Archive for March, 2011

UV has got to do…something

It comes as a “no duh” that Netflix is winning the battle to get customer’s mindshare when it comes to digital video.  Their strategy of embedding on pretty much every single device that is being manufactured is paying off handsomely.  I wouldn’t be surprised if my next toaster came with a Netflix app.

As I’ve written about, Amazon has entered the fray and is even providing a better value for the money versus Netflix.  But Netflix’s everywhere strategy has landed them a 61% chance that any given (legal) movie stream or download is coming from them.  Ouch to Amazon as they try to capture share.

But the point here isn’t so much about Amazon or Netflix, but rather about the up and coming UV service.  And once again I pose the question: how are they going to make some real noise in the marketplace in order to be heard?  With Netflix everywhere, and Amazon planning to get to everywhere, how on earth can UV wiggle into the fray and expect to come out with any meaningful share?  It’s a daunting task to say the least.  And it’s even further complicated by the Byzantine rules that customers will have to follow in order to enjoy their content.

As you breeze through the attached article which talks of the battle between Amazon and Netflix, think of little ‘ol UV.  What will they do to be heard above these titans?

The digital video market continues to grow as DVD sales tank, and Netflix is currently king. According to the latest data from the NPD Group, there’s a 61 percent chance that any given (legal) movie stream or download is coming from Netflix. Netflix’s aggressive strategy of being on every device and set-top box is apparently working, and Amazon clearly has a long way to go if it wants to really compete on the instant streaming front.

After Netflix, NPD says Comcast made up another eight percent of “digital movie units,” while DirecTV, Time Warner, and Apple all shared the third-place spot with four percent each. NPD’s data was collected from 10,618 US-based Internet users over the age of 13 between January and February of 2011.

The firm combined all legit online movie services in order to come up with its numbers, but pointed out that customers do seem to know the difference between “electronic sell-through” (EST, also known as downloads), Internet video on demand, cable video on demand, and streaming services. Customers apparently recognize that services like iTunes (which NPD categorizes as EST) offer the most current releases, “while Netflix streaming gets credit from customers for providing the best ‘overall shopping experience’ and ‘value for price paid.'”

Instant gratification appears to be what’s pushing customers to favor digital video—whether it’s from Netflix or another source—over DVD and Blu-ray. “Overwhelmingly digital movie buyers do not believe physical discs are out of fashion, but their digital transactions were motivated by the immediate access and ease of acquisition provided by streaming and downloading digital video files,” NPD entertainment analyst Russ Crupnick said in a statement.

That’s the angle that Amazon is going for with its recent rollout of Amazon Instant Video. At $79 per year, Amazon’s offering is cheaper than a year’s worth of Netflix (which is $95.88 per year on the streaming-only plan), but Amazon’s library is still considerably smaller than Netflix’s. That’s in addition to the fact that Netflix subscribers can stream videos to practically every popular device that they would want to use—iOS devices, Android devices, Roku boxes, Apple TVs, Xbox 360s, and more. Amazon, on the other hand, claims that there are almost 200 Internet-connected Blu-ray players, TVs, and set-top boxes that can play videos from its new service, but aside from the Roku, most are relatively obscure.

Amazon clearly wants to compete with Netflix, but it will have to step up its game if it wants to chip away at Netflix’s dominance in the digital video market. Indeed, Amazon needs to edge past iTunes and the various cable offerings to even show up on the leaderboard, so the team had better get cracking  to get more content online and deliver it to more places.

What will UV need to do in order to compete with this?

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Bon Jovi hates Steve Jobs

I feel dirty for including this image, but I'm looking to expand my demographic

OK OK so hate is a really strong word, but I came across an article where Bon Jovi publicly stated that Steve Jobs is single handedly responsible for killing the music business.  Them’s is fighting words.  I’d love to see those two in a cage fight and throw down.  Bon Jovi would pull out all that dark alley New Jersey shit and kick Jobs’ ass no doubt.  And when Bon Jovi is done, maybe Metallica can jump in there and pull out some Sandman kung foo and make Jobs say he’s sorry.  OK I’m getting carried away.  Here’s the article that makes some epic allegations.

