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Amazon Unbox On TiVo Bound For US

Amazon Unbox On TiVo Bound For US Amazon are expanding their Amazon Unbox service to the TiVo platform. It’s being described as a “soon-to-be-launched service.”

Unbox offers TV programmes and films for rental or purchase, delivered down a broadband connection.

Amazon are taking a route much the same that Sky is in the UK. They initially offered the Sky Anytime service on PC first, and are now in process of moving it to their Sky+ box. TiVo are claiming 1.5m broadband-ready TiVo boxes in the US, significantly less than the number of Sky+ boxes in the UK.

The straight Amazon Unbox service (omitting the Tivo part) was launched in September 2006, delivering content to PCs and, by way of difference from Sky, portable device (as long as they were Windows Media Video-compatible).

The line-up of content providers includes the usual suspects – CBS, Fox Entertainment Group, Lionsgate, Paramount Pictures, Universal Studios Home Entertainment and Warner Bros. Entertainment.

How do you get it?
Sign up for the service sounds pretty easy. TiVo subscribers simply log on to Amazon.com and follow a few simple steps to establish a link between their broadband connected TiVo Series2 or Series3 box and their Amazon account. The list of available content will then make its way down the broadband pipe, to be displayed on the usual TiVo “Now Playing” list.

Prices for television episodes are $1.99, with most films costing between $9.99 and $14.99 for purchase. Film rental starts at $1.99.

Respect for the customer
In a move that shows that TiVo/Amazon look at things from the consumer perspective, all purchased videos are automatically stored in each customer’s “Your Media Library” at Amazon.com for future access and download. This is absolutely the right way to do this, rather than forcing the consumer to buy it all again in their hardware gets into difficulty.

Amazon Unbox On TiVo Bound For US Impact
We suspect that Amazon won’t be stopping at delivering Unbox to TiVo and are likely to offer it on other PVR platforms after a period of exclusivity.

Given the straight Amazon Unbox service is wrapped in Microsoft’s DRM, we assume some kind of content protection will be applied to the Amazon Unbox on TiVo content. What is unclear is if this will also be by Microsoft – highly unlikely given TiVo runs on a Linux platform.

Potentially having to apply a second form of DRM to all of the content will be a major overhead for Amazon.

TiVo on Amazon Unbox
Amazon on Amazon Unbox

Domain Name Infrastructure Attacked

The most significant attack on the Domain Name infrastructure since 2002 took place last night.

The infrastructure stands at the middle of the DNS structure that translates domain names into their numeric IP addresses. Effectively acting as an address book.

It appears that two servers were the target of the attack. One of them was operated by the US defence department and the other by ICANN, the Internet Corporation for Assigned Names and Numbers, who look after the domain name structure.

It is understood that the attacks, which started last night and ran for 12 hours, were mounted from Asia.

“It was a significant and concerted attack, but the average Internet user would have barely noticed,” said Paul Levins, the vice-president of corporate affairs at ICANN, reports the Guardian.

These days the DNS structure is pretty robust.

Using language that only a quasi-military force can, the US homeland security department confirmed it was monitoring what it called “anomalous” Internet traffic.

Now Is the Time for Blockbuster to Make Its Move

It’s time for Blockbuster to get into the online download business. The market is only now emerging and the pickings are slim, but it’s not too soon for the company to expand its offerings to include web-based movie downloads and rentals. It could be the only company to offer a true “triple-play” of mail, brick-and-mortar, and online access – a combination that (given innovative marketing) could give a second wind to a dying brand and uniquely position the company for long-term success.

Failure to Launch
Blockbuster has a lousy record when it comes to identifying and quantifying emerging trends that may impact its business. Once a leviathan in the consumer video space, Blockbuster has seen its DVD sales migrate to mass retailers such as WalMart and Target; its DVD rentals cannibalized by Internet-based mail order houses (NetFlix); and its movie rental revenue snacked on by PayTV and on-demand providers.

