Entertainment Industry

Category: Online Video

Disney strikes deal to distribute movies to Chinese cable viewers

The Muppets
The Walt Disney Co. has reached an agreement that would bring Pixar Animation Studios' "Cars 2," Disney's "The Muppets" and other approved films to Chinese cable television viewers, broadening the Burbank entertainment giant's access in the world's most populous market.

An executive from You On Demand said Wednesday that it had struck a licensing deal with Disney to rent current films, as well as classic movies such as "The Lion King" or "Mary Poppins," through its recently launched on-demand service in China. These titles also would be part of a planned Netflix-like movie subscription offering that's expected to begin in June.

"Disney films define quality family entertainment and we're thrilled that You On Demand will be their showcase to the world's largest television audience," said You On Demand Chairman and Chief Executive Shane McMahon.

You On Demand operates under an exclusive joint venture with China Home Cinema, the HBO-like arm of China's broadcast movie channel, CCTV-6. You On Demand provides the video-on-demand service that is available to about 3 million viewers through cable operators in the Shandong, Jilin and Zhejiang provinces. 

Over time, McMahon hopes to expand the service's movie offerings and the availability in a cable TV market that already dwarfs that of the U.S., with some 187 million cable households. Warner Bros., with its library of hundreds of titles approved by the Chinese government's censors, was the first to offer its films through You on Demand. Earlier this month, Lionsgate struck a licensing deal to make available such titles as the Oscar-nominated "Hotel Rwanda," the popular "Saw" franchise and older movies like "Dirty Dancing."

You On Demand charges viewers $1 to $3 to rent a movie through their cable provider — a nominal fee that McMahon hopes will be attractive enough to allow You On Demand to compete with inexpensive pirated DVDs that are widely available in China. He said studio executives hope that services like You On Demand will convince Chinese viewers to pay for a convenient, high-quality movie experience. 

One investor, Neil Danics of SPAC Investments, points to an announcement Wednesday from Youku Inc., an Internet-based on-demand service that licenses movies from Warner Bros., Paramount and 20th Century Fox.  Since launching a year ago, Youku said it has processed more than 1 million pay-per-view and subscription orders.

"That tells us the Chinese people do pay for content," said Danics.


Warner Bros. to distribute films in China on cable TV

Shane McMahon looking to make his mark with China venture

China to give studios more access

Photo of Walter, the newest Muppet, getting a pep talk from Kermit the Frog in "The Muppets." Credit: Scott Garfield/Disney.

— Dawn C. Chmielewski

Virtual studio in Venice dives into the ocean

Ever wanted to go scuba diving without actually taking a dip in the ocean?

Now you can do it virtually, thanks to an unusual oceanic environment created by a start-up called Wemo Media.

The Venice-based company has spent the last two years developing the Web application, named theBlu, which simulates an oceanic environment and combines elements of an animated movie, online game and social media.

Unlike a traditional studio, Wemo functions as a virtual studio in which the animators and computer programmers aren’t housed in a traditional bricks-and-mortar building. The fish and fauna are created by artists from Los Angeles to Mumbai and are programmed to behave as they would in their natural habitat — allowing viewers to tag, follow and even buy their favorite fish.

TheBlu has been in a test phase for several months but officially debuts this week, the first of several interactive entertainment projects Wemo hopes will harness the global reach and interactivity of the Web.

Read more about theBlu in Saturday's business section.


A happy medium between animation and live action

You Tube awards cash, schooling to budding videographers

'Puss in Boots' showcases work by India animators for DreamWorks

-- Richard Verrier

Photo: Video on the making of theBlu. Credit: Wemo Media

Wal-Mart adds streaming video to its website

Photo: A screen shot of the film "True Grit" is shown as one of the titles available on Wal-Mart's new video-streaming service. Credit: Associated Press / Wal-Mart Stores Inc. Wal-Mart Stores Inc. has added streaming movies to its website as the world's largest retailer attempts to grab a bigger share of the online movie market from rival service Netflix Inc.

The decision to offer movie sales and rentals through Walmart.com comes just two weeks after Netflix raised prices for the majority of its customers. The price hike provoked howls of protest from consumers and disappointing subscriber growth projections, leading to a significant drop in Netflix's stock price.

