Walmart is out ahead of Black Friday with HDTV deals

For consumers who have waited for name-brand 32" HDTVs to drop below the $300 threshold, Walmart isn't even waiting until the Thanksgiving weekend timeframe - the offers start on Saturday. From TWICE:

Discounts on VIZIO TVs will include:

• $100 off a 26-inch 720p LED model, sale price $198;
• $50 off a 32-inch 720p LCD model, sale price $298;
• $50 off a 42-inch 1080p LCD sale price, $498;
• $100 off a 47-inch 1080p, 120Hz LCD, sale price $698, and;
• $200 off a 55-inch 1080p, 120Hz LCD, sale price $898.
  
  
  
  
  

Acetrax and Panasonic - More Premium Video on Connected TVs

This summer continues to be hot for announcements regarding connected consumer electronics and premium content services. A few weeks ago, the $9.99/month Hulu Plus service (with more than 2,000 television episodes available) generated the buzz, as it is available on a variety of connected TVs and Blu-ray Players (Samsung, Sony, and VIZIO), along with two game consoles (the Xbox 360 and PlayStation 3) and a variety of Apple products (iPod touch, iPhone, and the iPad).

Today, the European news is about Panasonic making available content from Acetrax. The service will be available in Austria, France, Germany, Ireland, Italy, Switzerland, and the U.K. with titles likely to cost £1.49-£3.49 (€1.78-€4.17) to rent and £4.99-£11.99 to own. Users will be able to register up to four devices on one account.

VIZIO and an industry first - an ad for connected TVs

How'd that Hulu ad from the 2009 Super Bowl work out? Pretty darn well, it turns out. At the end of 2009, Hulu offficials noted that the number of monthly users was 43 million, double the number from year-end 2008. They also indicated that the 924 million viewed clips over the last 30-day period was three times the amount from a year ago.

Let's see what success VIZIO has with their Super Bowl commerical from yesterday, which is the first time I've ever seen a connected TV advertised. Having Beyonce lead things off doesn't hurt! I don't know if I'd give all the credit to the ad, but I do see sales of connected TVs growing 150% this year.

Connected CE: Aimed right at Joe Sixpack?

Given the highly-aggressive nature of companies such as VIZIO (whose products are widely distributed at retail warehouses such as Costco) and now Funai Electric Co., which makes products branded Sylvania, Philips, Magnavox, and Emerson-branded HDTVs and Blu-ray Disc (BD) players, I'm thinking that connected and Web-enabled consumer electronics products will quickly move from the early-adopter to a more mainstream market. Today, Sonic Solutions announced that it will provide access to its Roxio CinemaNow™ movie service across a range of soon-to-be-released connected TVs and Blu-ray Disc Players.

Blockbuster is now in the Connected TV Game

Blockbuster and Samsung have announced that Blockbuster OnDemand will be available on select connected HDTVs, Blu-ray players, and home theater systems starting this fall. I talked to a Los Angeles Times reporter yesterday about the deal, and was told that Samsung does plan to offer connected Blu-ray players and home theater systems with both the Netflix and the Blockbuster online services. However, today's release from Blockbuster indicates that Blockbuster OnDemand will have "preferred positioning" on the Blu-ray devices.

My quote in the LA Times article compared the novelty of a connected TVs to that of a kid's Christmas present. My concern for the industry is that - lacking really compelling lineups of content (day-and-date availability, high-definition, ad-supported current television episodes, etc.) - consumers may play around with a Widget feature or download a movie in the first couple of weeks of use, but quickly grow tired of the device. It's happened to me. I get a new device, unwrap it, get it to work (sometimes), and play with it for a couple of weeks before its novelty wears off. Will the same thing happen to connected devices?

Now, if you're one of the ten million avid Netflix subscribers out there, then a connected device that streams older titles to the TV may be a nice complement to your Blu-ray and DVD rentals. However, given Netflix, Redbox, and your cable operator's growing collections of timely and high-definition content, how will connected devices provide a real utility and not just fade as short-lived novelties?

Are Current Titles Available? I'd like to better understand the title availability for both Blockbuster and Amazon's online content. How well do the rental and download options match those of the most-current DVD or Blu-ray releases that I can find at Blockbuster or Redbox? If there is a relatively close match, then there's definitely a convenience factor in not waiting for the Netflix envelope or trekking to the rental store or the kiosk. And, I know that the kiosks are everywhere, but c'mon...it's 105 degrees today in Dallas, and I don't care how close the Walgreens or the McDonald's is. It's too hot to go anywhere! So, title availability and convenience may be a factor, but...

Is High-Definition Content Convenient to Access? I'd argue no, based on my experience with the VUDU box. Even with a very high-speed FiOS broadband service, a download of an HDX movie takes several hours. At that rate, it's more convenient to make the drive (even in the Texas heat) to the video store or rental kiosk.

When will We See Highly-Desired TV Episodes Available? Your cable, satellite, and IPTV provider aren't going to sit still and let their bread-and-butter TV revenues get lost to online sources. So, the game today is to leverage a big catalog of free on-demand content to complement their many cable offerings. They're also ramping up their offerings of on-demand primetime shows to provide even more access to this programming. The connected CE folks are at a disadvantage here, because there is no model yet for streamed and ad-supported current television programming to the TV. They can certainly go the download route (although this is not going to be a big market at all ... why download to the TV when 80%+ of U.S. homes have pay TV and have more access to DVR and VoD primetime programming? They can also provide a great deal of older content, which is nothing to sneeze at. Look at Veoh Network's lineup of classic TV programs. Hey, even if it's not high-definition, The A-Team is pretty cool!