The result? The company enjoys the unique ‘blessing’ of managing hundreds of retail outlets, many of them struggling to stay open, others being shuttered on a weekly basis. The ‘local video store’ may never fade away, but Blockbuster’s version of it is dying a slow death.

What Train?
Of particular embarrassment was Blockbuster’s inability to foresee the emergence of NetFlix. Blockbuster’s senior strategists sat idly by as a no-name upstart gobbled up millions of Blockbuster converts who wanted a better video experience and knew how to take advantage of a basic Internet-connected PC.

Even now Blockbuster continues to play second fiddle to a once-tiny company that had an interesting idea, a decent understanding of technology, and a unique business model. Blockbuster’s leadership simply didn’t see the train coming, and by the time they did realize that NetFlix was for real, the train had pretty much rolled over them.

To give you an idea how much was at stake, simply take a look at NetFlix’s Q4 2006 earning statements revealed on Wednesday, January 24, 2007: NetFlix now has more than 6.3 million subscribers (compared to Blockbuster’s 2 million online subscribers) and enjoyed fourth quarter revenue of $277 million. That’s got to hurt!

Hard to Shake Old Habits
In March 2006, Blockbuster CEO John Antioco stated that the company had a “digital future” that could very well take it to a greater size than it achieved as a primarily store-based business. If judged by Blockbuster’s conduct since that time, he must be the only one who knows that strategy.

Yes, Blockbuster was an early investor in CinemaNow but never was a strong supporter of the concept or the company (it was too busy tending to NetFlix-related wounds). Yes, in June 2006 Blockbuster reportedly tried to buy a majority stake in Movielink for $70 million but the deal was killed. In both these cases, however, the Blockbuster brand was not involved – these strategies involved leveraging an existing online brand (neither of which have to date enjoyed any success).

Today, Blockbuster still has no real presence in an important emerging market while brands such as Amazon and Apple have already started building their own online rental and sell-thru video businesses.

Yet a recent shift in Blockbuster’s strategy may be the first sign that the company is actually aware of what cards it does hold.

Extending the Logic of Blockbuster’s “Total Access”
In November 2006, Blockbuster rolled out its “Total Access” program, an initiative that gives customers the option of returning DVDs through the mail or at their local Blockbuster store where, should they choose, they could pick up movie for free (but with time limit on viewing and return required at the same store). According to CEO Antioco, Total Access is the reason why Blockbuster’s online user base grew to 2 million at year-end 2006, up 500,000 in the fourth quarter alone. This is just speculation on his part (no evidence was cited) but it is interesting nonetheless.

To blend the concept of the direct mail DVD rental service with its local retail stores – and to brand the offering separately – would appear to be an obvious move. For Blockbuster, however, this represents a strategic revolution compared to its usual blind-leading-the-blind strategic thinking. (Again, this is the same company that thought it could bury NetFlix in just a couple years.)

Tactically, blending these two businesses makes a lot of sense. Strategically, however, it’s a better move than first glance might indicate.

New Moves for New Media
What’s the one thing that Blockbuster has that NetFlix, Apple, or CinemaNow don’t have? Hundreds of ‘brick-and-mortar’ retail video stores. None of these competitors has an interest in getting into the brick-and-mortal video distribution business, but this is precisely why Blockbuster has a lock on this notion. Ironically, it may be the local video stores that end up the centerpiece of Blockbuster’s digital future. They provide Blockbuster with a one-of-a-kind local marketing channel through which it can educate its customers about the benefits of online distribution and how to enable it, while still serving the needs of those interested in mail or in-store procurement.

Combining the online mail-order DVD and stand-alone retail businesses should be but the first step in a larger journey that culminates in a Blockbuster “triple-play” that also incorporates a full-blown online movie rental and sell-thru service. Not a CinemaNow or Movielink service, but a Blockbuster-branded offering that, when blended with the retail and mail-order channels, represents a comprehensive but tightly integrated offering that competitors simply can’t match. This comprehensive vision would serve Blockbuster well: it could minimize or recast what cannibalization did occur because of digital distribution by providing a comprehensive yet cohesive market message, one in which Blockbuster is itself recast as the true innovator in consumer video.

