Turmoil in On-Demand Viewing Creates Opportunities

Published by: DIGDIA

Published: Aug. 1, 2006 - 206 Pages

Table of Contents

1 Introduction

1.1 Finding a Billion Dollars

1.2 Explosion of Choice

1.3 Look beyond the Cheap Shots

Ecosystem - Overview

1.4 Digital Cinema

1.4.1 Theater Economics Primer

1.4.2 Pressure from Everywhere

1.4.3 Digital Cinema Initiative

1.4.4 On-Demand Cinema

1.5 Evolving DVD

1.5.1 Blu-ray vs. HD DVD

1.5.1.1 What may happen?

1.5.2 What about Red?

1.5.3 Home Theater

1.5.3.1 Full HDTV Displays finally arrive

1.5.3.2 DVD Servers

1.5.4 Traditional Rental & Retail

1.5.4.1 Big Chains

1.5.4.2 Independents

1.5.4.3 Rent to Own

1.5.5 Online DVD Rental

1.5.5.1 NetFlix

1.5.5.2 Blockbuster again

1.5.5.3 Other Services

1.6 Broadcast

1.6.1 Satellite Services

1.6.2 Over the Air Tricks

1.6.2.1 Multicasting

1.6.2.2 Broadcast Flag

1.6.3 The DVR

1.6.4 TiVo’s Shifting Business Models

1.6.5 STB

1.6.6 Place Shifting

1.7 Cable and IPTV VOD

1.7.1 Inconsistent Offerings

1.7.1.1 Rentrak

1.7.1.2 Where do you live?

1.7.1.3 The CableCARD Hole

1.7.1.4 Growing Library

1.7.1.5 Start Over & Look Back

1.7.1.6 Navigating through too much choice

1.7.1.7 Enter OCAP

1.7.1.8 A la Carte

1.7.2 VOD at the Head End

1.7.2.1 General Architecture

1.7.2.2 Can Cable VOD get too popular?

1.7.2.3 Standards

1.7.2.4 IPTV VOD

1.7.2.5 Network DVR

1.8 Network STB

1.8.1 Download to watch: Akimbo

1.8.2 Watching it now: ITVN

1.8.3 DTV-STB: MovieBeam

1.8.4 DaveTV

1.9 Media PC

1.9.1 Classic Media PC

1.9.2 Digital Cable Ready PC

1.10 Downloads

1.10.1 Mainstream Sites

1.10.1.1 Movielink

1.10.1.2 CinemaNow

1.10.1.3 RealNetworks

1.10.1.4 Vongo

1.10.2 Niche Survivors

1.10.3 Big Names Jump In

1.10.4 Bit torrents

1.10.4.1 The shady torrents

1.10.4.2 BitTorrent

1.10.5 Download-to-own

1.11 Pirate Primer

1.11.1 Plugging Leaks No Longer Sufficient

1.11.2 Grokster Rules

1.12 Portable Devices

1.12.1 iPod

1.12.2 PSP Video

1.12.3 Microsoft’s Portable Media Player

1.12.3.1 Handhelds and Smaller

1.12.3.2 Ultra-Mobile PC

1.12.4 Portable DVR

1.12.5 Which to Choose?

1.13 Phones

1.13.1 Mobile Video Issues

1.13.1.1 Number of Phones

1.13.1.2 Content

1.13.1.3 Interoperability

1.13.1.4 Carrier Control

1.13.1.5 Payments

1.13.2 Taxing Bandwidth, Battery, and Wallet

1.13.2.1 DVB-H

1.13.2.2 ISDB-T

1.13.2.3 DMB-T

1.13.2.4 MediaFLO

1.13.2.5 Packet

1.13.3 As a Remote

2 Delivering High Quality BITS

2.1 Quality Bits

2.1.1 File Size vs. Image Quality

2.1.2 Content Delivery Networks

2.1.3 Control of the Pipe

2.2 Government Steps In

2.2.1 Federating Franchising

2.2.2 BITS

2.2.3 Implications

3 Advertising

3.1 Television

3.1.1 Primer

3.1.2 Alternatives to the Shrinking 30 and 15

3.1.3 VOD Ad Situation

