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.

News Bytes: November 13

Digitalsmiths Lands Another $12 Million For Video Fingerprinting And Search
via TechCrunch

Research Triangle Park, N.C-based Digitalsmiths has closed a $12 million Series B round of funding to extend its video indexing and ad targeting technology platform. The money comes from existing investors The Aurora Funds and Chrysalis Ventures; .406 Ventures also participated.

Digitalsmiths has been indexing digital content in videos (both visual and audio) for Hollywood studios for the past three years and recently started providing its technology for web-based video platforms. The idea behind it is that content owners and publishers can monetize their digital video content more efficiently, while advertisers could potentially target ads to thematically relevant video content automatically.

The company first appeared on our radar when Warner Bros. announced it was using Digitalsmiths’ technology for enabling visitors of TheWB.com to search through their video clip archive by what the characters in scenes are saying (you can see our introduction to the new features here). A similar solution has been made available to another Time Warner property, TMZ, which notably pushed out competing video platform Brightcove in favor of Digitalsmiths.
Auditude (see previous coverage) and Viewdle are also players in this space, offering intelligent audio/video content detection.

NewTeeVee Live: Hulu CEO Says Success is About Being Obsessive
via NewTeeVee

Jason Kilar, the CEO of Hulu — everyone’s favorite way to watch studio shows online — discusses the three forces that are driving Hulu: the big wave of the online video trend, obsession (give ‘em what they want and be neurotic) and the positive results of the service so far.

A big wave: 12.6 billion was the number of video streams in the U.S. in September according to ComScore. It’s a big deal. It was a fraction of that 6 months ago. Think of it like what Starbucks did for premium coffee, is like what we’re doing for the premium content business — if you can make it easier to consume, people will consume more. Media is an impulse business. A lot of this is from infrastructure that is far beyond Hulu.

Obsessing: Our mission is ambitious and never ending. Our goal is to deliver a service that users, advertisers, and content owners unabashedly love. Our strategy is to deliver “brain-spray” awesome quality. The implementation is similar to when I worked at Disney. Attention to detail is the cornerstone of how Hulu has designed its service — we obsess over each pixel on the screen. The team at Hulu are odd birds. We argue over fonts, design, and we obsess over everything.

Give users and advertisers choice. Listen to users — empower them. Relentlessly innovate. The product is a function of being neurotic, but its good for users. Listen and take action quickly.

Results of Hulu: In the 8 months since launch, we’ve had 12 million monthly users, and 145 million monthly video streams. PC World Magazine named Hulu No. 1 product of 2008, and TIME Magazine rated Hulu among the Top 5 inventions of 2008. Hulu has been embedded over 1.5 million times, and on over 60,000 sites. We’ve attracted 115 top content owners, including Warner Bros, Sony, MGM, Fox, NBC, Comedy Central, Paramount, and NHL.

News Bytes: November 12

Media Vets Launch Digital Entertainment-Focused Agility Studios; Gets Funding
via paidContent.org

A new digital studio called Agility Studios, started by three online vets, has launched today. The company, based in Los Angeles, has been founded by Scott Ehrlich, former VP of media at RealNetworks, who will serve as the company's CEO; Larry Tanz, till recently the president and CEO of LivePlanet, will now be the president and COO; and Keith Quinn, recently SVP of production & development for LivePlanet, who will oversee programming and production as the company's chief creative officer.

The company has also received funding from Colorado-based Mantucket Capital, which usually invests as a PE firm or provides distressed capital. The amount was not disclosed, but is in the "several millions", Ehrlich told me. The reason he went outside the traditional VC route was because he believes creative development requires a different kind of capital from VC money, with a longer term horizon.

The studio will work with content creators to provide infrastructure services that include business and creative development, financing, distribution, sponsorship and advertising sales, operations, business affairs and back office support. The programs or shows its develops would be distributed through various partnerships online, and then look at other platforms like mobile and TV. No clients have been announced, but Ehrlich tells me they will announce some in the next few weeks. To help achieve its goals, the company has also hired other execs from the entertainment industry: Shannon Pruitt (formerly of Fremantle and Mark Burnett Productions) as SVP of Integrated sales & sponsorships, Zev Suissa (formerly of DigWorks), as VP of production & development and Jason Turner (formerly of Fremantle) as VP of distribution & sales. Some more details in the release.

Of course the competition in the space is heavy, with all kinds of digital studios from startups (Deca, NextNew, 60Frames, Vuguru, Break and others) to bigger media companies incubating their own projects (Disney, NBC and others). Then there is the consumer adoption factor for original shows online, a nut no one has been able to crack from a business model perspective yet.

