10 Predictions for the Second Screen Industry in 2013

It seems that technology triggers are often accompanied by the hype of future potential benefits, while the real value is elusive and slower to appear than industry journalists, analysts, or pundits would like, but I am going to lay out 10 scenarios that will develop in this still nascent industry during 2013.

2nd Screen expected to dominate the news and exhibits at CES

Already being dubbed the "Tablet Christmas" in London as retailers are seeing tablets fly off the shelves and into shoppers baskets at the rate of 1 per second, there is a large surge expected in tablets this holiday shopping season--so large that IDC has increased their 2012 forecast for tablet sales by 5 million units to 121 million units worldwide.  While the Huffington Post believes the driving force will be the wide spread availability and lower price point of 7-inch Android tablets, one thing is for sure, it is going to be a "2nd Screen CES" as a result, with major TV service providers working hard to attract revenue as more than 70% of table owners use their devices while watching TV.

A Review of The Dark Knight Rises experience on Xbox SmartGlass

Last week, the Dark Knight Rises finally entered the Blu-ray/DVD and digital download window for consumers.  While I am warming-up to the concept of "owning" a digital title on Xbox (portability issues still remain), I was very interested in digging into a premium experience on their new SmartGlass second screen platform.  It delivered premium and then some, offering what I think is currently the best UX to date for a movie companion second screen experience.

Analyzing the Disney - Netflix Deal

This already much discussed content deal was announced fresh on the heels of our discussions together Monday at the Forecast : Hollywood event where we discussed at great length the digital subscription window and how it impacts content owner profitability and why it is driving the vast majority of growth in digital video consumption.

But the more I discussed this Tuesday and Wednesday with various industry colleagues, and the more I read articles covered by various newspapers, the more I realized that there are details and nuances in how content windows work and what is driving servicer provider profitability and consumer consumption that not everyone is fully aware.

So let's examine a few of them from the three most important views in this equation: Disney, Netflix and the Consumer.

Driving digital video ownership

I had the opportunity yesterday to share the stage with rockstar analysts Tom Adams (of IHS Screen Digest), Anne Arroyo of the NPD Group, and Larry Taman of GfK to discuss an industry outlook for home enterainment at the Forecast:Hollywood 2013 event presented by Variety and MESA today in LA.  Some interesting data points shared during the presentations:

• UltraViolet now has 6m user accounts
• an estimated 30% of U.S. households have tried an OTT streaming service
• 31% of consumer households view their video entertainment on both physical and digital formats
• a substantial number of subscription streaming households (Netflix, Hulu, Amazon Prime) also purchase and rent content on eiher Amazon or iTunes 

The real question in front of content creators in the home entertainment space today is how to maintain profitability.  Video consumption has never been higher in the U.S. household, but it is the mix of consumption that is hurting Hollywood studios.  

Revisiting Microsoft's Xbox SmartGlass Platform

Last week I had the opportunity to moderate a second screen panel and attend several other panels and presentations at the Variety Entertainment App Summit in LA.  While I greatly enjoyed the panel on second screen monetization with YuMe, Magic Ruby, Cinram/1K and MTV, I thought the most eye-opening session was the presentation of Microsoft Xbox SmartGlass by Mark Turner.  While I had seen Ron Pessner present something similar back at a 2nd Screen Society in NY last June and I had been playing with the platform at home for the past 2 weeks (and even wrote about it last week), somehow the epiphany of just how big this could be for the entire second screen ecosystem had escaped me.  Let me talk you through the key points they get me excited and explain why I spent this weekend re-exploring the platform at home.

My Review of Microsoft Xbox SmartGlass

Microsoft has continued to develop the Xbox platform into an entertainment convergence powerhouse that has migrated from the family teenager's bedroom or basement into the living room.  They made a significant leap with Kinnect in the gaming world in early 2010, and then earlier this year launched a video and menu navigation system that leverages voice and Kinnect and even leverages their search engine Bing.

Then this spring they announced Microsoft Xbox Smartglass with a ton of fanfare, lead by Balmer himself and in LA of all places.  While they have continued to follow-up on that with Windows 8 phones and tablets, a formidable device and ecosystem approach in its own right, their greatest weapon for winning the living room battle may be their second screen development platform SmartGlass.

The Coming Battle for Second Screen

In the last few weeks, a key number of market events have taken place that give an indication of what lies ahead for Second Screen.


- Game Consoles. While all of us know have known for some time that Microsoft's announcement in the spring about SmartGlass was an important sign to their commitment to the space, most of us (including me) were surprised they delivered a revision-1 level experience relatively quickly and have a serious vision about what this change in consumer behavior can mean to their platform in terms of changing hard core gamer experience AND changing video entertaiment on the platform. But what I think is passing over the heads of most of the industry is what impact the Wii U will have on gaming and the second screen space.

An Updated NextGuide by Dijit - A Second Screen Content Guide App

Its been a little over 60 days since the launch of NextGuide by Dijit (and our review)--an app designed to help the consumer to Seamlessly find something to watch from multiple content sources including their channel provider line-up (using Zip Code and service provider information) and OTT sources like Hulu, Netflix, iTunes and Amazon. More importantly, the app's UI and UX are designed to facilitate Discovery of new content for the consumer.

An Updated View of which Second Screen Apps to Watch in 2012

Earlier this summer, I wrote a brief blog on 10 second screen apps to watch discussing which apps I thought had a compelling enough user experience to propel them forward. Since then, we have gotten together as an industry for debate in NYC (twice--once for Advertising Week, once for CEA), in Amsterdam @ IBC, and on the West Coast at the MultiScreen, NextTV and TV|Next summits. In the meantime, NextGuide and zeebox launched their apps in the US--a lot of changes have taken place.

As we are now a few weeks into the Fall TV season, I thought I would update my views on which apps seem to be furthest along the path to develop the features that will drive serious consumer adoption.

I continue to believe there are really 5 major features sets that drive consumers to pick up a device as their second screen in an attempt to add value to their first screen experience: Finding something to watch (Discovery), determining where to watch it (Seamless content sourcing, often combined with Discovery), launching that content to your first screen (Simple), getting more information about the program, whether sport stats, actor bios, games, or commerce opportunities (Stimulating), and then sharing all of that and more with your friends (Social).

UltraViolet marches onward, but can it succeed?

While the last official news from the UltraViolet website is from August 15th of this year, there was an interesting panel last week and some interesting support statements from the BBC, Fox and Barnes and Noble the previous week.  The title count is supposed to be above 7,000 now, available to more than 5 million consumer accounts through Wal-mart/Vudu and Flixster (as well as the studios' own title websites), with promises to be available soon on the Nook and M-GO.

But is this enough for success?

Netflix sneaks in some Simple second screen functionality

Depending on how up to date you are on your Twitter feed (or your S3 2Day curated news service), you most likely read the brief story on Gigaom about Netflix quietly rolling out some second screen functionality for the PS3 implementation of their streaming service.  I tried the service last night and included a few screen shots to give you an idea of what is capable, but let me try to take this conversation in two directions: 1) a discussion about what you can do today with an iPhone or iPad with your Netflix service, and 2) where the real opportunity for Netflix and other OTT video service operators lies.

Is Social TV failing? Is that the right question?

Somrat Niyogi, CEO of Miso, recently penned an article for TechCrunch that centered around the omni-presence of Twitter on live TV and that its apparent volumetric success implies that Social TV and its sibling Second Screen are failing.

An article clearly written to his peers in the industry, Somrat quickly concludes the reason he perceives that Social TV (and by extension Second Screen) are failing is that the industry fails to write apps that are compelling enough for the consumer to want to use (vs. Twitter apparently).

Second Screen and College Football

As an experiment, I thought I would test drive a number of popular apps over the weekend while watching a popular football game.  The Notre Dame / Miami match-up was perfect for the trial.