Not so long ago, Steve Jobs was hailed as a savior of the music industry.  But that was before digital didn’t pan out, and before everyone realized that Apple was really making billions off of devices – while piggybacking off of music.  Now, Jobs is just another bogeyman.

And even music’s elite – and very rich – are harboring ill will. “Steve Jobs is personally responsible for killing the music business,” Jon Bon Jovi ranted to the Sunday Times Magazine.  “I hate to sound like an old man now, but I am, and you mark my words, in a generation from now people are going to say: ‘What happened?'”

Well, a lot of things happened, and Jobs is just one part of that disruption.  But it’s still unclear whether digital distribution has really hurt Bon Jovi in the end.  After all, the wheels of discovery are more lubricated than ever, and Bon Jovi mints hundreds of millions in touring income annually.  In fact, Pollstar ranked the band first among all touring acts last year, with receipts of nearly $150 million in North America alone.

Of course, many of those attendees were born long after “Livin’ on a Prayer,” and have discovered Bon Jovi through digital channels.  Still, Bon Jovi feels that an essential part of the experience is now missing.  “Kids today have missed the whole experience of putting the headphones on, turning it up to 10, holding the jacket, closing their eyes and getting lost in an album; and the beauty of taking your allowance money and making a decision based on the jacket, not knowing what the record sounded like, and looking at a couple of still pictures and imagining it.”

What do you think?  What is your cage fight fantasy?

Do you see a disruption here?

As a follow up to to my bit on 8-tracks versus digital sales, following is a remarkable history of recorded music from 1973-2010 that will make any music exec’s stomach churn just a little more. The data really hit me like a ton of bricks after visiting a friend of mine who works at one of the few remaining music labels.  I was struck by a few things that weren’t altogether positive. 1) What on earth do all those people working at a label actually DO? 2) When will the grim reaper arrive?  I sensed a strange tension as the super-cool-chic music folks tried to hide their fear that a gaunt rich dude in jeans and a black mock turtleneck sweater was coming to slay them.  3) Where do old school music execs end up when their shift is done?  I mean these guys in their day partied.  Where do they end up now that the glory days are long gone?

Anyways, check out the happy times in 1998 versus the dreary days of 2010 in the album sales.  And then have a look at the singles trends.  It is breathtaking!

Not so much purple going on here

I'd say the purple is trending upwards

A world without Woody?

Another re-run, but an altogether great look at the continuing saga of UV.

I recently got a comment on a blog which asked about Keychest and Ultraviolet, and I’m here to tell you I found out some not-so-good news regarding “the future of entertainment.”  In a nutshell, I think the industry may be going down the path of confusing us with choices we will have to make.  While the industry seems to be trying, it is still coming up short.  Here’s what I’ve found out:

Disney and Apple are on their own

Imagine a world without Toy Story, Finding Nemo, Pirates of the Caribbean, The Lion King, Up, Cars, or The Chronicles of Narnia.  The top 10 movies from Disney have grossed an impressive $3.3 billion in US box office.  Despite being in 4th place for box office take so far in 2010, Disney is world famous for its franchises that earn billions of dollars.  No one can argue the staggering impact that this studio has had on merchandising, plush toys and bedroom decorations for little boys and girls across the world.

Continue to imagine a world without a close friend and ally of Disney’s:  Apple.  They continue to capture the world’s Luddites with its stupid-simple devices.  A not-unnoticed factoid with this company is that if you add the market caps of massive brands – take Microsoft ($230 billion), throw in two retailers like Best Buy ($18 billion) and Target ($40 billion) – and you come up with a few billion short of Apple ($292 billion)!  No one can argue the impact that Apple has had on the industries it plays in.

At the moment, UltraViolet, the industry’s leading consortium to create device and content interoperability so that we can enjoy content anywhere, anytime, anyplace, is heading down a path without Disney or Apple.  Disney instead is creating its own ecosystem called Keychest. The principles are the exact same as UltraViolet, only they have created an island.  With Steve Jobs on the Disney board, both Disney and Apple will likely continue to live on their own island and extend invitations to only those that are willing to play by their rules.  As a result, the content that is so popular around the world may not be part of UV, and will therefore limit my choice.  The devices that are so prevalent from Apple, will not work.

