Escalating their battle with video site Zediva, the movie studios are asking a judge to prohibit the company from streaming movies online. "Defendants are blatantly violating the Studios' exclusive right to publicly perform their copyrighted works," the Motion Picture Association of America said in a request for an injunction, filed Thursday in federal district court in New York. "Defendants' continuing unauthorized exploitation of the studios' works is likely to cause irreparable harm." Zediva, which launched out of beta in March, charges users $2 to stream a movie for up to two weeks. Unlike the rental companies Netflix and Redbox, which impose a 28-day wait for new releases, Zediva offers users streams of films as soon as they hit the retail stores. The company characterizes itself as a rental service, arguing that it buys DVDs, then only streams as many as it owns at any one time. "The only difference between watching a rented DVD on the DVD player in one's living room and watching a rented DVD using Zediva is that rather than connecting to the DVD player with a short cable, Zediva lets users connect to the DVD player over the Internet," Zediva argues in court papers. Zediva also says that because it lawfully purchased the films, it can rent them under the "first sale" concept, which allows anyone who purchases CDs, books or movies to resell or rent them. The company says it is entitled to a ruling that the service it offers doesn't infringe the studios' copyright. But the motion picture industry, which initially sued Zediva for copyright infringement in April, argues that the start-up isn't a rental company but a video-on-demand service that publicly performs movies. In addition, the MPAA argues, Zediva harms companies that have obtained licenses, like iTunes and Amazon, by siphoning away customers. Copyright expert and New York Law School professor James Grimmelmann has said that Zediva faces an uphill battle in court. He said that courts have ruled that brick-and-mortar stores that allowed consumers to rent video cassettes and watch them on the premises were infringing copyright by performing the movies.
@font-face { font-family: "Times New Roman"; }@font-face { font-family: "Arial"; }@font-face { font-family: "Calibri"; }p.MsoNormal, li.MsoNormal, div.MsoNormal { margin: 0in 0in 10pt; line-height: 150%; font-size: 11pt; font-family: Calibri; }a:link, span.MsoHyperlink { color: blue; text-decoration: underline; }a:visited, span.MsoHyperlinkFollowed { color: purple; text-decoration: underline; }table.MsoNormalTable { font-size: 10pt; font-family: "Times New Roman"; }p.yiv1507433580msonormal, li.yiv1507433580msonormal, div.yiv1507433580msonormal { margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: "Times New Roman"; }p.yiv1507433580msolistparagraph, li.yiv1507433580msolistparagraph, div.yiv1507433580msolistparagraph { margin-right: 0in; margin-left: 0in; font-size: 12pt; font-family: "Times New Roman"; }div.Section1 { page: Section1; } Advertiser spending for online video has come to a screeching halt. Businesses believe that ROI assessment tools are unreliable and advertisers are skeptical of any new metrics have been recently introduced. This grudge towards ad metrics may or may not be valid, but one new metric bucks the traditional trend of using cost-per-thousand impressions (CPM) to measure digital video (and TV)-take it a step further to cost-per-view (CPV). Both Google and TubeMogul endorsed this standardized CPV metric to the IAB's Digital Video Committee, and it's garnering a notable amount of industry support. With CPV, users are essentially in the driver's seat: they can choose whether or not to watch video ads. In this model, metrics only count if the viewer engages with the ad and clicks on the "skip" within the in-banner or in-player ad; advertisers only pay for the user-initiated ads. A proof point that proponents of CPV provide is that advertisers will now have a tool that measures effectiveness and will be able to create corresponding price model - potentially improving ROI. Please note my emphasis on "potentially," as it is essential to focus on the goal of your online video campaign when assessing its success. From Google's supporting perspective, CPV is a natural extension of Adwords and delivers a value proposition that serves the interests of direct marketing. It's not clear if this works for brand advertising because if, like in Adwords, the decision to show an ad is based both on how much you pay and by the click-rate on your ad--established brands tend to get higher click-through rates regardless of the creative. Additionally, is your ad designed to reach your most loyal customers that will engage without much effort on your part? Or is it the objective to reach new customers to start building brand awareness? Honestly, who can say they only want to reach existing and engaged customers? Promising, but is it enough? The underlying principles of the CPV model are promising, and there's no doubt our industry needs to improve the way online video is measured. We should continue to seek new ways to measure effectiveness and engage users - give them more control of their online viewing experience. Before we embrace it as "the new standard" for measuring online video advertising, we should consider some questions about the CPV model. For instance, how exactly does CPV apply to viral video? Viewers may choose to watch viral videos, but not necessarily because they're interested in the brand. Maybe they were lured to click on the ad because of a sexy thumbnail, or because they received a notice that their Facebook friends viewed the video. Of course, the reality is that most people watch viral videos simply for entertainment, which doesn't necessarily lead to the sale of a product. It's important to understand that CPV comes at a higher cost, as much as $0.20 to $0.25 for a video view, which is the equivalent of a $200 to $250 CPM for each actual viewing. This raises the question, is the value of CPV for all advertising on viral video worth that much? CPV does not measure effectiveness beyond the intended interaction, nor does it measure the long-term impact of heavy usage of new formats. In reality, we still know very little about how viewers interact with online video content and current metrics are only a proxy for measuring effectiveness and discovering impacts to ROI. CPM measures all impressions to determine efficiency, noting that some impressions are more valuable than others, while CPV measures fewer impressions, recognizing that some will be missed and that many are not valuable. The choice of metric should be based on the objective of a campaign. The debate between CPM and CPV ultimately comes down to how we measure human attention and human response in relation to ROI. It's apparent that brands are starting to pay more for online video. We will have to wait and see if brands that turn to CPV are willing to pay more for the actual view and potentially pay more than CPM. Stay tuned and grab some popcorn while you're at it -- this debate will surely continue as more business cases come to life.
