October 9, 2024

Hotel Guests Turn Away From TV and Toward Streaming Media

Mr. Markidan, who spends 40 percent of his time traveling on business and is an elite participant in the Hilton and Hyatt loyalty programs, takes his MacBook Pro and iPad with him on the road and watches all television programs by streaming them on his laptop, using a portable router to extend the Wi-Fi signal in his hotel room.

“For a lot of people my age and a lot of people in general, the way we consume entertainment at home is changing,” he said. “I no longer have a cable subscription — the way I watch entertainment at home is the same way I watch it on the road. I have a Hulu subscription, Amazon Prime and Netflix.”

Guest-room entertainment “is not an amenity that will drive my decision to stay at a hotel,” he said, adding, “I’m a lot more concerned with loyalty program perks.”

James Lingle of Highlands Ranch, Colo., a consultant to hotel companies and guest-room entertainment service providers like LodgeNet’s competitor iBahn, observed: “If you look back, typically the first thing a guest would do when they walked into the door of a hotel room would be to turn on the TV. Now people bring their entertainment with them, tablet-based devices like an iPad, accounts and memberships like Netflix, Amazon Prime and Hulu Plus, and they want to be able to use them.”

LodgeNet’s decline directly reflects these changes. According to its bankruptcy filing, the number of hotel rooms it served globally dropped to 1.5 million in 2011 from 2 million in 2009. It provided guest-room entertainment services to most major hotel chains, usually by installing and maintaining free televisions and offering video-on-demand entertainment, for which it and the hotels received fees. LodgeNet’s sales in 2011 were $421.3 million, a 21 percent drop from a high of $533.9 million in 2008.

Colony Capital, a real estate and hotel investment firm in Los Angeles, led a group that invested $70 million in a controlling interest in LodgeNet, based in Sioux Falls, S.D., and brought in a management team of former Starwood, Fairmont and Hilton executives. LodgeNet, which emerged from bankruptcy in late March, also signed an agreement with DirecTV to jointly offer entertainment to hotels and hospitals.

The revamped LodgeNet faces strong competition from companies including Swisscom Hospitality Services, based in Geneva; iBahn, based in Salt Lake City; Guest-Tek, of Calgary, Alberta; and Roomlinx, based in Broomfield, Colo. All are developing systems that let travelers consume entertainment the way Mr. Markidan does — via the Internet, frequently through subscriptions they already have and use at home, either through Wi-Fi or a direct cable connection between their laptop or tablet and the guest-room television set.

Different types of hotels have different policies regarding Internet access. Many less expensive hotels offer it free, while more expensive ones often charge for it. What’s expected to happen next, speaking broadly, is that using the Internet for e-mail will be free, while many hotels will charge for uses requiring a lot of bandwidth, like  downloading or streaming videos, with the cost tied to the amount of bandwidth required.

“We will give customers more short-form content at very attractive prices, affinity packages of sports channels, just-missed TV, video games, as well as movies currently in theaters,” said Michael Ribero, Lodgenet’s new chief executive. “We want to give them the opportunity to watch what they want, even if it’s through Netflix and Amazon Prime.” He said LodgeNet will no longer provide television equipment in hotel guest rooms in exchange for video-on-demand fees. Instead, DirecTV will offer hotel owners lease financing for TVs, freeing capital that LodgeNet can invest in product and service improvements.

Article source: http://www.nytimes.com/2013/05/01/business/hotel-guests-turn-away-from-tv-and-toward-streaming-media.html?partner=rss&emc=rss

Media Decoder Blog: Streaming Lifts Home Entertainment Spending

LOS ANGELES — Total spending on film and television in home entertainment formats rose ever so slightly in 2012, to about $18 billion, up 0.23 percent from $17.96 billion a year earlier, the Digital Entertainment Group, a trade association, said on Tuesday.

Any sort of increase was welcome news to the industry, given the long slide in DVD sales. The numbers were helped along by a sharp increase in revenue from the subscription streaming of movies and shows, to $2.3 billion from $1.6 billion.

Disc sales declined 5.5 percent to $8.5 billion, from almost $9 billion last year, and revenue from video rental stores declined sharply, to $1.2 billion from about $1.6 billion. But growth in video-on-demand and digital sales pushed the industry ahead.

Article source: http://mediadecoder.blogs.nytimes.com/2013/01/08/streaming-lifts-home-entertainment-spending/?partner=rss&emc=rss

Media Decoder Blog: Showtime Extends Its ‘Anytime’ Service

Following the lead of its larger rival HBO, Showtime is beginning to broaden access to an Internet service that lets its subscribers stream hundreds of television episodes and feature films.

