Archive for October, 2009

Eisner cuts deal for Web shows

October 30, 2009

Pacts with Rogers Communications for funding



Eisner Eisner’s Tornante produces ‘Glenn Martin, DDS’ for Nickelodeon.

Michael Eisner has grand plans for his made-for-Internet production business. Eisner’s Tornante Co. has cut a deal with Canadian media conglom Rogers Communications to help fund the production of as many as 30 Web skeins a year through his Vuguru production shingle. The deal with Rogers calls for Vuguru to become a standalone entity, with Rogers taking a minority interest in the company and controlling Canuck distribution rights to Vuguru productions. Eisner will serve as chairman of Vuguru, which will assemble its own board of directors. The plan is to recruit a CEO and expand the creative staff beyond the handful of execs who have worked with Eisner on the 3-year-old production venture. Vuguru will maintain its offices alongside Tornante in Beverly Hills. “We’re going to put the foot to the metal. We’re trying to show that high-quality content with a promotable hook can get an audience on the Web,” Eisner told Daily Variety. “If you can get an audience, you can get advertisers. I think the big upside in the entertainment business in the future is probably not the movie business or other existing businesses. I think it’s going to be story-driven content delivered through the Internet.” Vuguru has produced several Web skeins since the shingle was formed in late 2006, notably the serial suspenser “Prom Queen” and sports comedy “Back on Topps,” starring Jason and Randy Sklar. (Tornante bought the Topps baseball card and bubble gum company in 2007.) Eisner said Rogers execs approached him about becoming an investor in Vuguru. He hadn’t been shopping for a partner, but he’d gotten to know Rogers’ senior management team after the company acquired Canuck rights to “Prom Queen” as well as “Glenn Martin, DDS,” the stop-motion animation series that Tornante produces for Nickelodeon. A number of high-profile Internet production ventures, some with deep showbiz pockets, have folded or dramatically scaled back operations in the past year, including 60Frames, Mania TV, Disney’s Stage 9 and Turner Broadcasting’s SuperDeluxe. Among the notable ventures that are still investing in the realm are Will Ferrell’s FunnyorDie, Sony’s Crackle, MTV’s Atom and Reveille through its partnership with MSN. Eisner said Vuguru intended to ramp up production long before the deal with Rogers came to fruition. Vuguru has been able to keep its shows from running deficits because it keeps a tight rein on budgets. And it has been successful in recruiting sponsors and licensing its shows in foreign and ancillary markets. A tuner adaptation of “Prom Queen” is also in the works, while “Back on Topps” is being developed as a TV series by Comedy Central. Eisner said the company will focus squarely on scripted series running 120-200 minutes in total. Among the projects in the works is “The Booth at the End,” which he described as “In Treatment” meets “The Twilight Zone,” and “Pretty Tough,” revolving around the lives of young femme athletes. Vuguru productions are generally budgeted at $3,000-$6,000 per minute, though costs vary depending on the talent involved and the source material, among other factors. But even as the company expands its scope, another major factor in keeping costs down is to be selective, he said. “You only put things in development that you’re sure you’re going to make,” Eisner said. “The first time we talked about ‘Prom Queen,’ I knew we were going to make it. The biggest waste of money in this business is script and talent abandonment.” Vuguru has taken a number of different routes in the distribution of its Web product. “Prom Queen” got a promo boost in 2007 through its partnership with MySpace, which had a 12-hour exclusive window for each seg. “Back on Topps” has its home base on but is widely distribbed on other Internet vid sites. The ability to experiment with distribution strategies was one of Rogers’ motives for getting into business with Vuguru, Eisner said. Rogers has a wide footprint in the Canuck media landscape, from cable TV systems to local broadcast stations to Internet and telephony services. Whatever the distrib scenario, his experience has taught Eisner that the key is to promote the shows through social networks and other online media and make it easy for viewers to find the episodes on advertiser-friendly video sites. Eisner, who ended his 21-year tenure as Disney CEO in 2005, said his approach with Vuguru was shaped by his experience in finding creative solutions to fiscal constraints when he worked at ABC and Paramount in the 1960s and ’70s. “Everybody said we couldn’t get anyone to do movies for under $10 million, but that’s what got us things like ‘Footloose’ and ‘Saturday Night Fever,’ ” he said. “I’m always more interested in doing things that are uniquely challenging and that nobody thinks will work.”


