How Available (Really) Are Top TV Shows in the Digital Video World?

As the UltraViolet academy in London approaches to wake us out of our summer slumber and send us on to IBC, I sat discussing the onward march of digital video in today’s Top 20 ratings-driven world with some neighbors around the end of summer BBQs.  There was a general view that most TV shows were available (in the US) on either HuluPlus or Netflix.  While there was some discussion about network specific sites like ABC.com, HBO-GO and TV.com (CBS’ site) and some general understanding that there was content missing from HuluPlus and Netflix, most people felt like anything they were missing was probably available to purchase as a catch-up one-off show from iTunes or Vudu.

As I pondered this seemingly simple challenge, I though back to the end of May when I wrote a blog about the current state of digital title availability in the various service offerings (rental, sell-thru, subscription) and retailers (iTunes, Vudu, Netflix) and compared them to each other and to their physical counterparts.  So, with the help of some colleagues, I set out to get to the bottom of the details.

We started with the current TV Guide Top 20 (as of August, 2012).  I realize that the Top 20 would have been different in May and will be different in October once the season is underway, but this is a unique time of the year where even the most protected of shows has finally exited their Spring window and have been pushed out on DVD or at least a digital purchase service (if not a streaming one–rental by the episode is no longer supported by any site).

What were the results?  Surprising to say the least.  First, let me give you an idea of the list (since it is relatively short):

Now with this list, you would have thought there would be a high probability to have nearly all but the HBO and AMC series available already.  The results?

• iTunes carries 75% of the content (in SD) for purchase (most recent season)–Vudu and Amazon were just a step behind them.  The missing items were all some sort of reality show.
• Netflix has a (not surprising) poor showing for current seasons (strong for past seasons) with only 15% available, but to my surprise, HuluPlus only came in at 40% (disappointing in a big way).  Combining the two options only yielded 45% availability.
• Physical still trumped all of the options with 80% of them available for purchase from Amazon and 75% for physical rental from Netflix.
• Combining digital purchase and streaming (across all services) yielded a 90% availability (with only X Factor and So You Think You Can Dance absent)–yielding a problem discussed in my blog last week of finding content across multiple sources.

Microsoft Adding Access to TV Programming for Xbox 360 Subscribers

Microsoft seeks to further establish the Xbox 360 as an access point for all forms of home entertainment, announcing plans to integrate content and services from the likes of cable operator Comcast and networks such as HBO into the Xbox Live dashboard. The integration does not represent a consolidation of consumers’ cable bills, however (via the Seattle Times); access to cable programming, for example, will require subscriptions to both cable (and Internet) service and Microsoft’s $60-per-year Xbox Live Gold package.

Netflix Lines Up DreamWorks Animation Films for Streaming in 2013

Netflix and DreamWorks Animation announced their completion of an agreement for the streaming video service to begin offering DreamWorks films and television specials in 2013 (via The New York Times). For the studio, the deal—under which Netflix will pay an estimated $30 million per picture, according to analysts—replaces a licensing agreement between DreamWorks and HBO.

DreamWorks Animation chief executive Jeffrey Katzenberg tells the Times that the deal is “game-changing,” in that it represented the first time a major Hollywood studio chose a video streaming service over a pay-TV network for distribution of its films. But others see the announcement—rumors of which first surfaced in July—as more of a stopgap publicity measure for Netflix, which is still responding to customer outcry over its price increases and further separation of the company’s discs-by-mail and streaming services.

CNET contends that the company needs to land major-studio streaming content sooner rather than later, as Netflix’s distribution pact with Starz (under which the company has offered streaming films from Disney and Sony Pictures) is due to end in February 2012.

Netflix To Nab DreamWorks Animation Streams?

Netflix is close to securing exclusive streaming rights to films from DreamWorks Animation SKG, in a deal that would spell the early termination of a pay-TV pact between the studio and Time Warner’s HBO, Bloomberg reports.