I challenged the panelists on the Connected TV Strategies session at the June CONNECTIONS 2009 event with the question of what it will take to get agreements in place to allow connected TVs and other devices to receive streams of current ad-supported television programming. I think we're all in agreement that providing consistent measurement and analytics to programmers will be an important step to convincing content owners to release more of their content in an ad-supported format to the television. Without this data, there are still plenty of questions about the true audience size for any given episode, which has implications for how ad dollars are then allocated. The panelists (representing AnySource, IBM, VIZIO, Yahoo!) all acknowledged that this is a difficult problem to solve, and we're still some time away from seeing consistent measurement applied to online video usage. So, the connected TV folks are still largely relegated to transactional downloads, older streams, and not-so-current TV offerings, all of which give them a disadvantage to the current options of disc sales and rentals, and whatever you can get from your cable provider.

As I'm watching the connected TV market take shape, these three areas - content availability, high-definition support, and metrics and reporting - will be among the most-important factors I'll be watching to determine success or failure. With Blockbuster in the game, we at least have some more data points to be tracking.

DLNA Flunks Best Buy Tests? Some Controversy Brewing at CONNECTIONS

We're glad to see that the CONNECTIONS conference last week brought out some interesting insight on the home networking space. Rick Merrit at EE Times writes that DLNA may have some interoperability issues, based on tests conducted by Best Buy. We had both Best Buy and VIZIO represented on different panels last week, and we got some interesting comments from them regarding DLNA's issues.

We'll be updating the CONNECTIONS blog with additional notes about the event. I'm following up with speakers on my panels for some additional comments.

Blockbuster and Sonic Want a Piece of a $4.6 Billion Pie

Today, movie rental giant Blockbuster announced a partnership with Sonic Solutions that will allow it to stream movies and shows not only on TVs and PCs, but also on mobile phones, portable media players, Blu-ray players, set-top boxes and digital video recorders. Between them, Blockbuster and Sonic already have deals with such CE manufacturers as LG Electronics, Samsung, and VIZIO. VIZIO had just taken the wraps off of its “Connected HDTV” Platform at CES last week. VIZIO’s other content partners include Accedo Broadband, Adobe, Amazon.com, Flickr, Netflix, Pandora, Rhapsody, and Yahoo! The Blockbuster and Sonic direct-to-CE service is expected to launch in the second quarter of 2009.

The bulk of the content available through the service will be newer titles, which will be available to consumers a la carte. Pricing has not been disclosed yet; however, Blockbuster will have to charge around $5 per movie to remain competitive with pay video-on-demand offerings from the cable operators. Blockbuster is also contemplating a subscription model.

The partnership comes as no surprise. One may say it’s in the partners’ blood (pardon the expression), since Blockbuster owns Movielink and Sonic Solutions recently acquired CinemaNow (both companies offer online video purchase and rentals). However, both Blockbuster and Sonic Solutions must beware of the pitfalls that have made Movielink and CinemaNow acquisition targets in the first place:

•Business model: consumers already pay for content by going to movies, renting videos and paying their monthly cable/satellite/IPTV bills. Getting them to buy/rent more content will be tricky.

•Consumer experience: The digital rights management (DRM) software has the potential of undermining the consumer digital media experience. Content partners require strict DRM to protect content from being pirated. The side-effect of strict DRM is that consumers may only play content on a limited number of devices (such as the original PC to which the content has been downloaded). Poor experience will limit consumer interest in the offering.

•Competition: Obviously, Blockbuster’s direct competition is Netflix, which has made its Watch Instantly feature available through numerous consumer electronics devices (LG HDTVs and Blu-ray players, Samsung Blu-ray players, the Roku Netflix Player, the Xbox 360, and TiVo). Additionally, this new partnership will compete with cable operators’ ever-growing VoD collections. It will also compete with numerous free offerings directly from content owners, including Hulu, CBS, and Disney, to name a few.

Parks Associates recent study TV 2.0: The Consumer Perspective, indicates that the potential exists to convert the more than 26 million monthly users of online video services to premium offerings, as Blockbuster and Sonic Solutions are offering. Bringing premium Web video content directly to the consumer electronics device – whether it is the TV, the set-top box, the Blu-ray player, or other devices should be a lucrative business in the next few years. From our report Internet Video: Direct-to-Consumer Services: Second Edition, we forecast that that transactional revenues for online video consumed directly at the TV (via a connected CE device) will grow from $1.2 billion in 2009 to $4.6 billion in 2013. Not only could Blockbuster drive new transactional revenues from both a PC- and CE-oriented online video strategy, but there is much to be said about simply offering the additional online video content as a value-add, and – longer term – there may be some opportunities to derive ad revenues. However, Blockbuster’s success depends on the specifics of how the offering is implemented in terms of business model and the user experience, predominantly. As always, the devil is in the detail.

Good CES Connected TV Summary from The New York Times

I thought that this article captured the major CES announcements very well:

• LG Electronics and VIZIO and Netflix;
• LG, Samsung, Sony, and VIZIO all demonstrating the Yahoo! Widget Channel;
• Intel says that both Samsung and Toshiba will launch products with the CE 3100 SoC and the Widget Channel framework; and
• MySpace is launching a TV widget.

Yahoo! Widget Channel Announcements

Here's the rundown of the announcements that Yahoo! made in reference to the TVs demonstrating the Widget Channel:

• LG Electronics
• Samsung
• Sony
• VIZIO

Thanks to The Wall Street Journal, which used some of our data in an article last week discussing the Internet-connected TVs.