by Walter Avaroma Jr., Joshua Dunst, Heather Gately, Alexander Walker
Fall 2011 may mark the beginning of the death of cable television all together as products begin to flood the consumer entertainment market that are based on the streaming from the Internet.
What is Boxee?
A new media streaming software that adds a social network aspect to the media people watch. The company BOXEE has teamed with other companies such as D-Link to produce devices that run this software so the software can be used in home with an existing television set. The Boxee interface allows users to have apps for software such as Youtube and Netflix and view those on their home Television. This is a new convenient way to view media from the Internet.
The Boxee software was developed, then first made public in an alpha version in 2008, the beta version followed in 2010
Its main purpose is to act as a personal media center for your home television. In it’s attempts it is reaching out to third party hardware developers to capitalize on the software.
It competes with other services, but Boxee requires an account to access the media, and therefore creating a social networking aspect. Users can participate in viewing what their friends have watched and their friends can see what they are watching. Boxee uses Twitter and Facebook to monitor your feeds and adds videos from them to watch later. You purchase apps that will stream media to your television.
Boxee announced a new third party device in November 2011. This dongle will let users stream live TV through their Boxee interface. It takes over the air signals from local networks, the broadcast stations, FOX, ABC, CBS, NBC and displays through Boxee. While this is not the end all to cable for Boxee users it gives them a relatively cheap way of avoiding the monthly bills and poorly designed interfaces from the cable companies.
Amazon Fall 2011
Amazon was built on the buying and selling of books, but the rise of streaming sites like Netflix and Hulu caused Amazon to diversify. In early 2011, Amazon allowed Amazon Prime users to access streaming video and content on the web, which included over 12,000 Prime Instant Videos.
Between September and December 2011, Amazon added over 2,000 titles to its Prime Instant Video library. Deals with News Corp.’s Twentieth Century Fox Television Distribution unit and Disney-ABC brought such titles as Grey’s Anatomy, Glee, and Sons of Anarchy to Amazon’s already expansive streaming library. Prior to the contract with News Corp on December 8, Amazon already had licensing deals with CBS, Fox, NBC-Universal, Sony and Warner Bros for content. Brad Beale, director of video content acquisition for Amazon, stated that by January 1, 2012, Amazon will have over 13,000 titles available for streaming use.
Because Amazon brought streaming content to Amazon Prime at the same time Netflix was undergoing turmoil, Amazon reaped the awards, and added thousands of users. Amazon quickly realized that they could reach even more users by entering the tablet market, and so the Kindle Fire was born in September, 2011. The Kindle Fire allows Amazon Prime users to download or stream content directly to the device.
With the introduction of the Kindle Fire, Amazon also introduced the Amazon Lending Library. The Lending Library is a list of thousands of books that Amazon Prime members can download for free. Included in the library are hundreds of New York Times best-sellers. Publishers were furious with Amazon because they were never told their products would be sold for free. Amazon, however, reserves the right to sell the books it purchased at wholesale for any price it wants, even giving them away for free. This is a trend Amazon intends to shift towards their streaming video library sometime in the future.
Online Gaming Services in Fall 2011
Three major companies – Microsoft, Sony and Nintendo – currently dominate video games. Having already begun moving their reach into every aspect of entertainment, this fall all three made new strides into streaming and downloadable media. Their products are the Xbox 360, PlayStation 3 and Wii respectively, along with mobile devices Nintendo 3DS and Sony PSP.[i] While the 3DS was a March 2011 release,[ii] Nintendo plans on releasing a new home console called the Wii U.[iii] Sony has developed a successor to the PSP called the PlayStation Vita, due for release December 17, 2011 in Japan and parts of Asia,[iv] and February 22, 2012 in North America and Europe.[v] All three companies offer online services, and have had varying success.
