The Online Reporter

Digital Media & Broadband Industry News, Research and Insight

YouTube Working on New Approach to Generate Premium Content

-Courting Hollywood and Indie Producers

Two years and $250 million dollars later, not much can be said for YouTube’s 100 premium channel experiment. In fact, YouTube has virtually scrubbed all mention of the endeavor from its sites.

This week, Reuters reported YouTube was in talks with some Hollywood and independent producers about more funding for premium content, citing unnamed sources. It said YouTube is interested in transitioning more of the video offerings on its platform to premium quality, rather than user-generated. Reuters said YouTube may offer producers between $1-3 million in funds to produce content for the platform, and may contribute marketing funds.

Marketing is exactly what caused its first premium content push to flop. YouTube offered content creators money to produce professional video, but didn’t put any marketing behind those channels. Ostensibly, audience development was left up to the individual channels. Once the funding ending, many channels were forced to closed down or seek funding from other sources, whether donations or investment from larger media firms.

YouTube now says those surviving channels represent the top 2% of channels based on subscribers, though most of the channels are nameless and didn’t receive any mainstream attention. The recent marketing campaign YouTube has launched on billboards and subways, which highlights YouTube celebrities such as…

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Industry-Wide Decline of UHD TV Prices Continues

LG’s UHD TVs have made the top of the page in the Sunday newspaper color insert from the regional retail chain HH Gregg:

49-inch with an Ultra Clarity Index of 1200      $1,499
55-inch with an Ultra Clarity Index of 1200      $1,999

We know HH Gregg will sell the 55-inch model for $1,699 because we recently bought one for that price.

(We like to use HH Gregg pricing for pricing examples because as a regional retailer it’s smaller and has less buying power than Walmart/Tesco, Best Buy/Currys and Amazon.)

By comparison, Samsung’s older 55-inch UHD set is $2,298 at HH Gregg, $300 more than the LG that’s the same size. Amazon currently sells Samsung’s new 55-inch UHD (model UN55HU6950) for $1,997.99.

Samsung’s new 40-inch UHD set is $997.99 at Amazon. However, some say that UHD cannot be fully appreciated on sets that are that small.

In the last few weeks Amazon has again reduced its prices on LG’s UHD sets:

49-inch with an Ultra Clarity Index of 1200      $1,299
55-inch with an Ultra Clarity Index of 1200      $1,599

It’s likely that HH Gregg, Best Buy and other mass market retailers will match Amazon’s prices when they are shown print-outs of Amazon’s prices. For complete and current Amazon prices, see: http://www.amazon.com/s/lg uhd tv

LG also offers UHD sets with an Ultra Clarity Index of 1500, which are slightly more expensive. Other than the differences in their Ultra Clarity Index, the two models are the same. Both use IPS panels, have LG’s WebOS-based smart TV software and support 3D. LG’s curved displays are said to have better color.

The much anticipated $999 Vizio UHD set, announced at CES, has yet to appear. It will cause waves when it does because of its distribution in Walmart stores, the biggest mass marketer of them all. Additionally, Vizio has in recent years been upgrading the features and functions in all its TV sets.

US-based Seiki is selling its 50-inch UHD TVs for less than its comparable 1080p HD set, at least Walmart is. That could be because Seiki is about to launch a new 55-inch UHD TV or that Walmart wants to clear out its inventory. Prices at Walmart.com show:

Seiki 50-inch UHD             $429
Seiki 50-inch 1080p HD     $498

See: http://www.walmart.com/search/search-ng.do?search_query=seiki++tv&ic=16_0&Find=Find&search_constraint=0

Chinese set makers TCL, Hisense and Haier are expected to be major players in the UHD market because of the size of China’s UHD market. TCL currently offers two UHD sets in the States. Both are 50-inch models. The one that’s a smart TV sells for $1,099 at Amazon and the non-smart TV model sells for $799. Customer reviews are at:

http://www.amazon.com/TCL-LE50UHDE5691-50-Inch-Ultra-120Hz/product-reviews/B00ES5Q6E2/ref=psdc117_r1_B00ES5Q6EW_B00ES5Q6E2_cm_cr_acr_txt?ie=UTF8&showViewpoints=1

More is expected to come from the three Chinese companies so stay tuned.

