VUDU now available through the PlayStation 3

VUDU's online VoD service is now available on the PlayStation 3. Video-on-demand through the connected game console is currently the largest revenue generator for online video today. We estimate that 10% of all U.S. broadband households are using - at least occasionally - a connected game console to watch premium VoD such as movies. This is generating - today - up to $300 million in premium movie VoD revenues at the game console.

Digital video player news - WD TV Live Hub. Roku and Netflix, VUDU and the Boxee Box

Last week was a busy week in the digital video player market, with product introductions or extensions made from Western Digital, Roku and NETGEAR, and the Boxee Box and VUDU.

• Western Digital introduced the WD TV® Live Hub™ media center a 1080p media player with a 1 terabyte (TB) built-in network hard drive that gives users the freedom to play all their personal media on any screen in the home. The WD TV Live Hub media center brings new experiences to the WD TV family, including instantly renting or purchasing the newest releases through the Blockbuster On Demand® service, the same day as DVD/Blu-ray release, as well as interacting with personal Facebook® communities.
• Roku announced that is was licensing its Streaming Media Player Platform, and further announced NETGEAR as its first OEM Partner. The NETGEAR Roku Player - priced at $89.99 - will provide access to more than 100,000 movies and TV shows, live sporting events, music, online content from providers such as Netflix, Amazon Video On Demand, Vimeo, Pandora, MP3tunes, SmugMug, Flickr, MLB.TV ,and UFC.
• VUDU will be available via Boxee, including the Boxee Box. VUDU will be available as a Boxee App on Windows and Mac computers, as well as the Boxee Box by D-Link this November
  
  
  
  
  
  
  

Walmart to Purchase VUDU

Parks Associates research indicates U.S. premium video rentals and downloads will grow to $8.4 billion in 2014

After abandoning its initial online video plans in late 2007, Walmart has returned to this market with the announced acquisition of VUDU on February 22. With Best Buy working with Roxio CinemaNow, will Walmart leverage the VUDU acquisition to develop its own branded connected CE products?

Walmart is re-entering the OTT (over-the-top) market at an opportune time. Parks Associates forecasts that revenues for premium video rentals and downloads in the U.S. will grow from $2.3 billion in 2010 to $8.4 billion in 2014.

Given VUDU’s recent efforts to transition from a hardware vendor providing set-top boxes to a backend service provider of OTT content for connected CE devices, Parks Associates believes that this acquisition is an opportunity for Walmart to become a “category catalyst” in connected consumer electronics. VUDU currently is working with such CE vendors as LG, Mitsubishi, Samsung, SANYO, Sharp, Toshiba, and VIZIO.

Parks Associates projects that by 2014, more than 40% of transactional revenues for premium online video services will be through connected devices such as connected TVs, Blu-ray players, game consoles, and networked digital media set-top boxes. The presence of Walmart, with its retail muscle now in the online video space, could mean significant growth in the number and availability of Web-enabled consumer electronics products.

Wal-Mart Acquires VUDU - low-cost connected CE for everyone!

After bailing on online video in late 2007, Wal-Mart is back in the game with the announced acquisition of VUDU. With Best Buy working with Roxio CinemaNow, I can see Wal-Mart taking VUDU and developing perhaps their own branded connected CE products.

Instead of a connected TV, how about a VUDU box instead?

TWICE is reporting an interesting promotion between Mitsubishi and over-the-top video box provider VUDU. Starting tomorrow, Mitsubishi will offer a VUDU HD set-top box free along with $50 worth of movie credits for the purchase of most Mitsubishi TV models. The VUDU box and movie credit offer (a $200 value) will be available through all authorized Mitsubishi retailers, and will run through Aug. 10.

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.

I'm not bullish on Apple TV

For the past couple of years, there has been much emphasis placed on the "connected CE" market, where TVs, Blu-ray players, video game consoles, media adapters, media servers, and alternative set-top boxes like VUDU and Apple TV receive content from online sources. Having followed this space for some time, I've been particularly interested in how the technology requirements for connected devices have changed rapidly. In the white paper From Boob Tube to YouTube, I talked about the evolution of connectivity software to include not only device-to-device media sharing capabilities (such as what DLNA or Silicon Image's LiquidHD™ bring to the table), but also how they must take into account ways to "grab" online content and build user interfaces that allow consumers easy access to content, whether it's photos, video, music, games, etc.