Video-On-Demand Now 27% Of Internet Traffic: Study

October 30, 2009

Peer-to-Peer Usage Falls to 20% of Total, vs. 32% In 2008

By Todd Spangler — Multichannel News, 10/26/2009 12:01:00 AM

Video and audio streaming from sites such as YouTube and Hulu now accounts for about 27% of the Internet’s global traffic — up from 13% in 2008 — while consumption by peer-to-peer applications has dropped as a percentage of the total, according to a report by network-management systems vendor Sandvine. Peer-to-peer file sharing represented 20% of all usage on the 2009 survey of 20 Internet service providers worldwide, compared with 32% in 2008. Even though the amount of traffic consumed by P2P applications continues to grow on an absolute basis, video-on-demand applications are growing more quickly, Sandvine CEO Dave Caputo said. Sandvine CEO Dave Caputo”Peer-to-peer is yesterday’s Internet story,” Caputo said. “Every category is growing in aggregate bandwidth, but bandwidth as a percentage is undergoing a massive shift to video.” Sandvine’s 2009 Internet traffic trends report is based on data from more than 20 cable, DSL and fiber-to-the-home service provider networks representing 24 million subscribers worldwide. An Internet-usage survey Cisco Systems issued last week also found P2P traffic had declined from previous levels, although it pegged peer-to-peer at 38%. According to the Sandvine report, the mean average usage per subscriber is around 8 Gigabytes per month, while the median is about 3 Gbytes per month. The top 1% of Internet users accounts for nearly 25% of consumption, a cohort that uses 200 times the data per month as the average user. The Internet’s peak-usage window shrank by two hours, from 6-11 p.m. in 2008 to 7-10 p.m. in 2009, in Sandvine’s analysis. During that “primetime” period, the usage profile among all users was roughly equivalent, whereas the heaviest users (sometimes called “bandwidth hogs”) use their connections 24 hours per day. “From 7 to 10 p.m., we’re all consumption kings,” Caputo said. Given the 7-10 p.m. usage peak, Caputo noted, service providers have a strong incentive to try to encourage the use of non-real-time application at other times. “If you could shift some of that usage to the other 21 hours everybody would win,” he said. The data for Sandvine’s report was gathered between Sept. 1-22 and captured the bits-per-second, per protocol and the number of active hosts per protocol on the network. The data does not include any subscriber-specific information, such as IP addresses.

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Netflix video-streaming goes to PlayStation 3

October 30, 2009

DIGITAL: Users will play access content through a special Blu-ray disc

By Danny King — Video Business, 10/26/2009

OCT. 26 | DIGITAL: Netflix will make its video-streaming titles available to owners of Sony PlayStation 3 games consoles starting next month.

The announcement comes after Netflix said last week that it was about to disclose an agreement with a consumer-electronics company with a “material” user base.

“As a leading game console and Blu-ray Disc player, bringing Netflix to the PS3 system is a real win for both Netflix members and PS3 system owners,” Netflix CEO Reed Hastings said in today’s statement.

Netflix has been increasing sales and subscribers by augmenting its DVD-by-mail delivery with a video-streaming service that includes both a growing number of digital titles as well as a broader base of electronics components that can play them on televisions. About 9 million Americans have PlayStation 3 consoles, the companies said today.

Netflix has been streaming its titles through Microsoft’s Xbox 360 since Nov. 18. The exclusive deal has kept the Xbox 360 the only videogame console to be able to play Netflix’s digital titles. Subscribers to Microsoft’s Xbox Gold service will still be able to stream Netflix titles from their consoles after the PS3 agreement goes live, Netflix spokeswoman Steve Swasey said.

Unlike Netflix’s service through Xbox 360, which is accessible within Microsoft’s Xbox Live, for PlayStation 3 users, Netflix will give its subscribers Blu-ray discs that, when installed in PS3 consoles, will provide access to Netflix’s inventory of more than 17,000 titles, Netflix and Sony Computer Entertainment America said in a statement today. Netflix and PlayStation 3 users can order the free disc at Netflix’s Web site.

Both Sony and Microsoft also have their own digital TV and movie services, but the PlayStation Store and Xbox Live, respectively, offer downloads instead of streaming.

