Film & Television on the Internet
A Market Assessment

Brad Jobling
April 2007

2007 Brad Joblingbjobling95@gsb.columbia.eduwww.linkedin.com/in/bradleyjobling

Online Activities On A Typical Week of US Broadband Users, 2006

Title: Internet Video Audience; Authors: Hallerman, David; Source: eMarketer; Dec 2006, p9, chart # 077441

Top 10 Movie Web Sites in the US, June 2005

Title: Hollywood Online: Getting the Big Picture; Authors: Belcher, James; Source: eMarketer; Nov 2006, p13, chart # 065766

Demographic Profile of US Visitors to the Internet
Movie Database (IMDb) Web Site, Spring 2006, % Unique Audience Composition

Title: Hollywood Online: Getting the Big Picture; Authors: Belcher, James; Source: eMarketer; Nov 2006, p12, chart # 077565

Filmed Entertainment Spending in the US, by
Category, 2005-2010 (Billions of $)

Title: Hollywood Online: Getting the Big Picture; Authors: Belcher, James; Source: eMarketer; Nov 2006, p3, chart # 077535

Title: Hollywood Online: Getting the Big Picture.Authors: Belcher, JamesSource: eMarketer; Nov 2006, p3, chart # 077535

Filmed Entertainment Spending in the US, by
Category, 2005-2010 (Billions of $)

Title: Hollywood Online: Getting the Big Picture; Authors: Belcher, James; Source: eMarketer; Nov 2006, p3, chart # 077535

Title: Hollywood Online: Getting the Big Picture.Authors: Belcher, JamesSource: eMarketer; Nov 2006, p3, chart # 077535

Types of Delivery

Downloads Downloading of content to a PC.

Streaming Stream content from Internet on PC. Must maintain a live Internet connection for viewing.

Set-Top Boxes Content is watched on the television via a set-top box similar to a cable box or DVR.

Mobile Content available via a cell phone. Must maintain a a live connection to view.

Hybrid There are multiple options of the above:

Mobile on a memory card

Downloads to a set-top box

Set top boxes connected to a PC

US Spending on Internet Downloads of TV Programs, 2005-2010

Title: US DVR & VOD Usage: Ad Skippers and Time Shifters; Authors: Macklin, Ben; Source: eMarketer; Nov 2006, p16, chart # 078104

Devices on which US Young Adult Internet Users
Would Watch a TV Show, by Age and Gender, Jun-Jul 2006

Title Internet Video Audience; Authors: Hallerman, David; Source: eMarketer; Dec 2006, p27, chart # 076027

US Adult Internet Users Who Are Likely to Purchase On-Demand Online Video Programming, by Age and Gender, October 2005

Title: US DVR & VOD Usage: Ad Skippers and Time Shifters; Authors: Macklin, Ben; Source: eMarketer; Nov 2006, p17, chart # 071030

Number of New Feature Films Released in the US, by Distributor, 1995-2005

Title: Hollywood Online: Getting the Big Picture; Authors: Belcher, James; Source: eMarketer; Nov 2006, p4, chart # 077562

MPAA Member Company Average Theatrical
Marketing Costs per Film, 1985-2005

Title: Hollywood Online: Getting the Big Picture; Authors: Belcher, James; Source: eMarketer; Nov 2006, p9, chart # 077563

MPAA Member Subsidiary/Affiliate Average
Theatrical Marketing Costs per Film, 2001-2005

Title: Hollywood Online: Getting the Big Picture; Authors: Belcher, James; Source: eMarketer; Nov 2006, p9, chart # 077564

Watch Now (Netflix)

Rolling out a service where users can watch a certain number of hours per month online, based on their DVD rental plan.

This is in addition to their DVD rentals.

$17.99 plan/3 DVDs per month, 18 hours of viewing.

Service is 2 years in the making.

Spent $5 to $10 million last year to build. Will spend $40 million this year.

Will launch with 1,000 titles.

Title: Netflix rolls out VOD rental plan; subs get it free; Authors: Bond, Paul; Source: Hollywood Reporter -- International Edition; 1/16/2007, Vol. 397 Issue 44, p2-93, 2p

Watch Now (con't)

This will be a phased roll out occurring from Jan 07 to Jun 07.