I provided more coverage to the connected consumer electronics space in the recent report Home Networks for Consumer Electronics, which is now available. In this report, I again visited the technology, and included a great deal of primary consumer data (from four of our recent studies, including the Global Digital Living: Entertainment 2.0 in Europe survey of about 5,000 broadband households in Western Europe). For the report, I talked to more than 80 companies and included forecasts for seven product categories:

• Connected TVs
• "Cloud Media" set-top boxes (like Apple TV)
• Connected game consoles
• Connected Blu-ray players
• Network-attached storage
• Multi-room DVR
• Digital media adapters

I really struggled with forecasting the cloud media set-top box market, as there is still widespread consumer unfamiliarity with this type of product (in our recent study Consumer Decision Process 2009 Annual Survey), we're still finding that fewer than 15% of respondents in U.S. broadband households are highly familiar with the Apple TV or even the Digital Media Player by Roku. Also, when it comes down to it, consumers who desire video-on-demand are still going to look to their pay TV operator to provide it. In the report, I included data from the November 2008 study Digital Media Evolution that shows an overwhelming percentage of likely VoD users prefer to receive it from a service provider rather than a "device purchased at retail."

I'm just not convinced that we'll see consumers flock to stores to get these altnerative VoD devices, at least not in the U.S. One key part of the analysis was looking at how both broadband and digital cable and telco/IPTV households are expected to grow here and internationally. I think that in areas where a significant gap exists between broadband penetration and the penetration of households capable of receiving VoD content, you will see more of a demand for the cloud media set-top boxes. In briefings with companies like Syabas, which offers the Popcorn Hour product, this is exactly what's happening. The product, we're told, is quite popular in the European and Asia-Pacific markets. But it's probably not a mass-market product here in the States.

Pay TV operators are not standing still in delivering vastly-increased amounts of VoD programming, and I'd fully expect this to include online offerings. The folks at Comcast Interactive Media indicate that their plans to include a "bookmarking" feature to allow Fancast online video to be viewed at the TV are on track. Virgin Media in the U.K. already allows users to access content from the popular BBC iPlayer service. A little upstart called Verismo Networks won the award for "best new product idea" at a recent CableLabs show.

We've firmly established that consumers want their primetime TV anytime, and are increasingly turning to the Web and to their video-on-demand services to get it. I've been increasingly impressed with the primetime VoD offerings we get from Verizon's FiOS TV service. It's such an easy way to catch up on a lot of our favorite shows without having to set the DVR. In the end, I think that this is the mindset that will keep us paying our cable provider for the foreseeable future (that, and the sports and high-definition offerings that the online world just can't match). It's the convenience of not having to go and buy another box, hook it up, and pay some additional fees that will keep consumers faithful to their television service providers.

Of course, the whole technology question is still out there, as in what will be the optimal ways in which television service providers deliver Internet-like experiences to their customers in the most cost-effective manner and with the highest quality? I profiled 30 companies in the "Web on TV" space, and was left with more questions than answers at this point about the finer points of the technology. So, it's a continuing mission to better understand how the pieces come together and how content and service providers monetize these on-demand experiences. Of course, this will be a significant theme at the upcoming CONNECTIONS™ conference in Santa Clara in early June. We've lined up a number of "connected TV" and interactive TV panels that will focus on this subject, so it should be a really insightful few days.

Entropic showing MoCA-to-Ethernet adapter from NETGEAR with MoCA

This is a practical application. Entropic was showing a demonstration with the NETGEAR MCAB1001 Ethernet to Coax Bridge (ECB) kit, powered by its c.LINK MoCA technology, in live demonstrations with the VUDU HD Internet Movie Box at CES.

VUDU's New Angle - Web TV

Despite putting together a nice product with a great interface, VUDU has struggled to define itself. Is it the consumate video-on-demand box? The adult content box? The high-end installer box? A Blu-ray challenger?

With today's release, it looks like VUDU wants to take on the cable company. It launched VUDU RIA (Rich Internet Application) platform, a standards-based platform that brings Web-hosted rich applications and services to consumer appliances.

VUDU has created an initial set of applications and services in a new area of the VUDU home page, called VUDU Labs. Available today to all VUDU owners, these applications include casual games, implementations of Flickr, Picasa and the entire YouTube library, as well as a new "On Demand TV" area with more than 120 channels.

Today, VUDU customers can access a broad selection of free on-demand shows provided by major network television and on-line specialty sites spanning news, food, music, sports, and more. Programs include daily highlights from shows such as "Today", "The Rachel Maddow Show", "Anderson Cooper 360", "Fantasy Focus NFL", "MTV News", as well as full programs, some in HD, from Nova, National Geographic, PBS and others.