As well, Blockbuster has the brand clout to help legitimize online video distribution. Think of how Apple’s entry into the online video business (and its pending introduction of the AppleTV set-top box) has drawn attention to the progress that online video has made, as well as enhanced the awareness of online movie services. Blockbuster’s entry would have a similar impact, but instead of speaking to Apple fans and technology enthusiasts, it would whisper to the mass audience of Internet households that (given the right equipment) a broadband connection is now a legitimate conduit for delivering on-demand movie content to your primary home TV.

Sure, this type of prognostication is best reserved for long-term strategy discussions, but that’s exactly how Blockbuster should be thinking. After all, if you’re going to say you have a “digital future,” it’s to the future you should first look. Then and only then can you identify the steps necessary to enable that future to materialize.

A claim must first be staked out, this one in a virtual world where Blockbuster’s current and future competitors are building fortifications. And guess who’s setting up camp? NetFlix.

Michael Greeson, Founding Partner & Principal Analyst, The Diffusion Group

MySpace Face Four Child Lawsuits

MySpace is being hit with compensation claims by the families of four children who allege sexual assault by adult MySpace members after finding out personal information about them on their MySpace pages.

The families from New York, Ohio, South Carolina and Texas have filed seperate cases in Los Angeles. They’re being represented by Arnold & Itkin LLP of Houston, Texas and Barry & Loewy LLP of Austin, Texas.

They allege “negligence, recklessness, fraud and negligent misrepresentation” by News Corp. and MySpace.

These cases don’t appear to fall into the ‘oh this might have happened’ category. Three of the cases have lead to the incarceration of the attackers, one whom is serving ten years in Texas. In the other case the two men have been arrested and are awaiting criminal prosecution.

Not the first claim
This isn’t a first for Barry & Loewy LLP. Back in June 2006 they filed the first lawsuit of its kind against MySpace, for a 14 year old girl who was also allegedly assaulted after contact through MySpace.

They claimed MySpace was “negligent in protecting teenage users despite numerous warnings of the dangers” and “had full knowledge that sexual predators were contacting young children on the website but did nothing to stop it.” The financial claim was $30 million in damages.

Concerns like these aren’t new to MySpace. Back in Feb 2006, parents were voicing their concerns.

MySpace have taken action. In December last year MySpace took action to kick off known sexual predators.

Be careful
Cases like these will bring into focus the potential dangers to those who reveal details about themselves online, although with a few simple rules, horrible incidents such as these should be avoidable. Most of them being the same rules you would apply in normal, non-online life.

Nintendo Rake In Record Sales

Nintendo Rake In Record Sales The Nintendo DS has emerged as the top selling gaming device in both the US and the UK during 2006.

According to figures from the NPD Group, the DS outsold the Wii and PlayStation 3 (PS3) over the bumper Christmas holiday period in the US, with 1.6 million Nintendo DS’s flying off the shelves during December, adding to a total sales figure of 9.2 million units.

By comparison, Sony’s much hyped PS3 only managed to sell 490,700 units in December, hindered by supply and production problems.

Nintendo Rake In Record Sales Americans certainly went waheey for the Wii, with 604,200 consoles shifted in December, backed up by brisk business for extra games.

NPD found that Wii owners bought three extra titles on average, with a huge 86 percent forking out for The Legend of Zelda: Twilight Princess.

Nintendo Owns Europe
Across the pond in Europe, Nintendo managed to shift 500,000 Wiis during December, while in the UK a hefty 200,000 of the next-gen consoles found themselves in the clammy excited hands of game-crazy Brits.

Nintendo Rake In Record Sales Despite the bumper sales, Wii’s still remain as rare as a Cardiff City away win, with Nintendo Europe MD Laurent Fischer admitting that the company is still “facing stock shortages.”