Ehrlich hopes his connection and his team, the long term money, and lessons learned from the first-gen digital studios, give them a better chance of figuring out the business, well, long term. It will focus on being a B2B company and also won't get into the distribution game itself (via its own video portal, for example), something Ehrlich thinks has tripped up some of the other companies in the space who try to do everything along the value chain.

Meanwhile, this new company begs a question: what is happening with LivePlanet, the once hyped digital studio founded by Matt Damon, Ben Affleck, and Chris Moore? The two senior execs above have joined Agility; the others listed here on LP's website have left as well. It still has a bunch of projects going on. I have been hearing rumors about the company's potential sale for a while, but Tanz wouldn't comment on it when I asked. More when I find out....

Gartner Sees $1.5B for Web Studio Video by 2012
via NewTeeVee

Gartner put out a report this week on so-called “protail” video content, estimating that worldwide advertising revenue for “the segment between professionally produced content and user-generated content” would exceed $1.5 billion in 2012, up from $75 million in 2008.

Some thoughts:

· The definition of “protail” content doesn’t really satisfy me. According to the release it includes Dr. Horrible’s Sing-Along Blog, which I very much consider to be “professionally produced.” Further detail on the definition includes “higher-quality production and content produced in a more consistent or episodic manner…how-to, scripted sitcoms, scripted dramas, new forms of reality programming, niche news and lifestyle content (travel, food/cooking).” That means just about anything that isn’t personal sharing, viral vids, or ripped versions of TV shows, right? Gartner clarifies that “digital studios can create four-minute protail episodes for between $2,000 and $5,000″ — but then that doesn’t apply to Dr. Horrible, whose costs totaled six figures.

· $75 million is NOT a lot of money. Beyond the general economic malaise, no wonder so many folks are laying off people and cutting back plans. But…yay! $1.5 billion sounds very nice, thank you.
· Gartner’s Allen Weiner REALLY feels there’s a hole in the market for “‘clean, well-lit places” for this protail content. His proposed alternative to big sites like YouTube and Yahoo Video would help connect advertisers to content, and make it easier for consumers to find good content. This idea seems a bit shaky — it’s not like video portals out there such as Crackle, Veoh and Metacafe aren’t doing their best to figure out whatever needs they can address. And meanwhile Revver, probably the closest thing to what he’s talking about, seems to be down again this morning.

· One interesting, but somewhat unsatisfying, tidbit: Gartner was able to extract an exact number of views for Dr. Horrible, something we haven’t had much luck with. According to the report, “A one-week run on advertiser-supported Hulu.com netted more than 1.1 million streams.” Was that the first week, though?

Thumbplay Trims Headcount To Prepare For Prolonged Economic Downturn
via mocoNews.net

Thumbplay, a New York-based mobile entertainment company, said today it is trimming its workforce for what they are expecting to be a prolonged economic downturn. Thumbplay wouldn't specify how many employees would be let go, but confirmed it was much lower than the 25 percent reported by Silicon Alley Insider. A spokesperson said the total number of employees is under 100 employees.

In an emailed statement, CEO Are Traasdahl said: "Today, we informed members of our team about reductions in our staff. While difficult, these personnel decisions recognize the realities of the economy. This is preparation for what all indicators show will be a prolonged economic downturn. Thumbplay, like every responsible company out there right now, is preparing against future risk."

Trassdahl said 2008 is on track to be a strong year, with revenues expected to grow by more than 50 percent. Even by conservative estimates, he said next year will also deliver growth. The company is in a difficult position in the mobile content industry, where it is forced to either market directly to consumers, which can be costly, or to partner with carriers and share revenues. In March, the company announced it raised $18 million in venture capital. Thumbplay also has a number of high-profile partnerships, including deals with Cellular South, Comcast (NSDQ: CMCSA), MTV, AOL (NYSE: TWX), MSN, and has relationships with the four major record labels.

MySpace Launches PrimeTime App
via NewTeeVee

Social network MySpace launched its new Primetime application today, which lets users watch full-length content from their user homepages and profile pages.

To use the new Primetime feature, users must first download the free app, but once it’s running they will have access to premium content from Hulu, Warner Bros., Sony as well as MySpace originals like Roommates. The player offers sharing through links and embeds, as well as a thumbnail links to related content and a searchable directory of additional content.

MySpace says this new PrimeTime has the potential to monetize more than 150 million pages with video content, and mathematically that is possible. The company arrived at this figure based on comScore numbers saying the site reaches 76 million people a month and assuming each of those people installed the app on both their home page and profile page. Voila! You’ve got 152 million. Of course, that’s dependent on all users installing the app in both places.

