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Roku has added an AOL powered news feed to its home screen in a continuing effort to add value to its line of products. This comes on the heels of the addition live TV apps for Watch ESPN and the Disney Channel. The company is positioning itself well for the holidays. Roku, which adds new channel content regularly has been aggressively adding features since September including the M-Go on demand movie service, soon to be available on all current Roku Models.

Could DIAL Be Next?
There have been multiple indications during the past year that Roku has been working to add more web based video functionality. In September Janko Roettgers reported on Gigaom.com  that Roku would be adding DIAL, the same video and audio protocol used by the popular Google Chromecast. The protocol allows the Chromecast to send video from a smart phone or tablet to a TV. The device also allows users to mirror Google tabs from a laptop or desktop computer. As of yet this feature has yet to surface on the streaming box. Other reports of Mozilla working to develop the ability to mirror the Firefox browser on a Roku as well as multiple reports that the company is going to be integrating Miracast another Air Play like protocol indicate that Roku plans to be a major player for playing local and internet  based content moving forward.

Is There a Game Changer Coming?

Non Apple users have been longing for simple to use alternatives for AirPlay and Roku may find a way to not only offer a solution but multiple ones all in one place. While services like Miracast are available on various single use devices as well as the Matricom MX2 Roku has a chance to put together an offering that is nearly unmatched. If the company teams multiple second screen protocols with its ever growing list of set top based channels which includes HBO-Go, Hulu Plus, Netflix, Amazon Instant and so many others from live news feeds to pro sports apps it will be in position to offer a more than compelling argument to the consumer. Roku has been positioned at a strong second place in the set top market behind the industry leading Apple TV. Will moves like the ones it has made recently and a combination of what may be coming strengthen its position or even push it front and center?

 

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The ESPN family of networks is now available to Roku users.
The ESPN family of networks is now available to Roku users.

Ryan Michael Downey

Roku has added ESPN the biggest name in televised sports to its channel lineup. This gives Roku users another access point to live sports to go along with web based offerings from the NBA, MLB, NHL and others. This is a major development for the company that already offered over 1000 channels/apps. Until now Apple TV, which got the service over the summer,  was the only set top box that offered Watch ESPN. Watch ESPN is also available on the X-Box for Gold members.

The watch ESPN app requires cable service authentication which means that it cannot be accessed unless the user has a password and user name registered with a participating cable provider.

The App features all of the channels that ESPN offers, ESPN, ESPN2, ESPN News, ESPN U and ESPN Deportes. What one has access to all depends on what services they receive as part of their television package. The app also features ESPN 3 a broadcasting platform based exclusively on the Internet.  The service began as ESPN 360 and was originally available through ESPN’s official website. Adding ESPN 3 is a real coup for sports fans because the service multiplies the amount of live sports tenfold feturing  major college sports including football and basketball along with other international league sports like soccer, rugby etc.

One small limitation of the app is that contests featured in the same media market but on another channel  both OTA or cable will be blacked out on ESPN3. Out of market contests on the other hand can be streamed with impunity. This will be very advantageous to those who moved from Big Ten country to ACC country or the hard core SEC fan who moved out west.

Best Buy will be selling the older Roku HD for 39 dollars as part of its door buster sale. At a price like that this may just be the best stocking stuffer since the Walkman.

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Ryan Michael Downey
The growing popularity of streaming and video on demand is starting to be noticed and acknowledged by networks and it is changing the way that television show ratings are evaluated. In an
article appearing in LA Biz  Gina Hall reports that many shows have shows substantial viewership gains when the number of people who watch a show within 7 days of its original broadcast date are factored in to the equation.

This is a wonderful development for those who appreciate variety in television. In the past whether a show “won” a timeslot could very well determine whether it made it through a season much less got renewed for a second year.

