Link Your House

03.16.2009 — Lots of good news coming from the Consumer Electronics Association (CEA).                                       

• Multiroom audio (69%)
• Home theater (74%)

 Digital Entertainment March 4, 2009, 12:01AM EST

The likes of Comcast and DirecTV face accelerating competition from ZillionTV, Hulu, and other upstarts eager to provide programming on demand

Life may soon get even harder for satellite and cable TV providers. Already under pressure from phone companies eager to enter the video market, operators like Comcast (CMCSA) and DirecTV (DTV) are facing accelerating competition from a host of upstarts eager to deliver movies and TV programming on demand.

ZillionTV on Mar. 4 became the newest rival intent on giving consumers an alternative way to get their entertainment fix: delivered à la carte, via home Internet connections, instead of on a slate of channels in a monthly subscription package the way cable and satellite companies do. Once ZillionTV's set-top box offering is available later this year, it will compete in a crowded field that includes game consoles, Apple's (AAPL) Apple TV, Roku, TiVo (TIVO), and Hulu's video-streaming portal on the Web.

Companies are trying to come up with just the right mix of video to beat out the competition. On Mar. 3, Roku announced it was adding Amazon.com's (AMZN) Video on Demand library of 40,000 titles to its $99 Roku Video Player, joining Netflix's (NFLX) streaming video service, which offers about 14,000 titles of mostly older movies and TV shows. "Customers…are trading off cable or satellite subscriptions," says Tim Twerdahl, Roku's vice-president of consumer products.

A Future Only with Streaming?

A week earlier, Netflix CEO Reed Hastings suggested his company might launch a streaming video-only service later this year or early in 2010 for customers who no longer want to have DVDs mailed to them. "We recognize at some point in the long term, the streaming will be good enough that an appreciable number of people will find streaming is all they need," Hastings says.

There's no question that demand for video is on the rise. In the quarter ended Sept. 30, the typical American watched 142 hours of TV monthly, up about five hours from the same quarter the previous year, Nielsen Research shows. Internet use averaged more than 27 hours monthly, an increase of an hour and a half, according to Nielsen.

On-demand providers are betting consumers will opt for customized programming tailored to a person's tastes and schedule rather than watching at a set time or place—known in the industry as linear viewing. "Linear TV of yesterday is exactly that—the television model of yesterday," says Patrick Gauthier, ZillionTV's senior vice-president of product marketing and strategy.

The idea of Web-served TV is not just wishful thinking from companies trying to market new products. Researcher Parks Associates reports that among U.S. broadband households, nearly 50% are interested in receiving premium Web content, including TV shows and movies, through a connected set-top box. Nearly 35% are interested in receiving content through TV widgets, which are snippets of code that users click to access content stored on the Web.

Hollywood's Big Role

Hollywood also has a big hand in the trend. For years, major studios and content providers were reluctant to fix a system they didn't see as broken. Shows and movies were released at set dates and times and made available for purchase months later at Best Buy (BBY), Wal-Mart (WMT), and other retail outlets. Now, with DVD sales tanking and many people turning to the Web to watch video programming, Hollywood has become more open to alternative forms of content distribution.

ZillionTV, for instance, received its initial funding from major TV networks and Hollywood studios. When it begins selling its $50 set-top box through Internet service providers later this year, it will offer content from 20th Century Fox (NWS), NBC Universal (GE), Walt Disney (DIS), Sony Pictures (SNE), and Warner Brothers (TWX).

Massive investments in cheap online storage are helping usher in the era of personalized TV. Most of the services being offered today let the consumer "virtually" own the content. Instead of downloading the latest James Bond flick to a hard drive after purchasing it, Amazon and others store it on their servers. "You can access your library anytime and no longer have to worry about where you downloaded it," says Roy Price, director of Amazon's Video on Demand service.

Content providers love the idea. By streaming video instead of downloading it, there are fewer opportunities for users to copy the content without permission. And they still collect the lion's share of rental and purchase fees while relying on the streaming companies to do heavy lifting such as video encoding and storage.

Bandwidth Hangups

For their part, cable and satellite companies aren't standing still. Comcast, Time Warner Cable (TWC), and others already have large on-demand libraries. They also are installing equipment that as early as this year will let consumers order shows any time they want by freeing up cable bandwidth and opening up a two-way communication channel between the provider and the consumer's home.

There also are limits to the types of video that can be streamed to most consumers' homes. While 72% of U.S. households have broadband connections, only 28% have purchased the superfast connections necessary for delivering quality streams of video in high definition. That means many of the streams for now aren't DVD-quality. Cable, satellite, and telephone providers such as Verizon Communications (VZ) and AT&T (T) have dedicated pipelines into homes that have fewer bandwidth hangups.

