Seriously…an 8″ iPad? Wait, that’s not a bad idea…

Published by in Uncategorized on February 14th, 2012

On its face, it seems a little silly be considering a ‘mini’ iPad. Yet the more I think about it, the better I like it.

For reading and video, the 9.875″  iPad is a pretty comfortable size, big enough to provide detail and display ‘real estate’, yet small enough to be manageable.

Yet I do find myself wishing it was a little lighter. Perhaps if Steve Jobs had opted with a plastic screen rather than glass, things might be different, but the story of how and why the switch was made is a well-known fable now, used to illustrate not only the proper use of blusterous management but also as evidence of the nimbleness and supposed superiority of Chinese factories.

Yet an 8″ iPad would be just enough smaller that it could address the weight issue. This might help the iPad compete with the various Samsung devices and the Fire. The Wall Street Journal nails it:

“Samsung’s 5.3-inch Galaxy Note and Amazon’s seven-inch Kindle Fire have been selling well. It means consumers want a tablet that is smaller than the existing 9.7-inch iPad,” said Diana Wu, an analyst at Capital Securities in Taipei. “IPad’s features are good enough, but pricing would be an important factor in the mass market, especially in big emerging markets like China and India.”

Yet there have been many, many rumors in the past couple months about the timing and the nature of the latest iPad release. In my experience, all rumors are true, though they might not be true today.

Apple has previously followed a strategy of releasing different colors and sizes for devices before with the iPod, though it has not done so with the iPhone. Nevertheless, there’s clearly precedent for such an iterative strategy.  While the competition has been surviving, if not flourishing, in the ‘mid-size’ market, my business ‘spidey sense’ tells me that Apple’s not going to ignore this market segment for long. They’ll get in the game and they’ll do it in classic Apple fashion. The only question is when. Early March? Perhaps. I’m guessing April, on the anniversary of the original iPad launch.

I can see a mini-iPad being a little more mobile, a little handier and a little more…tote-able than a full-sized iPad, yet more useful and comfortable to use than the smaller iPhone.

With a proportional reduction in price, this could be what prompts me to buy a second one…for my family, of course.

 

 

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Beginning of the end for Netflix…or the end of the beginning?

Published by in Digital Entertainment on February 8th, 2012

From a position of seeming-dominance in the home entertainment market not so long ago, Netflix has taken a beating in recent months through a series of missteps and some surprisingly sharp competition.  Who would have guessed that this would be such an area of contention in the age of spiking VOD demand and emerging digital rights lockers?

Netflix seems to be lost in the weeds, wandering in the space between what their audience actually wants and what Netflix thinks they ‘should’ want.  I’m sure that the execs at Netflix hope that Lillyhammer and America’s undying love of all things mafia will herald the dawning of a new day, but I can’t help but wonder whether we’re witnessing the beginning of the end of this innovative company…the end of their revolutionary beginning?

Following closely on the phenomenal customer-relations snafu that was the Quikster split, the sharp cookies at Redbox seems to have stolen all the momentum — making partnership deals with Verizon and acquiring competitors (Blockbuster Express) for the purpose of eliminating them.  Consolidating…maneuvering.

Reid Hastings of Netflix

Though I haven’t used Redbox myself, being an admittedly long-time Netflix user (2000), I can completely understand the attraction of the omnipresent red kiosk in suburban shopping malls and locales. It’s like a Blockbuster store, but without the overhead and desultory staff. As the real estate adage says, “Location, location, location.” Being able to rent a disc, cheap, as a capper to a grocery run or local errand is a tough proposition to beat.  Must be a real boon to overworked parents! (Be where your customers are.)

Netflix has set out to differentiate itself in the increasingly competitive marketplace by becoming a producer rather a distributor.  While it’s very cool to be hobnobbing with the stars, resurrecting cult favorites like Arrested Development and producing new ones with Sopranos alumni, perhaps this is not the right way to go about rebuilding trust with the paying customers. Will American audiences find Lillyhammer to be so compelling that they’ll overlook the service-level chaos and mixed message coming from Netflix? It’s too early for me to say — and Netflix says they won’t.

In going down this path, Netflix has gained a little distance over their archrival, but created a potentially bigger problem by threatening the very companies on which its very business model depends.