Of the three companies, Microsoft’s X-box Live is the most prominent and has had the biggest developments this fall. Microsoft has just celebrated the 10th anniversary of the Xbox console, as well, which launched on November 15, 2001. [vi]
Xbox Live is the online multiplayer gaming and digital media delivery service created and operated by Microsoft Corporation. It is currently the only online gaming service on consoles that charges users a fee to play multiplayer gaming. [vii] The service first premiered in 2002, and the Xbox Live service is available as both a free and subscription-based service, known as Xbox Live Free and Xbox Live Gold respectively, with several features such as online gaming restricted to the Gold service. [viii] In June, Microsoft announced they would integrate the service into their upcoming Windows 8 operating system. [ix]
According to stats posted on June 3rd by “ Major Nelson,” the director of programming for Xbox Live, on his blog, Microsoft has sold 55 million Xbox 360 consoles across 38 countries, and Xbox 360 maintains its lead in the U.S. as the top selling console of 2011. It has had more than triple the growth of the PlayStation 3 and the largest growth of any console on the market. There are now nearly 35 million active Xbox LIVE members worldwide, spending an average of almost 60 hours a month on the service. Cumulatively, Xbox LIVE members are now logging 2.1 billion entertainment hours a month. [x]
Microsoft’s TV Announcement and November Acquisition of VideoSurf
Microsoft announced this October that it is partnering with regional cable companies to bring live TV onto the Xbox, which was also announced this June at the Electronic Entertainment Exposition.[xi] Because Live has been successful on the Windows Phone, it will be built into the PC and “be the service where you get your entertainment,” said Mike Delman, vice president of global marketing at Microsoft’s Interactive Entertainment Business group. “Xbox Live will be the pervasive media service across devices.” [xii]
Xbox Live already had compatibility with several entertainment services including Netflix, the Zune video marketplace, Hulu Plus, Last.fm, and programming from Sky Go, ESPN, Showtime, CNN and Fox Sports. The future plans include cloud storage, which would allow users to access data from any console, a Bing search engine, YouTube access, Skype chat, iHeartRadio service, and programming from Bravo, HBO Go, and other television networks and cable providers, and for Kinect users to be able to navigate the Xbox dashboard and Bing search engine using their voice. [vii] <!–[if supportFields]><![endif]–>Currently, Xbox content is accessed via the Xbox Live Marketplace, which is “a unified storefront which offers both free and premium content for download.” It can be combined with the Zune Marketplace, allowing the purchase of movies as well as rentals. [xiii]
On November 22nd, Microsoft announced its acquisition of California-based VideoSurf, in a move to “acquire the video search and discovery company’s technology.” [xiv] VideoSurf is a San Mateo, California-based company that allows users to search and watch online videos. It “offers a back-end computer vision technology that ‘sees’ frames inside videos” as it searches. VideoSurf’s search is “based on visual identification, rather than text only.” Microsoft said in a statement that it plans to integrate this technology into Xbox Live. Microsoft did not release how much it’s paying to acquire VideoSurf, but TechCrunch Europe put the price at $70 million, and then later amended that number to just under $100 million. Microsoft will not confirm the figure, saying they do not “share financial details.” [xv]
This acquisition, combined with the initial plan to use Bing to search content, using Kinnect’s voice commands and body recognition has MicroSoft excited. Alex Garden, Microsoft’s director of Xbox Live for the Interactive Entertainment Business, said in a statement, “Over time, as we integrate VideoSurf’s technology into our system, we are excited about the potential to have content tagged in real time to increase the speed and relevance of the search results.” [xvi]
On November 22nd, “Major Nelson” also blogged that December 6th would be the official release of the new update on Xbox LIVE, in which new personal and social features including cloud storage for game saves will be introduced, as well as the new integrated voice and gesture controls for the dashboard and applications, and the Bing voice search for the US, Canada and the UK. A “wealth of new content” will also be released starting December 6, with customized applications for TV, movies, video, sports and music “rolling out” in more than 20 countries. [xvii]