Plan to expands service to any Internet enabled device, including cellphones.

By end of 2007, plans 4.2 million subscribers out of their 8 million total.

The company does not plan to sell movies via download.

Title: Netflix rolls out VOD rental plan; subs get it free.; Authors: Bond, Paul ; Source: Hollywood Reporter -- International Edition; 1/16/2007, Vol. 397 Issue 44, p2-93, 2p

Title: Netflix plans to offer movies on cellphones; Authors: Kapko, Matt; Source: RCR Wireless News; 1/22/2007, Vol. 26 Issue 3, p15-15, 1/4p

Title: Netflix Delivers Upbeat News; Source: Business Week Online; 1/26/2007, p28-28, 1p

Long Tail & Netflix

30% of Netflix rentals are new releases, 70% of Blockbuster rentals are new releases. Both have the same customer demographics.

Netflix has positioned itself to purchase exclusive distribution rights through Red Envelope.

Netflix uses its extensive data mine of customer preferences to determine viability of hard to market titles.

Title: The Mail-Order Movie House That Clobbered Blockbusterl Authors: Mullaney, Timothy J.; Source: Business Week; 6/5/2006 Issue 3987, p56-57, 2p, 1c

Title: Mailboxes, Etc. ; Authors:Tobias, Scott; Source: Hollywood Reporter -- International Edition; Aug2006 Supplement, Vol. 395 Issue 25, p20-20, 1/2p, 1c

Long Tail & Netflix (con't)

Netflix has become vital to the independent film business.

Netflix is doing what college film societies did in the 60's and the 70's. Creating audiences for new European films and old European masters.

Netflix has created exclusive deals with NBC to make The West Wing, Studio 60 on the Sunset Strip, and Kidnapped available to Netflix subscribers 6 weeks before their network TV preview.

Deloitte POV

PC VOD services will have limited success in the short-term.

It will take a decade before broadband speeds make PC VOD worthwhile.

For now, streaming seems to provide the best results.

VOD is best deployed for non-blockbuster content that video stores cannot stock due to limited demand.

Yet, there will still be an increasing simultaneous release of PC VOD and DVDs.

Title: Long download times will hinder growth of PC VoD; Authors: McCormick, Andrew; Source: New Media Age; 12/21/2006, p4-4, 1/6p

Title: Media Predictions, TMT Trends 2007, Auhor: Brightman, Igal, Source: Deloitte: Technology, Media & Telecommunications, p4, p11 & p16

Deloitte POV

Media companies should not rely on the long tail to rekindle the appeal of every title in their archive. Search tools (pull) and recommendations (push) are still rudimentary. These will continue to improve over time.

The public's readiness to pay for content varies between geographies, changes over time and its influenced by a growing range of factors, from technology to disposable income.

As far as long tail & media are concerned, a bricks has room for the top 20, clicks the top 10, and mobile the top 5.

Additional POV

The big revenue is in DVD sales and not DVD rentals. This worries studio execs. (What does it mean for VOD?)

10 years ago TV programs had limited means of revenue via broadcasting. The DVD market has changed that.

Some downloadable films are more expensive than their DVDs & offer less features.

A higher quality IPTV is coming fast & should be a $13 billion market by 2010.

Title: Netflix adds its own pix to mix; Authors: Zeitchik, Steven; Source: Variety; 2/27/2006, Vol. 402 Issue 2, p9-9, 1p, 2c

Title: Movie Downloads Are Still a Flop; Authors: Tynan, Dan; Source:PC World; Dec2006, Vol. 24 Issue 12, p30-30, 1p, 1 chart, 1bw

Title:As Audio On Demand Hits Its Stride, Video On Demand Isn't Far Behind; Authors:David, Mark; Source:Electronic Design; 11/16/2006, Vol. 54 Issue 26, p17-17, 1p

Additional POV (con't)

Emerging media is creating sub-niche audiences.

In the Internet world it is better to specialize that become too broad.

There are 1000s of filmmakers who say they cannot find distributors and 1000s of distributors who cannot find quality films.

On demand viewing for TV audiences has created new markets.