Since the game was being shown on NBCU, I gave their NBC Sports LIVE EXTRA app a try.  While it is a pretty decent app, even allowing you to stream the game on a 30-second delay, there was no real second screen experience--more of a first screen on your tablet if you are no where near a TV.

A quick recap of the The Imminent Power of 2nd Screen Consumer Engagement @ Advertising Week

Rick Liebling of Y&R moderated a great panel of second screen industry experts yesterday in the NASDAQ Market Site in Times Square, largely focused on the impact second screen potentially has on the advertising space.

His able-bodied panel was represented by David Pugh of Magic Ruby, Joe Inzerillo of MLB Advanced Media, Jordan Berkowitz of Ogilvy & Mather, Sue Kaufman of Group M and Brody O'Harran of Microsoft Xbox--a great cross section of the burgeoning industry.

Long anticipated zeebox second screen app launches

zeebox announced their US launch today, starting with a partnerships that include NBCUniversal, Comcast Cable (Xfinity), HBO and Cinemax. For those who haven't had a chance to see the app while in the UK, it is certainly worth downloading. They are promising enhanced experiences for The Voice and Notre Dame Football on NBCU and for True Blood and Boardwalk Empire on HBO. They are additionally touting feature sets that include a 7-day program guide (for Discovery), live synchronization with their now famous zeetags (which enable contextual commerce and the look-up of Stimulating content related info), and of course Social integration with Facebook and Twitter.

A quick wrap-up of the 2nd Screen Society panel at the Next | TV Summit

Last Thursday (20 Sept), I had the opportunity to spend the day at the Next | TV Summit @ the Fairmont Hotel in San Francisco.  While the day was interesting all around (a lot of TV Everywhere, digital video growth, etc), I found the second screen panel perhaps the most interesting and engaging of the day (no surprise here).

Guy Finley, the executive director of the 2nd Screen Society, moderated the panel which consisted of Stephen Brooks from Magic Ruby, Stacy Jolna from ConnecTV, Ed Haslam from YuMe, Alex Rowland from Alphabird, Julien Signes from Envivio, and Chris Wyatt from YouToo.

Quick wrap-up of the 2nd Screen Society Panel at the Multiscreen Summit

I had the pleasure of attending a great panel this afternoon on the monetization and consumer engagement of second screen with a strong cast of industry players at the Multiscreen Summit here in Hollywood.

Guy Finley, the executive director of the 2nd Screen Society, moderated the panel which consisted of Babba Uppal from Endemol, Tom Engdahl of Magic Ruby, Matt Kennedy of 1K Studios, Zane Vella of WatchWith, Marjorie DeHey of MEF and James Hursthouse of Roadhouse Interactive.

A wrap-up of the 2nd Screen Summit in Amsterdam (#S3AMS)

If you weren’t fortunate enough to attend our 2^nd Screen Summit at IBC on Saturday, you really missed a special gathering (see the Twitter feed).  The afternoon was punctuated by some great presentations (“The Future of TV” by Alan Wolk of Kit Digital, “Synchronisation and Media Interaction with Your Consumer” by Alex Terpstra of Civolution), a strong review of the current 2^nd screen market data by Renaud Fuchs of Ericsson, and two great panels on monetization (featuring Joe Inzerillo of MLB) and consumer engagement (highlighted by Anthony Rose of zeebox).  We even hosted cocktails during the event and a sizable dinner after the event to take advantage of everyone’s creative juices.  For those of you that were registered attendants or are 2^nd Screen Society members or advisors, you can find the presentations and audio downloads here.  For everyone else, here were the key take-aways for me from the summit and for second screen at IBC:

My review of NextGuide by Dijit - A Personalized Video Guide

The long anticipated wait is over.  When CEO and co-founder of Dijit Jeremy Toeman (@jtoeman) told me in May that he wanted to launch a new 2^nd screen app focused on consumer search, recommendation and discovery, I had some pretty high expectations.  The concept of Discovery has been something I have written about in this blog a number of times, and by every account to date, it is something that is hard to deliver on because it is part approach/sophisticated algorithm integration and part UI/UX (user interface / user experience).  There are a few decent apps in this space already (BuddyTV, Matcha, Fanhattan), and they all have different strengths and weaknesses, but NextGuide has made a strong entrance into the marketplace in its 1.0 release on iOS for the iPad.

Second Screen by the Numbers for Summer, 2012

Second screen continues to explode as a segment of the digital living room.  While the 2012 Summer Olympics certainly stole the show by becoming the "first Social Olympics" in every aspect, there has been much progress across the board to keep everyone's enthusiasm in the space buoyant:

The Second Screen Hype Cycle

I was reading an article recently from an industry “evangelist” describing the second screen phenomena as very “nascent technology”, that the odds of you discovering that something is on television that you didn’t pre-record or already know about is low, that the majority of consumers will continue to want to channel surf to watch the lion’s share of their content and that the “remote is not going anywhere anytime soon”.

Not a middle of the road stance.

I thought long and hard about that article.  Part of the problem being described is a classic market adoption challenge known as “crossing the chasm”.  Fair enough--people’s behaviors take time to change as we are all creatures of habit.  But as I read and re-read the article, I started looking at the individual feature comments and thought in terms of the feature sets we have used to describe second screen (Simple, Social, Seamless, Stimulating, Discovery).

And then I re-read the most recent Gartner report called the “Hype Cycle for Broadcast and Entertainment - 2012.”

Digital Video by the Numbers for Summer, 2012

With the summer now officially over, the digital video space continues to march forward.  I am sure much of this will be discussed at the UltraViolet workshop in London tomorrow (Wednesday, September 5th, 2012) at the PARK PLAZA WESTMINSTER BRIDGE.  Below is some empirical evidence of the progress:

How available (really) are top TV shows in the digital video world?

As the UltraViolet academy in London approaches to wake us out of our summer slumber and send us on to IBC, I sat discussing the onward march of digital video in today's Top 20 ratings-driven world with some neighbors around the end of summer BBQs.  There was a general view that most TV shows were available (in the US) on either HuluPlus or Netflix.  While there was some discussion about network specific sites like ABC.com, HBO-GO and TV.com (CBS' site) and some general understanding that there was content missing from HuluPlus and Netflix, most people felt like anything they were missing was probably available to purchase as a catch-up one-off show from iTunes or Vudu.

As I pondered this seemingly simple challenge, I though back to the end of May when I wrote a blog about the current state of digital title availability in the various service offerings (rental, sell-thru, subscription) and retailers (iTunes, Vudu, Netflix) and compared them to each other and to their physical counterparts.  So, with the help of some colleagues, I set out to get to the bottom of the details.

The "Seamless" sourcing of video content from multiple aggregation services

10 years ago, life was simple in your living room.  You really had 3 libraries of content to worry about:

1. the 500 channels of content you were receiving from your Cable, Telco, or Satellite provider, 
2. the collection of DVD's on your shelf, and
3. the available plethora of DVDs to rent at your local Blockbuster.  

But even simpler then was the fact that there were only a few rights windows, and as a consumer, you understood them pretty well:

• Movies came out at the theater first, and then a few months later were available to rent (eg Blockbuster) or purchase (many locations) on the same day.
• A few months after this, they started appearing in your premium TV networks (eg HBO, Showtime).
• A few months after this, they came out on the standard, non-premium broadcast networks.

Video entertainment was easy, despite the poor available search methods of channel surfing your EPG and browsing your shelf or local store's shelves.

In 2012, you are perplexed by a long list of growing of (sometimes exclusive) digital sources of content with different restrictions and availability dates.  Some titles are available for sale but not for rent (eg iTunes, Vudu, Amazon).  Some titles are available for rent, but not in your subscription service (eg Netflix Streaming, Amazon Prime).  Sometimes the digital version is available the same day as the DVD/Blu-ray is available in stores for sale, but even the physical DVD rental has different availability dates in the few remaining Blockbuster stores and the Netflix mail service than it does at the RedBox kiosks in your local grocery store.  Throw in TV catch-up services where the DVD is often available after it is available for free or subscription online and you are thoroughly confused.  Or at least should be.