Alibaba Moves to Become Online Entertainment Powerhouse in China

Launch of an OTT Service, a New Net-Top Box and a Cloud Entertainment Service

Significance: China is the world’s second largest movie market, behind the US. Revenue from film is expected to grow by a third this year to reach $5.94 billion, according to some estimates. It has around 600 million Internet users, more and more of whom are watching video content online. The Chinese digital entertainment market is ripe for the picking, and the online and tech majors in the country are gearing up for the battle.

Online retailer Alibaba signaled this week that it’s ready to take over the living room in China, announcing a new suite of digital services and devices that signals the company is ready to become the OTT service and hardware powerhouse in China.

Alibaba, which is larger than Amazon and eBay combined, accounts for up to 80% of online commerce in China. It is currently working on launching an IPO this fall in the US, in what could be the largest tech IPO offering yet in the States. It has been pursuing content deals – and specifically online content deals – more aggressively over the last year. The company said it has an “ongoing commitment to advance our vision of making digital media entertainment available to our customers anywhere, anytime.”

 

images_en_news_library_offices_photo1_large

Pic source: Alibaba Group

Earlier this year, Alibaba, along with the affiliated equity firm Yunfeng Capital, made a $1.22 billion investment in Chinese online video platform Youku Tudou, which gave Alibaba an 18.5% stake in the streaming service. Alibaba’s CEO Jonathan Lu (Lu Zhaoxi) now sits on the Youku Tudou board, as a result of the deal. Alibaba said the deal would help its online and digital entertainment service.

Alibaba took a 60% stake in ChinaVision Media Group, which makes TV shows, movies and video games. It then renamed the company “Alibaba Pictures.” It also invested in Wasu Media Holding, one of the first “Internet TV” companies in China. Alibaba has a streaming license deal with Wasu Media Holding for its content, and Wasu launched last year a NTB with Alibaba called Wasu Rainbow.

The New ‘Western’ OTT Service
Alibaba announced that it and Lionsgate will launch a video streaming service in mainland China. The service, called Lionsgate Entertainment World (LGEW) is slated to launch next month, and will give Alibaba an entire library of popular and exclusive Hollywood content to deliver to Chinese viewers. LGEW will be available for a monthly subscription fee on Alibaba’s net-top boxes, alongside the company’s other OTT offerings.

TV shows include “The Royals,” “Nashville,” and the recently aired “Rosemary’s Baby” miniseries, “Mad Men” and “Weeds.” Films to stream include the “Hunger Games” series, the “Twilight” series, and the first installment of the “Divergent” series.

The service will also give subscribers opportunities to see bonus footage of content from the Lionsgate library, and related merchandise. The service will deliver to subscribers “first run films, television shows and behind-the-scenes experiences that aren’t available anywhere else in China,” and said Alibaba’s knowledge of the market will give the OTT service a competitive advantage.

The streaming service will offer TV shows and films from Lionsgate only, and as the name indicates, no other content partners have been announced yet. However, Alibaba will likely continue to license content from other international producers to flesh out its online offerings. It wants to start commissioning and releasing its own content for the platform, too. Last month, it partnered with Shanghai Media Group’s Dragon TV to produce TV content such as “China’s Got Talent” and “Chinese Idol.”

Hardware for the Living Room
Alibaba has launched entertainment hardware before, and it renewed its efforts to dominate the living room this week, with a new iteration of its net-top box (NTB) with the announcement of Tmall Magic Box. The NTB combines pay TV, online video streaming, music, video games and other digital entertainment. The company said the box marks “an integrated household digital entertainment system.”

The box offers access to 6,000 movies and 15,000 hours of TV shows from Wasu Media that viewers can access online and on-demand; it offers video games from Electronic Arts, Gameloft and Glu Mobile; it also supports a Dolby Laboratories Digital Theater System. Alibaba said subscribers would also be able to enjoy UHD content, but didn’t elaborate.

The company said it will develop and launch more consumer devices for watching content. “In the future, with more partners, we will develop more terminal devices to provide families with access to this ecosystem,” Lu said.

The company also launched a “cloud home entertainment” service, called Alifun. The service will “enable family members to play online games, watch television programs and online videos as well as shop online at home via a cloud network that can work across any terminal device such as TV sets, mobile devices and set-top boxes,” the company said.