Segments missed during normal viewing time can be watched later and prevent audience decline.

BBC iPlayer users viewed programs they normally wouldn't have time to watch. This was due to it's on-demand content.

Search & Recommendation

Recommendations cannot be driven purely by technology nor historical purchases.

Customer ranking, purchasing history and archivists suggestions make the best search and recommendation tools.

Tagging of content will be key to success in any search or recommendation.

Sophisticated tools exist to scan blogs, chat rooms, bulletin boards and other forums to ascertain what video content interests users.

Title: Media Predictions, TMT Trends 2007, Auhor: Brightman, Igal, Source: Deloitte: Technology, Media & Telecommunications, p11 & p16

Recommendation

Become a distributor for independents before Netflix.

Offer DRM free downloads.

Create detailed customer data profiles of customers in audio and video.

Offer promotional trial periods & free downloads.

Target set-top boxes, institutional markets, retailers, IPTV networks.

Become a player in own right or be acquired later for rights.

Create a video genome project?

Appendix

US Online Adults (18-34) Who Are Interested in Watching TV Shows & Films on TVs and PCs, 2006

Title Internet Video Audience; Authors: Hallerman, David; Source: eMarketer; Dec 2006, p27, chart # 070473

US Adult Internet Users Who Regularly or Occasionally Download or Stream Video or Television Content, By Gender, JulAug 2006

Title Internet Video Audience; Authors: Hallerman, David; Source: eMarketer; Dec 2006, p8, chart # 077823

US Online Video Viewers Who Have Ever Paid to
Watch Any Type of Video Online, Jul-Aug 2006

Title Internet Video Audience; Authors: Hallerman, David; Source: eMarketer; Dec 2006, p18, chart # 077479

Aspects of Watching Online Videos that US Online Viewers Enjoy, Jul-Aug 2006

Title Internet Video Audience; Authors: Hallerman, David; Source: eMarketer; Dec 2006, p16, chart # 076597

Aspects of Watching Online Videos that US Online Video Viewers Do Not Enjoy, Jul-Aug 2006

Title Internet Video Audience; Authors: Hallerman, David; Source: eMarketer; Dec 2006, p16, chart # 076598

Types of Online Video Watched Frequently or
Occasionally by US Internet Users, Feb 2006

Title Internet Video Audience; Authors: Hallerman, David; Source: eMarketer; Dec 2006, p23, chart # 078706

Types of Online Video that US Online Video Viewers Watch Once a Week or More Frequently, Feb 2006

Title Internet Video Audience; Authors: Hallerman, David; Source: eMarketer; Dec 2006, p23, chart # 077863

Non-Traditional Ways that US Consumers Watch TV Programs, Jan 2006

Title Internet Video Audience; Authors: Hallerman, David; Source: eMarketer; Dec 2006, p27, chart # 078701

US Internet Users' Interest in Computing, Television and Cellphone Feature Convergence, Feb 2006

Title Internet Video Audience; Authors: Hallerman, David; Source: eMarketer; Dec 2006, p28, chart # 078167