Wal-Mart, long the nation's leading seller of DVDs, signaled its intent to double down on digital movie distribution in February 2010, when it spent a reported $100 million to acquire Vudu, a Silicon Valley start-up that was gradually being added to home entertainment devices.

Since the acquisition, Vudu has been able to leverage the giant retailer's clout with manufacturers to incorporate is service into more than 300 consumer electronics products, including Internet-connected television sets, Blu-ray disc players and the Sony PlayStation 3 game console.

This spring, Vudu began offering movie rentals and purchases via the Web, through Vudu.com, positioning the service to better compete with the likes of Amazon.com, Apple Inc.'s iTunes or Blockbuster.

Offering 20,000 movie titles for rental and purchase through Wal-Mart's website, which attracts about 40 million monthly visitors, is a further step in that direction. It better positions the retailer to take on established online players, as well as traditional competitors such as Best Buy, which last may bought digital video service CinemaNow.

On Wal-Mart's website, the movies will be available the same day the DVDs go on sale in stores. Rental prices range from 99 cents to $5.99. Digital purchases are priced from $4.99 to $24.99.

Walmart.com general manager Steve Nave said the retailer is following its customers as they increasingly embrace digital movie rentals and purchases.

"We know customers are starting to shift their behavior, in terms of how they consume their media," Nave said, adding, "As as customers make that change, we don't want to lose that customer as they shift to digital."

Wal-Mart has been a laggard in the digital space, vying for third place with Sony's PlayStation Store and Amazon's Video-on-Demand. Its Vudu service currently accounts for fewer than 10% of all transactions -- and even less revenue, because of its 99 cent promotions, according to researcher IHS Screen Digest.

"iTunes is the market leader in this field, accounting for approximately 65% of all movies and TV shows bought or rented over the Internet," said Arash Amel, IHS's digital media research director.

Amel doubts that incorporating the Vudu service on Wal-Mart's site will move the needle, in terms of market share. Consumers have shown through the failures of other services that they don't want to watch movies on computers.

"The real strategic significance here is this is the fist step in the retailer trying to once more figure out how online video can add any meaningful value to the e-commerce components of its core business of physical goods," Amel said.


Wal-Mart to acquire movie download provider Vudu 

-- Dawn C. Chmielewski

Photo: A screen shot of the film "True Grit" is shown as one of the titles available on Wal-Mart's new video-streaming service. Credit: Associated Press / Wal-Mart Stores Inc.

Online advertising to reach $31 billion in 2011

As people spend an increasing amount of their time online, advertisers are swiftly following.

The U.S. online advertising market is expected to reach $31.3 billion this year, according to a new forecast from market researcher eMarketer. Spending is projected to grow by 20% from 2010 when advertisers invested about $26 million in online marketing. EMarketer_US_Online_Display_and_Search_Ad_Spending_2010-2015_128184

"As consumers continue to increase their time spent online, and as the resurgent economy continues to bolster ad budgets, we're going to continue to see an influx of dollars toward the Internet," eMarketer analyst David Hallerman said in a statement.

The increase is fueled primarily by significant gains in spending on display advertising, a category that includes banners, online video and sponsorships. U.S. advertisers are expected to spend $12.33 billion on online display ads this year -- a gain of nearly 25% from a year earlier. Video advertising is the fastest growing online ad format. 

"High inventory and lower pricing have made banner and video ads increasingly attractive formats for brand advertisers, many of which have seen their online ad budgets grow during the past year," Hallerman asaid.

These projected gains in display ad spending are narrowing the traditional gap between these types of ads and those placed next to Internet search results. Spending on search ads will reach $14.38 billion this year, up 20% from a year ago.

Online viewing has been growing fast, but is still dwarfed by the amount of time people spend in front of the TV.

The average American watched 34 hours and 39 minutes of TV a week, according to Nielsen Research -- with the most ardent viewers over the age of 65. By contrast, 143.9 million Americans went online to check out video in January and invested about 4 hours and 39 minutes a month watching on their PCs and laptops.

Online advertising has yet to catch up to spending on traditional platforms. TV advertising represented more than half of the $131 billion spent in the U.S. on overall advertising last year, a 6.5% increase from 2009, according to Kantar Media, which monitors ad spending.