Record sales
According to UK market monitor Chart Track, UK consumers also bought more than 500,000 Nintendo DS handheld consoles, making it the UK’s biggest games machine last year.

With the Wii whipping up a sales storm and the DS registering record sales on both sides of the Atlantic, Nintendo look set to notch up their most successful financial year ever.

[From PC Advisor and Reg Hardware]

Google On Course For Half Of The US Search Market

A new survey has seen Google continuing to exert its dominance on the US web search market, grabbing a huge 47.4 per cent of the sector, up 0.4 per cent during December.

Yahoo, ranked number two, also enjoyed an increase of 0.3 per cent over the same period, giving them a 28.5 per cent market share.

The figures from web audience measurement company comScore Networks revealed bad news for the third placed search engine, Microsoft, whose share dipped by 0.5 to give them just 10.5 per cent of US web searches.

Also heading downwards was InterActiveCorp’s Ask.com search engine, slipping 0.1 per cent to 5.4 per cent.

Google’s rise in the world’s largest internet market seems unstoppable, with the company notching up gains in 16 of the last 17 months.

With an estimated 6.7 billion searches by US web users in December – up one per cent from November – potential advertising revenues are immense, proving ample financial impetus for the search engine giants to embark on endless consumer-wooing feature updates for their services.

The overall US search market has ballooned by 30 per cent since December of 2005, with comScore reporting that consumers performed 3.2 billion searches on Google sites and 1.9 billion searches on Yahoo!

ComScore

[From Reuters]

US Internet Sales Pass $100 Billion

Internet Sales Pass 100 Billion Dollars In US High spending Americans splashed out over 100 billion dollars buying stuff on the web last year, with the popularity of Internet shopping set to keep on soaring.

Research firm comScore Networks calculated that high-clicking consumers ratcheted up 102.1 billion dollars via online retail spending (excluding travel) in 2006 -representing a hefty increase of 24 percent over 2005.

The build up to Christmas proved to be a bumper season for selling, with 24.6 billion dollars flying into online cash tills during November and December, up 26 percent from 2005’s total.

“E-commerce is becoming more mainstream,” said Jeffrey Grau, senior analyst at the research firm eMarketer.

“A larger segment of the population is buying online, and people are buying more things than they have in the past,” he added.

Internet Sales Pass 100 Billion Dollars In US
Investment firm Cowen & Co. put the total sales figure for 2006 slightly higher at 108 billion dollars, predicting that it will hit 225 billion by 2011.

In their report, the company estimated that US e-commerce sales will grow 20 percent in 2007, citing growing broadband adoption, lower online prices and added convenience as the driving forces.

According to their figures, e-commerce would end up grabbing a hefty 4.7 percent chunk of total US retail sales in five years time, a mighty leap up from the current figure of 2.7 percent.

Jim Friedland and David Geisler, analysts at Cowen, reckon online sales will eventually pass 10 percent of total US retail spending, fuelled by a consumer shift to more music and film downloads, adding, “We expect a dramatic long-term shift in the media category from physical in-store purchases to Internet downloads.”

[Via Yahoo]

AppleTV – The Revolution Will Not Be Televised

Michael Greeson of the Diffusion Group picks up on a theme we’d also raised earlier in the week – the insanity around Apple’s recent announcements, here he focuses on AppleTV.

AppleTV Unwrapped
On January 9, Steve Jobs made good on his 2006 promise to release an Internet TV Adapter (iTVA) and rolled out AppleTV, a set-top box that allows you to stream video from your PC to your TV. This was an important move for Apple and for the entire broadband video industry; one TDG predicted several years ago would likely happen in 2007.

AppleTV - The Revolution Will Not Be Televised

I don’t want to talk about the technology behind the AppleTV platform – you’ve all heard by now that it’s an 802.11n-based wireless media hub with a 40GB hard drive and Intel processing, and is capable of streaming video, music, and photos to up to 5 different PCs. You’ve also likely heard that it will hit the market in February and cost $299 (although those who simply can’t wait to say they’ve bought one can pre-order the devices as of last Tuesday).