Millions of $1985199520012002200320042005

Row 26.517.73130.63934.436.2

Millions of $20012002200320042005

Row 29.511.214.711.415.2

% of RespondentsColumn B

TVs0.68

PCs0.45

% of RespondentsDownload VideoAll Internet Users

Female0.3980.519

Male0.6020.481

Column B

Paid0.07

Did Not Pay0.93

Convenience22%

Accessibility21%

Entertaining8%

News/Weather Report7%

Fast/Quick6%

Different/Unique5%

Educational4%

Can See What I Missed4%

Can Check Out New Movies/Music4%

Current/Up-To-Date3%

Variety3%

Short Clips2%

Free2%

Can Watch or Stay Updated on Sports2%

More Detail/Information2%

Can Fast Forward/Pause1%

Can Save/Share Video1%

No Commericals0%

Other14%

Nothing10%

Not Sure4%

???Page ??? (???)03/17/2007, 18:51:16Page / Poor Quality17%

Problems with Audio/Video Playback14%

Download Time12%

Screen Resolution is Too Small6%

Slow4%

Ads/Commercials4%

Loading Time3%

Inappropriate Content2%

Lack of Comfort or Ability to Sit2%

Small2%

Don't Have Time2%

Viruses1%

Too Short1%

Cost1%

Watching Online0%

Other13%

Nothing24%

Not Sure4%

???Page ??? (???)03/17/2007, 18:51:17Page / % of RespondentsColumn B

Movie Previews0.31

News0.32

Music Videos0.23

Sports Highlights0.16

TV Show Highlights0.15

Full-Length Movies0.09

Sports Events0.09

Current TV Shows0.08

Classic TV Shows0.07

Any0.5

% of RespondentsColumn B

News/Current Events Videos0.27

Jokes/Funny Video Clips0.26

Movie Clips/Trailers0.24

Music Videos0.23

Weather Information0.19

Entertainment News0.19

Movie Reviews0.17

Sports Highlights0.17

TV Shows/Segments from TV Shows0.16

Advertisements0.14

Short Films (< 30 min)0.13

Business/Financial News Videos0.1

% of RespondentsColumn B

TV Series on DVD0.27

Video-on-Demand0.23

Online Broadcast0.1

Internet Download0.05

TV Show Clips on Cellphone0.04

% of RespondentsColumn B

TV-Related Features Available on Computer0.33

Internet-Related Features Available on TV0.28

Phone-Related Features Available on Computer0.27

Internet-Related Features Available on Cellphone0.23

Phone-Related Features Available on TV0.21

TV Related Features Available on Cell Phone0.15

% of RespondentsColumn B

Using a Search Engine0.86

Read news0.77

Check Weather0.74

Online Banking0.73

Shop Online0.71

Play Games0.65

Access Local Information/Yellow Pages0.55

Visit Auction Sites0.54

View Health Information0.52

View TV or Movie Listings0.52

Make Travel Arrangements0.45

Listen to Streaming Audio0.39

Download or View Streaming Video0.34

Read Blogs0.32

View Stock Quotes or Financial Information0.28

Download Movie or TV Shows0.21

Read RSS Fees0.14

Listen to Podcasts0.1

% Market ShareColumn B

The Internet Movie Database (IMDb)0.1463

Yahoo! Movies0.0979

NetFlix0.0857

MSN Entertainment Movies0.0573

Blockbuster0.0494

Fandango0.0355

Moviefone0.034

MovieTickets.com0.0206

Movies.com0.0166

Rotten Tomatoes0.0165

GenderMale55%

Female45%

Age12-179%

18-3427%

18-4964%

21-3424%

21-4960%

25-4956%

25-5466%

35-4937%

35-6457%

18+88%

21+84%

35+61%

45+36%

???Page ??? (???)03/17/2007, 18:51:17Page / Year200520062007200820092010

Box Office$8,991$9,273$9,622$10,080$10,584$11,100

In-Store Home Video24,28524,10224,77326,05327,75129,457

Sell Through16,67017,26218,15619,60221,40023,280

Rental7,6156,8406,6176,4516,3516,177

Online Rentals/Digital Streaming1,1231,7332,2742,7233,1953,618

Total Home Video25,40825,83527,04728,77630,94633,075

Grand Total$34,399$35,108$36,669$38,856$41,530$44,175

???Page ??? (???)03/17/2007, 18:51:17Page / YearMillions of $200520062007200820092010

Box Office899192739622100801058411100

Sell Through166701726218156196022140023280

Rental761568406617645163516177

Online Rentals/Digital Streaming112317332274272331953618

Millions of $200520062007200820092010

Row 21482235458700938

18-20 Male18-20 Female21-24 Male21-24 FemaleTotal

Computer47%41%42%33%40%

Mobile Phone7%12%10%9%

Video Ipod or Similar Device9%7%3%7%

None of the Above47%49%46%58%51%

???Page ??? (???)03/17/2007, 18:51:18Page / Age Group% of Respondents18-2425-3435-4445-5455-6465+

Female0.1680.1820.1570.1480.0780.128

Male0.2430.3140.2320.220.1630.182

No of Films ReleasedMPAAAll Others

1995212158

2001188274

2002220229

2003194265

2005198322

2005190345