 2 debut.
The service marks Warner’s first serious effort to recapture the South Korean home entertainment it all-but-vacated six years ago. The studio was the last Hollywood holdout in 2008 — pulling the plug on its DVD business, which had suffered due to rampant piracy and other issues.
Korea has been wired longer than most countries, with 94% of households reportedly having broadband connections since 2008 when the high-definition channel was still in its infancy. Indeed, Warner used the Korean market to test making new releases available two-weeks ahead of their packaged media retail date — beginning 2009.
Transactional VOD Growing in America
Transactional VOD has been available in the United States for years — largely through cable and satellite TV operators with little consumer traction. That trend is changing. A new Parks Associates study found that 37% of U.S. broadband homes use transactional VOD on a regular basis. Those households also proportionally opt for subscription streaming.
Indeed, about two-thirds of Amazon Prime Instant Video subscribers also rent or purchase titles through the service, and their average expenditures are increasing. By contrast, expenditure on downloads among Netflix subscribers is decreasing, according to Parks.
"Subscription services are the most popular form of OTT video, but a transactional service that offers a wide selection of titles and easy-to-use controls can score with consumers and create new revenues," Barbara Kraus, director, research at Parks, said in a statement.
Kraus added that a lack of engaging content can doom a transactional or SVOD service, which was made clear Oct. 7 by the shuttering of Redbox Instant. The Verizon joint venture had hoped to meld consumer interest in SVOD with its kiosk disc rental business, transactional VOD and electronic sellthrough.
“Redbox Instant failed in large part because only a limited number of titles were available to rent through its streaming library. What the service needed was a large selection of online titles, with easy access for streaming,” she said.
In a survey of 10,000 U.S. broadband households, Parks found that among frequent users of streaming media players, 80% pay for monthly streaming services, such as Netflix, but in addition, nearly 30% stream video rentals and 20% buy electronic sellthrough. These users are typically U.S. broadband households using a streaming media player such as Roku or Apple TV.
Connected Blu-ray Disc players rank just ahead of video game consoles and behind smart TVs and streaming media devices as the preferred option to acquire transactional VOD or electronic sellthrough content.
“Ease-of-use is the key factor driving most households to use a certain device, so developing a rental or download content service that is simple and well integrated with a device's [user interface] could help increase a la carte revenues among streaming content,” Kraus said.
Growth in subscription streaming (Netflix, Amazon Prime Instant Video, etc.), transactional VOD and electronic sellthrough will increasingly underscore total consumer spending from traditional home entertainment sources, including packaged media, according to analysis released at the recent PEVE Entertainment Business conference in London.
According to IHS, digital purchases are set to grow by 75% through 2017. In terms of worldwide consumer revenue, IHS forecasts that digital movie purchases will reach $2 billion by 2018.
Indeed, total U.S. home entertainment spending through June 30 topped $8 billion, according to DEG: The Digital Entertainment Group. Consumer spending on Blu-ray Disc and DVD declined 8.2% to $3.2 billion from $3.5 billion in the first half of 2013. Electronic sellthrough — buoyed by early availability — rose 37%.
“As physical rentals and purchases decline, the home entertainment revenue stream will rely more and more on the growth potential of the digital space,” Dan Cryan, senior director of digital media at IHS Technology, told attendees, which included representatives from the major U.S. studios.
Similar to foreign box office growth, IHS said major media companies such as Google and Apple are expanding their digital storefronts — Google Play and iTunes — internationally. Google Play movies are now available in Central Asia and Korea and iTunes is extending its reach into Egypt, Saudi Arabia, Oman, South Africa and Mozambique, according to the research firm.
In addition to digital sellthrough, IHS said media companies are innovating the ecommerce home entertainment experience to include catalog movies and pre-order movie sound tracks, among other content offerings.
“The digital content store page is changing,” Cryan said. “If ecommerce can extend the kinds of content types offered and include content, such as apps, they are likely to see increased sales.”
It’s been quite a week for Blinkbox, the electronic sellthrough movie and TV show platform owned by British supermarket chain Tesco.
At the PEVE Entertainment Business conference Sept. 30 in London, Adrian Letts, managing director of Blinkbox, announced the platform would “imminently” bow a digital content locker with UltraViolet functionality.
Letts said final details surrounding the venture were being ironed out with the studios and related content partners. Blinkbox, which offers more than 10,000 digital titles for retail and rental, is considered a key driver in consumer adoption of UV in the United Kingdom. The platform has generated more than 1.5 million registered accounts in the U.K. without a formal launch, according to the Digital Entertainment Content Ecosystem.
Indeed, 12% of respondents in a survey presented at PEVE by YouGov, a London-based Internet market research firm, said they would consider trying UltraViolet with their next packaged-media purchase. Another 55% of respondents who have tried UV said they would do so again, while 22% who had not tried the digital locker said they would do so going forward.
Meanwhile, media reports suggest new Tesco CEO Dave Lewis is looking to sell or shutter Blinkbox following an internal review of Tesco’s core assets. The chain is one of the largest packaged-media retailers in the U.K.
