Target Ticket Follows Redbox Instant To Close

Building a streaming aggregator is not an easy task.  It takes content deals, it takes customers, and it takes a solid infrastructure to manage the end to end delivery.  It doesn't take much for it to go wrong.  And it takes a sound strategy and firm execution to be successful.  Netflix and Amazon Instant have easily become the standouts of success.

Sling TV has just launched and word is that they are facing some difficult technological issues managing its streaming activity.  And while they push forward, Target Ticket, a streaming service created by Target to compete against other retailers like Walmart, has decided to shut down.  Never heard of Target Ticket, you are probably not alone.  I am a frequent visitor to Target and can't recollect ever seeing any marketing in-store or in their circulars. 

Their demise means that consumers that purchased digital product will have to switch to CinemaNow to continue to get access.  But with content that CinemaNow does not have rights to, customers will get credits instead.  That certainly is the biggest challenge when owning digital content that you don't have direct ownership of.  So what is next?  How long till CinemaNow, Walmart's Vudu service or even UltraViolet or another streaming service decides it can no longer compete with Apple and Amazon?  The loss of Target Ticket may simply be a precursor for more to come. 

Taking The Video Fight To The Clouds

There's a fight brewing for video purchases and sides are being drawn up.  For Apple, it has always been about the iTune library.  Consumers purchase and download or store in the Apple cloud for use on any device with iTune access.  For the studios, the push has been to maintain the DVD business by augmenting it with the UltraViolet cloud.  And there is Amazon who is designing both their own cloud business as well as building compatibility with UltraViolet.  


Retailers, trying to keep DVD sales alive, are also looking at the best approach to take.  Wal-mart has decided the UltraViolet cloud working with Vudu works best.  "The retail behemoth last week teamed up with five Hollywood studios in an effort to stem the continuing decline in DVD sales."  Vudu customers can take their previously purchased DVDs to Wal-mart and for a minimum fee, gain a digital cloud-based version.  Will Apple try to collaborate with UltraViolet or stay the course through iTunes?

And what does the consumer want?  Is it necessary to own the content anymore when titles are accessible anytime, anywhere, through cloud-based rentals.  Does Netflix and others offer a better rental alternative and should Apple consider building a rental program into their iTune model?  I like the closed architecture approach that has made Apple successful.  At the same time, I believe a rental model could work very well for Apple.  And as far as the DVD business is concerned, with the exception of kid videos that are watched over and over and over again, the rental market accessible on demand will continual to over shadow purchase.

Can Wal-Mart and UltraViolet Save The DVD Industry

The movie industry has enjoyed  a long history of selling  first laser disks, then VHS tapes, and DVDs to consumers seeking to build a personal library of content to watch at a moments notice.  But the rise of on demand and streaming content has made the concept of ownership less necessary.  Add to that the space a video library takes up on bookcases and the idea of ownership on digital devices or in the cloud becomes far more convenient with much less clutter.  And as consumers, there is less of a need to buy a DVD player with the rise of digital access to video content.  


When my kids were younger, we made sure our car had a DVD  player with screens in the backseat to entertain during long trips.  Today, that system is unnecessary.  Instead, we have iPads and iPods to provide that personal entertainment platform.  And they can each watch what they want..  No DVD  required.


But like all of us, we tend to be reluctant to embrace change, preferring to hold onto it as long as possible till it is too decomposed to even recognize it any more.  Do stores even sell VHS tapes anymore?  So how much life is left in the DVD industry and is it time to quicken its death or prolong it through UltraViolet?


Companies like Netflix, Apple, and Amazon are moving forward on a digital only strategy.  But Wal-Mart is still staying the course and working together with UltraViolet to push a dvd/cloud partnership.  " Wal-Mart is launching a disk-to-digital service, aiming to drive adoption of Ultraviolet, and DVD purchases, rather than lower-margin rentals, and to prevent piracy."  As long as consumers are expected to buy a physical DVD, I don't expect it to succeed.  Why buy a disk only to immediately throw it away once the digital copy is accessed.