The Olympics and Second Screen - not so great

While the 2012 Summer Olympics has certainly been appropriately dubbed the first "Social Olympics" (Twitter and Facebook comparisons discussed daily on the broadcast discussions by commentators) and even NBCU has come out and described it as a TV Everywhere success (streaming every event live for authenticated Pay TV subscribers in the US), it has be abysmal for Second Screen enthusiasts.

Don't get me wrong--I think the streaming capabilities to watch the events live were usually well delivered, and I have nothing against the massive Twitter and Facebook discussions.  I guess my point of view stems from the belief that until now, it has been live sports that has really driven the most valuable use cases for a second screen or companion app while watching the first screen, usually resulting in a more engaged consumer.  Knowing the stats of the football, baseball or basketball game of key players, updated in real time, is a big plus for the sports enthusiasts (of any sport).  But somehow, the Olympic implementations fell well short.

Preparing for Second Screen at IBC

Second Screen doesn't appear to have taken much of a summer break since our 2nd Screen Society conference in NY on June 26th.  Discovery just recently announced a new Social TV app, Yahoo and Twitter announced support for the Olympics, and two official Apps have been launched for the Olympics (London 2012: Join In and London 2012: Results). While I am disappointed that I didn't see a synchronized app come out of the official Olympic camp, I would expect 3rd party apps to be all over the games when they kick-off tomorrow on the 27th of July (you see can these headline articles here). If you are in the UK, I would highly recommend trying Zeebox for the experience. If you are based in the US, TVplus runs a great synchronized experience as well (see our app review from a few weeks ago).

Something else new and interesting happened this week in Europe: Grolsch decided to sponsor a movie experience app for Alliance Films (built by Mobovivo). I can't help but think of the monetization panel we had back in NY where a debate about how and when "real" monetization might reveal itself, but this might be as classic as it gets in terms of brand sponsorship: a major brand from the Netherlands in Europe sponsoring a 2nd Screen app built around perhaps one of the hottest movie franchise creators this summer (Alliance distributes the Hunger Games).

Better than bonus material? What Second Screen could do for title sell-thru

When DVD's first arrived on the scene back in the late '90s, the majority of consumers thought they were a significant leap ahead of VHS tapes because of their size, ability to quickly access anywhere on the disc, better picture quality, etc.  But as the industry realized the opportunity to create a sell-thru model (vs. the rental model with VHS), they started trying to figure out what it would take to get consumers to collect or gift DVD's (the biggest reason for purchases).

And bonus material was born.

Breathing Digital - Is Second Screen a fad or the growing slope of a demographic mountain?

I was having that familiar discussion in London last week about what 2nd screen was and whether or not this was a real market trend or just an overhyped fad.  Of course, it is always hard to know these things before they happen (else we would all be very rich), but in thinking through a new way to answer beyond stating the most recent statistics of 80%+ people using a 2nd screen while watching TV only to hear the the person I am speaking to me immediately tell me they never do, etc, I thought about a key note I saw at a conference in 1999.

An industry lunging forward - Second Screen industry shows visible progress

I think all of us in attendance last week in NYC at the 2nd Screen Summit were partly excited and partly surprised at how much progress this nascent industry has continued to make.  For example, in February there was some high level discussion about what it would take for the game console market to develop 2nd screen apps and most of the cocktail-hour pundits predicted the gaming segment would move as slow as they produce next generation consoles--at a snail's pace.  Only a few weeks ago, the entire media industry lamented on why Steve Ballmer would launch yet again another tablet--but all of us were very wrong.  Microsoft's Xbox team has been quietly but quickly developing concepts for 2nd screen user experiences (aka "SmartGlass") for the range of consumers who love everything about their gaming consoles.  

Second Screen by the Numbers Q2 2012

This is the third time we have tried to summarize the big numbers demonstrating 2nd screens progress in the marketplace--the first time was just before CES in January of this year, and the second time was in March of this year.  Well the market is not standing still and as our 2nd Screen Summit is about to kickoff in New York City, here is a recap of the activity over the past few months:

A feature ranking of 3rd party Second Screen Apps

Over the last 9 months, I have been reviewing second screen apps from all walks of life in this blog--apps for specific TV series or film titles, apps from cable/telco/satellite operators, apps from broadcast networks, sports league apps, major event apps, and of course apps built by "third parties" designed to cover multiple networks, titles, TV series, events, and sports.  The last time I did a feature summary of the major apps out there was shortly after CES.  Most of the apps have improved there feature set since then and as a background to the 2nd Screen Summit next week in NYC, I thought it would be a good time to review them again.

10 Second Screen Apps to Watch in 2012

The last time we published an app summary was just before the CES show this year in early January  and then again leading up to our 2nd Screen Summit in LA in mid-Febraury.  While the nascent 2nd screen app market segment has been exploding with new apps for shows, network channels, movies, major events, and sports all over the place, 3rd party apps have been quietly improving themselves and trying to find their way into more consumer living rooms.  As we prepare for another Second Screen Summit on June 27th in NYC, we should pause and review the progress those 3rd party apps have been making.

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.

Why is Discovery so hard to implement for video services?

Last week, Google said it was trying to tackle one of the hardest problems on the internet -- video Discovery.

Looking at consumer video services (Netflix, Hulu, Amazon and even GoogleTV) and their second screen counterparts (Matcha, Fanhattan, BuddyTV, etc), the admission of the challenge is painfully evident in the user interface the consumer faces and the result of the Discovery process.

But let's back up a bit first. What is Discovery? How does it relate to Search and Recommendation? I think we will find wide agreement that the concept of Search is one where you know what you are looking for and are trying to find it. Now this can be more complex than "Where can I find a legal version of Mission Impossible: Ghost Protocol that I can watch in my living room right now?" (which itself can be challenging in today's service offerings).  It is not usually as complex as the problem Shazam solves in the music industry ("what is the name of that song that sounds like..."), but can be difficult (I know the actor who was in the movie or what it was about). Search is decidedly a "lean forward" experience, and as most of us have found out over the last 5 years, it incredibly difficult to implement on a 10-foot remote experience, with various virtual keyboards or fancy remotes trying to help us solve this problem.

Thoughts on Using Audio Sync for Automated Content Recognition in Second Screen Apps

(this originally appeared in Civolution's Vision Newsletter at NAB 2012)

There has been a lot of a debate in the blogosphere and trade journals about the value of automated content recognition (ACR) to the user experience and the best way to provide that capability.  Let’s start by exploring the value of the feature first.  Most apps are using the concept of ACR to provide ease of use for the consumer by identifying the show they are watching and “checking them in” to the show (IntoNow is probably the most well-known for this, but many others like ConnecTV and Viggle use it as well).  Shazam uses it to provide a launch point to additional information about a product you are watching in a commercial.  TVplus uses it to provide a synchronized content experience.  There have been discussions about holding the microphone open (or checking occasionally) and when the consumer is determined to be watching something else, to prompt them to change channels (whether for rewards or otherwise). 

Converting physical DVDs and Blu-ray discs at Walmart to my Vudu (and UltraViolet) account

A few weeks ago when the story first broke about Walmart planning to launch an Ultraviolet-compatible disc-to-digital conversion service thru their own Vudu video service, I raised some points about cost vs. hassle, availability of titles, and potentially what could be done to use this (and hopefully other similar services) to drive growth in digital sell-thru for the studios. I also raised some points later about what would help drive digital sell thru.

So yesterday morning, on the day Walmart launched their service, I called Walmart and asked to speak to the photo processing departing. A very kind woman answered and said she wasn't sure if the service had launched, but had heard about it and asked if I could call back in 15 minutes so she could ask. 15 minutes later, she told me the service was ready, but that no one in her department including herself had been trained in how to do this, but if I was patient, I was more than welcome to come down to be their first customer.