Time Warner has already figured this out and responded, extended the waiting period for both Netflix and Redbox to access their titles for rental. (Redbox intends to ignore the window.) Perhaps this timing has something to do with the debut of Ultraviolet, which WB strongly supports.

Time-Warner subsidiary HBO followed suit not long after. The niche cable producer refused to sell Netflix rental discs at wholesale prices henceforth.

One of the reasons I signed up with Netflix back in 2000 was that it was the MOST convenient way to rent movies. No lines, late fees, or laughably narrow selection, all of which I was frustrated by at the local video store. As pleased as I am with Netflix’s recent push into streaming, I too was disappointed by the recent price increase and confused by the back n’ forth about Quikster. The icing on the cake seemed to be that Netflix hadn’t even investigated whether the Quikster Twitter handle was available before making their announcement. It came off like corporate strong-arming.

I’ll stick with big red for the time being, but Reid and company have to get it together if they want to keep me and mine as loyal customers.

A few modest suggestions: Continue to broaden the streaming choices. Mend fences with the studios. Provide service and selection. Remember who your customer is.

And don’t tell me how I want my media. I’ll let you know.

 

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Blu-ray Has Arrived, Without Question…But For How Long?

Published by in DVD & Blu-ray on February 1st, 2012

While it isn’t a surprise to many of us who work ‘behind the curtain’ of the home entertainment industry, we’re certainly pleased to see the recent business news which notes the strong performance of Blu-ray Discs in the consumer marketplace.

On Tuesday, February 1, Home Media Magazine reported a note from Morgan Stanley that stated that that Blu-ray sales overall were up 11% for 2011, even in the face of strong competition for consumer dollars from varied disc rental options such as Netflix and Redbox and VOD via brand names like Netflix, Hulu and ambitious up-n-comers like FlixFling. This echoes an early January report from the Digital Entertainment Group (DEG), also reported in the HMM, that 2011 Blu-ray Disc sales were up 20% for the year.

While the figures don’t match, it’s clear that many consumers are still interested in being content owners than simply viewers.  And their interest is not reserved for just the latest blockbusters, either.  The 3rd quarter of 2011 saw the release of some compelling catalog content as well, including fan favorite Star Wars, which has helped propel the format toward these good sales numbers.

From my POV, these are the hallmarks of a maturing format, when studios not only make sure that catalog titles have a place on their release slates, but they also see significant sales from fans who are eager to grab up their favorite films on the best home entertainment medium available. With average title prices dropping and an ever-expanding selection now available to the discerning consumer, Blu-ray is becoming one of the standards of the marketplace, rather than a luxury good only of interest to the fan-boys.

At Giant, we’ve seen increased interest in Blu-ray for titles ranging from foreign films to vintage TV shows and from clients ranging from independent producers to niche TV networks, from Fortune 500 content companies to sport leagues.  Without question, distributors get that Blu-ray has become a distribution necessity for a broad range of titles, rather than an afterthought.

Yet, many would agree with the conventional wisdom that Blu-ray won’t enjoy the same market dominance that DVD enjoyed before it will be eclipsed by the more immediate and individual nature of digital delivery. The DEG notes that total VOD revenue was only a few percentage points behind Blu-ray ($2 billion vs. $1.87 billion) in in 2011. It’s possible, even likely, that VOD will pass Blu-ray as soon as 2012.

The promise of being able to access nearly every title in cinema history (for all practical purposes), ready for streaming directly to the device of my choice is a compelling one to most consumers.  Thinking more broadly, perhaps VOD really addresses a consumer demand which has been ignored thusfar, a strength which will continue to fuel its rise.

It’s a cruel fact of the entertainment business: Not every movie or show merits repeat viewings. Sometimes people just want the experience. Previously consumers HAD to buy new media or undergo onerous rental experiences, neither of which allowed for the servicing of every taste, only the median. But now with Netflix, Redbox, Hulu, FlixFling, et al, the ‘long tail’ can be served…and served more efficiently. While these solutions offer lower margins for the studios, this may be the future.  We may be seeing a significant expansion of the availability in entertainment and a change in how audiences consume it.

As the trials and tribulations of the music industry demonstrate, selection and immediacy often trump quality. Detractors of MP3 decry the weaknesses of this format, but it seems evident that consumers value greater selection over dynamic range, variety over quality.

