As expected, Apple Dec. 8 announced Walt Disney Studios Home Entertainment’s Frozen as the top-selling download title on iTunes in 2014.
The animated box office hit has been a global cash cow for home entertainment, dominating packaged media, music and consumer goods retail sales. Apple added that Frozen's Oscar-winning theme song, “Let It Go,” was the eighth-most-downloaded song of the year, and the “Frozen Free Fall” and “Frozen: Storybook Deluxe” apps were top downloads on the App Store.
Disney’s Guardians of the Galaxy is the top-downloaded movie on iTunes, despite being released digitally just three weeks ago. Notably, Amazon ranks Guardians as the most popular packaged-media release based on preorders. The title streets Dec. 9.
HBO Home Entertainment’s Game of Thrones: Season 3 is the top downloaded TV show of the year. Sony Pictures Home Entertainment’s Breaking Bad: The Final Season is fourth on the list.
Upscale movie server company Kaleidescape Dec. 4 announced the launch of Alto, a cloud-based movie player with more than 8,500 movies and 1,600 TV show seasons from Warner Home Video, Sony Pictures Home Entertainment and Universal Pictures Home Entertainment, among others.
Alto retails for $2,495, which is significantly less than the $4,000 Cinema One streaming media player Kaleidescape bowed earlier this year — the latter a 2014 CES Innovations Design and Engineering Awards Honoree in the home audio/video components category.
Like Cinema One, Alto claims to stream content in 1080p Blu-ray resolution quality. In addition to an engaging user interface, Alto stores downloaded content on a hard drive — up to 100 movies in Blu-ray (1080p) quality, and 600 movies in DVD quality (720p).
Alto offers users the ability to upgrade their DVDs and Blu-ray discs to digital versions downloaded from the Kaleidescape Store.
“We help consumers discover and enjoy the finest movies, and we help the studios develop the emerging electronic-sellthrough market segment,” CEO Cheena Srinivasan said in a statement.
As expected, the amount of time Americans spend watching broadcast television declined more than 4% (12 minutes) in the third-quarter compared with the prior-year period, according to new data from Nielsen.
The average consumer over the age of 18 still watches 4 hours and 44 minutes of TV every day. Time-shifting content (using a DVR or video-on-demand technology) continues to resonate — albeit slowly at 30 minutes a day. That’s up just two minutes compared with the third quarter in 2013.
Meanwhile, the daily time spent using a smartphone increased 23 minutes, from 1 hour and 10 minutes to 1 hour and 33 minutes per day. DVD and Blu-ray player usage remains unchanged at nine minutes per day — more than double the four minutes spent using a streaming media device.
“The evolving media landscape has not lessened consumer demand for professionally produced content. What has changed is the number and reliability of new media available to viewers,” Dounia Turrill, SVP of insights at Nielsen, said in a statement. “What used to be a schedule to watch programming now seems like little more than a suggestion.”
Meanwhile, radio consumption remains strong at 2 hours and 44 minutes per day, which is down just three minutes year-over-year. Time spent accessing the Internet via a computer increased 6% to 1 hour and 6 minutes. Using a video game console increased 20% to 12 minutes per day.
Among racial and ethnic groups, Nielsen found that black viewers watch the most broadcast TV at more than 201 hours per month. Hispanic and Asian American viewers watch about 117 and 82 hours monthly, respectively.
Indeed, Asians watching over-the-top video increased 17% — underscored by the fact tablet penetration among Asian-Americans also rose 17% during the period.
BitTorrent, the file-sharing platform often associated with illegal downloads of movies and music, says its users actually purchase or rent more content than the average Internet user.
The platform said 52% of 2,500 respondents in an online survey conducted in September said they bought or rented at least one movie in the past month. Another 16% said they acquired or rented at least one movie in the past few days; 12% in the past week; and 17% in the past six months.
BitTorrent said users spend an average of $54 a year on movies, with 35% of respondents spending more than $100. Notably, 60% of respondents said they buy or rent movies on disc.
Most popular genres include action at 32%, comedy (16%), Sci-Fi (15%), drama (11%), horror and romance at 5%.