Jason Lynch, former TV editor for People Magazine elaborated on this point in a piece for QZ.com
Several new cable shows this year have also been saved from likely cancellation by their impressive L+7 increases.  FX’s The Bridge more than doubled its demo rating (105%) while the network’s The Americans saw a 93% demo lift.”

As sites like Hulu gain strength and networks continue to understand how to turn free rebroadcasting of their shows in to profitable platforms for advertising we could see a substantial change in the TV landscape. It is possible that we will no longer have to see promising series cancelled before they can prove themselves simply because a given network sent it against a perennial ratings champion. Networks should understand that just because someone chooses to watch CSI does not mean that they do not enjoy New Girl. Because a person works nights does not mean that they never tune in to Arrow. Now that network executives are starting to understand that reality, maybe more scripted shows will be given a chance.

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The Google Chromecast has been a top seller since its debut.

Pandora users can now listen to their favorite music app through their TV speakers via the Google Chromecast, Google’s inexpensive HDMI dongle. The Chromecast announced the addition this week bringing the amount of officially supported apps to 6. In order to use the app it must first be installed on a corresponding IOS or Android smart phone or tablet. When active the app displays cover art and album information on the screen along with the time remaining.

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Ryan Michael Downey

Apple has added an iMovie Theater app to its lineup of choices for its industry leading Apple TV. The app makes it easier than ever to share personally recorded movies produced with the iMovie app with friends and families via the cloud. Once a file has been uploaded it is just a few short swipes away from being viewed in full HD glory. The video portal marks the latest addition in the set top box that has recently added HBO Go, Watch ESPN, The Disney Channel and Vevo in recent months. It might be noted that the iMovie Theater is the second app in a row that is based on an existing IOS app, the last being iTunes Radio.

Apple appears to be expanding the scope of its set top product by both forging new ground with new content partners as well as optimizing the experience of their mobile apps in to a home television environment. Expect more additions as the company continues to aggressively pursue partnerships that may benefit the viewing experience of their customers.

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The Google Chromecast has been a top seller since its debut.

The Hulu Plus app for the Apple iPhone is now capable of being utilized by the Google Chromecast in the same way that Netflix is. Hulu Plus was already available via Apples iPad but will now be available on both of Apples signature mobile devices. The increased functionality comes on the heels of an update to the Hulu Plus app for IOS 7. The Chromecast which burst on to the scene this summer costs $35.00 but has no native apps The device acts as a receiver relying on mobile devices and computers for the supply and delivery of features. The Hulu Plus update brings its integrated mobile app selection to four including YouTube, Netflix and Google Play. Google play is not available on Apple products.

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 Will Netflix Displace HBO?

Netflix may well be part of a major shift in the television industry. According to the Washington Post the home of House of Cards may be coming to a cable box near you. Already available via its website and a variety of mobile and set top formats the company is having conversations with major cable distributors Comcast and Sudden Link about adding the service to their cable boxes. Such a move would be a crowning achievement for the service which eschewed releasing a branded set top box less than a decade ago in favor of becoming a partner with multiple devices. While in the process of developing a top secret dedicated box Netflix scrapped the idea in favor of building partnerships with multiple media devices. The company is the streaming industry leader at over 30 million subscribers.

Expanding their reach
The implications for Netflix are huge just based on the numbers. Despite the cord cutting trend especially among young adults, around 95 percent of American TV viewers utilize cable or satellite services to watch television. The current population of the US is about 315 million. While that number of course includes children and adults living in the same household this means that despite Netflix’s current subscription base there is potential for astronomical domestic growth.  While sales in the set top box industry which includes Apple TV 13 million units sold and Roku 5 million sold are steady game systems actually account for at least half of Netflix consumption. The thing about the video game console industry is that many annalists believe that its sales are starting to flatten out. If all current Play Station 3 owners bought a new device this does nothing to build Netflix’s market share. But there are millions of potential Netflix customers who do not have a game system, set top box or internet connected blue ray player, but the numbers indicate that almost all of them have cable or satellite. While these talks have not reportedly involved Time Warner Cable such an arrangement with even just two of the major cable systems would boost Netflix’s Net Worth.