So the real reason for this particular OpEd? The often nauseating level of presumption extended to Apple by the public media and (in many cases) the analytical community. It’s as if everything that Apple touches will not only turn to gold but fundamentally redefine how we experience media ^[1].

You Don’t Want This Kind of Hype
An AP article in this morning’s New York Times captured the dominant opinion regarding AppleTV, stating that it “could be as revolutionary to digital movies as Apple’s iPod music player was to digital music. ^[2] ”

In what world do these people live? Are they completely oblivious to the fact that Internet-enabled DVRs and set-top boxes, not to mention digital media adapters, have been around for a couple years? Are they aware that the latest generation of game consoles do pretty much the same thing as AppleTV (sans iTunes), including burning content to an embedded hard drive?

Why is Apple’s entry into this space considered “revolutionary” when so many others offering similar solutions were there first? Are they aware that, despite the fact that MacWorld may have been a more exciting show than CES, the number of PC-to-TV solutions, Internet-capable TVs, networked set-top boxes at CES was topped only by the number of attendees? Everyone’s in the game, so Apple’s entry could hardly be considered “revolutionary.” Again, this is convincing evidence of the press’s blind fascination with all things ‘Apple.’

But this should also be a concern for Apple itself. Could these pundits have possibly set the expectations for this device (and the whole concept of Internet-based digital video to the TV) any higher? There is no way Apple can live up to this kind of hype.

Second, these pundits are guilty of using an analogy which, however seductive, is so unrealistic it borders on being dangerous. Betting that the future of Internet video will simply mirror that of Internet music is foolish, and those spouting this nonsense should, well, have their iPods taken away for a week.

AppleTV - The Revolution Will Not Be Televised Let’s Get Serious, If Only For A Moment
Here is a litany of knee-jerk, prima facie objections to the pundits (the other pundits, that is) blind proclamation.

First, AppleTV is not the iPod. (Really? Yes, really. And neither will AppleTV enjoy the success of the iPod – again, the bar is simply set to high and such placement shows a poor understanding of the marketplace.)

Second, the online video business is not a simple mirror image of the online music business. (Yes, the similarities are strong but they are not universal. For example, purchasing a song download at $.99 is quite different than purchasing a movie download for $150-$20. Just ask someone who doesn’t work in the business how appealing this sounds. TDG has done the research and less than 13% of consumers would respond positively to such an offering.) As Dawn Chmielewski noted in Wednesday’s Los Angeles Times, no one knows whether the entire PC-to-TV or Internet-to-TV strategy will pay off, and if it does to what extent it will float all boats ^[3].

Third, iTunes on the TV is not the same as iTunes on the PC. (Nor should it be – Apple must avoid the temptation to simply duplicate the iTunes web store on the TV screen.)
Fourth, the ‘for-purchase only’ model of iTunes remains unproven. (Despite the fact iTunes has sold 50 million TV episodes and more than 1.3 million feature-length films, the real long-term winner may be movie rentals, not sell-thru.)

Fifth, the cable, satellite, and TelcoTV players will not sit still and let someone like Apple, Sony, or Microsoft simply step in and cannibalize their TV revenue. (Yes, the future of Internet TV is bright – TDG just released an analysis and forecast on the growth of Internet-enabled TVs. However, allowing consumers access to a wide variety of unique content that is not carried by the major players is not the same as offering a movie service that competes directly with the incumbent video offerings – especially movies.)

The list of objections can go on for pages. For TDG’s clients and frequent readers, you are aware that we remain as excited about Apple’s entry into the living room as the next pontificator. In the long term, this will have a positive impact upon both the ‘digital home’ and ‘connected consumer’ industries. However, this box is not ‘revolutionary’ in the slightest, nor is moving iTunes to the TV. This is just the latest move by a very important technology innovator, a market leader whose every move is in the professional and public eye.