In addition to the new app, MySpace redesigned the Primetime home on the site with a more pronounced player and easier searching for content across TV shows, movies, originals and channels.

While Hulu is a joint venture between FOX and NBC, the premium content company isn’t exclusively aligning with the FOX-owned MySpace social network. Hulu is also part of Facebook Connect and was supposed to launch that aspect of its service back in August.

News Bytes: November 6

YouTube Plans To Launch Live-Streaming November 22
via Silicon Alley Insider

YouTube will launch live-streaming in the style of startups UStream, Justin.TV, Stickam and Mogulus at its November 22 "YouTube Live!" event, a company source who has seen mock ups of the user-interface tells us.

"Of course something could go wrong and they might not launch it," say our source, who nevertheless says YouTube employees talk of the new service's launch as a foregone conclusion.
A YouTube spokesperson told us: "We're working with a third party to live-stream our event called Live. We have no product to announce at this time."

Live streaming is very expensive and hard to monetize. A Google source told us in August that YouTube execs figure that if just 10% of YouTube's users adopted live streaming, bandwidth costs would go up 20% to 25%.

That's because live-streaming clips tend to last much longer than the short video clips typical of YouTube. They also require data to pass both ways.

It's also hard to make money off live-streaming. Advertisers don't want to put their brands against live content created by uncontrollable YouTube users.

One possibility that we feel Google shareholders should root for: YouTube will launch live streaming as a service for paying customers only.

MediaBytes:
via MediaBytes with Shelly Palmer » MediaBytes

Google has abandoned its proposed search ads deal with Yahoo. Google walked away after the Department of Justice told both parties it would sue them to block the agreement. Yahoo’s stock was up on the news, while board member Carl Icahn continues to push for a sale to Microsoft.
Sprint will bring NFL games to mobile devices. The mobile broadcast deal, valued around $500 million for five years, gives Sprint the right to phone-cast 8 exclusive NFL Network games a year. The big question is whether or not Sprint will be able to sell more than $500 million in phone plans.

Michael Crichton, author and creator of the hit television drama ER, passed away yesterday. Crichton, who was battling cancer, is best known for Jurassic Park. NBC CEO Jeff Zucker noted that Crichton “was a modern day Rennaissance man…who helped change the face of televised drama.

via NewTeeVee
Mobile Video Infrastructure Market to Grow; despite downturn, research firm In-Stat predicts the market will reach $291 million in 2012. (emailed release)

YouTube Working on Adding Full Length Studio Movies?
via paidContent.org

So says a report from News.com, and it seems a no brainer on the face of it: YouTube, owned by Google (NSDQ: GOOG), has tried to get full length movies and TV shows from major networks and studios for a while now, but has failed to make major headway due to queasiness on part of the conglomerates. The media/entertainment companies worry about putting their shows/movies in what has primarily been perceived to be a user-gen-heavy environment, and then putting all eggs in one video basket, so to speak.

According to the story, YouTube has been talking to the major film companies about launching an ad-supported, streaming movie service. A studio source I spoke to said nothing's final yet, or anywhere near it, but headway has been made. The video site has built a "Screening Room" recently, with the idea to showcase indie movies there. That could feasibly be expanded to include major studio content as well. Some sticking points include how many and what kinds of ads could be places in movies. If YouTube chooses to go the minimalist Hulu route, then they better have patience with scaling up enough on the ad deals side (not audience, which it arguably has) to monetize it effectively. Even Hulu has to start considering that seriously.

News Bytes: November 5

Video Startup Veoh Cuts 18% of Staff
via TechCrunch

Online video site Veoh is laying off 20 people, or 18% of its staff of 110. The move comes a month after a Paidcontent reported layoffs in Veoh’s Russian office in St. Petersburg, which CEO Steve Mitgang says was a strategic decision rather than a financial one, as Veoh wanted to move its development staff to San Diego (where it has hired a replacement team).

This round is more of a financial move, given the new economic reality. The company insists that it is still strong on a financial front, and expects to be profitable next year, although CEO Mitgang admits profitability could be pushed out a quarter. Despite the somber news, he is confident Veoh will emerge as one of the few surviving video sites in what will no doubt be a coming shakeout.

According to comScore, visitors to the Veoh.com in the U.S. have come down from 4.5 million people in June to 3.8 million in September. And total minutes spent on the site has similarly dropped from 99.6 million minutes in June to 66.8 million in September. That drop in visitors is more than made up for in the growth in its standalone video app, Veoh TV, which reached 2.3 million people in the U.S in September. Globally, 16 million people watched videos on the site in September, and another 12 million watched via the app (see chart below).

