Amazon Wants Its Own Set Top Box To Send Its Content

Its one thing to have the content and another to have the distribution.  While Netflix has relied on third parties to distribute its subscription services, Amazon has taken a more technological approach.  Like Apple, Amazon built its own tablet to run its content.  And like Apple and its Apple TV box, Amazon now wants to distribute a set top box to stream to the television set.  "The device is code-named "Cinnamon," and will have apps for playing games and streaming video and music from other companies, not just Amazon, according to the WSJ. It will be released for the holiday shopping season." Certainly there are other devices already streaming Amazon content to the TV, but Amazon has hgad a strategy of selling devices at near cost to drive usage.  I suspect an Amazon set top box will also be priced cheaply (definitely below Apple TV's retail price of $99) to encourage new consumers to enter the marketplace.  And by pairing its Kindle with its new set top box, Amazon customers get an integrated usage experience sure to please the user. 

What apps and other video streams will be featured on the new Amazon box?  No word yet but I would doubt that other subscription services would be made available.  Perhaps free OTT like You Tube or even Vimeo or Crackle could be a possibility.  With so many OTT boxes for consumers to add, including their own cable TV box for now, Apple TV, Roku, new Smart TVs like Samsung and certain blu-ray players, and gaming consoles like XBox and Playstation, is the consumer ready for one more.  Certainly Amazon benefits by pairing this new box with its own best selling tablets, but other devices do the same thing through apps installed on tablets already.  The market is quickly becoming more crowded and consumers will have to decide which set top box or how many boxes they wish to connect to their TV set; or perhaps the answer is none as Smart TVs will be enabled to do all the work. 

Amazon Adding More Original Streaming Content

Amazon knows that to keep its streaming customers happy, you must continue to grow your video content library.  Syndicated content is great, especially titles with high perceived value.  But the key to superiority is not just having the most content to stream, but also original exclusive content.  Netflix has done it quite well with House of Cards and Arrested Development and Amazon wants the same notoriety. 

And so Amazon has formally announced three new comedies for 2014 including Mozart in the Jungle, The Outlaws, and Transparent.  Also according to Deadline Hollywood, unofficially Amazon has a couple dramas for streaming.  They include Bosch and The After.  Competition for viewers away from the TV screen is only getting more intense. 

With the growth of more streaming shows, viewers will have to decide whether to watch broadcast, cable, or streaming shows.  The more choice open to them away from cable, the more consumers will question whether it is time to star cutting the cord.  Amazon, Netflix, Hulu, and others are starting to make their inroads for greater share of market. 

Hulu Plus adds A New Distribution Outlet

While we all enjoy watching our favorite videos on our personal laptops, tablets, and smartphones, there is a reason why we buy big screen TVs.  We like to watch our shows on big devices, too.  In the competitive world of streaming subscription services, the easier it is to watch your shows across multiple devices, the better to market its value and ease of use.  As Hulu strikes out on its own, no longer being primed for acquisition, it has turned its attention to new ways to improve.  Thanks to a new partnership with Google and its Chromecast service, "Instead of watching video content from the online provider on an Android smartphone, tablet or Apple iPad, folks can shoot Hulu Plus to an HDTV."   

This kind of announcement is good news for both Chromecast and Hulu, making each a more valuable service to market to customers.  For Chromecast, it represents an important video partner to its stream.  For Hulu Plus, it puts them on equal footing with its competitor Netflix on the device.  But access alone is not enough of a reason; Hulu Plus also needs to keep pushing its exclusive content and library of available titles to keep growing its subscriber base.  Additional distribution platforms help but content remains king. 

More Broadcast Networks Go Dark On Cable

While the current word may be that a short term agreement has prevented ABC/ESPN Nets from going dark on Dish Network, another broadcaster failed to stay on.  Media General's 18 broadcast networks got shut down at midnight when no renewal was reached with Dish Network.  "Media General's retrans agreement originally expired in June, but Media General extended negotiations for 90 days."  So Dish consumers in those markets are now without their stations during the most important time for broadcasters, the Fall season. 

