Busy news week - Netflix, TiVo, ivi TV, Amazon and LOVEFiLM, Opera Software, Woomi, DivX TV

After a slighly lull following CES, earnings announcements and a full bevy of newsworthy announcements in the digital media and consumer electronics spaces have my e-mail inbox bursting. Here are a few items worthy of noting:

Netflix Subscribers Surge Past 20 Million
The guidance provided by Netflix's executives in Q3 2010 was subscriber gains of 2.7 million, and total subscribers between 19 and 19.7 million subscribers. In actuality, the company gained 3.08 million subscribers to end 2010 with 20.01 million (that's an increase of 63% from year-end 2009). Netflix's Watch Instantly service is now supported on more than 200 devices. Here's an interesting tidbit of trivia: Netflix says that the Apple TV is now generating more hours of viewing than the iPad.

ivi TV on the Ropes?
I've written about ivi.tv previously (here and here). The company's model is to take broadcast content from the Seattle, New York , Chicago, and Los Angeles and rebroadcast it online to subscribers who pay $4.99 a month. ivi TV officials believe that U.S. copyright law provides them with the right to rebroadcast the content as a de facto cable operator, but major broadcasters disagree. As they did with a service called FilmOn, the broadcasters are seeking an "enjoin" order, which would is basically a cease-and-desist order. In a court ruling last week, the broadcasters gained a victory.

Jim O'Neill at FierceIPTV summed up the court ruling from last week the best with this article:

A federal judge in Seattle late last week rejected a request from ivi TV for a declaratory ruling legitimizing its claims that it wasn't infringing on broadcasters' copyrights. District Court Judge James Robart wrote: "The totality of the circumstances here leads the court to conclude that ivi filed the action here because of imminent threat of suit by the Defendants, and to secure its own forum."

A bevy of broadcasters have sued ivi in New York seeking to stop it from broadcasting their signals. The Seattle ruling means that case can now move forward.

FilmOn does live on, at least in a role as distributor for independent or niche content. In fact, the company issued a press release today where it announced that it signed content agreements with Retro Television Network (RTV), The Ski Channel, The Documentary Channel, and Tuff TV.

Amazon Buys Full Control of LOVEFiLM
Unlike in the U.S., where Netflix dominates streaming video for TV shows and movies (our recently-completed study Digital Video: Three Screens and Beyond reveals that 22% of U.S. broadband households using Netflix's Watch Instantly feature), there is no pan-European equivalent. There are certainly some services to watch closely as their catalogues increase and their availability grows - among them are Acetrax, Qriocity (Sony), and Video Futur. LOVEFiLM is among the larger video distributors in Europe today, as it replicates the online DVD/Blu-ray Disc rental business of Netflix in the U.K., Germany, Denmark, Norway, and Sweden. It also has about 4,500 films and TV shows available online. This compares to 20,000 titles available for Netflix subscribers.

Amazon looks like it will take its vast distribution network - and digital video services - to Europe with its full acquisition of LOVEFiLM, announced last week. LOVEFiLM currently has 1.6 million subscribers.

Charter and TiVo Link Up
TiVo's future success is dependent upon lowering its dependency on the retail-based set-top box market and strengthening its relationship with operators and consumer electronics manufacturers that can license TiVo's software and user interface technology or use its hybrid set-top boxes (such as the TiVo Premeire). On January 18, TiVo reinforced its operator strategy by discussing its recent operator wins, including hybrid set-top box deployments with RCN and Suddenlink in the U.S. It notes that it expects similar agreements with Cox Communications and DirecTV in the future. TiVo's TiVo's software is currently ported to the set-top boxes of such European operators as ONO (Spain), Virgin Media (U.K.), and Canal Digital (Norway and Sweden).

On January 25, TiVo announced its latest operator partnership with Charter Communications. The cable operator will utilize TiVo's latest generation high definition user interface and TiVo Premiere set top box, as well as upcoming multi-room and non-DVR platforms. Beyond the initial phase, the strategy will encompass next generation platforms that will expand the service with new devices, features, and third-party applications. TiVo's discovery, search, navigation and recommendation features will bring Charter customers multiple forms of entertainment content, including linear TV, video on demand, online video, and IP applications.

Opera Software Gets Connected with Samsung and Broadcom
As I left CES, one takeaway is that - in the fourth generation of connected TV products - the market is still wide open for a host of technology developers to play a significant role. Whether it's system-on-chip companies, apps developers, user interface designers, content delivery and management specialists, aggregators, Web-on-TV technology providers, and advertising specialists, there is certainly no shortage of opportunity for this market.

Opera Software made two significant announcements in the past week - one with Sony and today with Broadcom. For Sony, the Opera Devices SDK provides the company's browser and other tools to bring Internet applications to Sony BRAVIA connected TVs and Blu-ray Disc players. In the Broadcom announcement, the Opera Devices DSK 2.9 will have out-of-the-box support on Broadcom's BCM7420 set-top-box SoC platform.