Broken down by activity in the past year, 47% of respondents said they watched a movie in the theater; 38% said they bought a DVD or Blu-ray Disc title; 23% utilized a subscription streaming service; 23% bought a digital movie; 22% said they rented a disc; and 16% said they bought a transactional VOD movie rental.
Indeed, BitTorrent contends allowing its users access to digital movie content, trailers and sneak peaks enhances the chances for retail transactions.
In 2013, Cinedigm partnered with BitTorrent to offer free seven-minute opening clips of Arthur Newman, starring Oscar winner Colin Firth and Golden Globe winner Emily Blunt, four days before the indie launched theatrically.
While sneak peaks and clips of theatrical releases online aren’t new, offering legitimate content on a file-sharing network synonymous with piracy represented a twist — and leap of faith among a movie distributor.
It also underscored BitTorrent’s efforts to legitimize a reported user base of 170 million. Movie studios lost nearly $2 billion in revenue on potential disc sales for the top 10 pirated movies of 2012, according to a recent research report, which cited data from BitTorrent.
“We’re able to connect Cinedigm with real movie fans that actively support content creators and by doing so BitTorrent can demonstrate how we add value through continued innovation,” Shahi Ghanem, chief strategy officer of BitTorrent, said in a statement last year.
B. Riley & Co. analyst Eric Wold said the promotion with BitTorrent enabled Cinedigm to look for creative ways to effectively promote their indie films to the right audiences and for the right cost.
“Cinedigm is not held to the traditional marketing/promotional ways of other studios,” Wold said.
Entertainment network Epix Nov. 25 announced it has launched a TV Everywhere app on Google Chromecast.
Though a bit lost in the crush toward subscription streaming and over-the-top video, Epix, which is co-owned by Lionsgate, Metro-Goldwyn-Mayer Studios and Paramount, was the first pay-TV network to launch on Xbox 360, PlayStation, iOS, Android tablets, Windows 8.1 and Roku players.
Authenticated subscribers have access to more than 3,000 movies, including the "Hunger Games," "James Bond" and "Star Trek" franchises, plus original programming such as documentaries “The Road to the NHL Winter Classic” and “The Road to the NHL Stadium,” Russell Brand: Messiah Complex and “Hollywood Sessions,” co-produced with the Los Angeles Times.
“The marrying of Epix with Chromecast’s easy-to-use device offers a unique and unparalleled experience. With this partnership, we’re continuing to build on our momentum of delivering great programming how, when and where viewers want to see it,” Keary Hanan, SVP digital programming and production, said in a statement.
Aereo TV, the shuttered subscription-based digital TV broadcaster whose business model was thwarted by the U.S. Supreme Court, has filed for Chapter 11 bankruptcy protection.
Chapter 11 will permit Aereo to maximize the value of its business and assets without the extensive cost and distraction of defending drawn out litigation in several courts.
Aereo has appointed Lawton Bloom of Argus Legal LLC in Virginia to serve as Aereo’s chief restructuring officer during this period.
In a Nov. 21 post on its website, founder and CEO Chet Kanojia said the reversal of the Second Circuit Court of Appeals decision in June by the top court proved too difficult an obstacle.
“The Supreme Court decision effectively changed the laws that had governed Aereo’s technology, creating regulatory and legal uncertainty. And while our team has focused its energies on exploring every path forward available to us, without that clarity, the challenges have proved too difficult to overcome,” Kanojia wrote.
Aereo TV launched three years ago in Manhattan, N.Y., offering subscription service for live and on demand access to local TV broadcasts on portable devices via micro antennae. Aereo’s legal claim was that its technology was simply capturing free over-the-air digital signals — something televisions in the past did with rabbit ear antennae.
Broadcasters and media companies didn’t agree. This set off a series of litigation with Aereo winning battles in the federal district courts of New York and Boston and the Second Circuit Court of Appeals.
CBS CEO Les Moonves, a vocal critic of Aereo, lauded the technology but characterized the service as theft of copyright material.
Regardless, Kanojia said Aereo has helped evolve TV distribution as evidenced by the flurry of over-the-top video services and on-demand platforms coming to market.