Despite these encouraging numbers, behind them is the stark fact that physical media IS in decline. While the increase in Blu-ray sales numbers is encouraging, it has not filled the gap left by the larger decline in DVD. Content owners should take time to consider how the roller-coaster ride of the music industry may foreshadow similar disruptions in the movie business and use this to prepare for their own necessary business evolutions.

Forward- looking companies and executives must determine how to maintain and exploit legacy formats and their fan base while simultaneously embracing and exploiting the new ones as well. There’s room for both, but the days of complete market dominance, of the one obvious choice and scorn for all others, are gone.

 

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Game on! Don’t forget the iPad…

Published by in Apps on January 17th, 2012

As the token Canadian here at Giant Interactive, it’s only fitting that my inaugural blog entry be about hockey. As the other staff members frantically place their wagers as to how this could possibly tie in to one of the many core services offered by Giant Interactive, allow me to make things easy for you; the iPad is currently revolutionizing how professional sports teams are coached.

As each major North American sports league differs on how they view the fairness of video monitors and television feeds on the bench (or dugout, sidelines, etc.), the iPad and other multimedia tablets have made their way into virtually every sport as a coaching tool to some extent, either as a nifty substitute for the white-marker board, or an interactive video-assist tool, sneaking under the radar of some leagues’ in-game TV policies. No sport has been more aggressive in embracing this tool to its fullest than the NHL.

A dedicated “video coach” is nothing new to an NHL team’s personnel, however live and interactive video capabilities change this role dramatically. Toronto Maple Leafs’ head coach Ron Wilson was the first to introduce a tablet on an NHL bench, allowing the coaching staff to review plays with individual players mid-game. This is a monumental advancement from the previous practice of reviewing tapes in the dressing room during intermission (when available) or more commonly between games, when the memory of each goal, penalty or neglected responsibility, is a distant one at best.

Pittsburgh Penguins’ assistant coach Tony Granato was quoted in PA’s Altoona Mirror last week reminiscing “You couldn’t cut tapes, so you’d have to rewind and fast forward the tape. A 15-minute meeting, you’d get two minutes of information out of it.” The Penguins are now sending key players home with iPads, pre-loaded with carefully selected game footage, specific plays and drills, allowing each player to study the on-ice strategy at the same level of detail each couch potato fan has had the ability to do at home since the advent of DVR.

As a handful of NHL franchises are either owned by or affiliated with a major broadcaster or cable provider (ie. Philadelphia, New York, Toronto), a team can leverage vast post production, content delivery and network infrastructures already in place to cost-effectively deliver a rich multimedia experience directly to the coach’s hands before, during and following each game. Immediate access to multi-angle footage from their broadcast colleagues upstairs provides a 360-degree perspective of the game as it happens, adding a visual element to a coach’s verbal directions during a game. Let’s not even start discussing how this addresses the many language barriers that exist on every team’s bench. Does this pose an unfair advantage over franchises without a broadcast partner or high attendance revenues to invest in the technology? Just another example of technology moving faster than us, or is it hockey’s answer to baseball’s steroid controversy? Expect to see this debated on a talk sports panel near you, in the very near future.

What does this all mean for our industry though? Well, as content production and delivery service providers (such as yours truly) broaden their scope of services to support their “traditional” customers’ expanding needs across new distribution channels and content monetization opportunities, the same expansion is happening in the non-traditional markets, and the need for experienced and timely digital content encoding, distribution and app development services across multiple industries is greater than ever. An NHL franchise has seen their biggest worry grow from whether they have enough pucks on the bus to make it through the road trip, to how they are going to get dynamic and interactive video coaching tools onto the iPad of each player to review during games, on the team plane, or during off-days on the couch. The home entertainment industry quickly learned in its transition from physical to digital, that content still has to get from point A to point B. As this becomes a competitive concern for each professional sports team, the opportunities for interactive, creative and digital service companies grow exponentially beyond our traditional customer base of film, television and music content owners.

Exciting times ahead. Oh, and go Leafs ;)

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Second Screen Conference Announced — Who’s Going?

Published by in Apps on January 6th, 2012

The Second Screen Summit has just been announced and you can bet that it’s going to be well attended.

