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VideoDaily Roundup: Hulu Considers TV Everywhere Model

Happy Monday!

There is lots of speculation in today’s Video Daily Roundup, starting with a report that Hulu is considering a move to a TV Everywhere-type authentication model. Next, Apple is reportedly negotiating a content deal with the multi-studio venture EPIX. GroupM’s Rino Scanzoni takes us through the problems with the much-heralded Digital Content NewFronts. CBS’ David Poltrack tells us why online video viewers are worth more to advertisers than TV viewers. Finally: a Russian video company strikes content deals with major Hollywood studios.

Source: Hulu Considers Authentication Model

Sources tell The New York Post that Hulu, the joint video venture from News Corp, Disney and Comcast, is considering a change to a “TV Everywhere” model, whereby viewers would have to prove they are pay-TV customers in order to watch shows through the popular online service. These sources also claim this authentication model was behind the move last week by Providence Equity Partners to cash out of Hulu after five years.

A separate report from the NY Post says that NBCUniversal, in its first Olympics under Comcast’s ownership, is considering a similar authentication model for the games in London this summer.

The move toward authentication would certainly result in a shrinking audience for Hulu, which earned $420 million in ad revenue last year.

It also comes at a time when just about every cable and network operator is considering its streaming strategy.

Sources: Apple Close to EPIX Deal, New TV Product

Apple Inc is in negotiations to stream films owned by EPIX on Apple TV and its other devices -- including a long-awaited Smart TV -- Reuters reported on Friday, citing unnamed sources. The talks are still preliminary, and no agreement is considered near, one of the sources said. Apple is expected to unveil a new TV product later this year or in 2013. EPIX is a three-year-old joint venture between major studios Lions Gate, MGM and Paramount Pictures.

TV networks and film studios, uneasy about the manner in which Apple disintermediated the music industry with iTunes and its various devices, have largely boxed Apple out of licensing their content. The iPhone maker, which has become the world’s most valuable corporation, tried unsuccessfully to secure agreements with the studios for a new TV service last year, one of the sources said.

The Problem with the NewFronts

The so-called Digital Content NewFronts wrap up this Wednesday, after two weeks of top online video publishers like AOL and Hulu parading their content in front of brands and agencies in the hope that they can attract TV dollars from their closely held budgets.

It’s all “kind of absurd,” says GroupM Chief Investment Officer Rino Scanzoni. While nobody is saying that Web video content doesn’t matter, Scanzoni points to two glaring problems with the Web video market that make the urgency for an upfront seem a little ridiculous: a lack of consistent measurement, and the fact that on the Web, content choices are infinite and audiences are unpredictable (whereas TV offers scarcity and universal measurement).

However, Scanzoni is optimistic about initiatives like Nielsen’s Online Campaign ratings, which aims to bring gross rating points to online video, but at the moment, only a few publishers use the product -- while others, including Google, offer competing GRP services.

Poltrack: Streaming Viewers Worth More Than Live TV Viewers

The online video advertising industry has reached a “significant tipping point,” according to CBS Chief Research Officer David Poltrack. At a recent industry conference, Poltrack claimed: "a viewer streaming our program online is now worth substantially more to us than a person watching that program in playback mode and skipping many of the commercials." He added that the value (to advertisers) of the online video viewer is surpassing that of the live-TV viewer, too.

Analyst David Charmatz also believes that despite the rise of subscription services like Netflix and Hulu Plus, the future of streaming TV will be ad-supported, mostly because many consumers simply aren’t willing to pay for content. While they willingly hand over money for apps and ringtones, “there is a whole group of people -- millions or potentially billions of people -- who don't see the value proposition in buying content.”

Russian Video Service Reaches Deals with Hollywood Majors

Russian company ivi.ru has become Eastern Europe’s first online video service to license content from Hollywood’s major movie studios. The deals total some 65,000 items of video content from the likes of 20th Century Fox, Walt Disney, Sony Pictures, Warner Bros., Paramount Pictures and NBC Universal.

“The reached agreements are an important step for the development of the legitimate video market in Russia and fighting piracy in the digital content industry,” said Oleg Tumanov, chairman of the board and managing director of ivi.ru.

According to research group Romir Gallup International, ivi.ru is Russia’s leading online video service, with a market share of about 30 percent. The company’s revenue streams include advertising, pay-per-view and subscription models.

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