Lewis is under pressure to right Britain’s largest supermarket retailer after it recently disclosed it had overstated half-year net income by more than $400 million. The news sent Tesco’s stock plunging and resulted in the government conducting an investigation to see if senior officials at Tesco “cooked the books” to mask slumping profits.
Indeed, Lewis reportedly has ordered senior executives to man store floors during the upcoming Christmas holidays. In addition, the chief executive is seen wanting Tesco to focus more on the grocery business than ancillary ventures such as Blinkbox. A reality Letts appeared to acknowledge.
“When a customer is starting to think digitally, when they are buying a mobile device, console or TV, those are probably better opportunities to market UV to customers than when they are in store buying groceries,” Letts said, as reported by Cue Entertainment.
Dish Network’s pending over-the-top TV video service got a new content provider.
The satellite TV operator Sept. 16 announced it renewed a multiyear retransmission agreement with Scripps Networks, whose properties include HGTV, Food Network, Travel Channel and Great American Country. The deal expands distribution of DIY Network and Cooking Channel.
Included in the agreement are digital rights to programming for live and video-on-demand. The pact also expands Dish’s distribution of authenticated live and VOD programming on Internet-connected devices.
Specifically, Dish plans to roll out OTT video subscription packages targeting Millennials, cord-cutters and cord-nevers. The satellite operator contends the content will be available to an untapped segment of customers that is seeking a flexible, content-driven, Internet-accessible service. Critics say the services could undermine the current $100 bundled subscription pay-TV business model.
Other OTT video content providers include Disney Channel, Disney XD, ESPN, ABC, A&E, History, Lifetime and H2.
Dish broke new ground in March when it renewed a TV retransmission agreement the Walt Disney Co. that included first-ever OTT video rights.
“This first-of-its-kind OTT deal for Scripps Networks Interactive enables us to reach even more people,” Kenneth Lowe, Scripps CEO, said in a statement.
Despite a surge in video consumption on mobile phones and tablets, most viewers still prefer connected televisions when viewing content longer than 30 minutes, according to new data from Ooyala Global Video Index Q2 2014.
About 81% of time watched on connected TVs was with videos longer than 10 minutes, while 70% of time watched on tablets was with video longer than 10 minutes.
Meanwhile, viewers using mobile phones spent 45% of their time watching videos of 6 minutes or less in length. Indeed, on connected TVs, viewers spent 65% of their time watching videos 30 minutes or longer; and more than half of that time (54%) was with content longer than 60 minutes. On tablets, viewers spent 23% of their time watching video of 30 to 60 minutes in length, more than on any other device.
The latter data point underscores the reality that while mobile phones remain the portable media device of choice among the coveted aged 18-24 Millennials demo, which primarily digests short-form video, not Hollywood movies or subscription streaming content.
Indeed, online video segments ranging from 1 to 3 minutes long get most of the plays on all devices, from 38% on tablets, and 49% on connected TVs, with content lasting up to 1 minute next most popular in a range of 23% on tablets to 31% on desktops. Meanwhile, tablets tied with connected TVs at 19%.
Ooyala cited research from Nielsen that showed Millennials watching 4.5 fewer hours of traditional TV than they did during the same period a year ago. Deloitte’s annual Digital Democracy Survey found Millennials spend more time watching movies and TV shows on devices other than TVs.
Mobile Video Surge
The connected TV may be the device of choice to watch movies and TV shows from online sources, but the report projected that online video on mobile devices is on track to make up more than half of all online video views by the beginning of 2016.
The report cited larger screens on tablets, smartphones and ultrabooks that make watching video easier, and increasing deployments of TV Everywhere platforms. For example, it's estimated that in the United States more than 90% of pay-TV subscribers have access to TV Everywhere and direct-to-consumer video offerings focusing on mobile devices.
In the past 12 months, mobile video consumption doubled from 11% of all online viewing to more than 25% in the most recent quarter – a 127% increase. As recently as Q2 2012, mobile views made up just 5% of the total, meaning that mobile share increased more than 400% in a span of two years.
Over the past five months, Ooyala said growth in the percentage of mobile video views hasn’t faltered, growing from 21% in February to nearly 27% in June.
A report from The Diffusion Group found that 49% of U.S. adult broadband users use mobile video at least monthly, with 17% engaging with a mobile video app weekly and 16% daily. And 63% of 18-24 Millennials say they use mobile video apps at least once a month.
Ooyala found that the size of the screen and the comfort of the living room remain important factors when watching long-form video. At the same time, increasing sizes of mobile phone screens is helping those devices make significant inroads in the consumption of content longer than 60 minutes.
Indeed, 25% of the time mobile phone users spent watching video on their devices was with video longer than 30 minutes.
EzyFlix.tv, the Australian online movie store, announced consumers in the country now have the ability to use their existing DVD and Blu-ray Disc collections to access digital versions stored in the cloud.
DVD conversions cost $2 (Australian), with upgrade to high-definition at $5 per title. The digital copy is added to the customer’s EzyFlix account. All eligible Disc-2-Digital movies (about 1,000 titles at launch) are UltraViolet compatible, which means users can share their films with up to five other people and stream or download them to watch on any of their devices.
