Snatch up all the set-top boxes, smart HDTVs and second screen apps you want. The future of television will still, at its core, be about one thing: content.
All of the stakeholders realize this, from legacy players such as networks and cable operators to new entrants including streaming services and search companies.
If the Web is going to compete with traditional TV, it won’t be so much with technology as with high-quality content that people genuinely want to watch. That’s why HBO is closely guarding its sought-after programing by tying its mobile apps to cable subscriptions. It’s also why Web companies are investing huge sums of money to create premium video content of their own.
Yahoo, AOL and Google have all been developing original video programming that they hope can compete with the type of content people have historically turned on their television sets to watch. Google in particular recently shoveled $100 million into premium content and has begun to reposition YouTube with less of a focus on bite-sized, viral clips and more emphasis on the quality stuff.
That investment in YouTube appears to be paying off in terms of time-on-site metrics, and the company is said to be recouping much of its expenses, thanks to ample ad revenue.
How Netflix and Hulu Are Upping the Ante
Two players that stand perhaps the best chance of making a mark have both made 2012 the year of premium, Web-original content. Netflix debuted a fish-out-of-water drama called Lilyhammer in February, right around the same time that Hulu launched its own original series called Battleground.
Hulu took things up a notch last week when it announced four more Web-only TV series, each one with its own impressive line-up of established TV-industry talent.
If any Internet-only TV programming has the chance to make a big splash, it’s the long-awaited fourth season of Arrested Development. The show became something of a cult classic after being canceled by Fox in 2006 due to low ratings. Early next year, the original cast will return for a fourth season, which will be released exclusively on Netflix.
The entire season will drop all at once, rather than being released incrementally as television shows historically have been. This is the model many viewers are now used to, thanks in part to services like Netflix. Still, there’s something to be said for the timed debut of individual episodes, which allows people to congregate via second screen apps and social media to have conversations in real-time.
It’s still a bit early to gauge the success of Internet-original TV programming in general. If the online chatter is any indication, people have been more excited about Game of Thrones and Downton Abbey this year than they are about Lilyhammer or Battleground.
The arrival of Arrested Development in early 2013 will provide a particularly interesting test case. In the meantime, expect to see the battle for video-seeking eyeballs continue to heat up online.
When it comes down to it, the value offered by services like Netflix and Hulu is primarily in their content offerings. Sure, they provide an on-demand, convenient way of consuming that content from a multitude of devices, but at the end of the day, it’s all about the television shows and movies available on each service. Historically, the premium video content that streams online has consisted almost entirely of material originally produced for another, older medium. In 2012, that’s slowly beginning to change.
After what turned out to be a pretty good year in 2011, Hulu announced last week that they are planning to invest $500 million in new content initiatives. That will undoubtedly include more pricey agreements with traditional content providers, but today the company revealed another place it plans on spending that money: on original programming.
Hulu’s first scripted, original television show, titled “Battleground,” will air next month, following “reality” and documentary-style programming that Hulu launched in 2010 and 2011. The series will be joined by the second season of Morgan Spurlock’s “A Day in the Life,” which debuted on Hulu last year. More original programming is expected to land on the popular streaming service later in the year.
A week before the debut of “Battleground,” Netflix will be airing its first installment of original programming as well. A mobster drama called “Lilyhammer” is expected to be the first in a series of Netflix-only shows to launch over the next two years. Next year, the canceled-yet-beloved series “Arrested Development” will be making its triumphant return to screens of all sizes, not through the Fox network on which it originally aired, but exclusively through Netflix.
Web-Only Premium Content: A Disruptive Force?
As early and unproven as this Web-first model is, it may well represent the next phase in Web TV and pose a tangible challenge to traditional content distributors. Such a challenge would come despite the predictions of people like Mark Cuban, who recently wrote a blog post outlining why the television business as we know it isn’t going anywhere, despite advances made in the online streaming industry.
Cuban, himself the chairman of a cable network, touts the immediacy and timeliness of the traditional TV model, as well as its inherent value to advertisers, who he says prefer to have their messages reach viewers within a shorter timeframe.
Still, if Web-only series such as those premiering on Netflix and Hulu do particularly well and spawn more like them, that will be one less reason for many people to keep their cable subscriptions, if they ever sign up in the first place. With the arguable exception of live sports and certain popular, premium cable programming, the incentive for subscribing to cable continues to decline, especially as prices climb.
Long the go-to source for LOLcats and viral, homemade videos, YouTube is getting serious about premium content as well, with Google actively seeking more progressional video content and redesigning the site to help better showcase that content. This push for premium video comes as Google TV is being revamped and added to more connected devices and television sets.
Cable may not go extinct overnight, but if what we saw come out of CES last week is any indication, the future of TV is very much connected to the Web and far more interactive than ever.
Fans of HBO’s unique selection of premium content will be thrilled to learn that the channel’s mobile app, HBO GO, will now be available to even more subscribers. Well, they’ll be thrilled as long as they already subscribe to HBO via their cable or satellite provider.