Who is to blame?  Frankly, the blame should be shared among all parties, Dish, Media General, and even the FCC for enabling broadcasters to charge for broadcast networks and the use of over the air spectrum.  This fight between operator and broadcaster continues to repeat itself endlessly.  And while Dish and ABC may have put into place an extension, it may still end up with networks being dropped off Dish.  It was only last month that Time Warner Cable faced this same issue with CBS; it will only happen again.  Broadcast networks should not be enabled to charge; if they want to then free up the airwaves and become cable networks. It is time for the FCC to intervene.

DirecTv Producing Content

For distribution companies, the need for quality content to put in the pipeline is essential.  And for content companies, having a strategy of placement to assure a nice return on investment is essesntial as well.  For DirecTv, it has led to a couple of attempts, most notably, trying to buy Hulu and its content deals.  But that attempt failed as Hulu pulled back its for sale sign and DirecTv has been looking for other alternatives. 

While not as big a deal as Hulu, they have found their next opportunity in the indie film arena.  "The satellite operator struck a deal with startup movie studio A24 Inc. to partner with it in acquiring independent films in exchange for rights to offer them exclusively on its video-on-demand services 30 days before they hit theaters."  While that might do A24 any favors with movie houses, it does guarantee them a premiere window and access to its huge subscriber base.  Add to that the marketing muscle of DirecTv and all you need is a potential hit film to dangle to consumers as "only available on DirecTv".  Of course to be realistic, very few indie films break through; in fact, some don't get their true notice till after their theatrical run when they hit the premium and/or DVD window.  Still, for DirecTv, its a good first step.

For those of us that believe that Content is King, it becomes crucial for distribution companies to secure exclusive content agreements to differentiate itself from others.  Its been done in the premium window with HBO, Showtime, and Starz and its been done in the streaming window with Netflix, Hulu, and Amazon.  And as my last post stated, it is why Intel Media has yet to move ahead.  Content is what viewers tune in for; it is why they are willing to buy cable subscriptions, premium subscriptions and streaming subscriptions.  And the value of these subscription deals are improved when the content becomes accessible across multiple screens.  But for me, it is most importantly the quality or the perception of the quality of the content. 

So DirecTv's decision to partner with A24 makes sense. But it can only be the tip of the iceberg of more exclusive content agreements.  I expect more such deals for DirecTv as they and others compete aggressively for subscribers.  That means that demand will continue to grow and the cost for content acquisition will as well.  And that is good news for content companies.

Intel Media Having Trouble Starting Up

What if you built potentially the best mousetrap but couldn't find either the cheese or the locations to place it.  Well that might just be the troubles facing Intel Media, a business inside Intel building its own OTT box and platform.  According to the article, the box was built and it looked and worked great; problem was that there are no content deals to run through the platform.  So, according to Peter Kafka at All Things D, it is time to either find a strategic partner or close up shop.

I certainly hope for the former as I know a few people on the team and have the utmost respect in what they are doing.  Their challenge is the same one that Apple seems to also face, how to get real content deals with the major cable and broadcast networks.  Truth is, it may be impossible to get linear network deals with these content companies.  They are so deeply in bed with the traditional Pay TV distributors, cable, satellite, and telco, that it is not in their best interest to risk these guaranteed monthly subscriber fees.  And despite having a superior OTT box, Intel Media should recognize the challenges being faced to get such a device into the home.  TiVo has been facing similar challenges for years.  So even if Intel Media gets some content deals, getting consumers to pay Intel for their OTT box and content may be an extremely difficult task.

The article suggests partnerships with Amazon and Samsung although I fail to see immediately what benefit they would derive from such a partnership or how it would best serve Intel.  While its box may be designed for streaming, its DVR feature is most likely meant for linear channels.  For now, Intel Media faces a daunting task, neither content nor distribution and the corporate clock is ticking.  As the article suggests, with its new CEO, this business may become DOA.