October Security Breach
However, the more well-known event this fall for Xbox Live was in October 2011, when users of Xbox Live reported having unauthorized access to their Xbox Live accounts, with Microsoft points subsequently being used to purchase various in-game items for the EA soccer game “FIFA 12.” Microsoft responded by restricting access to accounts for 25 days while fraud teams investigated. To the frustration of customers, both EA and Microsoft denied there was a problem with security. [xviii] The hacking was much smaller in scale, though, than the massive security breach of Sony’s Playstation Network and Online Entertainment Network in April 2011 that temporarily required a complete shutdown. [xix]
[i] Bakalar, J. (2011, November 22) Best 5 video game consoles. CNet. Retrieved on November 26, 2011 from http://reviews.cnet.com/best-video-game-consoles
[viii] “Xbox LIVE Membership | Xbox LIVE Subscription | Join Xbox LIVE.” (n.d.) Xbox.com. Retrieved November 26, 2011 from http://www.xbox.com/en-US/Live/Join
[x] “A few stats before we head into E3.” (2011, June 3) MajorNelson.com. Retrieved on November 26, 2011 from http://majornelson.com/2011/06/03/a-few-stats-before-we-head-into-e3/
[xi] Lawler, Richard. (2011, October 5) Microsoft reveals new TV providers including Verizon and Comcast coming to Xbox 360. Engadget. Retrieved on November 26, 2011 from http://www.engadget.com/2011/10/05/microsoft-reveals-new-tv-providers-on-xbox-360-in-the-us-and-int/
[xiv] Yagielowicz, S. (2011, November 26) Microsoft Buys VideoSurf; Xbox LIVE, Bing, Expected Beneficiaries. XBiz Newswire. Retrieved on November 26, 2011 from http://newswire.xbiz.com/view.php?id=141367
[xv] Tu, J. (2011, November 22) Microsoft buys video search company VideoSurf. The Seattle Times. Retrieved on November 26, 2011 from http://seattletimes.nwsource.com/html/microsoftpri0/2016824938_microsoft_buys_video_search_company_videosurf.html
[xvi] Tu, J. (2011, November 22) Microsoft buys video search company VideoSurf. The Seattle Times. Retrieved on November 26, 2011 from http://seattletimes.nwsource.com/html/microsoftpri0/2016824938_microsoft_buys_video_search_company_videosurf.html
[xviii] Kuchera, B. (2011, October 17) As Xbox Live-FIFA 12 fraud continues, Microsoft’s response becomes maddening. Arstechnica.com. Retrieved on November 26, 2011 from http://arstechnica.com/gaming/news/2011/10/as-xbox-live-fifa-12-fraud-continues-microsofts-response-becomes-maddening.ars
[xix] Seybold, Patrick. (2011, April 26) Update on PlayStation Network and Qriocity. Playstation Official Blog. Retrieved on December 8, 2011 from http://blog.us.playstation.com/2011/04/26/update-on-playstation-network-and-qriocity/
During the Fall of 2011 no company has had more ups, downs or changes in stock prices like Netflix. Following a summer price increase of its subscription packages. Netflix began the process of breaking apart its services into two. Now subscribers would have to go to separate websites for their DVD and streaming service. Reed Hastings the Netflix CEO attempted to justify the move by saying the two businesses have different cost structures and benefits, and splitting would let each grow independently.
Already dealing with customers who still had not forgiven Netflix for the price increase Netflix customers voiced their discontent by leaving in droves. Netflix CEO Reed Hastings sent an e-mail to customers in an apology that did more harm than good to the company. Netflix appeared to be a company that looked like it had no direction or ideas.
All these missteps within the company would happen as content subscriptions deals were becoming more complicated or not happening at all. A $300 million per year deal for streaming content form Starz was rejected. Starz had been Netflix first and now largest provider of streaming content. Netflix was also seeing competitors begin to take advantage of their fall. Amazon, Walmart and Verizon began taking steps of providing web-streaming services and became competitors for content.
Netflix was a sleepwalker that was now being woken up by its customers.
In October it was announced that Netflix lost 800,000 customers. This was more than they anticipated. It’s stock price plummeted at one point losing 75% of it value compared to last year. Once thought of as the darling of the internet age Netflix was getting pummeled.
The company would spend the rest of the year apologizing to customers even trashing their Quikster idea but the damage had already been done to the Netflix brand.