Despite the widespread cry of ‘revolution,’ the public has yet to weigh in on Internet video-to-the-TV in general and Internet movie downloads in particular, so that best that can be said is that the jury is still out. Research indicates that those that have used iTunes for video downloads are but a small portion of total iTunes users and comprised primarily of tech enthusiasts. Apple knows it will take a lot longer for iTunes to sell two billion online movie downloads at $20 than it did to sell two billion individual music downloads at $.99.

So let’s turn down the hype surrounding AppleTV. No doubt the expansion of Internet video into the living room is real; however, its emergence as a force in our TV viewing lives will be evolutionary or incremental in nature, not revolutionary. In other words, the AppleTV revolution will not be televised.

For a more sober look at Internet video on the television, The Diffusion Group would be delighted if you took a look at their latest report , Broadband Video: Redefining the Television Experience.

[1] This morning’s Good Morning Silicon Valley began with a headline entitled “You know, if the analyst gig doesn’t work out, there’s always a job for you in Apple PR,” a reflection on the fact that virtually every analyst on the planet was under the control of some sort of Apple-esque reality distortion field.
[2] “Apple Unveils New Mobile Phone,” Rachel Konrad, Associated Press, January 9, 2007
[3] “TV May Be A Tougher Challenge,” Dawn Chmielewski, Los Angeles Times, January 10, 2007.

Michael Greeson, Founding Partner & Principal Analyst, The Diffusion Group

TiVo: Broadband Music Deals; TiVoToGo For Mac; Emmy Award: CES 2007

TiVo: Broadband Music Deals; TiVoToGo For Mac; Emmy Award: CES 2007 TiVo has been shipping their PVRs with an Ethernet port since their series 2 model, promising content delivered over broadband.

At CES this week they told the world a bit more about what they’re going to do about it.

TiVo have signed deals with both Music Choice and RealNetworks to deliver music videos and songs to their panting subscriber’s TVs starting “later in 2007.”

The Real Networks deal is self-described as a “first-of-its-kind integration of the Rhapsody digital music service with the TiVo service,” which will give TiVo subscribers access to over 3 million songs on-demand only using their TiVo remote.

TiVo: Broadband Music Deals; TiVoToGo For Mac; Emmy Award: CES 2007 TiVoToGo for the Macintosh
TiVoToGo – the Tivo add-on service that lets subscribers burn the content they have on their TiVo to DVD and transfer it to portable devices – is now available on the Mac, a year after it was introduced for the PC.

They achieved this through a joint venture with Roxio, utilizing their Toast 8 Titanium software, letting subscribers transfer programmes either one episode at a time or automatically as soon as the TiVo DVR has recorded them.

The standard charge will be $99, but for a limited period it can be bought through the Roxio site with the bonus of getting a FREE TiVo Glo remote.

Emmy Award
TiVo has had a pretty long path to where they are now, which at times has been a little bumpy, so we imagine there is much happiness when they heard that its Interactive Advertising Platform was presented with the Emmy Award for Outstanding Innovation and Achievement in Advanced Media Technology.

The collective ears of the advertising business must be ringing when TiVo’s CEO, Tom Rogers said, “We have proven that consumers will opt in to an advertising message if relevant and provided the ability to not miss their favorite shows.” The Ads-types will see grasp hold of this, praying that this will lead them out of the valley of (income)-death.

TiVoTVToGo

IGF: Independent Games Festival 2007

Moscone Center, San Francisco, CA

The CMP Game Group established the Independent Games Festival in 1998 to encourage innovation in game development and to recognize the best independent game developers. They saw how the Sundance Film Festival benefited the independent film community, and wanted to create a similar event for independent game developers.

The competition, now in its 9th year, awards a total of over $50,000 in prizes to deserving indie creators in Main Competition, Student Competition, and Mod Competition categories at the IGF Awards Ceremony, which will be held the evening of March 7, 2007 at the Moscone Center, San Francisco, CA, and is one of the highlights of the Game Developers Conference.

Link