The Great Land Grab: A Look Back at the Last Year in Media & Entertainment
What About the Living Room?
Beyond this move toward the gaming console, there’s another loose coalition of fighters that are moving toward dominance in the living room, in a move that may upset the balance of content delivery.
Xbox LIVE Microsoft’s Xbox LIVE introduced instant-on HD streaming as well as integration with social media. One band of fighters comes from the original on-demand content space: movie rentals.
Last year, Roku launched a $99 Netflix player, which allowed customers of Netflix’s mail-order DVD rentals to also view a growing number of movies via on-demand streaming on the Roku box. The Roku-Netflix partnership has proved successful, with Netflix’s CEO Reed Hastings saying that the company is finally experiencing significant uptake in the number of Netflix subscribers who streamed movies in the last year—something Hastings has been waiting for since 1998.
"In ’98, when we started our initial venture funding, we thought we’d be at 50% streaming within five years," Hastings said in a recent Wall Street Journal article. "When we got to 2003, our streaming was zero. So we said, OK, by 2008, it’ll be 50%. Five years always seems like such a long time. In 2008, it had started, but it was still 1%."
Netflix is seeing streaming uptake rates that will take it close to 50% within the next 2 years, if growth remains linear.
"The lesson is, if you keep making the same prediction often enough, it eventually becomes true," quipped Hastings.
Roku is also expected to expand its offerings beyond Netflix, including live and on-demand MLB games, plus the addition of the Amazon on-demand movie and television show libraries, to offer more than 65,000 titles.
Another group is approaching from the opposite flank, using a box to push internet video content on to the big screen.
"The first dedicated Boxee box [device] will be coming in 2010," CEO and co-founder Avner Ronen said at a recent industry event. "In Brooklyn on Dec. 7, we’ll show mock-ups and hopefully announce who we’re working with on this first Boxee box. We’re also in discussion with several device manufacturer partners."
Noting that the December 2009 prototype Boxee box was by no means a finished product, Ronen added that Boxee has "updated our alpha to a more robust beta which has a whole new user experience, including social interaction."
Social interaction is an area that the Xbox is addressing with its Facebook still-image integration, although Microsoft’s Whitten says it will be a bit longer before Facebook videos come to the Xbox. Whitten sees a bigger issue, however, in the living room.
"One of the things holding back the living room from having communities rather than audiences," says Whitten, "is the fact that 14 different remotes are required to do 14 different things. The interface we use—the game player—is something we’ve used and will continue to use due to its simplicity. We’re also looking at ways to remove barriers for a nongamer, so that it’s intuitive for anyone who wants to become part of the Xbox community, in all its forms."
One way to eliminate numerous remote controls, though, is to integrate live and on-demand streaming technology directly into a device that’s already in the living room.
Netflix isn’t just stopping at the Roku box, however. Hastings told Reuters in late 2009 that he hopes Netflix’s streaming service will eventually be on all the Blu-ray players and all the internet TVs.
"We will get to mobile eventually, including the iPhone," said Hastings, adding that for now, mobile is not as big a priority as getting Netflix "on the TV, on Blu-ray and on the video game consoles."
Currently, Netflix’s gaming console dance card is full, as the company has an agreement to deliver Netflix streaming exclusively to the Xbox 360. But Hastings says the company is working hard to bring Netflix streaming to several additional nongaming devices.
The big-box retailer Best Buy is, perhaps, the one major player outside of specific device manufacturers that can force integration of live streaming and on-demand content into consumer living room devices. Best Buy announced in late 2009 that it will partner with Sonic Solutions to push streams and progressive downloads to a variety of electronics, including Insignia, its own internal brand.
Roxio CinemaNow from Sonic Solutions allows Best Buy to move beyond one-time revenues from the product sale and into a recurring revenue service model. The company already has agreements with device manufacturers to create Best Buy-only exclusive versions of popular televisions, Blu-ray players, and event computers.
Best Buy intends to integrate the streaming solution into Insignia-brand TVs and Blu-ray players, with the on-demand service intended to be available at the time of this issue of Streaming Media’s publication.
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