Customers of Time Warner Cable and Cablevision will soon join most other cable subscribers in being able to view HBO’s massive library of original content from their smartphones and tablets. So far, the response among those subscribers to the year-old HBO Go app has been rather positive. For many of those who don’t pay for a cable subscription, the response has been, “Hey, can I get your HBO Go login info?”
That’s because as beloved as HBO Go is, the service is not available to anyone who doesn’t have a cable subscription. That’s not just a feature of the early beta period of this experiment, either. It’s likely to remain that way indefinitely, if you accept the word of HBO Co-President Eric Kessler.
Historically, the only way to get access to HBO has been to pile it on top of one’s existing cable bill. The cost of those subscriptions have been going up and turning off more and more consumers, who are increasingly able to turn to online sources like Hulu and Netflix for video content. The so-called cord-cutting phenomenon was dismissed by Kessler, who said it would cease to be a significant force once the economy turns back around.
That may sound like a risky bet to some, akin to print publishers crossing their fingers for an economic revival to somehow bring their old revenue streams back. Yet HBO has important, deeply-rooted relationships with cable providers to preserve, so this stance isn’t shocking.
Unlike many of the other channels available on cable, HBO is known for a wide selection of premium, sought-after content. Because of the way cable billing typically works, consumers don’t have the option of picking and choosing channels they want and leaving out the rest. It’s all or nothing, and if you want the really good stuff (like HBO), you’ve got to pay extra.
The Web would seem to open up the possibility of a new approach, allowing people to pay a monthly fee for only the premium content they want, and many have indicated that they would do so for HBO Go.
So far, the business relationships of the legacy players have proven too entrenched to budge, even in the face of growing demand. Although it’s on the rise, cord-cutting is not yet a big enough trend to pose a serious threat to cable, to which millions of customers still happily subscribe. If people don’t stop ditching their cable bill, perhaps HBO will reconsider its position.
Mobile advertising platform Nexage is releasing a private exchange to enable premium publishers and developers to optimize advertising that best fits their businesses. Nexage believes it can help premium publishers make the most money off their mobile apps and games and by taking first-party publishing data and making it available to advertisers to help broaden the targeting and reach of its real-time-bidding platform.
Nexage’s private exchange is about monetizing app data straight from the publisher. The company’s goal is to make advertising the dominant form of application monetization by the end of 2012. Yet, Nexage is only shooting for the large publishers (it has Rovio’s business for ads in Angry Birds) meaning that the app publisher middle class will not be able to benefit from Nexage’s private exchange.
The real-time-bidding exhange (RTB) will allow publishers to take advantage of dynamic price floors to optimize performance and screen ads that are being served to manage brand safety. For instance, a family oriented game probably does not want advertising for Cialis popping up without warning.
The Nexage Exchange has grown from 8 billion monthly impressions in August to more than 12 billion impressions as of this week. It has liquidity for more than 200 publishers and 125 demand resources. Bid volumes on the exchange are growing at 71% per month and revenues are growing along with the bid at 70% per month.
What this all means is that advertising is starting to become a viable source of revenue for premium publishers. Nexage defines premium publishers as those that do more than 10 million ad impressions a month (with exceptions). The company told ReadWriteMobile that there will be an announcement in early 2012 for a advertising vertical designed to help monetize the application and developer middle class. The private exchange is not the answer for the middling developers of the world.
The nature of an RTB platform is that there is no real notion of lost inventory. Nexage does not deal with the long tail of mobile advertising. Hence, fill rates are not a concern to the company. Nexage sees mobile advertising moving the way of the exchange, giving buyers the chance to bid on the ads that appear on their platform. Web advertisers are familiar with this concept as it is basically what Google has built its empire upon with AdWords and AdSense. Google serves mobile ads through its AdMob arm. In September, Google announced that it was separating its mobile advertising and Web advertising arms so that AdMob would be purely focused on mobile while AdSense remained a Web property.
“I do think this marks an important point of maturation for the industry, especially as it catalyzes premium publishers that have to work through how to (safely) scale and manage integrated channels with their direct sales force,” said Victor Milligan, the chief marketing officer at Nexage.
Spotify Finally Launches Streaming Music Service In U.S; iPhone App Also Available In U.S. App Store
Spotify has finally launched its streaming music service in the U.S. During the invite-only beta phase, Spotify will be offering three options: Spotify Free, Spotify Unlimited and Spotify Premium.
Spotify is popular in Europe and has received glowing reviews, even from the likes of Facebook founder and CEO Mark Zuckerburg.
Spotify for iPhoneÂ app that has been available in some of the European App Stores for quite sometimeÂ is also finally available in the U.S. App Store. Users who opt for the Spotify Premium plan will be able to access Spotifyâ€™s music streaming service on the iPhone.
Spotify made the following announcement on their blog:
During our invite-only beta phase, we’ll be offering three great services – from absolutely free to paid subscriptions. The services we’re launching today are:
- Spotify Free – the unsurpassed free music service. With an invite, enjoy on-demand, buffer-free access to over 15 million songs on your computer and great social features. Manage your own music files through Spotify, and sync with your cellphone or iPod. Features occasional advertising.
