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The State of Media and Entertainment Video 2014

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In 2013 Amazon Studios fired up its Amazon Originals program, which began production on five shows -- "Alpha House," "Betas," "Creative Galaxy," "Annebots," and "Tumbleleaf." There are two comedies, one of which bears remarkable similarities to Netflix’s "House of Cards," and three kids shows. But it’s going to have a lot of competition in the near future with the mobile platforms ramping up digital video streaming options. Amazon started as the place to get everything online for a better price but then rapidly expanded to one of the largest cloud-based presences on the planet. Surely, it makes plenty of money off Netflix using Amazon Web Services, and perhaps that is subsidizing much of the Amazon Prime content. Many were predicting that Amazon Prime was firmly squaring off against Netflix for supremacy in the online SVOD market, but that might not be the case at all. It might be that Amazon Prime is just a vehicle to give users a taste of free video, but it then generates revenue by pulling half of every season behind a pay-per-rental wall.

Amazon Prime is challenging Netflix for content licensing, but all too often it only offers partial seasons or partial runs of television shows, making customers pay to rent or download some of the episodes. 

UltraViolet Expands

UltraViolet (UV) has been continuing its expansion, in terms of partners. But it still requires compatible devices and multiple accounts in order to purchase content. Target, Best Buy, Flixster, Nook, Vudu (Walmart), Paramount, Sony, Universal, and others have storefronts where you can buy or rent content. UV does allow multiple profiles, which is nice, and with many DVD and Blu-ray titles now offering free digital versions, it’s a quick and easy way to build an online video library for the whole family to enjoy. 2014 might see the end of the “triple-pack,” which offers DVD, Blu-ray, and digital download code sold in a single package. Blu-Ray plus digital could be the new standard, and movie cards might become more prevalent as the industry struggles to find something that appeals to those who want a physical representation of ownership for their always-available, cloud-based movie library.

YouTube: Still Searching for a Premium Model

YouTube wanted to be a provider of movie rentals and premium subscription content for some time, but now it seems to have turned to other avenues. It invested a couple hundred million dollars in YouTube content creators but has since been embattled in copyright infringement snafus, partner dissatisfaction, and the rise of the MCN -- multichannel network -- middle men. Its plan to recover the investment is in ad-supported video that has YouTube investment on the creative side. But the YouTube Original Channels page, which was the central repository of channels that had received some of that money, has disappeared. Aside from a few notables, such as H+ from Warner Bros., Bryan Singer, and Geek & Sundry from Felicia Day and company, one would be hard-pressed to find where that money went. Now, instead of dishing out cash, it is offering production support in four cities.

YouTube also dabbled in paid subscription-based channels, though of the 94 currently available, many appear empty or devoid of new content on a regular basis. It does also offer TV and movie rentals, but with all the options available, perhaps that signal is lost in the noise.

Announced and launched to great fanfare, the YouTube Original Channels page disappeared, with little content to show for the company’s massive investment. 

Tech Meets Media

At the end of 2013, people had started to talk about the need for tech and media companies to get together in strategic partnerships or to start merger and acquisitions plans. Ernst & Young sees the future of television as “a carefully crafted omniscreen experience that combines great content with equally compelling social and gamification techniques tailored to an individual viewer’s stated and implicit preferences.”

That, in a nutshell, is television meets technology. You need the compelling content from the media side of things, but as we’ve seen, it needs technology to push it to consumers in a way that they want it and that makes them want to talk about it and help others discover it. There will be more video-capable connected devices than people on the planet by 2017, and that is going to create an intricate and complex labyrinth of screens, resolutions, data networks, and users who all require a tweak here and there.

Many media companies are not distribution-savvy, and they will need more and more partners to reach more and more people in the new diverse realm of mobile connectivity. There are now more video entertainment options than ever before with new ones showing up regularly. More and more original content will need to be produced so that each of these new options has enough unique content to begin drawing an audience.

However, that could also trigger a shift in everything if the virtual MSOs get up and running. Either online video platforms will start getting bundled into traditional pay TV packages or the virtual MSOs will get smart and start cutting major deals to turn these available channels into packaged bundles along with live TV. Or maybe cable will finally get it and expand its offerings.

Cable Gets It, Finally?

It used to be that, in an article about streaming video, one never mentioned cable or satellite companies except to say, “They just don’t get it.” Well now, they get it. Cablevision got it early and already implemented a cloud-based DVR with the capability to record up to 10 shows at a time and that can hold up to 75 hours of HD content.

Meanwhile, DirecTV found its genie in a bottle and let it out to record five shows at a time with home Wi-Fi-based remote viewing (with a bunch of hardware). Its GenieGO package allows you to sync mobile computers (PC, Mac, tablet) with the DVR and download video content to them for watching on-the-go, though there’s no streaming option yet.

Dish offers the Hopper DVR and the Dish Anywhere mobile app where one can not only manage DVR content but also view live TV and DVR content anywhere there is a high-speed internet connection, including 3G.

At the time of writing, Time Warner Cable, which already allowed some Live TV streaming, launched its streaming app on the Kindle Fire to expand its reach for the holiday season. A few days later it launched a new cloud-based program guide as it too works toward a cloud-based DVR system in an effort to catch up to its competitors, including Comcast, which is also testing that sort of system.

2014 seems to be shaping up as the year that the traditional MSOs will implement streaming and anytime, anywhere access to DVR, VOD, and live TV at once. Perhaps they realized that streaming video portals were here to stay, and they had better get moving or they would lose vast swaths of market share to the next generation of virtual MSOs.

This article appears in the 2014 Streaming Media Sourcebook.

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