Woomi from Miniweb Interactive
Miniweb Interactive's history is in developing interactive features and user interfaces for television services. At CES, it unveiled Woomi, a connected TV services platform. It announced an early partnership with Turkish manufacturer Vestel.

Miniweb predicts that Woomi be available on over half of the world’s connected TVs by mid 2011. Going live across all Samsung smart TVs and Blu-ray players in the UK this month, woomi will then roll out to multiple European territories and the U.S. within the next three months. Woomi will also be distributed by Echostar Europe where it will be the main user interface for video discovery on a new, soon to be launched, set-top box. Also recentlynnounced are global distribution deals with Vestel, a Turkish white-label TV manufacturer, and with Chinese STB manufacturer, DTM.

DivX TV
At CES, DivX (Sonic Solutions, and now Rovi) announced new content and hardware support for DivX TV, its connected TV content platform, including Broadcom, Marvell, and Renesas.

Increasing online viewership intensifies competition

As U.S. video viewers increase their multiplatform viewing habits, advertising firms’ demand for an integrated tool to measure both TV and online video viewing will intensify over the next year. A new report, Cross-Platform Ad Metrics & Reporting, shows 71 percent of U.S. broadband households access videos online, compared to 87% who watch traditional TV content. Younger audiences, ages 18-34, are even more inclined to watch online video, with 88% watching online compared to 90% who watch traditional TV.

Online video viewing is approaching parity with traditional TV, especially in key audience segments, which is increasing pressure on the top firms to develop a comprehensive tool to quantify and evaluate the impact of online video content. Right now, Nielsen, Kantar Media, TiVo, Arbitron, and Rentrak are the primary cross-platform digital video audience measurement firms in the U.S.

Mixed media are increasingly important to a key and growing segment of consumers, and companies need to get ahead of this trend with cross-platform metrics in order to assess, assign, and evaluate the overall media mix. Nielsen plans to release an integrated TV and online video product in 2011, but it is unclear how the industry will receive the combined video metric and, more importantly, if the firm will meet its expected deliverable goal. In Cross-Platform Ad Metrics & Reporting, Parks Associates lists universal metric definitions, standards, and data collection methods as necessary to ensure industry-wide adoption of a new metric.

Cross-Platform Ad Metrics & Reporting provides a competitive analysis of the leading digital TV and online video audience measurement firms in the U.S. The study employs a competitor analysis framework, using competitor profiling, to determine which digital video audience measurement firms are strategically positioned to provide an industry-recognized, cross-platform digital video audience metric standard. In addition to the competitor analysis, the report examines multiplatform video usage trends based on key audience demographics.

DIVA TV's Viewster Online Video Available on TechniSat Hybrid Set-top Boxes

DIVA AG has completed a deal with TechniSat Digital GmbH to include its Viewster VoD widget on Technisat’s Hybrid set top boxes in ten markets beginning in 2011.

This continues the trend of pay-TV operators and technology suppliers racing to deploy online video and Web content services, particularly in Europe.

Other deals of note include:

ONO (Spain) and TiVO: ONO is the exclusive distributor of TiVo's advanced television services in Spain. Similarly, TiVo will become the exclusive software provider for all next-generation set top boxes deployed by ONO, including both PVR platforms and traditional "non-PVR" set top boxes. ONO and TiVo also expect to collaborate on solutions that make the TiVo experience available to consumers beyond ONO's cable footprint in conjunction with terrestrial and Internet delivered content - although specifics of these plans were not disclosed.

Telefónica and MeeGo-based Connected TV Devices (25 markets): In June, Telefónica announced it will jointly explore with Intel and Nokia how to leverage MeeGo's capabilities to provide content and applications to s smartphones, netbooks, tablets, and internet connected TVs.

MeeGo combines Intel’s Moblin and Nokia’s Maemo open source projects into one Linux-based software platform hosted by the Linux Foundation. MeeGo has already been endorsed by a number of key OEMs and application developers. MeeGo enables an open software environment for rapid development for a range of smart, PC-like devices and exciting new services.

TiVo's Future: A pay-TV /UI provider? Canal Digital is the latest customer

TiVo is already supplying "OTT" hardware to Cox Communications and Virgin Media. Now, Nordic DTH operator Canal Digital will license TiVo’s middleware and user interface to serve as Canal Digital's next generation platform, seamlessly integrating linear satellite and terrestrial TV channels, Canal Digital's video-on-demand service, and a variety of current and future “OTT” services.

TiVo Joins MoCA

The company that pioneered the concept of whole-home DVR has hung its hat with the Multimedia over Coax Alliance.