Updating the Second Screen Ecosystem Infographic

In February when many of us met to discuss the quickly developing second screen marketplace at the Second Screen Summit, we referred to an infographic that helped describe the players in each of the contributing market segments.

We had many spirited conversations that day and in the following weeks about which actors were left out and where they belonged.

Thanks to tremendous effort by MESA, below is an updated infographic that is complete and ready for your use during NAB this week.

We have identified the major players from contributing market segments including:

Harnessing "exclusive" content to aggregate larger audiences in the digital living room

I think there are 4 primary reasons consumers are willing to pick up a device in the living room while watching TV:

1. Simple. It starts with turning on the TV itself, but it is really about getting the content you want to watch onto the TV (whether the right channel, the right device for Blu-ray or digital video, or something you found on your 2nd screen and want to watch on the 1st screen). Last week's blog covers this challenge in detail.

2. Social. Currently a huge topic in the press and in the industry, this is about engaging others via Facebook, Twitter, or specialized second screen applications while you watch the show. A hugh phenomena right now.

3. Discovery. More and more, consumers are picking up a device to find something to watch rather than trying to use the EPG or the 10-foot remote experience of searching for content on the 1st screen. This is still a very nascent consumer experience, but one where real improvements are imminent in the space.

4. Stimulating. Another reason consumers are watching with a device in their laps is because they want more information about the movie, TV show, sporting event, or live event they are watching. They are looking up the actors, checking the stats of their favorite players, seeing who made that dress--all of the information they want to check in real-time while watching the first screen.

In my last blog, I discussed the evolution of the digital living room in terms of the devices outside the Apple ecosystem and how difficult it is for consumers to get a truly integrated content experience (devices don't play well with each other or with content). Part of the solution, I argued, could be solved by UltraViolet, the video content industry's effort to provide a path for digital sell-thru. Another part was a combination of CE devices / operator STBs opening their control systems to 3rd party developers (APIs, web servics) so that other applications like digital video service providers (Hulu, Netflix, Amazon) or second screen applications (Fanhattan, BuddyTV, TVplus) can allow consumers to find their content and get it to play effortlessly (Simply) on the first screen (their TV).

But there is another major element missing in this effort to make the consumer experience in the digital living room a better one: access to stimulating content.

If you used the Masters 2012 app last weekend while watching the golf tournament (or read my blog on it), you noticed there were 6 sources of video available (the live broadcast plus 5 other camera setups). If you watched the Oscars and the pre-show red carpet event using the official Oscars app or the E! Red Carpet app, you also would have noticed additional camera angles that were not available through any other source. Movie titles do this (create an app specific to the title with exclusive bonus materials). TV shows and even TV networks do this to--making content exclusively available thru their show specific or network specific app.

When you ask yourself why they do this, you initial conclusion is that it must be about money, yet in nearly every example I can find of exclusive content, the app itself is made available to the consumer for free. Perplexing.

So let's step back from this for a minute. Why do TV shows, sports events, or studios invest in custom created apps for their content? They want to aggregate bigger audiences around their content. In fact, that is why TV networks, movie studios, and sports leagues exist--to aggregate audience to increase monetization thru content licensing, advertising or subscription.

So why keep the special camera angles, bonus features, and star-studded interviews exclusive? My guess is that part of this is down to the human nature of the managers involved in the process to promote the app that they have built. But most of it is about cost and control. The content creator doesn't want to bear the cost (time, resources, money) of distributing the content to third parties, and additionally, they want to maintain quality control over how the content is used.

Are there models today where this problem is already is solved? Certainly. Look at at big brand or movie title. When they launch a new product or movie, they develop a very specific set of rules on how the logos, brand images, photos, and even movie trailers are to be used and then make them available under a limited use license to "trusted" 3rd parties to put to use to help them promote their brand or movie.

So how do we bring this together in the living room? We need a way to get content creators and application developers to syndicate this stimulating content. The content creator needs a cheap and efficient way of making the special content available to "trusted" 3rd parties so that when you are watching the Masters in 2013, you get access to the great materials in the Masters 2013 app and in the ConnecTV or TVplus app. When you are watching the Oscars next year but prefer to use IntoNow or Miso, perhaps you will still have access to those additional camera choices. When you watch the Hunger Games this fall, you will hopefully have access to the bonus materials thru the custom app AND through Fanhattan.

While nothing is free, perhaps there is a reciprocal business arrangement between the apps (digital video services, second screen apps, social TV apps) and the content creators that can make this all worthwhile (sharing ad revenue, customer affiliation, or even a simple syndication fee).

If we can solve this access to content challenge and the challenge of the multi-brand device living room, we can create an environment where the consumer will have more reasons to watch the content in the first place, increasing overall consumption perhaps even at some premium pricing--and everyone in the ecosystem wins: the content creators aggregate a larger audience, the distributors aggregate a larger audience, the app developers aggregate a larger audience, and the device makers sell more devices.

Masters 2012 App Reivew on the iPad

For anyone who saw the final round of the Masters last Sunday, you were treated to an exciting and incredibly stimulating entertainment experience filled with double eagles, come from behind efforts, and a sudden death play-off shoot out.  The Masters 2012 app for the iPad matches that excitement and stimulation on every level.  While this app doesn’t provide tons of social tools (perhaps the demographic is wrong) and doesn’t provide any control of your 1^st screen, it more than makes up for those missing feature sets by providing a stimulating experience beyond what most consumers could have wished for.  The app was the perfect companion to one of golf’s most historical weekends, with the ability for the consumer to not just see the obvious additional information items like the leaderboard and bit of information about the players, but to see live video from the broadcast (delayed 30 seconds) or from one of 5 other camera locations on the course, to see the leaderboard with video highlights on the exciting holes (loaded nearly in real time), to see an in-depth view of the players weekend progress in addition to their professional backgrounds, and and incredibly rich and stimulating historical perspective on the course and the tournament in the form of a decade by decade multimedia timeline and video fly over course map.

The user interface of the app is clean and simple, with the features centering the live video window (with 6 camera location options including the live broadcast) and highlight a mini-version of the leaderboard.  The video for the various camera feeds was delayed from live by 30 seconds, but started quickly and had no pixelation or frame issues, even when shown full screen on my iPad 3.  Drilling into the leaderboard revealed a rich and interactive view of the players’ progress, with video highlights available with a simple touch and an ability to select your favorite players so that they would always appear at the top of the board when you checked on their progress.  There was even an alert feature, letting you know when your favorite player was on a key hole or had moved up or down in the race to victory.  A live text update of significant events was provided just below the mini-leaderboard (presumably in case you missed something), and current video highlights were promoted just beneath the live video window, helping you quickly and easily find the most amazing shots of the day and the weekend.

The lower nav bar on the app allowed for more detailed exploration on the course and the tournament, providing a rich media view decade by decade of both.  There was also a very well developed course map with the lore and legend of the course combined with the obvious video flyover of each hole.  Of course, there was a detailed photos section (both current and historical), and an ability to check the player pairings for each day (with tee times) so that you could more easily follow your favorite players around the course.

While watching the end of the tournament with a few friends on Sunday, we found ourselves constantly referring to the app to see recent hole highlights (the double eagle by Louis Oosthuizen) and to check on the leaderboard as a guide to switching camera angles while the broadcast was focusing on players we were less interested in.  When Bubba Watson started to come from behind, everyone wanted to know who he was and what tournaments he had won.  As the tournament headed to a sudden death play-off, the room immediately wanted to see the hole they had to play and how the 2 players had fared on that hole earlier in the day.  The only real missing feature set was the social arena.  While I don’t think most golf fans want live Twitter feeeds, something like the ability to share a link to those favorite video clips so that your friends who were not in the room could share the moment with you, even if not in real-time, would have been nice. 