In an earlier article, I talked about why the nomenclature for GoogleTV and AppleTV is ill-conceived, and why Google and Apple are doing the marketing of these products a disservice. At the same time, the opportunity to bring Internet and digital media to the largest screen in the home is immense (as I wrote in a recent report I co-authored for the Yankee Group). The nomenclature, the product development and marketing approaches demonstrate that neither company has qualified this opportunity sufficiently. For the most part, GoogleTV is a bit of a joke in the industry given its lackluster success and Google's mishandling of its launch at CES 2011. Similarly, Steve Jobs has admitted that, till recently, AppleTV was a hobby, and I believe he is being sincere in saying so. Actually, I think both GoogleTV and Apple TV are still hobbies (read science projects) for these companies, and it is not entirely surprising. The market for these products is not realized yet. What market does exist is marginally attractive in the larger scheme of things and is already full of scrappy price competitive players like Roku, NetGear, and others. Today, perhaps the most appealing Internet video experience is from NetFlix, who reportedly accounts for 20% of Internet bandwidth consumption during peak hours and 61% of all full length movie streams. In large part, this experience is successful because it started as an extension of an existing online service, a not insignificant amount of content is available on Netflix, and it is ridiculously inexpensive, both in the equipment required and the subscription service. (There is an interesting analysis to be done on to what extent this last part is sustainable and what the implications are for network service providers, and therefore consumers, when adoption grows further. Will consumers expect ever better streaming quality and more rapid content refresh and what does that mean for Netflix?) In any event, Internet video today is, by definition, a disruptive video experience -- i.e., lower quality and choice at a lower price -- compared to what is available on pay TV programming. For those that want to argue about the infinite content choices that come with the Internet, let's just say that with Netflix and Hulu as the fastest growing streaming sites it seems pretty clear what's going on with consumer demand. For now, consumers don't know what they're missing because they haven't seen it before. Today, by connecting the biggest screen in the house to the Internet consumers are getting the typical television-like experience for most part. Changing that is the big opportunity for either or both Google and Apple, redefining the category similar to what Apple did for music. I would like to think that if the opportunity was ripe for the picking for Google and Apple they would have more well-conceived offerings. Today, there are a lot of low hanging fruit and there are lots of companies having a fine time picking at it. It will not be much longer before the shakeout and consolidation happens, just as, about a decade ago, the home networking market surged in numbers of vendors and quickly settled within a matter of two or three years. That's Moore's law at work among other things. That is when the real opportunity will emerge for big plays more suited to the Googles and Apples of the world. Sure, a few different things could happen including some existing players getting well ahead of the pack and changing the game. For example, NetFlix could conceivably set the mold for the next generation of a media company and television experience. In that case, "Netflix TV" might become the one to beat. Or it may not. Another set of interesting developments are the permutations around what I call "tethered experiences," particularly with the iPAD. Such solutions may well preempt quantum leap solutions like Google TV is intended to be, benefiting incumbent PayTV operators the most if they are quick enough to capitalize on the opportunity. Solutions from companies like IntoNow, which Yahoo recently acquired, and other things going on with auto content recognition (using watermarking and fingerprinting solutions to synchronize IP data with broadcast programming) may well create a more seamless and desirable adoption path for the mass market where traditional television programming is augmented with tethered wireless devices. In the scheme of things, the Smart TV and Internet TV phenomenon seems a safe harbor to a lot of companies (and even industries) who are getting upended by the forces of change. These include television set and Blu-ray manufacturers, and even NetFlix with its traditional physical-media business. It is not surprising to see the surge of products and services getting launched, not a few of which are ill conceived. Neither Google nor Apple need this safe harbor as a matter of survival, nor is the market ready for them. If anything, the market for portable and mobile devices and applications of both these companies far exceeds the near term prospects for either Google TV or Apple TV. I'll discuss this further in an upcoming article. It would, however, be ironic if their respective tablet and mobile device formats end up as the next definitive evolution of television viewing despite their own TV initiatives, wouldn't it?