Can UltraViolet exist post DVD?  With the rise of multiple cloud services and digital being the platform of choice, the movie industry may best be served selling itself to other retailers unless it can come up with a compelling approach to make UltraViolet a better consumer choice.  For now, perhaps it deserves a better brand name.

Movies - Own, Rent, Subscribe, Watch With Ads - Many Choices

Theatrical films have been enormously impacted by the web.  Not so long ago there were clear and easy windows in which a newly released film would exist.  Start in the theater and then a year later find itself available for purchase on VHS.  Wait another  few months and the movie made itself to a pay service like HBO or Showtime, and then finally it hit commercial TV, with commercials finally inserted into it. Depending on how likely we wanted to watch the movie, we may have watched in the movies and then waited for its TV airing to see it again; or we missed the theatrical run, rented from Blockbuster, and enjoyed it for a week before returning it.  Old favorite films like Godfather or Star Wars would capture our attention each time they returned on the air.

Today the windows are far shorter and harder to distinguish.  Theatrical films can show up as DVDs just a few months later and find themselves available to rent on demand.  Cable networks sometimes bid more for a film so that it bypasses Pay TV and hits the air much sooner.  And the creation of digital copies and cloud ownership means that exclusivity windows become harder to enforce.  "New technologies, like iCloud, are making these conflicts more obvious, pressuring traditional media businesses to rewrite their agreements. Movie studios want consumers to buy more digital-movie downloads as DVD sales shrink and digital rental and subscription services, from which studios earn less, gain traction."  

Even the notion of the cloud has gotten fuzzy.  Apple has its cloud, Amazon a different cloud, and the movie studios are trying to rollout their own through UltraViolet.  At the end of the day, the consumer only cares about where they can find a movie and how effortless it can be to view it.  If they want to buy it, they will; if they want to rent it, they will seek out that option.  If they want to watch it with commercials because it is there at the moment ready to watch, they will do that too.  And while the pay channels may seem to be most affected, they have not been blindsided.  They have been seeing this trend for a while and it has been their motivation ( as well as Netflix), to diversify into original programming, in order to remain competitive and ahead of the problem.

What Does The UltraViolet - Amazon Deal Offer?

There are multiple reports that Amazon is growing its cloud offerings with a deal to sell UltraViolet movies. Some sources believe the deal is tied to one of the UV partners, Warner Brothers, and no details of the agreement have been released. "Analyst Jan Dawson of Ovum said the biggest challenge to UltraViolet comes from the top competitors in online retail for entertainment: Apple and Amazon. Each of them maintains its own online 'lockers' for purchases. If Amazon really commits to UltraViolet, that would be a 'total game changer,' Dawson said."

So is Amazon considering converting its cloud to the UltraViolet solution or simply offering its customers more choices? While Amazon is know to sell both physical DVDs and downloads, will the new UV deal require a disc still be purchased or will UV adapt to enable a download only model? Clearly the studios got behind UltraViolet in an attempt to extend the product life of the physical DVD. It is hard to imagine that they will get off that requirement too quickly. If a digital only solution is part of the Amazon UltraViolet deal, then that represents a major strategic shift.

Would Apple ever agree to such a deal? Most likely not. Apple likes to work in its own closed platform. Studios would have to agree to an Apple iTune cloud model, one without the requirement of a physical DVD purchase. And Apple is not one to follow along.

So is the Amazon Ultraviolet deal a game changer? Amazon definitely gives the movement credibility. It likely enables an Amazon cloud consumer to have access to these films from their Amazon account. At the same time there are only a handful of titles available and consumers could just as easily buy them from the Amazon website or pick up from Target or Walmart and access through a Flixter account and through connected devices. We will definitely wait for more news to learn more what this new partnership means for Amazon and the UltraViolet movement.

Will DVD Sales Rise From A Link With The Cloud?

When was the last time you bought a cassette tape? When CDs were created, no one tried to sell you a cassette with every CD you bought. Most likely because you were still buying a manufactured item. But with the rise of digital and now the cloud, the need for manufactured CDs and even DVDs is less and less. Yet, it seems that companies aren't ready to breakaway completely.