Uncertainty is Holding Back Consumer Spending on Digital Content

When it comes to paying for digital video, consumers are faced with a significant amount of uncertainty, enough to keep them from more actively spending.

If a consumer decides to watch a movie or TV program, they likely do not know if they have already paid for that content. So, they have to consider checking their channel listings (is it on Bravo or HBO currently?), their DVR (did I record that?), their Netflix subscription (is it an Instant View or do I have to wait for a disk?), free VOD or catch-up TV, and perhaps Hulu or other options. And this is all assuming that they know in advance the specific content for which they are searching. (If you add in the additional decision of which content that they might want to watch, the decision process becomes a real headache.)

Some in the industry are taking notice. TiVo is specifically addressing this issue by improving their search feature to allow searches across content sources (linear, DVR, online, etc.), allowing consumers to see the content to which they have access. By seeing what video is "theirs", will consumers be more willing to spend to add to their "collection" of available video?

TiVo: It's a UI, not an OS

Some clarification on the blog post yesterday. TiVo is supplying Best Buy (Insignia brand products) with its UI that will provide access to online content services such as Amazon Video On Demand. I would say that this then puts the TiVo offering more on par with DivX TV. The choices for heavy lifting for connected TVs (at least for embedded solutions) is more IBM, Google, and Yahoo!

Add TiVo to the list of Connected TV "OS" Providers?

Looks like we need to add TiVo to the list of connected TV "OS" players. TiVo is working with Best Buy to integrate TiVo's software and advanced television services into broadband-connected Insignia televisions.

Who's going to control search and discovery on the connected TV?

With The Wall Street Journal today reporting a Google test of a service to allow consumers to search for both broadcast and broadband content, and TiVo's announcement from last week regarding TiVo® Premiere and TiVo® Premiere XL box experiences, I do think that the battle for TV-based search, discovery, and recommendations is on in full-force. From Rovi, to DivX, and others, this is going to be a really hot space to watch.

Broadband-connected TiVos being deployed by cable operators

In our recently-completed Set-top Boxes: Outlook report, we wrote the following:

Consumers report strong interest in the concept of connected consumer electronics, including set-top boxes that link not only to television offerings from their service provider, but also to content hosted on home computers and streaming from the Internet. There is strong demand data for the concept of a set-top box that can pull in content from a variety of sources.

Perhaps more interesting – at least from a service provider’s desire to create new revenue streams – is the percentage of consumers willing to pay additional fees each month for this kind of feature. The percentage of consumers expressing a willingness to pay up to $5.99 per month for such a feature is comparable to the known take rate for Verizon’s Home Media DVR feature, a multi-room DVR and networked set-top box features. Verizon charges FiOS TV subscribers an additional $4 per month for the benefit.

When consumers are asked what features they would find valuable from a connected set-top box, the ability to stream music is the top application. Not too far behind this feature is access to email and customized weather. Access to premium Web video such as TV shows and movies appeals to about half of consumers interested in connected set-top boxes.

There are plenty of ways for cable operators to facilitate delivery of online applications to the set-top box, including transcoding in the network (ActiveVideo Networks or Clearleap, or a homegrown solution being deployed by Verizon), and we've been wondering if browsers will start appearing on more advanced set-top boxes (there is a growing consensus that browsers will be found on many connected consumer electronics). Or, the operator could simply buy a web-enabled set-top box box and deploy it (Digeo, Entone, TiVo, etc.).

There is an interesting announcement from RCN regarding its selection of TiVo as its primary DVR platform. The key to this announcement is the fact that RCN customers with TiVos will be able to access online video through services such as Amazon Video On Demand and other features.

In addition, notes the article from Multichannel News, the TiVo DVR from RCN will let users access trademark TiVo features such as Season Pass and WishList (to automatically record shows based on keywords or other parameters) searches and receive personalized suggestions. Subscribers will be able to schedule recordings via the Web or with mobile devices.

The RCN-TiVo DVR will offer interactive applications, such as viewing pictures and listening to music stored on a home PC, accessing millions of songs from Rhapsody, and receiving weather reports and traffic updates.

RCN is not TiVo's only TV operator win this year, however. CED magazine reports that Earlier this year, Evolution Broadband announced a deal with TiVo to use the latter’s Series 3 high-definition set-top boxes. With its recent waiver from the Federal Communications Commission, the TiVo deal will allow Evolution to offer small- to medium-size cable operators access to Internet content from the likes of Amazon and Netflix, which provides them with a VoD-like service without the expensive network equipment.

Things are definitely getting interesting.

Watching Amazon Video On Demand on a Connected CE Device

Since I updated the Netflix connected CE devices, here's a list of the devices where the Amazon Video On Demand Service is available:

• Xbox 360 (content must be downloaded to the PC first)
• TiVo
• Roku Digital Video Player
• Sony BRAVIA TV
• Panasonic VIERA CAST TV

More Connected CE Devices Doing Netflix Streaming

Now that Sony BRAVIA Internet Video Link TVs can show Netflix streaming content, it's a good opportunity to revisit the connected CE devices playing Netflix content.