How will it work
If such an arrangement comes to fruition the interesting thing to look at will be how the financial arrangement will work. What incentive will cable companies get from Netflix in order to make the deal happen? There has never been a standalone company integrated in to a cable service provider as a partner. Will the cable companies get a cut of the profits from any new subscription authenticated through their hardware? Will Netflix pay a fee to be on the boxes like an advertising fee? Will cable companies pay Netflix a fee cents per each of its customers the way it does with a traditional channel like Nickelodeon or ESPN.  The most profitable arrangement for Netflix may be for the cable boxes to work with Netflix in the same manner that set top boxes and other distribution platforms do. If Netflix is allowed to continue to collect its normal monthly fees from millions of new customers than it will build a war chest that could outstrip all of its competition.

How Could It Effect Netflix?
If it substantially increases its profits subscribers can likely look forward to more high end original programming and more exclusive content. Such an arrangement could give Netflix much more bargaining power than its competitors when the next big distribution contracts come up with film studios. Netflix already has deals lined up with EPIX, Disney, DreamWorks and many other distribution partners. Netflix could also become the landing place for the next Firefly, Terra Nova or Eureka when a traditional network gives up too early. It’s alternative approach to series production gives it leeway that traditional networks do not have and if people can access Netflix separately from a digital tier it may grow past HBO and Showtime as living room staples. Imagine how established players in the television industry would react if Netflix picks up a cancelled series and wins an Emmy. These could be very real possibilities.  We will continue to monitor this story.

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Google is no longer going to refer to its interactive television product as Google TV. It is re-branding the platform as Android TV. The change comes after numerous products utilizing the Google TV branding have failed to make an impact on the marketplace. The hope is that by identifying the TV product with the popular mobile operating system that it will appear more appealing. This may come as a surprise to many observers who thought that Google may have been abandoning the platform entirely with the release of the Chromecast.

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Ryan Michael Downey

Samsung began sale of its own entry in to the set top video market Sunday with its release of the Home Sync. The device gives Samsung Galaxy device owners a new way to add functionality to an HDTV. The Home Sync, which runs on Android’s Jellybean 4.2 gives Galaxy phone and tablet owners the ability to mirror content on their devices in order to play games on their TVs instead of being confined to a phone. The device is also an easy way to share personal pictures and videos.  The $300.00 device does not ship with a remote but there are two USB 3.0 ports that can be used to connect a mouse or keyboard. Other ports include 1 Ethernet port, 1 Micro USB, 1HDMI, optical audio. The media sharing capabilities are limited to select Samsung products and will not work with Android phones outside of the Samsung family.

What’s Included
The system’s launch screen includes quick launch buttons for the devices photo gallery, YouTube, an Internet browser, Samsung’s a group  apps, along with Samsung’s Media Hub, an iTunes like video store where customers can purchase or rent movies as well as purchase the latest episodes of current television shows along with Google Play and All Apps which like other android devices leads to the collection of all Android apps on the device including those on the launch screen. The product also offers a 1 terabyte hard drive for local storage, a feature that stands out from its competitors which include the Roku 3, Apple TV and the Chrome Cast.  Once users register their products they will be given a $50.00 credit to begin to fill the hard drive with content.

Controls
In the case of navigation Samsung has something for everybody.  Once the HomeSync  app is open on a Samsung phone users can scroll to apps by using the phone as a pointer point like the Nintendo Wii, as a wireless mouse pad or utilizing mirror mouse a setting which mirrors the HomeSync screen of the HomeSync  to a mobile device allowing the user to open and close apps in a more familiar setting. As was stated earlier a keyboard or mouse can also be used to navigate the device.