Last year, the company announced its smart TV operating system, with TV maker partners Skyworth, Haier and Changhong. It also has a smartphone and tablet operating system called Aliyun. The two platforms are different, but the company told The Next Web last year it hopes to create synergies between the two devices.

Obstacles for Alibaba
Alibaba will face …

 

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In this week’s edition …

 - Headlines and Content for The Online Reporter 887

TOR887 Cover Samsung Alibaba

 

KEY ISSUES

Samsung Is First Major TV Maker to Deliver a Sub-$1,000 UHD Set
Alibaba Moves to Become Online Entertainment Powerhouse in China
Murdoch’s Attempted Purchase of Time Warner Is an OTT Play
Sony’s Quandary Highlighted by Fox’s Attempted Purchase of Time Warner
US Copyright Office Says No to Aereo

UHD
Industry-Wide Decline of UHD TV Prices Continues
Where’s the UHD Content?
Predictions for UHD Market Are Flat-Out Wrong
Vizio Aims to Sell 1m UHD Sets in 2014
Philips Is First European Brand with a UHD TV
Sharp Gets Serious about UHD TV Sets
What We Don’t Know about UHD
Hisense Launches 2 More UHD Sets in Australia
UltraFlix to Stream in UHD Hundreds of Hours of Concerts
Samsung’s UHD Evolution Kit Is Selling for $337
Walmart Is Not Really in the UHD TV Market, Yet
SMPTE Discusses Path Forward for UHD

OTT SERVICES, SCREENS AND APPS

OTT
AT&T-Chernin Venture Makes First OTT Acquisition
Amazon’s Selection of Exclusive Shows in UK Proves Enticing to Viewers
Online Video Services Turn to Streaming Concerts for Revenue
Yahoo Sees Spike in Eyeballs for Video Platform

ORIGINAL ONLINE VIDEO
YouTube Working on New Approach to Generate Premium Content
TV4 Entertainment Launches another Online Channel
Amazon Samples Netflix’s Buffet Model for New Original Series
Microsoft Makes U-Turn on Xbox Strategy

ENABLING TECHNOLOGY
Wintel Tablets Coming for Less than $250

WIRELESS BROADBAND
KPN Slips out 250,000 Homespots Using FON Software
Comcast Pounces on PowerCloud to Shorten Wi-Fi Time-to-Market

LIES, DAMN LIES AND STATISTICS
On-Demand Is on the Rise across Europe
TDG Says: Lack of Awareness & High-Prices Plague Demand for UHD TVs
Lessons for the UHD Crowd in a JD Power’s Survey
The World Cup Streaming Stats

DIGI GRAMS
Analyst Colin Dixon: On-Demand Content Rules the Internet
Dish Network Wants More Wireless Spectrum
CBS Will Talk’ to Aereo Now That It’s a Cable Company
Internet Giants: Fast Lanes Distort the Market
Personal Apps Are the New Channels’
Does Next iPad Need a UHD Screen?

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CBS Expands Streaming Options with New Netflix Deal

CBS has partnered with Netflix as the digital home for CBS’ upcoming broadcast TV series, “ZOO.” The full season of the show will become available on Netflix immediately after its full season broadcast on CBS next summer. This is the first such deal Netflix has struck with CBS.

CBS has been more innovative in its streaming licensing, in part because it’s the only national broadcast network that doesn’t have content on Hulu, and it isn’t part owner of the TV OTT site. Instead, CBS has struck lucrative online distribution deals with Amazon for its summer hits, such as Stephen Spielberg’s show, “Under the Dome.”

CBS is experimenting with windows in its summer series. Amazon was able to stream episodes of “Under the Dome” four days after they aired on CBS the past two summers. Netflix won’t get the same immediate access to new episodes for “ZOO,” but will have the entire season available to stream immediately after its broadcast, instead of having to wait until a few months before the second season is set to debut on linear TV, which is the standard window for broadcast TV for Netflix.

CBS has navigated these streaming waters brilliantly: Amazon is rumored to have paid $900,000 per episode of “Under the Dome,” and Netflix is paying around $1 million for each episode of “ZOO”; earlier this year, CBS licensed “Elementary” to Hulu and WGN for around $3 million per episode, according to The Hollywood Reporter. Streaming deals for the summer shows were struck before the shows had premiered on TV, which The Hollywood Reporter points out, ensures those series are profitable before they even air.