Wednesday, November 19, 2008

News Bytes: November 17-19

Sony presses 'pause' on streaming Netflix Instant Watch movies to Xbox 360*

via L.A. Times Tech Blog

Sony is fine with selling its movies and TV shows through digital means -- just not, apparently, when it involves working with its chief video game rival.

Sony has thrown a minor monkey wrench in the launch of Microsoft's revamped Xbox Live online platform. The rejiggered Xbox Live has, among other new features, the ability to stream about 12,000 movies and shows from Netflix's Instant Watch service to Microsoft's Xbox 360 video game console.

But now it's 12,000 minus "a couple of hundred" titles, Netflix spokesman Steve Swasey said. He declined to reveal the studios behind those titles. But an executive with knowledge of the matter confirmed reports that they come from Sony, which makes the PlayStation 3 console, and its subsidiaries. (The executive declined to be named, citing sensitive negotiations between Sony and Netflix.)

"We're very hopeful we will have these titles on the Xbox 360 shortly," said Swasey, who added that it would be a matter of "weeks" rather than months.

Sony issued the following statement:

This issue is not specific to Xbox or any other individual platform. Sony Pictures is currently in discussions with the relevant parties to resolve certain licensing matters related to the distribution of its motion pictures. Given the ongoing nature of these discussions, we don't think it is appropriate to comment further at this time.

Netflix subscribers who can't wait to stream "Superbad," "Drunken Master," "Bad Boys" or "Karate Kid" can still watch them on the Roku Netflix Player, the TiVo digital video recorder and several Blu-ray players made by Samsung and LG, as well as on Macs and PCs. Just not on the Xbox 360.

-- Alex Pham

Photo : Image of the Netflix service on Xbox Live by Microsoft

*UPDATED at 5:35 p.m. with a statement from Sony.

No One Expects… Monty Python on YouTube!

via NewTeeVee

Break out the comfy chair — famed British comedy troupe Monty Python now has a channel on YouTube. And in a very Python-esque manner, they’ve kicked the whole thing off with an introductory video that calls out YouTube users for ripping them off over the past three years.

From the Python channel page:

We know who you are, we know where you live and we could come after you in ways too horrible to tell. But being the extraordinarily nice chaps we are, we’ve figured a better way to get our own back: We’ve launched our own Monty Python channel on YouTube.

The channel currently has 24 videos, mixing classic clips from Python TV shows and movies along with interviews from cast members. According to the intro video, not only is this an attempt to wrest control from people posting illicit content, but also to provide higher-quality versions of clips instead of cruddy ones. And I’m sure having ads run over the bits doesn’t hurt either.

Vid-Biz: Move

via NewTeeVee

Move Networks Partners with Permission TV; adaptive streaming company hooks up with online video platform provider to resell integrated services to smaller media companies. (Broadcasting & Cable)

Online Movie Service Cinemanow Acquired By Sonic Solutions

via paidContent.org

Cinemanow, the online movie service that has been around for a long time, has been bought by Sonic Solutions, the digital media software company. Terms of the deal were not disclosed, but rival Movielink got sold for a fire-sale price of $7 million last year to Blockbuster, and while Cinemanow's price is probably not that low, it isn't likely to be exponentially higher as well.

Cinemanow, founded in 1999, was backed by Lionsgate, but never really took off, and had been languishing from slow growth, as other online TV-focused (and more open) rivals like YouTube, Hulu and others took off. It was one of the first ones to offer DVD burning with some movies, and also offered limited "day and date" download and DVD burning; it was also one of the first ones to be embedded with devices such as Dell, HP, Samsung, TiVo, DivX, and Archos, but adoption was minimal.

The company CEO Curt Marvis left earlier this year to join Lionsgate as its new president of digital media. In 2006, it received $20.3 million in late stage (fifth round) funding, from Echostar and Japanese mobile content giant Index Holdings (JSD: 4835). Previous investors included Transcosmos, Cisco Systems, Lionsgate and Menlo Venture. Total money invested was more than $40 million.

As for Sonic, the two companies had been working together for a while to enable the download and burn of DVD movies on to its new Qflix DVD drives. The Qflix system adds a digital lock to burned DVDs, and thus studio-sanctioned, so to speak, and it had been working with partners like Dell and Pioneer for distribution. CinemaNow will be merged into Sonic's Qflix team to form a new Premium Content Group under the direction of Mark Ely, Sonic's EVP of Strategy. With this deal, CinemaNow CEO Tom Frank is leaving, while its COO and president David Cook become the GM of this new group. The group will focus on increasing the placement of CinemaNow's storefront on PCs and consumer electronics devices, and expanding the adoption of the Qflix technology platform. Sonic also owns Roxio, for those interested, which at one point owned Napster. Details in release.

Hulu To Be Bigger Than YouTube Next Year?

via Alley Insider

In a sign of just how little success Google has had at monetizing YouTube, a research firm is predicting that Hulu will surpass it in US revenue next year.

Screen Digest estimates that YouTube will make $100 million in US revenue this year compared to Hulu's $70 million. Next year, the firm estimates, both will make about $180 million. (See article in FT)

Before moving on, it's worth noting that Screen Digest is presumably talking about gross revenue. Hulu passes a far larger percentage of revenue through to its content providers (70%-80%) than YouTube does, so with $70 million of gross revenue, Hulu's net revenue would be a paltry $14-$21 million. YouTube also shares some revenue with some content providers, but a far smaller percentage, which is why News Corp and NBC built Hulu in the first place.

Also, as we noted last week, Google will be adding search-placement ads to YouTube, in which producers can pay to have their videos appear on search results. This should help boost YouTube's revenue and takes advantage of YouTube's enormous traffic (83 million monthly users to Hulu's 6 million).

But all that said: The fact that a research firm can make this prediction when YouTube has more than 10-times Hulu's US traffic illustrates the challenges Google faces in making YouTube into a real business. This is why YouTube is, intelligently, increasingly working with premium content providers. To get MGM et al as partners, we suspect YouTube is having to give up, if not a Hulu-like share of revenue, at least close.

YouTube still has the ability to squash Hulu: To do so, it has to match (or come close to matching) Hulu's revenue sharing terms and make its display, embedding, and editing tools as good as Hulu's. If it does this, it will erase the advantage Hulu has had over the past year, and its vastly greater size will make it a must-partner for every major video producer.

YouTube will also be able to make other revenue around the videos, so this wouldn't mean surrendering completely: Its position as the leading global video aggregator and search engine is still immensely valuable. Matching Hulu would, however, mean that YouTube would continue to be a vastly lower-margin business than Google's main business--which is why Google has fought like hell against going that route. But it sounds as though it may be time to throw in the towel.

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