With the music technology landscape every shifting, Pat Welsh decides to take a look around the entertainment business as a whole in this week’s Programming To Win column. Welsh takes a “radio-centric perspective” on a number of other entertainment options, including Netflix, YouTube and Pandora.
Pat Welsh
By Pat Welsh
In addition to consulting work with radio stations and TV networks around the world I also work with a number of new media, entertainment and technology clients. As such, it gives me a unique perspective to view the entertainment world. The big news lately has been the cloud-based music services from Amazon, Google and Apple. Cloud services have existed for years, but with some of the biggest companies in the world involved, we’ll see if this technology reaches a tipping point.
Radio stations are entertainment brand distributed across many different platforms, so it’s important to stay on top of the key trends in other areas of entertainment. So here’s a radio-centric perspective on other important trends in music and entertainment.
Netflix
Netflix has done a stunning job of reinventing its business in a short period of time, transitioning from a mail-order DVD rental service into a streaming video behemoth. Netflix now makes up 20% of all Internet bandwidth in the US during primetime. The company dominates in movie streaming, with 61% of the market; no other company is in double digits.
The evolution has been a tremendous success. Netflix now has more subscribers than any cable company or satellite TV provider. This kind of showing by a subscription video service from a smart and aggressive company provides a good model for the new cloud-based music subscriptions services that have just launched. Who will get it right in music?
YouTube
YouTube won’t be left behind in movie streaming. It has reportedly signed deals with a number of studios, allowing it to launch its own movie rental streaming service. Since early last year, YouTube has been offering a number of independent movies for $2.99. They started this following Sundance in 2010, but the new deals with the big studios bring this to a whole new level.
The other news with YouTube is that Google has a plan to refocus YouTube on channels. The company wants to do a better job of bundling content to encourage users to spend more time on the site. YouTube has tremendous reach, but Google wants to make the site stickier.
Streaming Video Apps
The land grab for streaming video also includes a number of TV providers and programming producers. Time Warner cable recently launched a live streaming iPad app, “TV Everywhere,” for subscribers to both its cable and broadband Internet services. It’s designed to allow customers to stream programming that they already subscribe to, to their iPads within their own homes.
Even with those limitations, Time Warner has faced a storm of controversy from producers. Disney has embraced the idea, but many others made Time Warner remove their channels. In the long run, these kinds of services will become more prevalent. It’s just a matter of who gets to provide them. Here are several TV networks that have launched their own apps:
· CNN’s “TV Everywhere” makes CNN available to pay-TV subscribers; TNT and TBS are expected to be added soon.
· HBO has created HBO GO and MAX GO to allow subscribers of HBO and Cinemax to access the programming they subscribe to on mobile devices
· Watch ESPN is Disney’s effort to allow in-app streaming of all ESPN networks.
3D Video
After big growth in 2009 and 2010, some are panicking about falling 3D movie ticket sales this year. But unlike the 3D fads of the ‘50s and the ‘80s, 3D in the 2010’s has more support. For instance, most TV manufacturers have committed a lot to 3D TVs as a way to keep sales at a high level. After all, with so many people having upgraded to HD in the last few years, TV manufacturers need something new to keep sales moving forward.
Three areas are important for the growth of 3D: glasses-free technology, compelling content, and gaming. Everyone seems to agree that if glasses-free 3D can make a big breakthrough sometime soon, 3D will have a much clearer path to success.
Content is crucial too, but even if Hollywood goes through lulls, many people are bullish on the use of 3D for sporting events and other live entertainment specials. And if that’s not enough, video game manufacturers are also betting heavily on 3D. Sony just announced a new 3D console which will go on sale later this year.
The iPad
Among tablet devices, there’s no contest; the iPad rules. Apple has sold over 25 million iPads in just over a year. One of the most fascinating aspects of the iPad is how it’s displacing other devices. Nielsen did a survey about this recently, finding that desktop PCs and laptops ranked first and second as the devices that people were using less often once they acquired a tablet. Now, other companies have surveyed the PC market and found that PC sales are poised for their first quarterly sales drop ever.
People use tablets while watching TV more than any other activity, but radio isn’t completely out in the cold. Radio has embraced the iPad indirectly, through the adoption of mobile apps. But only a few have gone the next step to create iPad-specific apps, ones that will take advantage of the iPad’s larger screen and bigger interface.
Pandora
Terrestrial radio’s biggest competitor in online radio is readying for an IPO sometime soon. As part of its filing with the FEC, Pandora claims 94 million registered users, of which 34 million are considered “active.” Both of those are big numbers, but the most important number is written in red. Pandora has yet to turn a profit, but they predict they’ll do so sometime in 2012.
They’ve also recently announced the addition of comedy to their music service, adding over 10,000 comedy clips from more than 700 comedians. Pandora will take the same “genomic” approach to coding all of the comedy routines for specific characteristics to make the customized channels.
Spotify
Spotify enjoys iTunes-like dominance in its home base of Sweden and a large market share across several other countries in Europe. But what about the U.S.? It’s a running joke about Spotify’s intention to launch in the next quarter. Deals with the major labels for U.S. licensing have been elusive.
Perhaps the Apple iCloud deal will provide the impetus for Spotify (and Google and Amazon) to bite the bullet. Some who’ve used Spotify say they think it’ll be superior to Apple’s iCloud service. But Apple already has a successful music brand in the US. That’s a big shadow that Spotify will have to fight to get out from under, if they ever do settle with the labels.
Hitch Radio
Finally, Hitch Radio recently launched its service. Hitch is unique in that it’s an online service that encourages the use of terrestrial radio. Hitch allows users to search and stream thousands of broadcasts from around the world. Users can search by station, artist, song or keyword. Each search pulls up a list of options and the user can begin streaming their selection until they want to “hitch” a new ride on another station.
There’s also a social networking element to Hitch that’s built in. Friends can hitch rides on each other’s streams, publish to social networking accounts, and approve/disapprove of their friends tastes in programming. Check it out for yourself at HitchRadio.com.
Pat Welsh, Senior Vice President/Digital Content, Pollack Media Group, can be reached at 310 459-8556, fax: 310-454-5046, or at pat@pollackmedia.com.