Compatible digital devices include smartphones and tablets, compatible Smart TVs, PCs, MACs and Google’s Chromecast.
EzyFlix’s Disc-2-Digital initiative follows CinemaNow in Canada as the second retailer outside of the United States to offer consumers digital copies of packaged media stored in the cloud.
Walmart bowed the first (store-based) disc-to-digital program in April 2012. The retailer and Best Buy subsequently offered the service in the home in 2013.
EzyFlix, which is owned by Access Digital Entertainment, accommodates UltraViolet and Disney Digital Copy redemption codes. ADE operates online packaged-media fulfillment services, in addition to websites, including WowHD.com in the U.S.
The company says Australia has more than 50 Million DVD or Blu-ray movies in circulation eligible for conversion. The Disc-2-Digital initiative aims to further digital access to movies without having to purchase electronic sellthrough.
“When we transitioned from VHS tape to DVD and even from DVD to Blu-ray, technology dictated that consumers had to essentially re-buy their [movie] collections to keep enjoying the films and programs they loved,” Craig White, CEO of Access Digital Entertainment, said in a statement.
Australian sales of movies and television shows on DVD and Blu-ray topped $1.17 billion in 2013.
Now, another reason not to go the movie theaters.
Dolby Laboratories announced that movies from Paramount Pictures and Warner Bros. featuring Dolby Atmos digital cinema surround soundtracks will soon be available in home entertainment channels.
Dolby Atmos movies, which represent studios’ efforts to replicate the digital theatrical experience in the home, will be available this fall on Blu-ray Disc and via Vudu, Walmart’s digital media service.
On Sept. 30, Paramount Pictures will release the first Blu-ray Disc to feature a Dolby Atmos soundtrack with Transformers: Age of Extinction. Both the Blu-ray Combo Pack and the Blu-ray 3D Combo Pack will offer a Dolby Atmos soundtrack encoded in Dolby TrueHD. Paramount Home Media Distribution has slated additional Dolby Atmos releases later this year.
Dolby Atmos soundtracks are fully backward compatible, meaning they’ll play on traditional home entertainment playback systems, in addition to Atmos speakers and home theater networks.
“If you’ve experienced Transformers: Age of Extinction in Dolby Atmos in the cinema, you understand the power of sound to transport you right into the middle of the action,” Edward Hoxsie, SVP of worldwide product production and fulfillment for Paramount Pictures, said in a statement.
Meanwhile, Jim Wuthrich, president of the Americas for Warner Bros. Home Entertainment, said the studio would soon offer select releases in both digital and physical formats featuring Dolby Atmos sound.
“By leveraging new technologies, we can deliver a more enriching and realistic experience that taps into the power and location of the audio, to draw fans deeper into the story unfolding on the screen,” Wuthrich said in a statement.
Best Buy-owned Magnolia Home Theater and Design Centers plan to feature Dolby Atmos demonstrations in select locations starting in October.
Roku Sept. 8 announced it has expanded its international presence through the launch of a marketing program designed to implement its streaming technology with third-party pay-TV operators.
Dubbed “Roku Powered,” the program is intended for pay-TV services to enhance their bundled channel business model by incorporating over-the-top streaming. While OTT is considered kryptonite by many to the multichannel video distribution market, Roku contends embracing technology that enables services such as Netflix, Amazon Prime Instant Video and Hulu Plus to thrive will enhance premium television.
The Roku Powered program provides pay-TV providers with access to low-cost hardware, software, a simple and intuitive user interface, a broad selection of streaming content, and access to ongoing software upgrades. Software customizations include pay-TV operator branding of every stage of the user experience, custom user interface themes, built-in promotional capabilities, and control of the streaming content available through the platform.
Roku believes OTT video can help reduce MVPD video subscriber churn and actually encourage broadband tier upgrades. Indeed, while pay-TV operators continue to experience ongoing declines in video subscribers, some of those losses have been offset by high-speed Internet subscriptions.
“There has been [a] demand from pay-TV providers for a simple way to address the increasing consumer interest in Internet-delivered entertainment,” Steve Shannon, GM of content and services at Roku, said in a statement.
Roku cut its teeth connecting with pay-TV in 2012 when it partnered with satellite TV operator BSkyB, which led to the development of the Now TV set-top-box in July 2013. It was the first time Roku had licensed its streaming platform, allowing Sky to extend its pay-TV market-leader status in the United Kingdom.
The collaboration was prompted in part by Rupert Murdoch-owned News Corp. (now 21st Century Fox) and Sky investing $45 million in Roku in 2012. Murdoch is a majority stakeholder in Sky.
“The innovative licensing approach we developed with Roku dramatically reduced our time to market, enabling us to capitalize on the growing demand for Internet TV by launching a powerful and great value streaming box,” Emma Lloyd, director of corporate business development at Sky, said in a statement. “The Now TV Box is already a key component in our OTT leadership, giving customers another simple way of accessing Sky content and further extending our distribution footprint.”
Indeed, Sky this year implemented shipments of DVDs as backup to electronic sales of movies and TV shows via the Sky Store.
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.