VOD Matters

Missed last night's shows on CBS, don't worry, CBS will remind you that you can still watch them through video on demand.  As shows are rated based on both live and VOD viewing, it makes sense to continue to promote them and remind viewers of how easy they are to watch, or catch up, before the next new show airs the following week.  "CBS predicts that increased use of video on demand for time-shifted viewing, binge-viewing and catching up with missed episodes will be 'really transformative' for the television business,  Mr. Poltrack (chief research officer, David Poltrak of CBS) said."  Truth is, on demand has been around for a while and consumers have been using it more and more to watch their shows.  In fact, viewers used to record shows on VHS even before DVRs and even before VOD so Mr. Poltrak should also be reminding his audience to record and watch, too.

So why this news during Ad Week?  Perhaps the fact that CBS is promoting series the day they were viewed.  Certainly for shows that are important to the future of CBS for ratings and ad dollars, it makes sense to promote across the Fall Season, not only before its premiere  but after as well.  With so many premieres on so many networks, broadcast and cable, constant promotion, before and after the linear show date, makes sense for building interest and appeal and viewership, whether on linear or DVR or VOD.  Frankly, it sounds like a no brainer.

DirecTv Eyes OTT Video Platform

DirecTv was no doubt disappointed that their bid for Hulu was rejected.  It seems they still have an interest in adding a video streaming component to their business model.  "CEO Michael White said the satellite TV giant will probably launch a targeted over-the-top video offering, which will be on a smaller scale than Netflix or Hulu."  So the question to ask is, will DirecTv build or buy.

With Hulu off the table and Netflix an unlikely acquisition target, perhaps DirecTv should look at a streaming service like Redbox Instant. Currently in a partnership deal with Verizon, Redbox might like to have the resources of DirecTv as well to help them better compete in a streaming media world.  Whether Verizon and DirecTv could work together might be either a stumbling block or an opportunity for both companies to better advance their footprint as well. 

As far as Redbox Instant is concerned, it has been slow out of the gate to compete at the same level with Hulu, Netflix, or even Amazon Prime.  It has the technology and a current library to work from, a better position to be in for DirecTv, than to try to build another video streaming competitor from scratch.  Perhaps this idea is what White is alluding to at the Goldman Sachs Communacopia conference.  It would certainly make sense to partner rather than build at this moment. 

Native Advertising Makes Ads Look Like Content

How often do we go from website to website, barely looking at the banner ads that fill the top, side, or bottom of the screen?  Sometimes though, they are hard to ignore, especially when they are the same ad, with bright colors and moving images that attract our eye.  But how often do we click on them... rarely, never?  Like commercials on television, banner ads have been the means for advertisers to reach audiences.  But the clutter gets to be so much that we start to ignore and worse, avoid them.

The latest tactic to hit the web is certainly not a new one.  And yes, native advertising has been around for a while. But many viewers may not be aware that they are really ads.  For TV, think of it as integrated or product placement advertising.  Products or services being mentioned and used within the body of the show.  Hard to ignore because they are part of the fabric of the content.   For the web, native advertising looks and acts like content.  But they are indeed sponsored and paid for by third party advertisers hoping to get you to click on them and thus transported to their sites.

How can you differentiate between advertising and true content?  Some websites specifically tell you you that a particular box is sponsored content, others do not.  Words like "Around the Web" or Latest"  are used.  Click them and you open a new page of content, some that bring you to new web content helping sites to improve their ComScore and Google ratings, others to pure advertiser pages.  Facebook and Twitter put these "sponsored" or native ads right in your feed so that it looks like part of the content flow that you read.  It also may ask you to "Like" the content, share or retweet it, or click it and push out to another page.  What seems clear is that presenting ad messages in a more integrated way into content improves the interaction with the ad.  But it also blurs the line.  But let's be clear, it is not new to the world of advertising; it has been learned and reshaped to fit into the digital world.

“It has been found that the less an advertisement looks like an advertisement, and the more it looks like an editorial, the more readers stop, look and read. Therefore, study the graphics used by editors and imitate them. Study the graphics used in advertisements, and avoid them.”  - David Ogilvy