This is a hot area of home entertainment. It depends on who you ask, but estimates of how many viewers access their mobile devices when watching TV vary from 70 to 86%.  Yet whichever estimate you choose, this still amounts to a significant portion of the viewing public. When you consider that nearly one third of Americans own smartphones, this is a group which networks, producers and content owners would be foolish to overlook. It’s a huge pool of fans!

My own experience certainly confirms this. When I’m watching TV (or streaming from one of several of my favorite sites), I’ve got my iPad on hand to check IMDB, do a little Facebook posting (if I haven’t thought far enough ahead to DVR my favorite show), or scan through Flipbook. I’ve even toyed with the Grey’s Anatomy app which has a very interesting synchronizing feature which keeps new questions, trivia and more coming.

Katherine Boehret dives into three of the top apps in this review and from what she reports, there’s some strong contenders including Shazam, IntoNow and Showtime Social. (Looks like I’ve got some downloading and TV watching on my schedule.) Yet these second screen apps which interact with the program while it’s broadcast live, which reduces their utility, especially in an age when many (most?) people time shift their TV watching.

I think there’s also a large, unidentified and unexploited niche for apps out there, waiting to be discovered, which help broaden and deepen the fan experience. How? I know I’ve been interested in how networks and producers can expand ecommerce opportunities: Want to buy that outfit your favorite star is wearing or a show T-shirt? You should be able to do it right from your phone or tablet. That one seems like a slam dunk.

I’m sure that these opportunities, both realized and still to be, will be covered at length during the S3. We’re looking forward to being part of the discussion. MESA puts on a pretty good event (kudos to Guy Finley and everybody at MESA), so let us know if you’ll be there.

 

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Managed Copy Is Around the Corner

Published by in AACS/Managed Copy on December 23rd, 2011

One of the lauded features of the AACS copy protection scheme used on Blu-ray discs is the capability it offers to allow disc-owners to make a full-resolution copy of the content for use beyond their Blu-ray player…for playback on mobile devices, tablets, and more. Scheduled to debut at some distant, undetermined point in the future (see this 2007 Ars Technica article for an optimistic view of timely implementation), this has been one of the cornerstones of Blu-ray versatility and an oft-forgotten ‘selling point’ for the technology.

Courtesy of www.crave.cnet.co.uk

With the awkward name of ‘Managed Copy’, this feature has been long viewed as a way for content owners to capture more eyeballs, provide extra value and utility to consumers and perhaps even weaken the incentive for casual piracy. According to this ZDNET posting and other similar articles, many, if not most, ‘pirates’ aren’t looking to sell their prize, but rather unlock their disc-based content.

The debut date hasn’t yet been named, but the AACS Licensing Authority has begun to get content providers and authoring vendors up to speed on the protocols and procedures of Managed Copy with the idea of implementing the feature in 1Q’12. We’ve seen a number of invitations come out for informational webinars and notifications of upcoming training sessions, so it seems like the AACSLA is getting serious even though many pieces of the puzzle such as player capability have yet to be solved.

But has Managed Copy taken so long to get to market that its improved functionality has been left behind by services such as Ultraviolet or Disney Studio All-Access?  While these services don’t fulfill the Managed Copy requirement from a legal standpoint, but their ease of use and ubiquity may make Managed Copy obsolete. A common criticism we’ve heard of Managed Copy is that it may prove so cumbersome that while content providers are required to offer it, the uptake by consumers may be miniscule.

Even now, the AACSLA has not announced the ‘sunrise’ date, putting Managed Copy at an even greater disadvantage as the mediascape continues to evolve.  It might be too little too late, as SVOD, VOD and DTO sites proliferate. It’s possible consumers will opt with convenience over quality as has been demonstrated before with the triumph of MP3 over other, richer audio formats.

While we’re gearing up to offer this as part of our overall Blu-ray authoring service, we’ll be anxious to see how the major studios deal with this challenge to the status quo of the home entertainment distribution business, how it affects our production pipeline going forward and how consumers receive it.

We’ll track it and let you know.

 

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March to the Beat of a Different Drummer

Published by in Digital Entertainment on December 19th, 2011

With all the news about apps for movies, albums and streaming content, I’ve been curious to see how iTunes is going to change to keep up with the times.