The company has raised $70 million, including $30 million just last June. We are adding this announcement to our Layoff Tracker.

FCC Approves Use of "White Spaces" for Wireless Broadband
via Digital Media Wire - connecting people & knowledge

Washington - The Federal Communications Commission (FCC) voted on Tuesday to authorize the opening of unused portions of the broadcast spectrum to deliver wireless broadband Internet access. "Opening the white spaces will allow for the creation of a WiFi on steroids. It has the potential to improve wireless broadband connectivity and inspire an ever-widening array of new Internet based products and services for consumers," said FCC chairman Kevin Martin.
read more

Mobile Content Bits: Pepsi-QR Campaign
via mocoNews.net

-- Pepsi UK launches mobile QR campaign: A massive mobile ad campaign in the UK using QR codes. PepsiCo plan to put QR codes on 400 million cans and bottle, reports Brandrepublic.com. When a consumer takes a photo of the code with their camera phone, they will be sent to a WAP site where they can access games, ringtones and wallpapers or win prizes. The QR codes will be placed on all Pepsi brands, including Pepsi, Diet Pepsi, and Pepsi Max. Users must first download a QR reader to their phone if they don't already have one. They must also have internet access on their phone.

Echostar-Owned Sling Launching Online Video Portal; Hoping For Multi-Screen Convergence
via paidContent.org

Sling Media, the place- and time-shifting device company that is now owned by Echostar (NSDQ: SATS), is launching something that seems counter-intuitive on the face of it: a free, ad-supported online video portal aggregating video from various professional sources like TV networks, studios and other independents. Sling.com will launch as a video portal on Nov 24.

Anyone can use the site—they don't have to be a Slingbox user/subscriber, though if they do have it, they can plug that into Sling.com site, and watch live TV through their own TV boxes (like they do now through their online accounts, only in this case it is all integrated).

I spoke to Jason Hirschhorn, the president of its entertainment division, and he explained to me the rationale for the site. The site had been in works even before the company was bought by Echostar, and had been delayed for a bit while the content deals were coming in place.

Content wise: it has a lot, but the glaring omission is *Viacom/MTV Networks*, which means Comedy Central's popular shows like The Daily Show and the Colbert Report are not available.

Hirschhorn said the company is working on a Viacom (NYSE: VIA) deal and hopes to have something to announce soon. And Sling has the Hulu deal, which means it has everything from there except, well, Viacom content. It has also done separate deals with Warner, MGM, Sony (NYSE: SNE) Pictures, CBS, and others, and is working on doing more. On the movie side, it only has 125 of them, but is working on more. Unlike some of the others, it is also aggregating video news content from AP, Reuters and others. Since most of the media companies don't do exclusive content-distribution deals, it will get all of those deals anyway, and be competitive on content library, the company hopes.

More details after the jump

Functionality/design: more cluttered than Hulu, but then so is every other video site, compared with Hulu's minimalism. It has good IPG and search capabilities, more editorial curation and blogs from editors. Sling.com has tried to build in a lot more social functionalities, like a news feed of your friends, a la Facebook, profiles, sharing, etc. It is also building connections into other social sites, and working on building widgets and apps for those as well.

Challenges: Huge. Tons of competition from everyone and their mother in law. But Hirschhorn thinks it is still early in the game and no one has won the online video battle. Also, with Echostar behind them, and Charlie Ergen's support, they are in it for the long haul. Also, online is just one part of the full spectrum for them: with Slingbox, users can watch home TV and DVR online; with doing the same on mobile with SlingPlayer Mobile, with its SlingCatcher service, users could do the reverse: bring online video onto their TVs. Sling.com is another in that spectrum. The convergence hope, in other words. The company also recognizes that the Slingbox is an intermediary product, and that it will soon be integrated with Echostar's boxes itself. Echostar is the number-two satellite player, so Sling's distribution will be through those channels in the long term. Conceivably, it could also white label its video portal for cable and satellite providers. But if it could pull this convergence thing off, it would be in competition with the likes of Apple and Comcast, not the online video players

The big internal challenges would be: how long does Echostar keep supporting it; how long before the main entrepreneurs within Sling, the founder Krikorian brothers and Hirschhorn stay with the company; where do they get the big online traffic funnel, being a company with little online consumer presence; and how do they build up monetization and a sales team, not something the company has been known for till now. And then, that economy thing…
More screenshots of the service here.