The Masters 2012 app has truly been world class delivery for a stimulating second screen experience.  I am hoping to see this level of effort for the other major tournaments (British Open, Ryder Cup, etc) in golf going forward.  At least for this consumer, it will certainly raise my interest and viewing time for all of those supported tournaments.

@ChuckParkerTech

http://www.chuckparker.tv

The Evolution of the Digital Living Room

Apple with its iPad, Apple TV and iCloud for movies and TV shows has delivered a seamless ecosystem to the consumer's digital living room for owning and watching content from multiple devices in the home.  The rest of the industry (SmartTVs, connected devices, Android tablets) struggles to create a similar experience when they are a single-brand ecosystem and fail miserably when there are devices from multiple manufacturers in the household.
How can the industry work to solve this problem?  Part of that solution is UltraViolet.  As discussed in previous blogs, the concept is that someday I will have the same experience as the Apple ecosystem (buy a movie with the UltraViolet feature and have access to it from every device I own).  The reality today is that none of my SmartTVs or connected devices (except my iPads and PCs/Macs) can stream content from Flixster, some have access to Vudu, but if I purchase on Blu-ray I can use "sneaker net" to carry the disc from room to room.

But perhaps more important than UV is a better connectivity approach to the digital living room itself.  The challenge here is that DLNA is not enough.  Assuming I have a pre-sorted directory on my PC where I can access that I am looking for is a bad assumption.  The majority of SmartTV companies have been busy building their own proprietary approaches to solving this problem (with and without partners).  Boxee is trying to solve this problem, but I think its focus on a 10-foot remote experience limits its capability to do so.

I think the best way for the consumer and for the device manufacturers to move forward is for the device manufacturers to focus (similar to LG) on exposing their devices via APIs to applications on tablets (second screens) and local (home movies) and over-the-top video services (Netflix, Hulu, Vudu, Amazon, VDIO, M-GO, etc).  This allows Second Screen apps (think BuddyTV, Dijit) to deliver the "Simple" capability to control the large TV (1st screen) and deliver the selected TV show or movie to that 1st screen (or tune the channel), but also provides a more natural interface (2-foot remote, touch screen, virtual keyboard) for "Social" interaction, review of "Stimulating" content and "Discovery" of new content, and providing the "Seamless" delivery of the source of that content across services so that it can be delivered directly to the viewing screen.  This then gives the consumer the capability to buy devices (Boxee, PS3, Xbox, Blu-ray players) and Smart TVs from different manufacturers and still have a robust alternative ecosystem that is similar in capability to Apple's.

And this approach is an urgent requirement for the industry because the consumer will not wait much longer to improve their own digital living rooms.

Let's face the facts.  If the iPad tablet market share holds in the 90%+ range, consumers are going to start buying Apple TVs (Tim Cook described them as iPad accessories), which will obviate the need for SmartTVs and other devices almost entirely:

• removes the need for Blu-ray players since the Ultraviolet experience is built-in to iCloud for the Apple ecosystem
• removes the need for SmartTVs as Apple TV connects to HDMI
• removes the need for other devices for streaming services with Netflix, MLB.tv, etc, on the AppleTV product
• leaving only the home movie challenge which Apple then solves with their iMovie and iPhoto products.

If you don't believe this is urgent, check out my recent experience at home below:

I have had a frustrating last few weeks with my Apple Ecosystem at home (AppleTV, iTunes on a Windows PC as my main library, 4 iPads & 4 iPhones for a family of 4--by no means ordinary in penetration).  Apple's latest 10.5x change to the iTunes software has a bug in it that requires you to turn off IPv6 in your network adapter of your Windows 64-bit PC (guess how long it took me to figure that out?).

So for those few weeks, I was forced to deal with the "average" digital living room in my attempts to share and watch content in my home.  I am sure most Americans have 3-4 TVs in the house (so say the statistics)  of different brands plus a gaming console or two and various connected Blu-ray players.  In my house, we have a Boxee Box, an Xbox 360, a PS3, 3 "SmartTVs" (a Samsung TV, an LG TV, and Panasonic) and another connected LG Blu-ray player.  We typically use Vudu to rent movies (better experience than Apple in Discovery and delivery in real-time) on the PS3 or Boxee, we watch "high end" TV on the Apple TV (series not yet available on Netflix or Hulu), and watch all other content either live or DVR'd from our AT&T U-verse or from iPads/other connected TVs/devices via Netflix or Hulu+.

What a mess.

Our digital living room experience at home a few weeks ago (and going forward since I fixed the IPv6 problem) was that for special movies and TV series, we would buy them, and they would download automatically into the main library where everyone in the family had access to them forever more from iPads or the Apple TV (using local delivery or the iCloud).  Home movies that were already in .mp4 were also available to those devices.

During the "time of digital failure", I tried using the DLNA capabilities of the various devices including Boxee, PS3, and my TV-connected PC to watch home videos or non-DRM'd content (outside of Netflix and Hulu+).  I think all of you probably already know how painful this was.  Boxee is probably the best at being able to decode multiple formats of personal home video (Canon camcorder, Canon DSLR, iPhones, etc), but is difficult to use to browse and find content (as we shoot and store video).  The PC which houses everything is just not built for a 10-foot remote experience (yes I have tried to font changes, I have a Logitech mini-keyboard, and even occasionally us LogMeIn from a laptop instead to control it).

The experience was so painful, that we actually purchased a few movies on Vudu as an experiment (can't download to the iPad, but you can stream) and had another push on Boxee for home movies.  Ultimately, it was the "stick" that drove me to fix the Home Sharing bug Apple created.

My Review of Matcha as a Second Screen experience

I noticed Matcha present at the OTT Conference on 20-21 March and was very curious as to what their app experience was all about.

When you launch it, it immediately asks you to connect Facebook, Twitter, Netflix and Hulu, and quickly let's you know that it is essentially a video recommendation service which will also serve those videos on your iPad or laptop (so a second screen app that turns the 2nd screen into the first screen). They clearly have ideas for Amazon Prime and Xfinity even though neither are working yet (bottom greyed out portion of UI).

After you connect your accounts up, you notice that Matcha organizes "suggestions" in 5 rows. First, there is a row on the "Hottest" content. Based on what they showed me, I am assuming this is popular in Matcha vs. popular in broadcast TV in general, etc.

The 2nd row is "Newly Available", presumably content that was just made available to Netflix or Hulu.

The 3rd row is about "Recommendations". I am assuming in this case that they have taken into account my Netflix Queue, Hulu queue and my Facebook likes (I can't tell) to make a recommendation. Most of my recommendations I have already seen, but most of the recommendations are in the right space.

The 4th row is called "Friends" and is presumably a collection of what my friends liked on Facebook. There does not seem to be a discernable order though (most liked, recently liked, etc).


The 5th and final row is called "Queue", which seems to be a combination of the Netflix queue, my Hulu queue, and a Matcha queue.

There are a few filters that can be applied (Movies vs. TV, year of the content's release, genre).

This collection of 5 rows seems to be the primary function of the app--a recommendation service that helps you launch directly to Netflix or Hulu as a result (and presumably Amazon in the near future). How good is it? I think the UI is clean, but not as sophisticated as Fanhattan, which has more discernable selection criteria (Emmy winning, Oscar winning, Top 20, Recently Like, Most liked, all fitlerable by ratings, genre, etc, etc).


There is a product detail page, which similar to Fanhattan, shows the sources and suddenly introduces iTunes and Amazon as a source (rental and purchase). I did try to Like the content and put it in my queue. I cannot tell if the Like went to my Facebook (they also have a dislike which Facebook does not do), but it did add it to my Matcha queue (but not my Netflix queue).