But what about choice?!

A deep, complete selection of titles from ALL studios from which I can choose and enjoy on any of my devices – from my living room to my devices in the pocket – is critical for me to join to a service.  UltraViolet has done an admirable job in bringing 60+ companies to the table to discuss how to create an alternative in the marketplace, yet driving a truly revolutionary service offering that will inspire me to buy legitimate sources of content still comes down to a fundamental issue: I want unlimited choice.

So long as there are islands, consumers will learn that their freedom of choice is limited, and they will understand that the evolving promises of both Keychest and UV are deeply flawed.  As consumers lapse into apathy and not participate in either UV or Keychest, the industry will continue its gradual decline.  With home entertainment representing more than 50% of a studio’s revenues, studios will stop making movies.  I don’t know about you, but I don’t want to see that happen.

You’re still ignoring my Mom

Here’s another re-run, but I thought I’d toss it out there for further contemplation to ride the UV flurry of news recently…In my previous article, I complained how UV was forgetting the simple customers like my Mom...

We left off in the previous article talking about the confusion of Digital Copy, Magic Codes, DisneyFile Digital Copy, etc.  Let’s now look at some other confusing attempts at creating the future of entertainment and what it means.

Renting digital is even difficult

Take renting a movie from one of the myriad digital services that exist today.  While customers are getting closer to being able to choose from a decent selection of titles to rent, there are still strange rules that are not transparent to customers.  Again, I ask you to put your customer hat on – Why are some new titles available to buy and not rent?  Why are some available for rent later? Why does content disappear if I don’t watch it in 24 hours? Indeed, the industry will reply that windows are carefully crafted to protect revenue streams.  But once again, these rules in today’s day and age are frustrating customers and leading them to opt out of digital entertainment altogether.

My Mom doesn’t care about “elegant solutions”

So why has entertainment forgotten about the end consumer and making life simple and more enjoyable?    Why is this stuff so hard to understand?  I believe that while the application of technology is a fun and engaging puzzle to solve, the industry loves to create “elegant solutions” that don’t really solve customer problems, but rather protect industry interests.  Guess what.  Customers don’t care about elegant solutions. They only care about things that delight and awe without any extra effort.  In short, technology shouldn’t exist for its sake alone; it must be leveraged to create awe-inspiring, magical value props.

If anyone from consortia like Ultraviolet or CMX or DEG or others is reading this, please pay attention to making things simple!

Self-preservation vs innovation

I also believe the entertainment technology industry is putting self-preservation ahead of innovation and flexibility. We all know the broad entertainment industry is in gradual decline.  But unfortunately, the reaction to double digit declines is to hold on even more tightly to the formula that worked in the past – get behind a format change and ride it until the next “big” format wave rolls ashore.  The reality is that the choices and actions that are NOT being made today will likely impact the business in three years’ time.  Given the rapid disruptions that occur in entertainment, the industry can’t afford to wait to act.   Within three years’ time, we’ll be in an even more dire circumstance.

To put it in terms my Mom can then understand, I’ll then be out of a job.  And she definitely understands that.

What do you think?  Why has entertainment technology forgotten about the consumer?

Twitter-rama

I admit that since becoming the Fool, I have been learning the ways of Twitter and the rest of the whole social media scene.  For me,  Twitter is both awesome and horrible at the same time – it’s utterly distracting as Tweets pop up in my corner with Tweetdeck and horribly time consuming to fire off well written, attention grabbing  Tweets.  But at the same time it’s an incredible way to get those bite-sized snacks of information coming from all over the world. And it’s a great way to just make a little noise about what you believe in.

In honor of Twitter’s 5th birthday on Monday, the 21st of March, here are some staggering stats they shared.

#tweets

  • 3 years, 2 months and 1 day. The time it took from the first tweet to the billionth tweet.
  • 1 week. The time it now takes for users to send a billion tweets.
  • 50 million. The average number of tweets people sent per day, one year ago.
  • 140 million. The average number of tweets people sent per day, in the last month.
  • 177 million. Tweets sent on March 11, 2011.
  • 456. Tweets per second (TPS) when Michael Jackson died on June 25, 2009 (a record at that time).
  • 6,939. Current TPS record, set 4 seconds after midnight in Japan on New Year’s Day.