The rise of UltraViolet and in the UK, Blinkbox, is still being tied to the purchase of a DVD. All with the hopes of improving a dying distribution model. And while this strategy may lengthen the product life, the patient will eventually die and be buried. Such as it was for the 8 Track, the cassette, and soon the CD and DVD.

For the short run, a dual purchase makes everyone happy. "This is a fascinating link-up between atoms (DVD) and bits (streaming). The added value of the dual option could drive more plastic-disc sales at the checkouts." Ultimately, the customer no longer seeks to clutter their homes with jewel boxes of various shapes and sizes when their digital devices both store and play. The arrival of cloud based storage enables access of this same content wherever and whenever you want, although it requires that wireless access is present.

How long will this shared model last? The speed of adoption of tablets indicates that this process should only last a few more years at best. Notice that no tablet comes equipped with a DVD or CD reader; even laptops are being built without the hardware. Change is a coming and like the Laser Disc, the DVD will also become part of our history.

Ultra Violet Brings Cloud Competition

It's time to take the fight to the "clouds" as in storage, streaming and downloading. With Apple and Amazon developing their own cloud platforms, "a consortium of large Hollywood studios, gadget makers and retailers" have been also backing UltraViolet, a cloud storage locker to enable movie ownership across devices. Their hope is that combining the physical sale of a DVD with a digital copy will reinvigorate the DVD industry. But they are running in third place as Apple and Amazon have each released their own proprietary cloud product. And neither require a DVD purchase to own a movie.

To date, each have their unique pros and cons and the Wall Street Journal has a nice chart differentiating each service. Obviously too, cloud competition is in the nascent stage, with not enough movie content or device choices and flexibility to stream and/or download. As this business grows. more content will become available. I also expect that content deals will start to include exclusivity over one cloud than another, just like what Amazon has done with DC Comics and their digital graphic novels. If you can't differentiate cloud service by exclusivity and other unique attributes, then you are left with price wars. The studios and other content creators don't want that.

Can UltraViolet succeed against Apple and Amazon? Only if consumers once again want to embrace ownership of DVDs. The DVD manufacturers that have signed on to UltraViolet might be upset if a DVD purchase was no longer required. Will consumers embrace the cloud experience? Certainly the push is on and the iOS 5 system on the iPhone and iPad include an iCloud subscription. But I should tell you, I recently uploaded iOS 5 on my iPhone and have deleted my iCloud account. It seemed to have caused a faster draining of my battery life and so far, without it, I am seeing a longer usage. As we depend on our devices to do more and more, power consumption and longer battery life must become the next priority.

UltraViolet Makes Appearance Thanks To The Smurfs

Is your DVD player UltraViolet compatible? Does knowing a DVD title includes UltraViolet appealing to you? Wait, you haven't heard of UltraViolet. Well then you are definitely not alone. "UltraViolet is a "digital locker" system designed by the Hollywood-led Digital Entertainment Content Ecosystem to let users access their movies and TV content through any UltraViolet-compatible service or device, such as PCs, tablets, cable set-tops and smartphones." Hopefully by the time that CES rolls around, UltraViolet will be the hot buzz word.

The release of new platforms always involves a careful balance of content. And seems to ask the age-old question of which comes first, the chicken or the egg. In this case, Sony's release of DVD titles, including The Smurfs, recognizes that consumers respond to content to run their machines. And while Sony is the first to release titles with UltraViolet authentication, other studios will follow.

Can it jumpstart the DVD industry or will it find more acceptance with consumers seeking content anywhere via their cable provider? And with Apple on the sidelines, what will its cloud-based competitor do differently? For consumers seeking to access content outside their home on their PC or mobile device, the cloud is bringing the library to us, without requiring us to download and save on a hard drive. Good news in a connected world.

Wal-Mart Trying Hard To Compete With Netflix, Apple And Others

Big box stores like Wal-Mart are recognizing that they need to have a strong digital business to survive and compete. And a dot com strategy must be more thaan simply selling its in-store merchandise online. It is why Wal-Mart continues to push a streaming media video play. "A cloud-based video movie service, Vudu lets customers rent or buy movies over the Internet and stream them to their TVs, Blu-ray players and a variety of Vudu-enabled devices such as Sony's (SNE) PlayStation 3 and HDTVs from LG Electronics, Sharp and Panasonic (PC)." Vudu was bought by Wal-Mart last year and is being rolled out next week.