- Spotify Unlimited – all the special features of our free service, but with uninterrupted, ad-free access to Spotify on your computer. All for only $4.99 a month.
- Spotify Premium – the top-of-the-range Spotify experience. Premium gives you access to all the music, all the time. Listen online or offline, on your computer, your cellphone and a whole heap of other devices. Enjoy enhanced sound quality and access to exclusive content, competitions and special offers. Premium costs just $9.99 a month. (That’s the equivalent of a couple of fancy coffees.)
Spotify for iPhone includes the following features:
Stream millions of tracks from thousands of albums and artists to your iPhone, iPod Touch and iPad. Take your existing Spotify playlists with you on the go – listen to them during your commute, in the gym or on a flight. With â€˜Offline modeâ€™ you can listen even when no connection is available. Wirelessly sync your local files to your phone to merge your catalogue with ours, no cables required!
Download and get started directly from your mobile.
â€¢ Wirelessly sync your local files to your phone â€¢ Create and sync playlists â€¢ Receive music from friends via the inbox â€¢ Star your favourite tracks â€¢ Scrobble tracks to Last.fm
Spotify Premium provides you with:
â€¢ Access to over 13 million tracks from our catalogue â€¢ Offline playlists â€“ listen to music with no mobile connection and avoid using your data allowance
You can signup for an invite by following this link to checkout the free option or you can directly signup for Spotify Premium or Unlimited for $4.99 or $9.99 a month respectively. You can download Spotify for iPhone using this iTunes link.
Will you switch to Spotify or will you stick to Appleâ€™s iTunes? Do you think Apple should be worried?
[via Spotify blog]
Yahoo has just announced that it will be acquiring advertising platform 5to1. Terms of the deal, which we previously wrote about here, were not disclosed but we estimate the deal is around $30 million.
5to1 first launched at TechCrunch50 in September 2009, and raised around $13 million in various rounds of funding. The startup is an online advertising alliance consisting of major media publishers. Built on a proprietary publisher-controlled platform, 5to1 offers advertisers premium inventory at mass scale.
Yahoo says that the acquisition of 5to1 will enable allow the company “to build upon its publisher partnerships and expand its premium inventory.” 5to1 works with more than 20 premium publishers. The 5to1 team will be joining Yahoo as part of the Ad Marketplaces group.
An acquisition by yahoo isn’t particularly surprising. As we wrote previously, the company has deep ties with Ross Levinsohn, Yahoo’s EVP Americas and formerly the President of Fox Interactive Media. Levinsohn is actually a cofounder of the company and a former board member and shareholder (he divested himself after joining Yahoo). Cofounder and CEO Jim Heckman worked with Levinsohn at FIM. We first covered the company, including their management team, in June 2009.
The iPad App, which is free, includes access to documents that are shared on the platform, including both premium and free content. Users have access to over 10,000 business and professional documents, and can also search and download over 20 million library documents. Content includes company business plans, proposal letters, real estate purchase forms, LLC operating agreements, marketing plans,and more. You can also integrate your saved, bookmarked and uploaded documents from the web on the app through your account.
Within the app, you can upgrade to access premium content (for $9.95 per month) from Docstoc. The startup has been making a big push towards premium content, launching a marketplace for professional documents, as well as books from premium publishers. Docstoc co-founder Jason Nazar says the iPad app gives users access to over 3000-plus high quality legal and business contracts, forms, guides, and templates as well.
This is actually Docstoc’s first mobile app, which is surprising considering that the startup has been around since 2007 (Docstoc launched at TechCrunch40 in 2007). But Nazar says an Android app is currently in the works and the company is ramping up mobile development. And the startup, which faces competition from Scribd and SlideShare, is growing in terms is usage. A year ago, Docstoc has around 3 million users and today the site has 11 million registered users.
Mobile app analytics provider Localytics, a graduate of the 2009 TechStars Boston class, has raised $2.5 million in new funding from Launchpad Venture Group, New York Angels and Hub Angels. This brings the company’s total funding to over $3 million.
Localytics offers a comprehensive mobile analytics platform to help give app developers and publishers with real-time reports on how customers use their applications on Android, Blackberry, iPad and iPhone devices. The startup’s product can be used to monitor basic usage, custom events, and enables publishers to dynamically generate custom segments and chart results with hourly granularity.
Today, Localytics is also unveiling a new premium offering, which includes a custom charting feature to build and share customized reports, additional analytics and more. time. Additionally, a new App
Comparison tool allows developers to compare performance across a number of apps. Developers can see which apps are contributing most to growth across different markets and platforms. The Premium version costs $95 per month for Android, BlackBerry, iPad, iPhone and Windows Phone 7 applications.
We have a number of discounts for the service. Readers that enter TC35X6 as a coupon code when signing up here for Localytics Premium before April 30, will get 35% off their first 6 months of the analytics service.
Localytics’s platform is being used by a number of well-known companies including News Corp., Skype, Bluefly, RueLaLa, Turner Broadcasting and more.