Rival services say it's only a matter of time before they catch up. Even if they don't, it looks like customized TV is here to stay.

 By Cliff Edwards

Microsoft in deal to bring Universal movies to the Xbox
Keith Stuart
guardian.co.uk, Thursday 26 February 2009 14.55 GMT

Shaun Of The Dead is one of the NBC Universal titles that will be available for download on the Xbox 360

Microsoft has announced a content deal with NBC Universal, making a modest chunk of the studio's portfolio available for rent via the Xbox 360 console.

Thirty movie titles have been confirmed, mostly back catalogue favourites such as Scarface, The Mummy Returns and Shaun of the Dead. The selection will be regularly updated and Neil Thompson, Senior Regional Director of Microsoft's Entertainment & Devices Division in Europe, wouldn't rule out the possibility of featuring NBC Universal's TV content in the future.

The deal, which is specific to UK and Ireland, adds considerable value to the Xbox 360's burgeoning video-on-demand service. Currently around 300 movies are available to UK users, with Paramount, Warner Bros and MGM already supplying content.

Customers pay around £2.50 to download a movie, which remains on their console's hard drive for 14 days – but once you start playback, you have 24 hours to watch the film before it expires. Many of the titles are available to rent in either standard or high definition formats.

Microsoft sees the provision of a movie service as a key element in expanding its market beyond the traditional gamer demographic.

"We're looking at how we can grow Xbox as a core entertainment hub," said Thompson "There's a phenomenon at the minute where more and more people are staying at home to consume their entertainment – we're really offering a convenient one-stop shop for them."

At its press event in London on Thursday (26 feb), Microsoft also sought to portray the Xbox 360 as a platform for family games – not just shooters such as Halo and Gears of War, for which it is renowned. The company official revealed a new Wallace and Gromit game as well as extra downloadable content for its karaoke sim, Lips, including tracks from Coldplay.

There was also a demo of the console's forthcoming Primetime service, an online multiplayer quiz channel, which will allow users from all over the world to compete for real-life prizes. Thompson describes it as a "Saturday night family experience, more involving than just watching the TV." Primetime is set to launch with a version of TV show 1 vs 100 in the spring.

While Nintendo's Wii is currently winning the "next-generation" console war with global hardware sales of around 45m, Xbox 360 is performing well and growing in popularity.

On Wednesday, Microsoft revealed that over Christmas, European sales were up 120% compared to the same period in 2007. Worldwide sales figures stand at around 28m.

Mobile, DVR Video Log Fastest Growth
By ELIZABETH HOLMES
The Wall Street Journal

Online video is cutting into television, albeit slowly.

People are watching more video than ever on every type of screen -- television, the Internet and mobile devices -- according to a report on the nation's viewing habits to be released Monday by Nielsen Co.

Nielsen found that during the fourth quarter of 2008 the number of users and the time spent watching each of the three screen media rose from the previous quarter. "If people like video, they like it wherever they can get it," said Susan Whiting, vice chair of Nielsen.

The biggest jumps came in the number of viewers watching video on mobile devices and "time shifted" television, that is, programming viewed with a digital-video recorder. Each rose about 9% in the fourth quarter from the third quarter. Roughly 11 million people used mobile viewing and 74 million people watched DVR programming. Internet video users increased 2.3% to 123 million people.

Traditional television is still the most popular by far. Roughly 285 million of the nation's 306 million people watched TV in their home in the fourth quarter, up about three million people, or 1%, from the prior quarter.

Television also wins in terms of the time spent on each medium. People spent more time watching TV: an average of 151 hours a month or five hours a day -- a record high, according to Nielsen. That is a 7% increase, or roughly 11 hours more.

Internet video viewers, on the other hand, spent just under three hours on that a month, or 22 more minutes than the prior quarter, a nearly 15% increase.

In both time spent and number of viewers, Internet video grew at a rate twice that of television. Michael Vorhaus, president of consulting firm Frank N. Magid Associates, points to the growth as a threat to traditional television viewing. "It's not going to go away and it's not going to get better," he said.

For the first time in the Nielsen study, people ages 18-24 spent nearly the same amount of time -- roughly five hours -- watching Internet video each month as they did watching DVR programs. Other age brackets watched half as much or less Internet video than they did DVR video.

Online video viewing is increasingly seen as more valuable than DVR viewing because, unlike DVR viewing, viewers can't fast-forward through the advertising.

Television viewing, however, remains the most valuable for advertisers because of its breadth of audience.

Write to Elizabeth Holmes at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Printed in The Wall Street Journal, page B6