While I am not sure this app is intended to be a second screen app, I would say the following:

- Simple. No control of the 1st screen. Would be a MAJOR improvement if available.
- Social. Other than likes and importing likes, there was little ability to push information socially. Low.
- Seamless. A good effort on gathering sources of content, though the cable/telco/satellite channel line-up for content is missing. Medium.
- Stimulating. Relatively lightweight here (low).
- Discovery. Ahh--isn't this what they want to be? I think the app is a probably in the Amazon mode (your friends watch, this is popular), but has not yet built an algorithm to help me Discover new content. I would say medium for effort, but if this is to be there "raison d'etre", they need to find an algorithm/engine (Digitalsmiths, Jinni, theFilter) to drive real Discovery features for the consumer. They would also need a better seeding process (similar to BuddyTVs) to help capture what I like in general and what I have seen at a cursory level.

As a consumer already exposed to Fanhattan and BuddyTV, Matcha has some feature development to do to get me to switch to their app.

My Review of the CBS / Turner NCAA March Madness App as a Second Screen Experience

I have been reviewing second screen app experiences for some time now (approaching 100 apps), and this is the first time I ever felt like someone nailed it for sports.  While we can have an argument over the aesthetics of the user interface (UI) based on the consumer’s personal preference, this is clearly the “sports fanatic” UI with the right amount of options and control.  Oddly enough, I’d like to meet the product manager and shake his or her hand.

Let’s talk thru the experience.  First, upon opening the app in my iPad (using the iPad3), you see a clean and simple presentation (below), showing you what games are on today (and what the current score is, time remaining, quarter, etc) and giving you the option to check the match-up for the games in the near future.  You notice some sponsorship (Buick, Coke Zero, CapitalOne) and some relatively unobtrusive banner ads at the bottom.

Choosing a game opens up a whole new vibrant and stat-oriented interface—something akin to a jet fighter’s cockpit display, with the streaming video in the center (should you choose to update to the $3.99 paid version) and all of the ancillary information surrounding it.  At the 11 o’clock position is the live score of the other games on today.  At 12 0’clock is the current score and game clock, with an ability to turn on the video, team alerts (close games, your favorite team, upsets, etc), and the ability to turn on the radio broadcast (in the event you don’t want to pay for the video or have low bandwidth).  Just below that is a great graphic called the “lead Tracker”, allowing you to see what the lead was at any point in the game (easily demonstrating the fan adrenalin level of the game).  On the left and right hand sides is an ability for you to choose one of three options for either team playing: a Twitter feed (very likely curated based on my testing), current team stats, or a list of the players with photos and stats.  The real estate at the bottom holds a clever implementation of a “cheer” button, which launches a combined window for Twitter and Facebook with a pre-populated (but editable) text with all the right hashtags to say something about your team.  For unpopulated text boxes, you can “comment” and it brings up a similar box, and you can check-in in a similar fashion (the other well architected feature is that you can click Facebook or Twitter separately if you manage those social networks differently as many do).  I even love their “Enjoy More Tweets” approach, which generates a refresh of the curated Twitter feed.

I went ahead and signed up for the live video feed and I have to admit the quality (on wi-fi) was pretty good.  I tried the radio feed as well--also very good.  I did notice that the video feed was delayed almost exactly 30 seconds from the live feed to my TV (I am assuming on purpose), though the scores seemed to update more quickly than that (created some odd scenarios as times).  I also took note that when my 1^st screen went to a commercial, so did the live video stream (30 seconds delayed actually), but it had its own set of streamed video commercials (not those Hulu video/internet hybrid commercials).  This part seemed at odds with the rest of the design (since I would have thought they would want to capitalize on the ability to re-emphasize the brands on the 1^st screen, but it seems they went for selling the inventory twice instead).

Poking around a bit more on the menu bar on the top left of the UI, I found the Bracket Challenge section (where the super fan could have filled out his or her own forecast of the games on their CBS Sports account and tracked their progress), and a current bracket with final and live game scores, allowing you to see at a glance what the impact of the game outcome was on the tournament at large.

In terms of the classic way I have been reviewing these second screen experiences:

-          Simple.  No way to control my TV, but not surprising with an app designed to reach this many people (and with a near-live video stream of its own available in the app).

-          Social.  A well-constructed UI with the ability to ask for more feeds, pre-populated “cheering” and check-in buttons for both Twitter and Facebook, and the ability to comment in free form as well gave this a high rating in my book.

-          Seamless.  There was no attempt at integrating other sources of content, though the network carrying the games are displayed

-          Stimulating.  This was stimulation on steroids!  While there was no synchronized features (everything was planned for a live event), I don’t think that is a drawback in this case (most of these games will be watched live by the fans).

-          Discovery.  No ability to discover other content, but great ability to see when the next games are, etc.

Now you may recall that I have reviewed a number of sports apps before and I typically rave about the professional league apps (NFL Live, NBA Courtside and MLB At Bat).  I have to admit that I think this is the best sports fanatic app I have seen in terms of it completeness and its flexibility for the user to control what they see and what they don’t see.   While it didn’t score well in 3 of the categories, I don’t think that matters for the sports fanatic that this was clearly built for who, like my neighbors with the Oscars and Red Carpet experience, is so overwhelmed by the abundance of Stimulating and Social feature categories that there isn’t time to think about what else the app could do for them. 

Wow.  What a great experience.

Chuck Parker

www.chuckparker.tv

My Takeaways from the OTT Conference and the future of broadband TV

I was fortunate enough to attend the Over the Top digital video conference this week in Santa Clara (thank you MESA).  It was one of the larger conferences that I have attended for the content with about 400-500 people in the main presentation room during the keynotes (CES and NAB are bigger, but most people are not there for the content, they are there for the sales opportunities).

There were some great panels and some interesting points of views exchanged on the most relevant topics affecting those companies in the OTT Digital Video Ecosystem.  I thought in general that the panelists and presenters were a good mix of service providers and content owners/distributors (Fox, NBCU, etc), though some of the smaller concurrent sessions where blatant (and poorly presented) commercials.

The quote that summed up the conference for me was "The future of OTT will be won by service providers who can deliver Discovery on the Second Screen"  I couldn't agree more.

While there was some interesting banter on exactly what "OTT" meant to different people on the panels (with the day 2 keynote Jon Cody speaker suggesting we scratch the name OTT and replace it with Broadband TV), I was surprised at how few people attending the conference understood the second screen or even what Discovery was (more on that next week).  My other big surprise was how pervasive the view that OTT (or Broadband TV) was somehow going to grow up and kill Comcast, DirecTV, and/or Verizon (examples only).  Thought the stats were thrown around the conference both days, a ton of the attendees just didn't seem to process them.  We all know that Netflix has 20m+ subscribers, that Apple has sold 4m+ Apple TVs and that on-line video is growing quickly, but we somehow fail to remember that of the roughly 37 hours of TV that the average American watches every week (not sure where the average person finds the time), only 3 of that is on-line (web, OTT, or otherwise).  Further, that of the $200b in TV advertising, a scant $4b (2%) is spent on online/OTT video, and despite the fact that OTT has taken a significant chunk of the DVD business (close to 20%), when compared to the combined sell-thru, TV advertising and Pay TV amounts, the Netflix, iTunes, Hulu+, Amazon, Vudu, etc, all add up to a less than 5% of total consumer spend (thanks for your Keynote covering some of these points Jon Cody).

I don't think there is any doubt that IP delivered video is going to continue its march to near global ubiquity (as predicted by one of the speakers), but I do believe that 2012-2015 will be marked by the striking back of the operators who will march over to the content creators in Hollywood with their StreamPix (Comcast's answer to Netflix) and Verizon/Redbox partnership (their answer) and demand the same mobile streaming rights that Netflix has for no additional charge since they are already paying millions and millions for their pay TV rights of the same content.  I don't think Netflix with 20m subscribers at $15 a month can outspend Comcast with a similar subscriber base at $100 a month, and in the end, I think the big operators will either consolidate the OTT players or try to match their capabilities to do what they do best: raise ARPU and reduce churn.  Consumers will win (they will get the video they want, when they want it), and the operators (OTT or otherwise) that continue to provide a great UX (user experience) for their consumers will survive (Apple is an easy prediction here).