Wedbush Morgan analyst Michael Pachter said early last week that Netflix was on the verge of announcing an additional videogame-console agreement and called Sony the “most likely” partner.Netflix chief financial officer Barry McCarthy said at a New York conference last month that videogame platforms are “ground zero” for hardware devices that will most effectively increase the number of Netflix subscribers who stream video titles, and that the company would consider similar agreements to the one it has with Microsoft as with companies such as Nintendo and Sony for their Wii and PlayStation 3 platforms, respectively, when Microsoft’s exclusivity expires.

Netflix’s video-streaming service has helped its financials. Late last week, the company reported a 24% jump in third-quarter sales from a year earlier as a higher percentage of its broadening subscriber base took advantage of the company’s video streaming.

The No. 1 U.S. DVD-rental service via mail widened its subscriber base from a year earlier by 28% to 11.1 million.

Sony’s PlayStation 3 has lagged behind other next-generation consoles Xbox 360 and Wii in unit sales, however, that picked up after Sony cut the PS3 price by $100 to $299 effective Sept. 1. September unitsales of PlayStation 3 leapfrogged those of long-running games console leader Wii, NPD Group said last week.

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Lionsgate to put Weeds, others on ZillionTV

October 30, 2009

DIGITAL: Studio will provide content to online video-on-demand service launching next year

By Susanne Ault — Video Business, 10/26/2009

OCT. 26 | DIGITAL: Upcoming video-on-demand service ZillionTV has signed on studio partner Lionsgate, which has committed such film/TV content as Mad MenWeeds and Tyler Perry’s Madea Goes to Jail.

Lionsgate joins such other studio partners as Warner Bros., Sony Pictures Entertainment, 20th Century Fox, NBC Universal and Walt Disney Studios.

Lionsgate will make its programming available to ZillionTV as either paid electronic rental or sell-through or as free ad-supported VOD. The studio, whose library encompasses 12,000 movie and TV titles, also will offer the films The Haunting in ConnecticutMy Bloody Valentine 3D and Rambo, among other titles.

“We are delighted to add Lionsgate’s diverse range of television and film properties to the ZillionTV service,” said Mitch Berman, executive chairman of ZillionTV. “Lionsgate has already established itself as the leading next-generation studio committed to finding new and exciting ways to connect with its consumers, and it offers an impressive array of commercially successful and critically acclaimed feature films and television programming in addition to its enormous library of filmed entertainment content.”

Lionsgate president of digital media Curt Marvis said, “We are always exploring new ways to monetize our content in a digital world. We believe that ZillionTV has distinguished itself with a strong business model and an impressive content offering, and we look forward to our partnership to deliver content to our audiences with the customization and immediacy of the online world.”

ZillionTV is expected to launch in the second part of 2010 through partnerships with media service providers. Earlier this month, the company cut staff and replaced its CEO.

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Disney’s Keychest expected before competitors

October 30, 2009

DIGITAL: Analyst: Service will attract core fans, not everybody

By Jennifer Netherby — Video Business, 10/27/2009

OCT. 27 | DIGITAL: Walt Disney Co. is likely to launch its Keychest service, to enable consumers to access digital content on a number of different devices, before competing services offer their own versions of a digital content cloud, market research firm In-Stat said in a research note Monday.

Last week, Disney announced Keychest, technology developed by the studio that would allow consumers to buy digital or packaged content and access it later through different digital platforms, such as mobile phones or videogame consoles. Content would be stored on a “digital cloud” so consumers never have to download it but can always access it.

In-Stat principle analyst Gerry Kaufhold predicts Disney will be able to make some money from Keychest fairly quickly, but he noted it’ll take some time for digital content to catch on with consumers. And even then, some consumers will stick with packaged media.

“Not everybody wants to do this,” Kaufhold said. “Disney has a dedicated group of fans; they’ll be able to get some percent of the Disney fan base to use it because it provides portability of their content and permanence of their content. For Disney, it’ll work, and if it works for Disney, there’ll be others trying it out too.”

He said it’s possible Disney will get its Keychest technology off the ground before the Digital Entertainment Content Ecosystem — a consortium that includes every major studio except Disney, and such major companies as Sony Computer, Microsoft, Intel, Comcast and Best Buy — introduces its own open system to allow digital access to content across platforms.

Kaufhold said Keychest is part of a larger trend by content holders to keep their content under their direct control. He expects Disney will eventually create a content exchange for distributing digital content securely to various service providers under rules the studio establishes.