A new agreement certainly would be high-profile for Netflix; the studio’s films include the “Shrek” and “Kung Fu Panda” franchises. But one analyst notes that with the DWA-HBO agreement running through 2014, “Any earlier deal would clearly need HBO’s consent, which it would obviously not provide unless there was a financial benefit” (via The Hollywood Reporter).

If the Netflix deal was the result of HBO offering the studio an early-exit option, says Janney Montgomery Scott analyst Tony Wible, it would “beg the question of whether Netflix won a DWA deal or was the buyer of last resort.”

Speaking at a conference last week, DreamWorks Animation chief Jeffrey Katzenberg didn’t hint at changes to the studio’s streaming distribution. But the executive did sound off on everything from the quality of theatrical films to 3D television and studios’ forthcoming UltraViolet digital rights initiative. See BTIG Research (registration required) for a link to Katzenberg’s comments.

Netflix, HBO Talk DVD Opportunities Amidst Digital Growth

Executives from HBO and Netflix observe continuing opportunities in the physical disc business, even as home entertainment markets around the world move to digital models.

Speaking at the Nomura U.S. Media Summit June 2, Netflix chief content officer Ted Sarandos acknowledged that his company has been primarily focused on building its streaming services, while its U.S. DVD rental business “has been running calmly on its own.”

Still, Sarandos noted, “there are a lot of markets that are terribly underserved for DVD rental, and [that] don’t have the kind of broadband speeds yet to backfill with streaming.” Accordingly, “over the next couple of months, couple of years, you’ll see us putting a little bit more of a focus” back on physical media rentals.

The ramifications for disc manufacturers are difficult to ascertain, given that DVD sales remain in overall decline. Sarandos attributes waning DVD sales to persistent economic conditions, as well as consumer desire for greater digital access to a broad array of content.

“What we need to do as an industry, Sarandos said, “is figure out how to monetize the new [consumer] behavior, which is monetizing access to media, instead of ownership.”

Nevertheless, as Netflix CEO Reed Hastings himself has long held, Sarandos maintained that “the value proposition of the DVD business is going to be good for a very long time.

“Most of our subscribers will take a disc here and there,” Sarandos said, noting that customer tastes remain immensely broad. On an average day, customers are renting some 45,000 of Netflix’s 100,000-plus DVD titles.

While streaming services continue to be main source of growth for Netflix — as the company eyes expansion both in the U.S. and abroad — Sarandos acknowledged that physical media has a role to play in that market transition.

“I think Blu-ray probably becomes the default [physical medium], and will replace DVDs over time — because the [Blu-ray] machine is so much better for streaming,” he said. “Oddly, that’s the thing that’s going to attract people to Blu-ray.”

Even the DVD rental business’s “first-sale doctrine” — which Netflix leveraged as a bargaining chip in its 28-day window agreements with several studios — is providing the company with a counterweight against content owners such as HBO, which is withholding digital licenses of original programs to build up its own catalog of exclusive streaming content.

“I honestly think the ‘absolutely exclusive forever’ strategy will evolve over time,” Sarandos said, adding that HBO shows like “Entourage” are “on DVD, so [they are] really not that exclusive anyway.”

HBO Sees DVD ‘Uptick’

Naturally, HBO expresses a somewhat different viewpoint than Netflix. But the content owner is also continuing to pursue opportunities for packaged media in a digital world.

Speaking at the same Nomura conference, HBO chief executive Bill Nelson said that even as the company markets its exclusive “HBO Go” streaming services to its pay-TV subscribers, DVD sales of original programs are still contributing to the company’s global expansion.

On a global basis, Nelson said, “our DVD business is on an uptick, bucking the industry trend. It’s the result of our continued investment in original programming — not only have we upped the quantity but we’re upping the quality.”

Nelson predicted that as long as HBO keeps producing hit original series, its global DVD growth should continue. “Worst case,” he said, “it flattens.”

Time Warner CFO: Digital Holds Potential for Higher Margins, but Market Transition Will Take Time

Time Warner will encourage home entertainment consumers to purchasing more digital media goods over physical discs because digital transactions represent “better” earnings prospects for the company “on a like-for-like basis,” according to John Martin, the media conglomerate’s chief financial officer.