“We feel incredibly lucky to have had the opportunity to build something as meaningful and special as Aereo. With so many shifts and advances in technology, there has never been a more perfect time to take risks, challenge the status quo and build something special,” Kanojia wrote.
Vudu.com has joined Disney Movies Anywhere as a participating retailer, allowing movie fans to access their DMA content through the Walmart-owned digital movie service.
Disney Movies Anywhere (www.disneymoviesanywhere.com), which launched in February with about 400 Disney, Pixar and Marvel titles, utilizes a proprietary cloud-based storage platform, while Vudu is compatible with a number of digital platforms, including UltraViolet — the cloud-based platform supported by other studios.
The agreement coincides with Disney's Nov. 18 launch of the sing-along edition of animated hit Frozen, as well as the digital version of Marvel’s Guardians of the Galaxy (available on disc Dec. 9), which are available through Vudu (www.vudu.com/dma).
“In addition to its robust digital video service, Walmart is a top destination for Blu-ray and DVD purchases, and bringing Disney Movies Anywhere to Vudu enhances the value of those purchases,” Janice Marinelli, president of Disney Studio in-home and digital distribution & Disney-ABC content Distribution, said in a statement.
Prior to the deal, some Disney Movies Anywhere codes included with new Blu-rays could also be redeemed at Vudu, allowing consumers to store Disney films at both locations. This new agreement directly links a consumers' accounts to both services.
Disney Movies Anywhere, which bowed with Apple’s iTunes iOS operating system, earlier this month expanded availability to Google Play, which uses the competing Android operating system.
For a limited time, users who connect a participating digital retail account receive a free digital copy of Disney’s Wreck-It-Ralph.
“Vudu’s availability across in-home entertainment devices like smart TVs, Roku 3, Xbox One and PlayStation 4 as well as Apple and Android smartphones and tablets means Disney fans can now enjoy their movies on more devices than ever,” Jeremy Verba, GM of Vudu, said in a statement.
SANTA MONICA, Calif. — On Sept. 5, independent distributor Gravitas Ventures released the Olivia Wilde and Jason Bateman comedy-drama The Longest Week day and date in both theaters and on VOD and electronic sellthrough via digital platforms.
And while the film pulled in almost nothing on the big screen, it made “a few million” via digital, according to Gravitas CEO and founder Nolan Gallagher. Indeed, according to Rentrak data covering digital sales and rentals, The Longest Week quickly hit No. 14 on its top 20 EST and VOD list (for the week ended Sept. 14).
Speaking Nov. 11 at the American Film Market conference, Gallagher said people are consuming VOD in record numbers, especially on mobile devices, and that it’s become increasingly important for film distributors to treat a digital release with the same gravitas as theatrical.
“Getting the film up there, online, that’s possible,” Gallagher said. “It’s a matter of aggregating your audience ahead of time. Treat your VOD debut the way you’d treat your theatrical debut, and there can be real money in it.”
Paul Davidson, SVP of film and TV for distributor The Orchard, can attest to that. His company released the documentary film Harmontown, about writer-comedian Dan Harmon, in early October. The film follows Harmon on tour for his podcast series, which regularly pulls in more than a million listeners.
“When you have a community around [a property], you can plan a release around it. That’s very appealing,” Davidson said. “It’s easier to get to ‘my audience,’ a small cross-section. That’s realistic in the short term.”
But in theaters, across digital platforms, day and date? That’s just not so simple for independent filmmakers.
Still, getting on VOD platforms is easier than ever, thanks to the investments made by companies to remove the barriers for entry, according to Doug Sylvester, president of multiplatform video services company Vubiquity.
“What then becomes the issue is getting noticed,” Sylvester said. “More and more owners of content … have to take on that responsibility.”
Amazon, Netflix and iTunes have done a masterful job of knowing the consumers using their services, Sylvester said. However, they don’t share that data very quickly with everyone else. “You can get a very clear picture [of data] across platforms, but you’re looking back six months,” he said.