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CTAM Summit 2009: Stern: Stop Chasing ‘Shiny Objects’

October 30, 2009

Operators, Programmers Should Focus on TV

by Mike Farrell

— Multichannel News, 10/27/2009 6:00:00 PM

Online initiatives are all well and good, but programmers and operators should focus most of their efforts and dollars on the products and services that make up the bulk of their business, rather than on “shiny objects,” Time Warner Cable executive vice president and chief strategy officer Peter Stern said at the closing general session at CTAM Summit ’09. Time Warner Cable’s Peter SternStern said that Time Warner Cable is participating in online initiatives like “TV Everywhere” and the like, but said that instead of focusing on beating back the threat of the Internet on the traditional cable business, operators should focus their energies on giving customers what they want. Stern said the focus should be “to deliver the best possible experience to the customers, rather than to deliver the next shiny object.” He added that the average person views four-to-five hours of television and two-to-six minutes of Internet video per day. And even the core 18-to-24 demographic only views about 6 minutes of online video per day. What cable operators should do is find ways to help consumers navigate seamlessly between the two mediums. “It is incumbent up to us to give consumers a great navigation experience and enable those customers to get the content they want when they want it,” Stern said. “And we should deliver it on the device they want it on. But we shouldn’t lose sight of the 97% that is watching on TV.” Time Warner Cable has had success in delivering products that allow time-shifting on TV, including StartOver and LookBack and Stern said a new product being worked on is On Channel On Demand, which takes the “On Demand experience and puts it on the programmer’s channel.” Other members of the panel session agreed. Turner Broadcasting Systems vice chairman Andy Heller said that programmers and operators need to pay attention to customer behavior. And he added that consumers who may be used to getting video content online for free are willing to pay for it as long as that content is compelling. While some online services like Hulu have been criticized by distributors for threatening their business models by delivering free content online with few advertisements, Hulu CEO Jason Kilar said the content delivered on his service is different. Kilar (who spoke with Broadcasting & Cable’s Claire Atkinson after the session) said that about 40% of the content viewed on Hulu is short-form programming that never finds its way to the living room and 50% of the content viewed in a month wasn’t available in the living room for the past year. Hulu offers viewers a choice, he said. Heller said the popularity of Apple’s IPod and ITunes services proves that given a compelling product, customers are willing to pay for what they had been getting illegally for free. “Apple has taught us many things, not the least of which is the consumer isn’t necessarily desirous of being a thief,” Heller said. “If you give them a better product and reasons to do it in an honest fashion, they are more than willing to pay for what they get.” Heller said that Hulu and Apple are two can serve as models for ways to deliver compelling content for a fee to customers in the future. “What we have are two relatively new entrants into our business that are demonstrating to us ways to satisfy consumers that we need to pay attention to and give them reasons to come back to the core,” Heller said.

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Plug and Play Internet on your TV: Roku launches two new set-top boxes

October 30, 2009

DIGITAL: New components to retail for $79.99, $129.99

By Danny King — Video Business, 10/27/2009

Roku HD-XR picture
Roku’s HD-XR online-video set-top player is priced at $129.99.

OCT. 27 | DIGITAL: Roku has launched two new online-video set-top players and will launch a Roku Channel Store on its Web site offering content from new partners to be announced soon, the company said in a statement today.


The closely held company, whose set-top boxes let Amazon Video On Demand and Netflix customers play digitally delivered movie and TV titles on their TV sets, has introduced a standard-definition set-top box for $79.99 and a $129.99 high-definition box with an 802.11n connectivity protocol that’s considered better for video-streaming HD content than the $99.99 box Roku released last year. The high-def HD-XR also includes wi-fi and a USB port for future use.

Last year, Roku’s set-top boxes were the first components Netflix used to make its video-streaming titles playable directly on TVs. Amazon began streaming its digital movie and TV titles through Roku set-top boxes in March. Between those two services, Roku users have access to about 60,000 titles.

Roku, which was spun off from Netflix by founder and CEO Anthony Wood, is looking to boost sales with a wider range of both hardware products and content that they can play on TV sets.

The Roku Channel will be launched within the next few weeks, the company said. In the past few months, Roku has started channels for such content providers as Major League Baseball and podcast provider Mediafly. The company also improved the design of its interface for Netflix customers.