-- Dawn C. Chmielewski

Image: U.S. Online Search and Display Advertising graph. Soruce: eMarketer

YouTube awards cash, schooling to budding videographers

Zach King Thumbnail
Even as Google Inc.'s YouTube works to secure newly released Hollywood films for users to rent, the dominant online video site is cultivating a promising crop of amateur videographers through funding and professional training.

YouTube identified 45 users, among thousands of entrants, to participate in a pair of programs designed to support original content creation. YouTube says some 35 hours of video are uploaded every minute, driving billions of views every year. To keep YouTube as a launching pad for new talent, it has begun this program of funding, education and promotions.

Twenty people were selected to participate in YouTube Creator Institute, where they will gain new-media training at either the USC School of Cinematic Arts or Columbia College Chicago. Another development program, YouTube NextUp, awarded $35,000 each to 25 creators to help advance their work on YouTube.

Zach King, a 21-year-old film student at Biola University, said he would use the cash he received from the NextUp program to develop a series of short films that focus on storytelling. His award-winning submission, "Contest Entry Gone Wrong,"  relies on special effects -- he appears to dodge an assault by airstrikes and groundfire as he calmly pleads his case to be selected for the YouTube award.

"I started my channel two years ago, FinalCutKing, I started posting video tutorials," King said. "I recently turned to posting cool videos, doing digital effects."

One video in particular, in which King seems to be demonstrating a fictional "hologram setting" on his new Apple iPad 2, attracted notice. "That's why we decided to enter a special-effects video on YouTube," he said of the video shot with his friend, Aaron Benitez. "It was different."

-- Dawn C. Chmielewski

Photo: Zach King from his video, "Contest Entry Gone Wrong."  

YouTube co-founder Chad Hurley exits YouTube

Chad Hurley, one of the three original founders of the groundbreaking website YouTube that radically altered the media landscape, is stepping down as its chief executive, the San Bruno, Calif., company said Friday.

Hurley Hurley, 33, let the news slip Thursday night during a technology conference at Trinity College in Dublin, Ireland. When asked what he's up to, Hurley responded that he would be giving up his CEO title and take on an advisory role.

The company said Salar Kamangar, vice president of product management, would assume the role of CEO.

News of Hurley's resignation did not surprise many YouTube employees, who have gotten used to seeing less of Hurley over the last two years as Kamangar took on greater responsibilities of running the online video company.

Kamangar came to YouTube from Google Inc., where he and a small team of engineers came up with AdWords, the revenue engine that drives much of Google's profit. He is said to be charged with finding ways for YouTube to make money from the billions of user-generated online videos it serves up each day. Google, which owns YouTube, has said the site is on the verge of profitability, thanks to Kamangar's efforts to cultivate the type of premium content that can command higher advertising rates.

Google purchased YouTube for $1.65 billion in 2006, just over a year after Hurley co-founded the company with Steve Chen and Jawed Karim. Hurley's share from the sale was close to $350 million.

Hurley co-founded YouTube aftera stint at PayPal, which is where he met Chen and Karim. The site, which launched in 2005, was intially a haven of amateur videos and pirated content from movies and TV shows. YouTube has had a love/hate relationship with traditional media companies, including Viacom, which got into a heated legal battle over pirated material on the site. Many media companies now, however, use YouTube as a promotional platform for their content.

YouTube has also become a place for gotcha moments. Gaffes by politicans and world leaders are often uploaded to the site for the world to see, and "YouTube moment" has become a catchphrase for when someone makes a blunder in front of the cameras.

-- Alex Pham

Photo: Chad Hurley. Credit: Simon Dawson / Bloomberg.



Sony's Crackle movie and TV streaming service debuts on Android phone app market

Now playing on an Android phone in a hand near you: Sony's Crackle service for streaming movies and television shows.

Crackle for Android, which debuted Wednesday on Google's Android Market, gives viewers access to hundreds of titles. The free version lets viewers watch condensed snippets of TV episodes. A premium version costing $4.99 a month gives viewers access to a bigger roster of titles from Columbia Pictures, Tri-Star, Screen Gems and, of course, Sony Pictures Classics.

Crackle_Movies_Android With featured titles such as "La Femme Nikita," "Bram Stoker's Dracula," "Taxi Driver," and "Drunken Master," the lineup is largely back catalog titles rather than hot new releases.