Familiar Feel
When viewing photos the phone or tablet can be used to zoom in on pictures on the TV by a pinching motion as it does when the media is being viewed on the mobile device.

Questions
What remains to be seen on this new product is whether there are enough Samsung device owners who are in the mood to pick up a 300 dollar tab to use their phones for entertainment at home. If there is not enthusiasm for the device it could be another black eye for Samsung as has been the smart watch. Up until now televisions equipped with Google TV functions have been sorely underutilized. Will the device create more sales of Galaxy devices because people want to use the HomeSync in it fullness? Time will tell.

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Hiring Patterns Beginning to Match Up

Not just Speculation
Amazon may be looking at joining the set top device market. Whether it is the name of a new product or service Internet retailer recently patented the name  Fire Tube . The company has also made a number of moves in the past year indicating something big on the horizon. This should come as no surprise as it is a natural follow up to news in 2012 when Amazon began recruiting for development of a new product . The statement contained this very telling passage.

“We are working on a new revolutionary V1 product that will allow us to deliver Digital Media to our customers in new ways and disrupt the current marketplace. We believe this new product will be even bigger than Kindle.”

Could the spate of game developer hires and other murmurs be linked to this patent?  When this  information is coupled with reports that Intel is reaching out to Amazon as a partner for its proposed internet based television service it appears that something significant is about to happen.

Right Timing
Will Amazon debut a new product this year? There is no telling if an Amazon based streaming box will be unleashed this fall but when the company does jump in to the market it will be at the right time to make the biggest splash. It will be ready to ship out quickly to its base of Amazon Prime customers. It will be the first real game changer in the market. The product will get major press and Amazon is unlikely to make the same mistake as Google did with its sloppy roll out of the Chromecast. Right now the number one selling (DMR) AKA streaming device on the market is Apple’s Apple TV. There has to this point been more than 12 million sold. Roku, its closest rival in the category, has sold over 5 million units and is aggressively expanding into Europe. Google has entered the fray with it dongle device the Google Chromecast as well as a number of products that run the Google TV platform. But a sleeping giant is about to awaken. And when it emerges the whole market may be in for a major shakeup. The reasons for this are numerous.

Unique Force in the Marketplace
Amazon has a very different way of making money than other tech companies, media distributors, or retailers. This is because of its unique position as a retailer that produces high end media products that in turn encourages its customers to purchase completely unrelated products. Most technology based companies make money from the sales of their physical products, units sold. For instance Samsung makes money based on selling cell phones to carriers, branded TV’s, blue-ray players and the like. Retailers on the other hand make money when people come walking in to their stores and walk out with products. For stores like Best Buy that means that they profit by selling Amazon’s Kindle Fire tablets and its E-Readers. But on the other hand as Jeff Bezos was recently quoted during his announcement for the newest Kindle Fires saying, “We want to make money when people use our devices, not when they buy our devices,”

What does he mean by that?
Amazon makes money every time someone buys a 99 cent app for the Kindle Fire. Amazon makes money each time someone at a coffee shop killing time buys an episode of a recently aired show from Amazon  Video on demand. Amazon is no different than Apple in that regard. Its iTunes Store and App Store are set up in a similar way. But Amazon can create capitol in a completely different way. By encouraging customers to utilize Amazon Prime. On the surface, Amazon Prime membership appears to be a service that saves its subscribers money by providing free shipping, use of the free lending library for its E-books as well as access to a large library of television shows and movies along with its coming original content. This means that when Christmas rolls around and all of the Big Box retailers are advertising the Kindle Fire and E-Readers to entice customers to come early on Black Friday what they are doing is inviting customers to buy everything else for the holiday season from someone else. The company always gives away a free month of Prime membership with the Kindle Fire. So now if someone needs new cords for that TV from Target the hardware can be purchased right from Amazon with free shipping. What is the hot toy this year? One click buying means that you can have it at your home packaged and ready to go in two days. Would you like to fight traffic at the mall instead? The Prime program is like an incentive card that you need never have a key chain addition for. And its tablets are a mobile store that you can access anywhere that you reach the Internet. On top of that Amazon does have an incentive based credit card program with its Amazon branded Visa card. The card earns costumers points that can be used to purchase products from….Amazon of course. This is a company with not only its own ecosystem but its own gravity. Its sales strategy is so disruptive to traditional big box stores that some have stopped carrying the Kindle Fire.