3.1.3.1 AAAA Guidelines

3.1.3.2 Ad Essentials

3.1.3.3 Live Plus Seven Day

3.1.3.4 VOD Upfronts

3.1.3.5 Dynamic Ad Insertion

3.2 Web Video Ads

3.2.1 Not a 30

3.2.2 Web Video Upfronts

3.2.3 Intermediaries

3.3 Mobile Video Ads

3.4 Theater Ads

4 On Demand Content

4.1 On Demand Movie Content

4.1.1 Shrinking Windows

4.1.2 Box Office Freshness

4.1.3 DVD Release Windows

4.1.4 VOD Release Windows

4.1.5 VOD Selection

4.1.5.1 Cable VOD Selection

4.1.5.2 Movielink VOD Selection

4.1.5.3 MovieBeam VOD Selection

4.1.5.4 CinemaNow VOD Selection

4.1.5.5 Comparing the Four Services

4.1.5.6 Bit Torrents

4.2 On Demand Television Content

4.2.1 New Programming

4.2.2 Vintage, Foreign, Niche Television

4.2.3 User Generated Content

5 Consumer Survey

5.1 Criteria Priorities

5.2 Familiarity with Advanced Digital Video

5.3 Will Day and Date DVDs kill Theaters?

5.4 Blu-ray vs. HD-DVD Purchase Criteria

5.5 Attractiveness of a $35 High Definition DVD

5.6 Buy, Rent, or Download to Own?

5.7 DVD On Demand vs. Buying the DVD

5.8 Watching Downloaded or On Demand Movies

5.9 Watching Downloaded or On Demand TV Show

5.10 Interactive Advertising

5.11 Online Movie Pricing Models

5.12 Familiarity of Online Video & Movie Services

6 Forecasts

6.1 Digital Cable Homes

6.2 Cable VOD Viewing

6.3 Cable NDVR Viewing Scenario

6.4 DVRs

6.5 TV Viewing Percentages via DVR

7 Strategic Trends and Opportunities

7.1 Which Half of Advertising

7.2 Indies for TV

7.3 Getting Noticed

7.4 Dynamic NDVR

7.4.1 If Viewers Choose

7.4.2 Recording Everything

7.4.3 System Requirements

7.4.3.1 Servers

7.4.3.2 Storage

7.4.3.3 Bandwidth

7.5 Integrated Cable/Internet Strategy

7.6 Download-to-Own Opportunity

7.6.1 Download-to-own is Broken

7.6.2 Fixing Download-to-own

7.7 Utilizing Dead Times

7.8 Outside the Box Cross-platform Ads

7.9 HD-ray

8 Conclusions

9 Late News and Commentary

10 Appendix

10.1 Glossary

10.2 Industry Organizations

Figures

Figure 1 - Types of Content released by Channel, Portion and Window

Figure 2 - On Demand Ecosystem Elements

Figure 3 - U.S. Cinema Revenue in reported and inflation adjusted dollars, U.S. admissions, and video sales

Figure 4 - Toshiba HD DVD HD-A1 player at 2006 CES

Figure 5 - HD-FVD player from Taiwan

Figure 6 - Kaleidescape DVD server, and bank of HDDs

Figure 7 - DVD and VHS U.S. rental market for 2001 to 2005

Figure 8 - NetFlix revenue and subscribers for 2001 to 2005

Figure 9 - Digital Cable subscribers, versus satellite and basic cable

Figure 10 - Comcast On Demand Views per Month

Figure 11 - Microsoft/SBC (AT&T) IPTV interactive program guide with video insert38

Figure 12 - Moxi IPG with “cross bar” interface & On Demand Quick Picks

Figure 13 - Avtrex IPG showing that it is being tailored to “Bob’s” needs.