While it is part of the same big, happy family of Apple products, a number of my colleagues here at Giant Interactive have wondered how iTunes Extra will adapt to the changing world of media consumption.  As apps become more commonplace and versatile, will there be a role for this media form?

Well, I think we’ve gotten our answer.  Via Home Media Magazine, (which has my favorite weekly DVD/Blu-ray sales chart), we learn that iTunes is debuting a new ‘enhanced feature’ product for Avatar. The article notes that this improved iTunes download “…includes a feature that allows viewers to interact with the performance capture and visual effects levels in 17 scenes. Dubbed ‘Green Screen X-ray,’ the unique feature offers a view of original green screen footage while the film plays.”

Of any filmmaker and any title, James Cameron and Avatar are most closely related in the public consciousness with cinematic technological innovation than any others in the past decade. And it was hugely popular. Wise choice for the inaugural title.

In some ways, this new feature is covering ground which DVD and Blu-ray have already broken years ago with ‘branching’, but nevertheless, the additional functionality in a download is impressive indeed.  That it’s exclusive to iTunes makes for a compelling reason for fans to visit the store and collect it.

We’ve been talking recently with a number of media clients of every size about how they can deliver movies and entertainment that delivers an innovative experience in the mobile space.  Sometimes that conversation has centered around developing custom movie apps which follow in line with Warner Bros.’s Dark Knight and Inception and other times it’s involved deeper discussions about more complex streaming solutions.

Most companies, however, are still testing the waters, waiting to see if there’s a firm demand from consumers for such investments, however modest.

With the development and release of such products such as this, the balance may be swinging back in favor of the established release channels and away from custom development particularly for these non-studio client.  Why develop something from scratch when the dominant digital marketplace already has a compelling product which delivers a unique experience and superior quality?  When the economics of the proposition (30% to the big name) means that additional innovation and investment may not necessarily be rewarded, it’s a serious question indeed.

Yet I think there are good reasons for distributors to develop their own delivery vehicles.  While distribution via the app store is still a very smart move, there’s still an audience for unique features which are widely accessible, beyond the laptop and the desktop.

Entertainment companies can still differentiate themselves outside of Apple’s orbit by delivering experiences which are more than what the ‘other guy’ did yesterday. Whether that’s an title-specific app or a more broadly-targeted ‘brand’ app, either can engage viewers and expand the goodwill of viewers in ways which are rewarding for both consumers and distributors, particularly with the leverage provided by social media.

While such developments coming from ‘the big name’ are interesting indeed, there’s no reason why this must be the only beat to which we all march.

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18 Billion Apps. That’s A Big Number.

Published by in Apps on December 12th, 2011

The Huffington Post recently reported that over 18 billion apps have now been downloaded from the App Store.  When combined with the 10 billion downloads which the Android store lays claim to, that’s an astounding 28 billion apps or around 56 apps for every person living in the United States.

That’s a pretty impressive number, but it’s also one which warrants a bit of a reality check. An illuminating study by the Pew Research Center’s Internet & American Life Project noted that although smart phone users may download many apps, only a few really get regular use.  As noted in “More mobile apps downloaded, but users rely on just a few: Pew study“,  smart phone owners depend on a only a half dozen or so apps, on average.

So it seems that while people graze widely in the app store(s), they don’t necessarily find a great number of apps which they use regularly.

I can attest to the truth of this.  According to my present count, I have 68 apps on my iPad.  However, I only interacted with 8 of them (excluding business research) of them in the past couple weeks.  Though I’m not the ordinary user (needing to evaluate apps as part of my job here at Giant Interactive), the majority of my use is concentrated in just 13% of my downloaded app library.

Thinking about the usage patterns of my family, who ‘borrow’ my tablet frequently, the same trend holds true.  My wife uses a recipe organizer, Paprika; my kids are big Angry Birds, Plants vs. Zombies and CookieDoodle fans.

The most commonly downloaded apps, says the Pew study, can be broadly categorized like this:

  • Information updates: 74%
  • Communication with others: 67%
  • Help in learning about something: 65%
  • Getting more info about something: 53%
  • Help with work-related tasks: 48%
  • Help in shopping/buying: 46%
  • Watching movies/TV: 43%

So what does all this mean when brainstorming app ideas or developing apps for clients anxious to engage mobile and tablet users?