What to Expect while we are Anticipating
When it gets in to the DMR game it is going to have a very well thought out strategy and it will be set up to make a profit. There will certainly be a way to shop for everything Amazon sells. Expect integrated video reviews of many of the top selling products on the site right at your fingertips. Expect to be able to listen to Amazon’s audio books with on screen X-Ray integration. Movies and TV shows from Amazon Instant will be an obvious feature and users should expect IMDB integration along with it in the least. The company has a new feature which allows those using Amazon Instant Video service to find info about music in a given movie and of course purchase it. This will certainly be a feature in the new device.

Performance and Hardware
It will likely be a high performing device with a top of the line processor that puts most others to shame. If the hardware of the Kindle Fire HDX is any indication then whatever is the top of the line processor used in the set top platform at that point will be matched or exceeded by Amazon. The company has advanced metrics on what the public is looking for in set top devices and a library of reviews on all of the devices on the market whether they have a Google TV format, Apple TV, Roku and even the Android based machines. While they will definitely do their due diligence on customer needs the public has already told Amazon what they like and dislike about all of their potential competitors.

Gaming
Amazon may even find a way to integrate Android gaming. Multiple reports including USA Today have said that Amazon will be selling a dedicated game console but I have a feeling that the game info is being floated because it is going to be integrated with a streamer. The OUYA valiantly tried to open this market as an Android gaming console but it has yet to catch on. Why would Amazon try and integrate games into its streaming device? Because it will be another revenue stream and reports indicate that the device will come with a dedicated controller. But if the system happens to allow console emulators or advanced games a second controller with more options than what is included might be nice. I wonder if there is anywhere to order one? See how this works?

Third Party Integration?
It will have the sorts of capabilities Roku Customers and maybe even Apple customers have always hoped for. Expect it to integrate seamlessly with the Kindle Fire in a similar fashion to how Apple products integrate with the Apple TV. It should be seen as a major shot across the bow that the new kindle Fire is Miracast capable. Expect Miracast integration not to be limited to the Kindle Fire but there will likely be features that are only fully accessible with its products just as an added incentive to purchase their own hardware. Expect the device to integrate Discovery And Launch Protocol (DIAL) which is the same technology used in the Google Chromecast and soon the Roku. This is the protocol that allows tablets and cell phones to seamlessly “Cast” Netflix and YouTube via the Chromecast. This kind of integration will benefit Amazon if its competitor, Google pulls the same game with Amazon as it has with Roku, basically barring its competition from using YouTube, the most recognized source for streaming content in the world. I would expect that Amazon will also have numerous partnerships with companies to allow for multiple video apps.

Cost
The kindle Fire is sold at most at a break-even price and you should expect any streaming device to be sold the same way. This is done so that people can easily be pulled into that sales vortex. Right now regardless of the quality of the competition various versions of the Kindle Fire make up 12 of the top 20 sellers on Amazon, though you can be sure that will change when the new iPads debut. Apple, the worldwide leader in tablet sales occupies 3 of the top 20 spots, likely because so many apple customers buy their products from other sources including Apple Stores, numerous retail locations and their own website.

Who What Where When
We can already answer who. What Where and when still remains a speculation game. What can be said with near certainty though is that an Amazon streaming product whether it is a dongle like the Chromecast or a set top box like the Roku product line and Apple TV will likely be a compelling and dynamic addition to the marketplace. The Streaming Advisor will keep a close watch on this story as it continues to develop.

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