Building critical title mass for digital video services

In the on demand video world, title availability can either help or hinder consumer adoption.  Finally ready to try a new digital video service but can't find your favorite more or a new release?  This experience just pushes you back to the physical world (Amazon.com and Netflix disc rental).  As the content industry is a few years into an effort designed to increase digital sell-thru (vs. digital rental and subscription services) in an attempt to improve their overall margin structure as physical sell-thru continues to decline, they have developed UltraViolet as a way to encourage consumers to build a digital catalog at home, across multiple services, DRMs, and devices, to gain the freedom they experience with physical DVD or Blu-ray.  The most obvious way to do this today is thru Walmart's Disc to Digital program on their Vudu digital video service.

Looking for evidence of the “Digital Living Room” of the future

When I attend industry conferences, I often spend time asking myself if I am generating enough value by attending to justify the travel cost, the time away from family, and the pain of the accompanying late nights and early morning meetings.  After arriving in Boston for NCTA’s 2012 CableShow, I noticed the relatively light attendance when compared to previous CableShows or other industry events.  Now I am not complaining that the cab lines are short or that I could get a sandwich at lunch time (vs. a few hours before or after) without a problem, and I am certainly not complaining about the host city—Boston is fabulous town.  But when I looked around the show and asked others what were the big “a-ha’s”, there wasn’t an immediate reply.  Everyone quickly said they caught up with tons of industry contacts, colleagues, and of course customers, but we don’t need the show floor expense with demos and meeting rooms to accomplish that.  What were we hoping to see at a show anchored by giant media conglomerates like Comcast (with 22m Xfinity subscribers and NBCUniversal networks) and TimeWarner Cable?  I think everyone was hoping to see some progress against the promise of a better digital future for the consumer—and despite how much attention the press gives all of the great digital living room start-ups and OTT video service providers, the vast majority of consumers still get their media from a Pay TV operator.  I guess my long-winded point is that if those new user experiences aren’t reaching the consumer thru cable operators, they aren’t really reaching the masses.

Who is going to disrupt the Pay TV industry?

I've spent the last few weeks having renewed discussions with a variety of people whose opinion I respect in this space, including those in the Twitter-sphere, the blogosphere, and in plain old real life, and with the NCTA Cable Show happening in Boston next week, I think it is the right time to open this debate up again.

The debate is simple: Who is going to disrupt the current Pay TV industry?

A few months ago at the OTT Con in Santa Clara, I had this discussion in spades with many of the participants in the would-be "cable killer" world (most of whom themselves are "cord cutters" or at least "cord thinners").  My take aways after those discussions were that it was incredibly premature to even think about "Over the Top" or "broadband" video killing the established Pay TV operators like Comcast, DirecTV and Verizon because only the metrics had indicated that all of the current players combined had only made a minor dent in TV Viewing (3 hours of online viewing vs. 34 of traditional viewing per week, 2% of the $200B TV advertising spent on "on-line" video) and that so far the only business being disrupted in a serious manner was DVD sell-thru, which was suffering as much from physical Netflix and the shift from purchase to rental as it was from digital Netflix.  My brief conclusion then was simple: Large pay TV operators were bringing in an average monthly bill per household of close to $100 (ARPU) and the would be disruptors were still in the sub-$15 range and those Pay TV operators were "Striking Back" with their own TV Everywhere solutions, so any would-be survivors in the next 3-5 years would have to deliver an incredibly compelling user experience (UX) centered around Discovery (likely on the second screen).

Returning to Wal-mart to try the Disc to Digital conversion to Vudu again

Since I visited Walmart previously on the day they first opened their service, I thought I would give them a few weeks to work out the kinks and try again.  I also thought I would test my own theory that I put forward in several blogs (What is holding back digital sell-thru?, Converting your physical disc library to a digital locker).  The short summary of that discussion was that if I had the supposed average 80+ titles in my library as the average consumer, I would find that only 75% would be available on Netflix (reducing the need to purchase) and of the remaining 25%, half would not be available for conversion on Walmart / Vudu.

My Review of the Walking Dead Second Screen app built by Red Bee Media

There has been a huge amount of discussion in the trade press and blogosphere about what consumers are doing on their second screen and if they should be engaged in them at all. Certainly in this blog, we have discussed that one reason they might want to engage is to get access to more Stimulating content--everything from stats for sports fans to more detailed information about the show or even commerce opportunities.

Well the Walking Dead FX app built by Red Bee Media is certainly the most stimulating app a fan could hope for. If you are not familiar with the show, it is in essence a show about zombies and the humans who are trying to survive in a world full of them. That means lots and lots of zombies need to be killed--perhaps the attraction of the show itself. This app capitalizes on that fundamental "raison d'etre" of the show--by creating a game out of trying to predict who will kill the most zombies in a particular episode, what will be the most used weapn for the kills, and what the final kill count will be at the end of the show.