“Our strategy,” Martin said at a Morgan Stanley investor conference March 2, “is to try to push usage, through pricing and windowing, to the highest-margin channels.”

Those channels could include so-called premium VOD, which Warner Bros. and other studios plan to launch in partnership with cable, satellite and Internet service providers later this year; and digital services marketed directly by Warner units, such as HBO’s Internet VOD service, HBO Go. Martin’s remarks followed HBO Go unveiling online access to a library of some 1,400 movies and original series for its pay-TV subscribers.

Martin added that Warner Bros.’ windowing strategy with DVD rental services such as Netflix and Redbox has brought an approximate 15% sales lift “for comparable films once the window was instituted versus before the window was instituted.

“We’re convinced,” he said, that the studio’s institution of a window “was helpful” and “the right thing to do.” Warner executives noted during the company’s earnings call in February that the studio would be evaluating the terms of its window agreements. “But [we] would certainly rather have the window than not have the window,” Martin said.

For Time Warner, whose business units span television production and videogame development, the home entertainment industry’s digital transition is a long-term growth prospect. In 2011, Martin offered, increases in cable network affiliate fees, among other sectors, pose more immediate and assured revenue growth opportunities.

“It’s going to take some time [for home entertainment markets] to shake out,” he said, “but I think if we successfully execute and can transition from physical to digital, as an industry, it [will present] a nice opportunity for us.”

Fox Joins Broadcasters Blocking Google TV

Fox joins ABC, CBS, NBC, and broadcaster-backed Hulu in blocking Google TV devices from accessing programs streamed on its websites, according to paidContent. Google continues to count among its partners cable networks such as HBO and Turner’s TBS and TNT, along with electronics makers Logitech and Sony Electronics, and online video sites such as Sony-owned Crackle (which announced an optimized site for Google TV this week, via GtvHub).

Speaking at yesterday’s NewTeeVee Live conference in San Francisco, Google TV executive Rishi Chandra tried to characterize broadcasters’ ambivalence as a matter of course. “It’s not unheard of when there’s a new technology,” he said, “that a lot of incumbents in the space are trying to find out what that technology means for them.”

But Chandra also tried to qualify Google TV as a complementary service, as opposed to a disruptor, to the traditional pay-TV business. “Cord-cutting is not happening anytime soon,” he said (via TechCrunch). “We’re not trying to replace cable.”

Apps Will Be Key Feature of Google TV

The Google TV service will launch with apps including Netflix, Pandora, and Amazon’s Video on Demand, with the company planning to open the platform up for independent app development in 2011. So says Google on its newly unveiled promotional site for the service, which electronics makers such as Sony and Logitech are integrating into “smart” TVs, Blu-ray players, and set-top boxes for introduction this fall.

Google also announced content partnerships with several television networks, including HBO and Turner Broadcasting; but its general focus differs from the rental model put forth by the rival Apple TV service. More at TechCrunch and the New York Times.

TV Everywhere A Go With HBO

Time Warner took a key step Wednesday in its ambitious plan to migrate its subscription-based cable-TV model onto the Internet, with HBO announcing that its Go broadband programming service will soon be available to Verizon FiOS subscribers. The HBOGO.com will contain 600 hours of the pay cable network’s programming and be available to subscribers of both FiOS Internet service and HBO. By The Wrap

HBO Holding Up The Movie-Download Future

Exclusive output deals between HBO and three major Hollywood studios stand as major obstacles to a robust movie-dowload business, holding back a potentially lucrative distribution channel and creating conflict between the powerhouse divisions of TimeWarner — HBO and Warner Bros. — who for once find their interests at odds. By TheWrap

HBO Runs TV Ads For Blu-ray

HBO has launched its first TV campaign dedicated entirely to Blu-ray Disc, covering such new release and catalog titles as “True Blood,” “Band of Brothers,” and “John Adams.” The spots, which run through Christmas, are running on male-centric shows and networks, including during NFL games on Fox and NBC, and on channels ESPN, Spike, G4, FX, and others. By Video Business

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