Sony claims to be the first to offer an app that can stream TV shows and full-length movies on mobile phones that have the Android operating system, developed by Google.

There's no dearth of entertainment options among the 67,747 Android applications, according to Appolicious, an app review and recommendation site. But when it comes to movies and TV shows on Android, the offerings resemble swiss cheese, with large gaps of missing content.

Blockbuster, for example, has an app that can stream movies, but only on a handful of devices including Motorola's Droid X phones from Verizon and HTC's HD2 handset from T-Mobile. YouTube, which is owned by Google, has more than 300 movies users can rent, but lacks titles from several major Hollywood studios. Another app, FuelTV, carries mainly extreme sports videos. And Slingbox can access only TV programming and recorded shows from the owner's home television.

Eric Berger, senior vice president of Sony Pictures' digital network and head of Crackle, said the service seeks to differentiate itself by programming a select number of genres such as science fiction, horror, comedy, action and thriller.

"We don't just aggregate content," Berger said. "We program and curate our titles to fit the tastes of our viewers."

The service began as an online video sharing service called Grouper Networks in 2004 and was purchased by Sony in 2006 for $65 million. Sony renamed the service Crackle and began streaming licensed content from its own movie and TV archives as well as content from other studios, attracting an average of 7 million unique online viewers a month this year, up from 5 million two years ago.

Sony is launching the mobile version of Crackle on Android, but has plans to develop one for Apple's iPhones, where Netflix currently dominates with its Instant Watch application for subscribers.

-- Alex Pham

Photo: Crackle application on an Xperia cellphone running Google's Android operating system. Credit: Sony Pictures.


The Morning Fix: Where'd all the fanboys go? Hulu's IPO a reach? HBO not shaking over Netflix.

After the coffee. Before realizing we're almost in the dog days of August.

Will Wall Street embrace a Hulu IPO? Word that Hulu, the video-sharing site owned by Disney, NBC Universal, News Corp. and private equity firm Providence Equity, wants to launch an initial public offering is raising a lot of questions about whether the timing is right. It appears that Providence Equity may be pushing the move as a means to get out. In the meantime, it remains unclear how Hulu's pay plans will be embraced by its audience. Also, as more programmers try to take control of their online destinies, will Hulu really be able to become the one-stop shop for TV content online, or will there never be such a place? A look at Hulu's plans and reaction from the New York Post, Wall Street Journal, Hollywood Reporter and Los Angeles Times

Did the fanboys get lost on the way to the multiplex? Universal's "Scott Pilgrim vs. the World" had the buzz, but it didn't get the box office in its opening weekend. The movie, based on a graphic-novel series and starring Michael Cera as a teen who has to battle his girlfriend's exes, took in only $10.6 million. Of course, once again the debate is going about whether films based on comic books or graphic novels that are not Batman or Spider-Man can translate into big bucks. Marc Platt, a producer of the movie told the Los Angeles Times that the first weekend was "disappointing" but added that "the film's financial story cannot be written after one weekend "but in weeks and months and years." Let me throw something out there. As adorable as Michael Cera is, he seems to be playing the same role in every movie. He needs to do something different, and casting directors need to find a new lovable geek. More on why Scott Pilgrim didn't save the box office from the Los Angeles Times and Hollywood Reporter.

HBO shrugs off Netflix. All the talk last week about Netflix striking a deal to stream movies soon after they appear on the new pay-TV channel Epix is supposed to be a direct blow at HBO. Only problem is someone forgot to tell the Time Warner behemoth that. HBO says it's not interested in a deal with Netflix nor does it feel threatened by Netflix. The network has some crazy idea that it makes sense to keep the online rights to the content it spends so much on to itself instead of throwing that content all over the Web and let its value be diluted. "There is value in exclusivity,” HBO Co-President Eric Kessler told Bloomberg.

Apple versus Google on the small screen. With search giant Google getting ready to spring Google TV on the world this fall, Apple is looking to beef up its own foundering Apple TV. Both companies want supremacy in connecting the Internet to the TV. USA Today looks at the turf battle and whether the rest of us want one more box next to our television.

Rupert gets revenge for Obama causing L.A. traffic jams. News Corp., the media conglomerate headed by Rupert Murdoch, gave $1 million to the Republican Governors Assn., according to Politico, the D.C. website that tracks Capitol Hill. A News Corp. spokesman told Politico that the company is in lock step with the association's "pro-business agenda."