Wal-Mart hopes that it is not too late to the game, with Apple, Netflix, Amazon, and others also in this space. "Unlike competing services such as Netflix, the Vudu platform on Walmart.com does not offer any subscription service, and the retailer said it does not currently plan to offer such a service." A one off strategy may not be enough to work as companies are looking hard at subscription strategies as a means to better forecast and achieve higher revenues. And Wal-Mart may need to add music and other digital deliverables to its mix as demand for these other downloads grow as well.

Like the early days of cable, when there were many operators, the streaming media business will quick enough find that it needs to consolidate with others to control and own the platform. Perhaps Wal-Mart needs a partner like Barnes and Noble to add a digital book component to its mix. Or perhaps it could align with Apple to mutually support their new cloud approach. At the end of the day, many platforms for distribution streaming will merge into few and the leaders will be the ones to pursue consolidation and growth strategies.

UltraViolet Helping Warner Bros' Push of Digital Everywhere

Consumers love simplicity. And the rise of Apps on smartphones, iPads, and PCs have enabled consumers to connect with the things they love - music, wine, TV, and movies. Warner Bros. is continuing its leadership approach by working with other movie content companies and distributors to create a seamless application, currently titled 'Digital Everywhere", to find, organize, watch, and share movies.

"'Digital Everywhere' isn't a retailer like iTunes, but rather it gathers all the various ways movies can be bought or rented. It also organizes an individual's entire library of digital movies and TV shows - not just Warner brothers. And it will consumers to access their library from any internet-connected device - a TV, laptop, iPad or smartphone - through a cloud authentication system, called UltraViolet, that will be released this summer from a studio consortium." It aggregates information, organizes your current film library, searches and shares recommendations of new films, and enables you to buy or rent to your platform of choice: iTunes, Amazon, Netflix, etc. With Ultraviolet, information is managed centrally and shared across different technological platforms. And by making search, organization, and purchase easier, consumers should appreciate the ease of use and sales should surely rise.

Warner Bros. maintains a leadership in Hollywood with a willingness to collaborate with its rivals for the good of the movie industry. Ultimately, the consumer will pick the content and not the studio; building an app that strengthens the movie industry as a whole will also bring good fortune to Warner Bros. individually. It is a smart strategic move.

Not yet included in this future App is the role that the cable on demand platform plays. As the TV on demand piece brings a big financial segment, let us hope that Comcast, Time Warner Cable, and other cable operators come on board. Ultimately the consumer will choose which platform to view a movie from. While the app makes it a more level playing field for distribution, it also pushes each distributor to find new ways to differentiate itself from the competition. Without cable in the mix, 'Digital Everywhere' could still succeed and cable operators could find that they are only hurting themselves.

Cable Operators Starting To Offer Mobile Live TV

While a number of cable operators are starting to work on pushing cable channels to mobile devices, Time Warner Cable is the first to release an App. "Time Warner Cable on Tuesday is set to debut an app for Apple's iPad that will let customers watch more than 30 live channels over their home Wi-Fi networks, at no extra charge for those who take both broadband and expanded basic or higher video service." Of course their are a number of limitations. You can only watch on a mobile device within the home. Only 33 cable channels are available, no broadcast channels have been mentioned. And no ESPN, TNT or TBS yet. Still, it is a good first step for operators to satisfy the needs of today's mobile customer and create added value. Comcast and Cablevision seem to be close behind in announcing their app. It is still a baby step as the consumer is restricted to watch only at home, despite being untethered.

Of course, the competition has been offering complete remote access to all channels for a while. Dish Network has been using Slingbox to access remote viewing on both a computer and the smartphone.

Digital broadcast networks are looking at new technology to enable connections to the consumers across any device. Currently known as UltraViolet, consumers could buy once and play content anywhere. It is another step in enabling consumers to watch their TV content anywhere and everywhere. As cable offers a key aggregation approach, these stars could align to bring a robust line-up to the consumer, without the need for a wire.