Figure 14 - MosaicTV approach might stop channel surfing

Figure 15 - VOD headend elements

Figure 16 - Video Server using DRAM for high volume titles

Figure 17 - Cable’s frequency allocation

Figure 18 -Verizon FiOS IPTV interactive program guide example

Figure 19 - Original and current MovieBeam STB and antenna

Figure 20 - Movielink Downloads and Number of Titles over Time

Figure 21 - Number of Titles for which CinemaNow has Distribution Rights

Figure 22 - Online Video Back in the Pre-Bubble Dot-Com Days

Figure 23 - Comcast’s “The Fan” video portal

Figure 24 - Typical “bit torrent” Movie Search

Figure 25 - MPAA estimate of Worldwide Piracy Rates

Figure 26 - MPAA Photos of Hidden Camcorder System

Figure 27 - Pirated Movie Worldwide Timeline

Figure 28 - Estimated Cumulative Pirated Downloads Over Time for a Sample of Movies

Figure 29 - On-Demand Anywhere display by Scientific Atlanta

Figure 30 - PSP with Universal Media Disk (UMD) and Memory Stick Duo

Figure 31 - Perhaps the world’s tiniest video player

Figure 32 - Intel’s Ultra-Mobile PC

Figure 33 - PVR2Go portable PVR

Figure 34 - Motorola Razr used as portable DVR player

Figure 35 - Lyra X3000 for DirecTV2Go

Figure 36 - Countries with Phone TV Services or Plans

Figure 37 - Movie clip shot from a 700 kilobit/second stream

Figure 38 - Movie clip shot from a 1.3 Megabit/second stream

Figure 39 - Movie clip shot from a 6.8 Megabit/second stream

Figure 40 - Estimated 2005 U.S. Media Advertising

Figure 41 - Sample interactive television ad

Figure 42 - Two ads showing individualized messages by region

Figure 43 - Web Video Intermediary

Figure 44 - Movie Windows in the Previous Century

Figure 45 - Movie Windows Today

Figure 46 - Statistics: Percent of Box Office Take by Week After Release

Figure 47 - Statistics: DVD Release Windows Over Time by Studio

Figure 48 - Statistics: VOD Release Windows over Time

Figure 49 - Statistics: VOD Release Windows by Major Studios

Figure 50 - Statistics: Ranking of Titles Released to VOD over the years

Figure 51 - Statistics: Comcast Content by Release Date and Box Office Ranking.128

Figure 52 - Statistics: Comcast Content Grouped by Date and Ranking

Figure 53 - Statistics: Movielink Content by Release Date and Box Office Ranking 130

Figure 54 - Statistics: Movielink Title Distribution by Decade

Figure 55 - Statistics: Movielink Content Grouped by Date and Ranking

Figure 56 - Statistics: MovieBeam Content by Release Date and Box Office Ranking

Figure 57 - Statistics: MovieBeam Content Grouped by Date and Ranking

Figure 58 - Statistics: CinemaNow Content by Release Date and Box Office Ranking

Figure 59 - Statistics: CinemaNow Content Grouped by Date and Ranking

Figure 60 - Statistics: Comparing Comcast, Movielink, CinemaNow & MovieBeam 135

Figure 61 - AOL’s In2TV Classic TV Lineup

Figure 62 - Survey: Importance of Anywhere, Instantly, Price, Quality, Choice (forced rank)

Figure 63 - Survey: Familiarity with Cable On Demand, DVR, Movie Downloads, Video on Mobile Phones, Downloads to Portable Players

Figure 64 - Survey: Will you still go to the Theater if the DVD is coming out soon?

Figure 65 - Survey: What factor will most influence when you buy a High Definition DVD player (Blu-Ray or HD-DVD) - Price, One Format, Multi-Format, Movie Choice

Figure 66 - Survey: How likely or willing would you be in paying $35 for a “High Definition” DVD?