Perhaps all of that sums up the quote I took away at the top of this blog, awarding the digital video future to those who build great consumer experiences while recognizing that those with deep pockets might make a few blunders and might move slowly, but that they will move and will flex their dollar-based muscles and ultimately will be providing their own Broadband TV services (across their own and other operator networks).

Chuck Parker
www.chuckparker.tv

The new iPad--worth the extra dough?

I have had a few people ask me what I thought of the new iPad (the iPad 3).
I have had it about a week now and can certainly share my thoughts.
I was willing to pay for a new 64GB 4G iPad (AT&T) because I was trading up from the iPad 1 (64GB, 3G) and have been trying to use it instead of my laptop (Macbook Air 13") in most scenarios. The iPad 1 was demonstrably slower on many of the apps I frequently use and it was starting to drive me mad.
I was expecting:
- 4G connectivity (LTE and the HDSPA+)
- 2x the processing power
- better screen resolution (though only a nice to have benefit)
What did I get?
The 4G (HDSPA+, same as iPhone 4S) is actually pretty decent. From the rudimentary tests I have run (iPad's side by side, speedtest.net, etc), my guess is that it is 2-3x the normal 3G connection. In the week I have had it, I have seen 4G in almost every location I have been with it. I am happy with this feature.
The 4G LTE is VERY fast. My guess is 10-20x the normal 3G connectivity (technically only supposed to be 15x, but the improved process power probably helps). I was able to stream Netflix in my hotel room in San Jose with great quality and sustain it for 40 minutes (while only showing 1 bar on the signal strength indicator). Very pleased with this even though it is in a relatively small number of markets compared to Verizon.
The processor is a noticeable upgrade. Even on wi-fi, web pages load faster, the common apps I use whether for news, weather, DropBox, etc, all load faster and perform better. I am very happy with this feature as well.
The screen resolution is harder to tell. On video and photos, you can see the difference vs. the iPad 1. I realize many apps are still upgrading their image quality to take advantage of the new resolution. The kindle is easier to read (as is Zinio, etc). PDFs are clearer. There is now a 1080p option for video (which is obviously a bigger file than the 720p, but I am not sure you can appreciate the difference on the small screen. Again, this was a nice to have feature, not a needed one, but I am relatively happy with it so far.
All the noise about the heat issues? I don't run sustained hard core games for 45 minutes at a time, and have not experienced the heat while watching movies or using other applications. Not an issue for me so far.
Would I recommend one? If you have the iPad 1 and use it more than casually, I would suggest you upgrade, especially if you move around in non-wifi areas with it. I think if you have an iPad 2, probably a tougher sell unless the 4G is critical.
Enjoy
Chuck Parker
www.chuckparker.tv

What is holding back sell-thru in digital?

A friend and industry expert made a great point about my last blog entry relative to the choices consumers have beyond ownership in terms of managing their digital collection of movies and TV shows.

It used to be that we all had the "Discovery" experience in Blockbuster (going to rent a video, expecting a 15-minute trip and spending an hour combing the walls of the store looking for something to watch). Then, DVD sell-thru became VERY affordable. So affordable that not only were the big releases being sold by Wal-mart, Target and Bestbuy below their wholesale pricing (losing money to drive traffic to their stores), but as the DVD industry matured, cheaper back-catalog titles became available in the check-out aisles of grocery stores. Spending $5, $7 or even $10 for a title to have forever seemed like a bargain compared to the time suck of the trip to Blockbuster combined with its late fees. More importantly, buying a cheap title to watch when it was a slow night in the near future was a perhaps a better alternative then cable TV. For years HBO filled this need--a subscription movie service that allowed you to essentially turn on the TV and watch something "good" when you had time on your hands for entertainment.

Next physical Netflix started to make a serious dent in all of this--but it only worked for those people who had patience and essentially replaced the new release for those willing to wait and the back catalog for those who planned ahead and always had a title around to watch. I think this is the first time consumers had an alternative to the timesuck/late fee experience to watch new movies and to the "what's on HBO?" experience (despite all of us having DVR's, but not having the foresight to use them to solve this problem).

Then we had a step change improvement -- rental went digital thru iTunes, Vudu, Amazon, and Xbox. Now, the "Discovery" process happened in your living room. There was some initial disappointment with titles only available on certain services and sometimes later than the physical DVD rental and sell-thru date. The fact that the studios made more money per rental (improving their share from 25-65% on average) hastened the demise of Blockbuster nearly overnight and brought digital rental day and date with physical rental and often sell-thru.

Then Netflix dropped the boom and started a digital subscription (SVOD) service. In theory, this was no different than HBO--you had a bouquet of content that you didn't really understand and had no guarantees on what would be in there tomorrow, but instead of setting your DVR or waiting until the next movie started, you could now actually search/discover and watch "something" instantly. And cheaply. Cheaper in fact than HBO.

Consumers voted with their feet/pocket books and Netflix grew their subscribers at an alarming rate, threatening even the mighty HBO.
Not surprisingly, the physical sell-thru rate started dropping quickly. Consumers now had a better rental experience either in Netflix or digitally and had a digital subscription video service that replaced the "what do I watch when I am bored" scenario.

Studios wanted and needed sell-thru, digital or physical, to regain its previous levels (while their share is similar with digital rental, the gross sales on sell-thru 3-5x higher). But how? Digital purchasing meant you acquired a title on a single device (your Vudu box, your PC) and at the time the concept of cloud ownership was non-existant (even with the mighty Apple).

What consumers needed was confidence that they could buy something digitally and have it on any of their devices when and where they wanted it.
The industry launched the concept of an industry-supported digital locker service in 2008 (then called DECE), but like all industry initiatives, it languished under the weight of its own support. The 75 initial members pulled it in many directions and then suddenly with Microsoft and Sony clearly at the helm, Apple refused to join. The battle lines had been drawn and the law abiding consumer suffered (and digital pirates continued to flourish).

Now as scant 4 years later, Ultra Violet has launched (the industry's answer to a consumer digital locker). But there are serious challenges to drive consumer adoption:
1. The experience isn't consumer-centric. You don't have the same experience movie to movie (same offer) or retailer to retailer (different sign-up processes, different viewing process).
2. In four years, Apple has launched and owns the tablet segment, probably where most digital movies and TV that are owned are viewed BY FAR.
3. Netflix has used the 4 years to cement a 20m strong subscriber base, offering unlimited movies for less than the purchase of a single new release.
4. The "connected TV" promise has become a confusing wasteland of technical solutions that make Apple all that more appealing.

And now, Wal-mart / Vudu wants to help you convert your physical library to digital with a hefty fee--and most of the physical titles you own you probably also have access to on Netflix. What to do?

While in my previous blog, I described the time vs. money trade-off of the legal conversion option, the other challenge is the easy access to a large library in which content is likely but not guaranteed to be there tomorrow vs. the cost (and hassle) of converting those titles to UltraViolet and Vudu.

My guess is that of the 400+ titles I have at home, probably 3/4 of them are available on Netflix. The other 25% are going to have issues with availability (Disney, other smaller studios) or won't pass the rental option test (ie if I am truly only going to watch that title once in a long while, is a $4 rental a better option at the point of viewing vs. a $2-5 investment for a title I may not watch for some time).

If consumers think all this thru while thinking about what the Wal-mart experience may be like (and that they likely can't view these titles on their iPad while traveling), my guess is that this will not take off very quickly.

I will try it myself on April 16th and let you know how it goes.