Developing an app which is just a showpiece isn’t going to endear you to consumers and won’t earn a place on the ‘most used’ apps in a personal collection.  But creating something which fills a need, solves a problem or eases information flow for users delivers a much-needed boost in the competition for viewer eyeballs.

I’m particularly struck by the ‘Help in learning about something’ category, which scores a strong 65%.  (We’ve got a project which will debut in early 1Q’12 which fits this one perfectly.)

Something to keep in mind — it’s gotta have a purpose, not just look pretty.  Luckily, the Giant team can do both — letting you have your cake and eat it too.

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Blu-ray On The Rise…But What’s Next?

Published by in DVD & Blu-ray on December 8th, 2011

Back in the day — just two years ago — there was plenty of talk about ‘if’ Blu-ray would ever make it as a format.  Well, those times are behind us, but there’s been plenty of speculations about how Blu-ray will fare in coming years in the face of VOD and SVOD.

Well, the latest news on this front, as reported by Home Media Magazine, is that Blu-ray is doing well. Sales in the US are up 35% and the numbers in other regions of the world are showing similar gains.  Consumer electronics manufacturers are releasing players at very economical prices and when combined with the greater number of catalog titles available, there’s never been a better time for Blu-ray.

As predicted by research firm Futuresource, however, physical media will certainly need to share consumer dollars with digital delivery platforms in the near future.

“Indeed, Futuresource projects that by 2015, 30% of video consumption will occur online, followed by Blu-ray Disc (29%), transactional VOD (21%) and DVD (20%).”

That’s a fundamental shift from the years immediately following DVD’s debut. Optical media ruled the home entertainment shelves. Yet the entry of such businesses as Netflix and Redbox, both of which make it so easy to rent titles…to own them TEMPORARILY…has certainly changed how people relate to their media consumption. Now the imperative is to find ways to deliver entertainment media where people are.  And that place isn’t fixed in the living room any longer — it’s on the move, it’s mobile.  Thus the proliferation of streaming sites and of ‘movie apps’ such as The Dark Knight and Inception by Warner Bros.

We’re not too proud to say that we recognize a great idea when we see one.  Our Giant app development and digital media teams are hard at work on creating our own ‘movie app’ which will be a little more manageable to our non-studio and mid-sized distributors and clients.

While we’re certainly pleased to see that Blu-ray is continuing to grow and do well, the general consensus is that Blu-ray will evolve into just one of several ways viewers find and interact with content that interests them.  Their method will undoubtedly be a more personal choice, with portability competing with quality among many other factors on the consumer spectrum.

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The Dual Screen Experience

Published by in Apps on December 6th, 2011

Variety’s Entertainment App on Dec 1 provided an intriguing educational opportunity even for those who didn’t attend.

We were well represented at the event by President Jeff Stabenau and Director of Digital Jay Chumley who will be bringing the insights garnered there back to strengthen our app development practice and our app-focused business development, I’m sure.

Of the news which came out of the conference, a fact of particular interest was one which Scott Maddux of Neilsen (the ratings firm) noted: Some 70% of tablet and smart phone owners use their device while watching TV.

What an incredible opportunity for show runners, network executives and marketers of very kind to connect with a willing and interested audience! Speaking from experience, I know that I often have my iPad in hand while I fire up my beloved Tivo: checking IMDB, visiting show websites, reviewing network line-ups and confirming the theatrical release dates of movies.

How can tablet- and phone-based apps make the fan experience richer and more engaging?  Grey’s Anatomy was one of the first shows to provide a synchronized app-based experience and while not every show has the budget or fan base to support such an undertaking, every show can benefit by a mechanism to focus fan attention and deliver MORE to the couch-bound viewer. This could take the form of actor bios and credit lists, episode synopses, behind-the-scenes clips, integration with Facebook/Twitter. Each of these serves to connect the individual viewer to a larger community of fans.

It has been said that TV has become a very solitary experience as multiple devices within the home and a proliferation of channels allowed individual, custom experiences devoted to narrow demographics. TV-focused ‘second screen’ apps have the potential to negate that trend and turn TV viewing into a group activity once again — perhaps not with Mom, Dad and the kids gathered around the digital hearth, but with like-minded people connecting with thousands of others. Not a family, perhaps, but a community nonetheless.

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