Figure 67 - Survey: Ranking Buying the DVD vs. Renting the DVD vs. Download to Own (forced rank)

Figure 68 - Survey: “DVD On Demand” vs. Buying DVD - varying Price and Release Date

Figure 69 - Survey: Viewing a recent hit movie - Ads vs. Paid-VOD vs. Download vs. Buying DVD (forced rank)

Figure 70 - Survey: Getting a TV Show that was missed - Ads vs. Paid-VOD vs. Subscription vs. Download vs. Waiting for Reruns (forced rank)

Figure 71 - Survey: Reaction to interactive ads that offer free samples, more information, drawing for a prize, or discount coupon

Figure 72 - Survey: Movie Services - Various Fees/month vs. Fee for Some or All Premium vs. buying DVD (forced rank)

Figure 73 - Survey: Familiarity with Movie/Video Services - Akimbo, AtomFilms, BitTorrent, BlinkX, CinemaNow, Google Video, iFilm, In2TV, MovieBeam, MovieFlix, MovieLink, NetFlix, Slingbox, Vongo, Yahoo Video

Figure 74 - Forecast: U.S. Digital Cable Homes (2001 - 2011)

Figure 75 - Forecast: U.S. Cable VOD viewing hours & as a percent of all TV watched (2002 - 2011)

Figure 76 - Forecast: U.S. cable VOD viewing per household as a percent of all cable viewing (2002 - 2011)

Figure 77 - Forecast: U.S. cable VOD and NDVR hours watched per household (2004 - 2011)

Figure 78 - Forecast: U.S. cable VOD plus NDVR viewing per household as a percentage of all cable TV watched (2002 - 2011)

Figure 79 - Forecast: DVR subscribers that are standalone, associated with satellite, and cable if cable does not offer NDVR (2004 - 2011)

Figure 80 - Forecast: DVR Subscribers that are standalone, associated with satellite, and cable if cable offers NDVR (2004 - 2011)

Figure 81 - Forecast: Percent of TV watched per household by type - standalone, satellite STB, Cable STB and Telco IPTV NDVR

Figure 82 - Forecast: Percent of TV watched per household by type - standalone, satellite STB, Cable STB and Telco IPTV NDVR with cable NDVR present

Figure 83 - Viewership vs. Program popularity

Figure 84 - Program’s probability of recording by NDVR at 25% take/100K homes

Figure 85 - NDVR Number of hour to record/week vs. number of subscribers

Figure 86 - Integrated 3rd Party Content Aggregator

Figure 87 - Clearing house for viewer data

Figure 88 - HD-ray compromise disk structure

Tables

Table 1 - DVD Servers

Table 2 - STB Vendors with DVR models

Table 3 - MSO Cable TV/Digital Cable 2005 Subscribers and VOD status

Table 4 - VOD Content Aggregators for Cable & IPTV

Table 5 - IPG suppliers

Table 6 - Defunct or struggling television program channels

Table 7 - VOD Vendors

Table 8 - Niche Movie/Shorts Download Survivors

Table 9 - “Unlimited” Free Movie Download “Services”

Table 10 - Sampling of “bit torrents”

Table 11 - Video Converters for Video iPod

Table 12 - Sources of Content for Video iPod

Table 13 - PSP Video Converters

Table 14 - Sources of PSP Videos

Table 15 - Content Delivery Network Service Providers

Table 16 - Studio contracts with SVOD providers

Table 17 - List of Movie Titles from a Sample Bit Torrent

Table 18 - Business Model: Primetime Television On Demand, Pricing & Distribution

Table 19 - Video iPod Top Titles

Abstract

• Cable's PPV, SVOD, TOD, MOD, OCAP
• Telco's offering Network DVR, SVOD, MOD
• Satellite offering MOD via DVR
• Carriers offering Mobisodes
• Studios offering downloads of TV shows, movies, and aggressive windows
• Internet companies with unique new business models
• Digital Cinema offering live events and day & date DVDs
• Advertising with measured engagement ads, auctions and on-demand Upfronts
• Manufacturers providing systems for Network DVR and dynamic ad insertion
• Consumer Electronics that connects to all of the above

• Overview and current status of each industry in the on-demand viewing ecosystem, including some of the key technology that makes things possible
• Some statistics on the type and freshness of content found on several of today's on-demand services
• Consumer survey results that reveal what the market feels about the many choices and tradeoffs companies are giving them
• Forecasts of on-demand viewing and the potential impact of services such as Network DVR

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