As for the other burning question, "How can the studios improve digital sell-thru"? That's an easy list to create but hard for them to accomplish:
1. Make the UltraViolet offer consistent on every title (streaming, download, HD for the right price, viewable on an iPad).
2. Make it easier to register the UltraViolet copy (should be as seamless as my Blu-ray player detecting it and marking my digital locker appropriately).
3. Make the iTunes digital copy work with Ultraviolet (for a small fee).
4. Like iTunes, let me purchase UltraViolet digital only titles (Paramount started this late last year).
5. Provide an incentive for me to convert my physical library that counters that hassle and the Netflix inertia.

If the studios can't do these things in the near term, I predict that a "Seamless" 2nd screen app (Fanhattan, M-GO, BuddyTV) will come along shortly that will "catalog" my digital collection and combine that with the sources of subscription and rental services, and further combine that with my Cable/Telco/Satellite provider program line-up and a slick recommendation / Discovery engine (DigitalSmiths) that includes my social network "likes', and consumers will have the tools to reduce their "purchase" of physical and digital content to only what they need, when they need it...this is a race that Discovery, Social networks, and 2nd Screen might just win.

Chuck

www.chuckparker.tv

Converting your physical disc library to a digital locker

There has been a significant amount of press this week around the Wal*Mart announcement to provide consumers the ability to get UltraViolet digital copies of their existing Blu-rays and DVDs starting on April 16th.  The concept for the consumer is that your bring your collection (minus Disney movies) into the store and they do some magic and create digital copies in your digital locker to be accessed through your Vudu account online.  They perform this service for you for a mere $2 per DVD (presumably then generating a non-HD digital copy) and $5 per Blu-ray disc (presumably for the HD digital copy).

Does this sound like a deal to anyone or does it sound like the consumers are getting the short end of the stick?

A few things to think about first:

• Apple does not support Ultraviolet, so you will not be able to view your converted library on your iPad or AppleTV.
• There will be content gaps.  Disney does not currently support Ultraviolet, and there will be many other smaller studios that don't yet support them either (the other 5 majors do).  I am curious to see how this will be handled on April 16th at your local Wal*Mart store.
• If my memory is correct, the average consumer in the US currently has a library of about 70 DVD and Blu-rays (I will try to dig up this data to confirm).  That mix in 2012 is probably 80% DVD and 20% Blu-ray (I am making an educated guess about penetration over time).  So the cost to convert the average person's library (assuming all titles were supported by Ultraviolet) would be roughly $182.  Ouch!  I have over 400 DVDs and about 40 Blu-rays, so I need to get a 2nd mortgage to convert my library.
• $2 vs. $5 presumably for better quality video.  Let's think through this.  Your typical DVD puts out an average bit-rate of about 10 mbps in video rate (this is a measure of how much data is transferring from the disc/player to your tv screen).  I say average because intense scenes (big explosion, etc) push more data and slow moving scenes push less.  The average bit-rate of a Blu-ray is roughly twice that (about 20 mbps).  The typical "SD" or standard definition download or stream from iTunes, Amazon, Netflix, Vudu, Hulu, etc, is around 2 mbps.  What is typically called "HD" for high definition is pushing 4-6 mbps (720p vs 1080p matters here because there is more data to push).  Vudu's "HDX" is supposedly in the 10 mbps range.  Now I am sure all of the videophiles out there (and the experts behind download services compression algorithms) will jump in here to say that they are compressing the data "in a smater way" than is typically done for DVD and Blu-ray and therefore get a better picture as a result.  I would dispute that for a wide range of fact-based reasons, but even if we gave them a 20% improvement based on this urban legend, what do we have:  We are paying $2 for a video to be transferred to my digital locker that is only 20-30% as good as my physical SD version and $5 for a video that is 25-30% the quality of my Blu-ray HD version.  Seems like a pretty poor deal.
• What are my options?  Well, legally, none.  Despite the urban legend that I can rip DVDs and Blu-rays for "personal use", it is still illegal according to the digital millennium act.  But what if I were a 19 college student who perhaps cared less about these kinds of laws?  I could use a number of paid-for and free software programs available on the internet to "rip" a copy of the DVD or Blu-ray into an .mp4 file.  Let's pretend I pay $30 for "good software" (making this up).  Let's pretend that I have to spend 12-15 minutes each time I want to make a copy for my personal consumption (typing in the title, the destination, importing into my program for viewing, etc, though the actual transcoding might take an hour while I am doing something else).  Let's pretend that I get paid $10 an hour as a college student.  My 70 title library would now "cost" me $170-205 (12-15 minutes) to put together.  The cost for this library moves and and down based on the consumer's perception of the value of their own time.
• What about quality trades?  The great thing about getting an officially sanctioned copy of the title in your digital locker is that it has all of the searchable metadata (title, summary, cast, etc) already done for you.  The pro for using locally available software is that you can have a high-quality encode (depending on the source and your tool) every time (ie better than the $5 version).

• What are my options moving forward for new titles?  A little research on Amazon tells me that I can buy an "Ultraviolet enabled" version of the title when I buy new movies.  The price difference varies.  It seems that Warner Brothers is including it with the DVD and Blu-ray for nearly the same price as the discs used to be alone, where as Paramount, Sony and others are charge $2-7 more for a bundled product that is the DVD + Blu-ray + Ultraviolet Digital Copy.  My other alternative is of course to buy it from iTunes (typically at the same price as the DVD or Blu-ray), and while I do not get the physical disc nor do I get an UltraViolet compliant digital copy, I get the movie in my "iCloud" service, and can download/stream to any of my apple devices (AppleTV, iPads, etc).  If you have tried registering a purchase in Ultraviolet, you know that the experience is complicated and confusing--unlike a purchase from Apple.  There has been some activity (from Paramount) offering the digital-only UltraViolet copies to consumers, but this is typically not the case (ie buy something in Vudu, it is stuck in Vudu).

So what does all of this mean?  

It means that for the non-technical or time-valued (and legally conscientious) segments of the population, there will be a service where you can bring your physical library to "jumpstart" or convert to a digital library, held in a digital locker which will work with multiple providers but that does not work with Apple (bad based on iPad penetration) and carries an annual fee (not mentioned on the UV site but only your first year is free of charge).

Going forward, it means you can buy physical copies (if you like) and still get a digital copy in that same UltraViolet digital locker service.  You will also be able to buy just digital (soon) and have access to that version in your UltraViolet digital locker.  Or you can stay in the Apple ecosystem and have all your movies and TV series (including the ones you purchased digitally over the last few years) with no hassle, no sign-ups, and no incremental fees.

It seems that while the "iCloud" enabled TV shows and now movies has gotten very little attention, they seem to already have outdone the industry supported effort in terms of ease of use and cost to the consumer--except that you have to be committed to be only in the Apple ecosystem.  

What if you are a big Apple ecosystem owner and want to convert your physical library?  Unfortunately, today at least, there are no legal options here (just the route reserved for those who are technically adept and have time on their hands).

So this service is a step in the right direction for a large segment of the population, but here is what they need to do to help this achieve wide-spread adoption:

• Solve the pricing issue.  Give the consumer a bulk-rate discount to convert 50 or 100 movies at a time to encourage them to do it.  Drop the $2 vs $5 disparity since both are inferior in quality that the version on the disc in the first place.
• Create digital service options that are Ultraviolet compliant.  Meaning, let me purchase a movie in the Vudu service and view it on my Amazon or Flixster service.  Make all the other digital services as easy as using iCloud when accessing my digital locker.
• Get the rest of the content creators / studios to join UltraViolet (they all have agreed to iCloud for Apple).
• I am not going to suggest they get Apple to join UltraViolet because with iCloud for movies, it is clear that with iPads covering 85%+ of the tablet market and the iCloud service being simple and free, they don't need join--they just need a legal physical library conversion option (which I doubt the studios will grant unless they join UltraViolet)...