Connected TVs

• LG HDTVs with NetCast Broadband (55LH50, 47LH50, 42LH50, 60PS80, and 50PS80)
• Sony BRAVIA Internet Video Link

Connected Blu-ray Players

• LG LG BD370 and LG BD390
• Samsung BD-P1600, BD-2500, BD-P3600, and BD-P4600

Connected Game Consoles

• Xbox 360

"Cloud Media" Set-top Boxes

• Roku Digital Video Player
• TiVo HD DVR

Connected Home Theater Systems

• LG Network Blu-ray Home Theater Systems (LHB953, LHB977)
• Samsung Blu-ray Home Theater Systems (HT-BD1250 or HT-BD7200)

Best Buy and TiVo Form Alliance

TiVo, the Silicon Valley company that popularized the digital video recorder, and Best Buy, the national electronics chain, are forging a broad partnership.

On Thursday, the companies plan to announce that Best Buy will heavily promote TiVo products in its 1,100 stores in the United States. TiVo will develop a version of its set-top box, to be sold in Best Buy stores, that will let the retailer advertise its products and services to TiVo subscribers on their home televisions


Read More: NY TIMES

Western Digital expands the capacity of the My DVR Expander product

Western Digital announced today that its My DVR Expander™ is now available with 1 TB capacity. TiVo Verified™ compatible with TiVo Series3™ and TiVo HD DVRs, the new My DVR Expander is capable of storing up to 140 hours of high-definition (HD) television programming based on 1 TB of hard drive storage.

The ability to expand DVR storage with an attached external drive was something that we explored in both domestic and international consumer studies last year - TV 2.0: The Consumer Perspective and Entertainment 2.0 in Europe. We found fairly high demand for this kind of solution, particularly among consumers in the U.S., the U.K., France, and Italy.

TiVo gets Blockbuster content

Seems like everyone is courting TiVo. Between Netflix, Amazon, and now Blockbuster, there's more content on demand available on a broadband-connected TiVo box. Blockbuster will also hawk TiVos in some stores.

3D TV – Coming to a Living Room Near You

Last night’s trial run of an NFL broadcast in 3D was not without hiccups, but nonetheless an exciting experience, so we are told. Four experiences over the past year have convinced me that 3D will land in our living rooms within the next two years.

First, while at last year’s CES, TI was demonstrating 3D programming on two DLP TV models. The experience was very impressive, but more amazing was to hear all 16 people in the demo area say “wow” at the same time. This spring I spent some time with representatives of 3ality Digital LLC, the L.A. company that not only enhanced 3D display technology for the TV, but elevated the filming of 3D content to a true art form. They are the talent behind National Geographic’s amazing U2 3D IMAX production – a visual experience so stunning that you can count the fillings in Bono’s back teeth while he belts out Pride. In a pre-release sneak peak of U2 3D, the room quickly filled with curious onlookers whose only words were again, “wow.”

This fall at the IFA conference in Berlin, the German national think tank and technology lab Fraunhofer Institut demonstrated 3D technology on TV which did not require stereoscopic glasses and which displayed 2D content which had been enhanced to add 3D effects. While not as rich as previously mentioned examples, the demonstration was evidence that 3D will soon be offered without glasses and costly 3D videography.

Lastly, as we carefully watch consumer purchasing habits while the economy collapses around us, we see that TVs and TV services are holding up fairly well. Today’s news in TV Week states that over half of adults surveyed for Verizon plan to beat the recession by spending more time at home with TV-based entertainment. Parks Associates’ consumer surveys confirm that CE products and services are low on the consumer cut list.

Greater emphasis on the home entertainment experience suggests that the very powerful Wow! factor of 3D will find fertile ground in the home. After all, for those that have owned 3D capable TVs for more than a handful of years, isn’t it time to find a reason to upgrade? 3D will be your answer.

New Term: TiVo Guilt

Great - now our consumer electronics products are giving us a complex. CNN reports today on "TiVo Guilt," where TV viewers who record shows on their DVRs feel an obligation to watch every single episode recorded and suffer guilt when cleaning out unwatched shows.

It got me thinking about the state of my TiVo and TV watching for the past few months. If I had to count the number of shows that we watch pretty regularly on a weekly basis, I'd say it's probably 5-6. There are another 3-4 that we'll watch with less regularity, but I don't get heartbroken if I miss a few weeks.

I do relate to actress Amanda Peet's comment about having "TiVo OCD." I'm the same way - I feel the need to get in there and clean out the old shows about every week.

I'll offer some free therapy to those who feel the TiVo guilt. The summer rerun season is long. There's plenty of time to catch up on those shows.