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Paramount bows Web series on MySpace, Circle of Eight will later have exclusive Blockbuster rental run

October 30, 2009

By Susanne Ault — Video Business, 10/27/2009

OCT. 27 | DIGITAL: Paramount Digital Entertainment will launch new Web series Circle of Eight at before rolling out the project as a rental exclusive at Blockbuster and Blockbuster On Demand.

Circle of Eight debuts today on MySpace as a three-episode series. Seven more episodes of the show, which tracks a woman’s supernatural experiences at a historic building, will be presented through Dec. 8. The series integrates social gaming and networking, with viewers able to post comments for others to see.

Mountain Dew partnered in the project as a sponsor, and the soda brand is heavily featured in the Circle of Eight plot line. Mountain Dew plans to widely promote Circle of Eight through theatrical and TV spots.

Adobe powered the technology behind Circle of Eight’s creation.

At an unspecified time after its MySpace run, Circle of Eight will be compressed into a full-length film, with additional scenes and an alternate ending, for exclusive Blockbuster rental distribution. The chain will offer the title in select Blockbuster stores, through its mail service as well as through its new VOD offering. No other sell-through or rental retailer will offer the product.

Circle of Eight shows our ongoing commitment to launch studio-quality entertainment on digital platforms,” said Thomas Lesinski, president of Paramount Digital. “With strong, mutually beneficial relationships with brands such as MySpace, Mountain Dew, Adobe and Blockbuster, we can launch premium-quality content in the digital window and continue to monetize Circle of Eight on additional platforms, multiple windows and in international territories.”

Blockbuster executive VP/chief merchandising officer Bill Lee added, “We are thrilled to bring such an innovative entertainment experience to our customers. This is one more indication of Blockbuster’s continued commitment to deliver exclusive content to consumers on as many screens as possible, whether that’s through our stores, by mail or through our on-demand service.”

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TV, online channel Epix launches Friday

October 30, 2009


DIGITAL: Verizon offering programming for $9.99 monthly fee

By Jennifer Netherby — Video Business, 10/28/2009

OCT. 28 | DIGITAL: Epix, the new premium TV and online movie channel being launched by Viacom, Paramount, MGM and Lionsgate, will go live Friday through Verizon.

Verizon will offer the channel for a $9.99 monthly fee to FiOS subscribers, allowing them access to the channel on TV and online. Epix also will make more than 150 movies available each month for online viewing at for subscribers.

Verizon is the only telco that has so far signed on to carry the new premium movie channel.

“We’re taking the lead in delivering the richest and best entertainment to movie lovers, on whatever platform they choose,” Verizon VP of content strategy and acquisition Terry Denson said in a statement announcing the launch.

Verizon has offered a free preview of Epix on demand since August. The high-definition and standard-definition versions of Epix will be offered to FiOS TV customers for free this weekend.

Epix will debut with a two-hour Madonna concert, Sticky &Sweet Tour: Live From Buenos Aires. The channel also will air Iron Man, comedy special Eddie Izzard: Live From Wembley and 15 other movies, including The Curious Case of Benjamin ButtonMedea Goes to JailThe Pink Panther 2and Indiana Jones and the Kingdom of the Crystal Skull.

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Warner launches on-demand site in Japan, DIGITAL: Content can be viewed on PCs, mobile phones

October 30, 2009


By Jennifer Netherby — Video Business, 10/28/2009

OCT. 28 | DIGITAL: Warner Bros. Entertainment Japan will begin offering Japanese consumers the ability to rent or buy Warner movies and TV shows directly from the studio for viewing on PCs and mobile phones by the end of November.

Warner On Demand will offer new and recent TV and movie titles including the upcoming Harry Potter and the Half-Blood Prince as well as classics from its library, some of which have never been released on disc.

Consumers will be able to transfer films between their PC and mobile phones from NTT Docomo for viewing on either device.

Warner said it is launching the service to give consumers more ways to watch movies and to build a more direct relationship with them, according to the announcement. The company is calling it an extension of a global WB loyalty program started in the U.S.

Warner will send regular news and updates from the studio on theatrical, Blu-ray Disc, DVD and digital releases to consumers.

Warner Bros. Entertainment Japan president and representative director William Ireton said Warner On Demand is part of a “strategic initiative perfectly suited to Japan’s leadership in technology,” and one that will help the studio grow the Japanese video market.

The site will be the only one in Japan to offer WB content through electronic sell-through.

Warner has partnered with Japanese software company Skillup Japan to deliver digital content through Skillup’s content delivery platform.