Inside the Los Angeles Times: Patrick Goldstein on Hollywood's aging business model. Officials of CKX, parent of "American Idol" producer 19 Entertainment tells potential suitors to show them the money. Developer Hal Katersky, whose no stranger to controversy, has big plans for Hollywood.

-- Joe Flint

It can't all be Hollywood. Follow me on Twitter for all your Redskins news: Twitter.com/JBFlint

Hulu Plus gets lots of minuses on iTunes

One the sacred commandments of retail is "Thou shalt not raise prices, at least not so noticeably as to incur the wrath of thy customers."

Seems that rule also applies to online videos. Hulu Plus, a $9.99-a-month video service introduced Tuesday, is getting lots of minuses when it comes to user ratings for its iTunes app, which lets subscribers view Hulu videos on Apple Inc.'s iPads. 

Hulu Plus iTunes Ratings As of 9 a.m. Friday, the Hulu Plus app had received 3,173 one-star ratings out of a total 3,836 on iTunes. That's 83% of reviewers claiming to be unhappy with the app. Check out a snapshot of the full ratings profile, pictured on the left.

Just for comparison, 24% of those who reviewed the Netflix app gave it one star.

Why all the frowns for Hulu Plus?

Hulu executives this week said the new service would be in addition to the site's current offering of free TV shows. But viewers aren't seeing it that way. One reviewer summed up the rage in a relatively tame comment, saying, "Why pay $10 a month for something that was free on my computer?"

Another common complaint: the ads. One reviewer wrote, "They want $10/mo to watch TV shows WITH COMMERCIALS included. No thanks." Another review, entitled "Useless," read, "What idiot would pay 10 bucks a month to watch ads."

Note to TV executives: Fabulous app! Except for one small thing. Viewers don't seem to like it.

-- Alex Pham

Teleshrink? NBC.com wants to suss out what you will want to watch next

NBC logo What do you feel like watching?

NBC.com wants to answer that question for you, and it's using technology from The Filter, a company partly funded by British rocker Peter Gabriel, to do so.

Anticipating what Web viewers want to watch next is not as easy as it looks. What you feel like watching is not going to be the same thing that your best friend, looking at the same Web page, is going to want to see. So NBC.com has to know who's looking at its site and be able to read their minds -- sort of.

That's where The Filter comes in. It tries to figure out the tastes of each person, based on the digital breadcrumbs they leave behind on their computers. That includes things such as what a person has just searched for, clicked on, listened to or moused over.

The method is called "session psychology," and it's the latest development in the evolution of Web 3.0, in which viewers are inundated with billions of hours of potential entertainment options. In an era when 24 hours of video are uploaded to YouTube every minute, the trick is to match the right video to the right person.

"Finding the next piece of content that you're going to like is the single most important problem on the Internet today," said Douglas Merrill, a board member at The Filter and former vice president of engineering at Google.

The Filter, which started in 2004 and attracted Gabriel as an investor in 2005, has been doing the same thing for music for several years. Back then, Gabriel "saw the potential for listeners to be paralyzed by the sheer volume of digital entertainment, and he felt that the solution was to connect people's tastes with the music out there," said David Maher Roberts, chief executive of The Filter, the British firm that announced its deal with NBC.com Thursday.

Filtering technologies have been around for more than a decade. It's how Netflix and Amazon serve up recommendations for movies, books or products its customers might like, based on what they've seen or purchased in the past. For NBC.com, the point in getting people to click on another video increases "dwell time" -- and the number of ads they see.

But companies such as The Filter, Mood Agent and others are taking these algorithms a step or two further to make more nuanced recommendations that are more likely to hit their marks. And they do so by trying to divine not just what people are clicking on, but their moods and what they're likely to be doing at the time, using a host of clues, such as where people are, what their Facebook friends are watching or even and what time of day it is. For example, news is more likely to be consumed in the morning, while comedy and entertainment are more likely watched in the evening, after dinner.

The exact formula for these recommendation technologies are closely guarded secrets, so Roberts declined to spill the beans on The Filter's exact methods. But he summed it up this way: "A lot can be deduced about a person from two or three clicks, and those clues allow us to provide them with more relevant recommendations."

-- Alex Pham


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