#accounts

  • 572,000. Number of new accounts created on March 12, 2011.
  • 460,000. Average number of new accounts per day over the last month.
  • 182%. Increase in number of mobile users over the past year.

#employees

  • 8. 29. 130. 350. 400. Number of Twitter employees in Jan 2008, Jan 2009, Jan 2010, Jan 2011 and today.

You’re ignoring Mom

And she's not easy to ignore...

In this re-run, I confused my poor Mom around T-bird time when I explained a few UV things to her….

It’s a few days after Thanksgiving, and the time I spent with my Mom over the holiday serves as my inspiration for today’s Digital Fool.  During the Martini-full holiday, I tried again to explain to her what I do for a living, and I discussed the many exciting things that are happening in entertainment and technology.

Not surprisingly, she had a rather blank look on her face, without even an inkling of understanding.

“Oh that’s nice, dear, good for you,” she commented, but her face said very clearly: “WTF is he talking about?  I mean really, who cares!  The stuff I get just works – put it in my car or DVD player or VHS, press the triangle button thingie and it goes!!”

She has a point.  Entertainment and technology have forgotten about my Mom and simple people – the mass consumers who are the lifeblood of  home entertainment.  My Mom may not be the sharpest tool in the shed, but she, and millions of others just like her, still buy a ton of CDs and DVDs each year as gifts for grandchildren and a few for themselves.  Let’s talk about some of the recent efforts to coax my Mom into the next generation of entertainment.

Some things are new, but…

Take Digital Copy or as it was once known, Second Session.  This is supposed to be a safe and easy solution for customers to get legitimate digital video and introduce them to a “digital lifestyle.”  Buy physical, and get a digital copy that is either downloaded from a studio site or was included on the disc itself.  While it seems like a good idea,  it doesn’t work so well for me.  For example, a Warner Digital Copy is different than a Disney Digital file.  Each studio has a different sign up process.  Some studios ask for personal information, others don’t.  Some studios store files on a user’s desktop, others store it in a specific file directory.   Even packaging varies from studio to studio – customers really don’t know what they are getting or why.  All customers know is that sometimes they pay more, sometimes the same.   Put your customer hat on for a moment – does this sound like something worth spending time to figure out?

But hooray, Disney has Digital Copy as well, and maybe they can help sort this out.  I looked at their Disney Online Movie website, and I learned about Magic Codes (I’m not kidding).  Check this out (but remember, try to keep my Mom in mind):

How is [DisneyFile Digital Copy] different from a Digital Copy?

With DisneyFile Digital Copy, you receive a standard definition digital version of the movie in iTunes or Windows Media as well as the ability to stream the movie on Disney Movies Online. The DisneyFile Digital Copy is inside your Disney Blu-ray/DVD Combo Pack on the disc labeled “Digital Copy”. DisneyFile Digital Copy is a fast and easy way to enjoy your favorite Disney movies, anytime, anywhere on your PC, Mac, or compatible portable device. Disney fans can watch their DVD or Blu-ray in the living room and enhance their mobile life style by bringing a DisneyFile Digital Copy of their movie on the go!

DisneyFile Digital Copy is accessible on Disney Movies Online using the Magic Code found in your Disney Blu-ray/DVD Combo Pack. Once you have entered the code you can access your movie on Disney Movies Online from any internet connected computer that meets our system requirements without using storage space on your hard drive.

At this time, select Disney movies are available with a Digital Copy. For more information, please visit DisneyFile Digital Copy

Currently, movies purchased on our site are unable to be transferred to iTunes, Windows Media Player, or any other portable device.

Huh?

Come back later this week – I’ll talk more about other crazy examples in entertainment that are not so Mom-friendly. I’ll also share some cautionary thoughts on why the entertainment and technology industry is making this so annoyingly complicated.

In the meantime, what other silly things has the entertainment industry done in recent years to confuse you?

Savvy

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