There’s a reason for that, according to John Sloss, founder of New York-based film and media advisory services company Cinetic Media. “The people who hoard data, keep it secret, profit off it,” Sloss said.
Upscale movie server company Kaleidescape Nov. 11 announced it entered into a license agreement with Universal Pictures Home Entertainment for electronic-sellthrough rights to 1,000 movies and 210 TV show seasons.
The transaction brings to 8,500 movies and 1,600 TV seasons available for download on the Kaleidescape Store.
Kaleidescape said its online store features new recommendation software, as well as a link enabling users to access digital versions (for a fee) of their DVD and Blu-ray Disc collections stored in the cloud.
The Kaleidescape Store, which serves all Kaleidescape Systems in the United States and Canada, also facilitates cloud-based UltraViolet functionality.
The agreement includes Bridesmaids; films from the "Bourne," "Jurassic Park" and "The Mummy" franchises; in addition to Despicable Me, Hop and Curious George. Additionally, award-winning television series such as “The Office,” “30 Rock” and “House” are available.
“Kaleidescape is focused on the overall experience in purchasing, choosing and watching movies at home … for families who own a personal movie library,” Michael Bonner, EVP of digital distribution for Universal Pictures Home Entertainment, said in a statement. “We like to support innovative companies within the UltraViolet ecosystem, and Kaleidescape is well-known for its innovative products and services.”
While home entertainment executives continue to talk up digital downloads of movies and TV shows as a growing, and increasingly lucrative, trend, Blu-ray Discs and DVDs remain the industry’s proverbial cash cow, at least in the sales end of the business.
U.S. consumer home entertainment spending in the third quarter of 2014 was essentially flat with last year’s third quarter, coming in at an estimated $3.92 billion, down 1.2% from the $3.97 billion consumers spent in the third quarter of 2013, according to numbers released Nov. 5 by DEG: The Digital Entertainment Group.
In the first nine months of this year, consumers spent an estimated $12.5 billion on bringing entertainment into their homes and various mobile devices, a decline of less than 1% from the $12.62 billion they spent in the first nine months of last year.
As expected, disc sales continued to fall, with consumer spending on Blu-ray Discs and DVDs combined down 8% in the quarter, to $1.33 billion from $1.45 billion, and 8.2% for the year through Sept. 30, to $4.6 billion from $5 billion.
Electronic sellthrough (EST) rose 26.7% in the quarter and 33% in the first nine months of 2014. But total spending — $347 million in the quarter and $1.02 billion for the year through Sept. 30 — remains a small percentage of total sellthrough spending and wasn’t enough to lift the category into positive territory. For the first nine months of this year, EST accounted for just 18% of total consumer purchase dollars, while discs accounted for 82% of the total sellthrough pot.
DEG numbers show that the total amount of money consumers spent in the quarter on buying filmed entertainment — on disc and digitally — slipped 2.5%, to $1.68 billion from $1.72 billion in the third quarter of 2013. For the year through Sept. 30, consumer sellthrough spending was down 2.7% to $5.61 billion, from $5.77 billion in the first nine months of last year.
The DEG did not break out Blu-ray Disc sales from overall physical media sales. Home Media Magazine research estimates Blu-ray accounted for 28% of packaged-media revenue in the quarter and 30.7% through the first nine months of the year.
Consumer spending on subscription video-on-demand — such as Netflix streaming — rose more than 26% in the first nine months of 2014, to $2.94 billion, from $2.33 billion in the comparable period a year ago. Transaction video-on-demand (VOD), meanwhile, was down nearly 7%, to an estimated $1.45 billion from $1.56 billion. Total digital spending — on subscription VOD, a la carte VOD and EST — was up 16.3% to an estimated $5.4 billion from $4.65 billion, DEG numbers show.
The biggest loser was again traditional disc rental at physical video stores, which declined 32% to an estimated $517 million in the first nine months of this year from $760 million in the same period last year.
Disc rentals at Redbox vending machines and other kiosks were off 5.9% in the first nine months of this year, to $1.34 billion from $1.43 billion. The drop was even more significant in the third quarter: business was down 11.5% to $418 million from $472 million in the third quarter of 2013.
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.