The service, called Showtime Anytime, was turned on for Verizon FiOS customers on Tuesday, and will be extended to several other cable and satellite distributors later this year. Already available for Comcast and ATT U-verse customers, and now available for the first time on the iPad, it is part of a push toward subscriber-only streaming.

While many networks, including HBO and Showtime, have made some programming available via traditional video-on-demand systems for years, the Internet streaming interfaces are more functional and have a deeper selection of shows and films. HBO made a competing service, HBO Go, broadly available to its subscribers last year, drawing rave reviews and motivating other television networks to try to match it.

Tom Christie, Showtime’s executive vice president of affiliate sales and marketing, acknowledged in an interview that HBO had forged ahead with HBO Go and called it an “excellent product.” But he said HBO’s head start “had no perceptible effect on our business.”

“We took a look at what they did, and we took a look at what else was happening in the space that is frequently called ‘TV Everywhere,’ ” Mr. Christie said. “We took our time to be careful and put together the best product that we could.”

Both networks treat the streaming services as tools to retain subscribers and entice new ones to sign up. The services protect the current relationships between distributors and programmers by requiring viewers to log in with their cable or satellite account.

HBO moved quickly to line up all the major distributors for HBO Go, with two exceptions, Time Warner Cable and Cablevision. Those companies announced last month that they had belatedly reached agreements with the company. (Time Warner Cable officially turned on HBO Go on Tuesday.)

Mr. Christie said the HBO and Showtime strategies differed significantly.

“It appears to us that HBO went out and very quickly got it launched on cable systems; they didn’t have much of a negotiation with cable affiliates,” he said. “But once it has launched all over, it becomes a major sticking point in the negotiations.”

Showtime, instead, has included the new streaming service in negotiations as its previous agreements with distributors have come due for renewal, he said. The Showtime Anytime introduction with Verizon is part of a larger five-year renewal.

HBO declined to comment.

Terry Denson, the vice president of content strategy and acquisition for Verizon, said the renewal would allow out-of-home viewing of Showtime programs on the iPad — a sticking point in some other negotiations between distributors and programmers.

Mr. Denson called out-of-home access an important differentiator for Verizon. Though it may sound clichéd, he said, “if you look around and say, ‘Geez, where can you really do it?’, there’s not a lot of places.”

Comcast was the first to allow its subscribers to stream Showtime content online in late 2010, though only on its own Web site, not on Showtime’s. Mr. Christie said the two companies were now working on an integration.

Mr. Christie said there were several other distribution deals “that will come in for a landing shortly.”

Article source: http://feeds.nytimes.com/click.phdo?i=7d85038f396f7ea6d2088813611db436

Netflix’s Profit Rises Amid a Rush to On-Demand

“It took us four years to get to 3.3 million subscribers,” Reed Hastings, the company’s chief executive, said in an interview Monday evening. “Now we did it in one quarter.”

Mr. Hastings said the online streaming business “is just racing ahead.” But earlier in the day, in a letter to shareholders, the company cautioned that its torrid pace of growth might be tempered in the months ahead. It said it expected to add 1.2 million to 2 million subscribers in the next three months. Netflix shares declined about 5 percent in after-hours trading.

Although some analysts were disappointed by Netflix’s outlook for the second quarter, its results in the first quarter were generally above expectations. At the end of the first quarter, Netflix had 22.8 million subscribers in the United States, giving it as big a footprint as the biggest American cable operator, Comcast, which reported 22.8 million subscribers at the end of last year.

That subscriber milestone was the best proof to date that Netflix has responded more quickly and more effectively than any other media company to customers’ demands for video-on-demand. Yet the milestone is largely symbolic because Comcast and Netflix do not directly compete; Comcast is available only in certain parts of the country, and Netflix is largely supplemental to the services provided by cable and satellite operators.

Still, the comparisons made by analysts underscored just how fast Netflix has picked up customers. Two years ago, it had 10 million customers and was largely a DVD-by-mail service; today it is a force in video streaming.

Netflix said in a letter to shareholders that it had benefited from a “virtuous cycle” of “increased investment in streaming content, strong word of mouth and an expanding device ecosystem.” (The service is often connected to devices like video game consoles and Internet-ready television sets, which have rapidly proliferated and have driven Netflix’s subscriber growth.) It reported worldwide revenue of $719 million for the quarter, up 46 percent over the same period last year, and $60 million in net income, up 88 percent over the same period last year.

Netflix’s streaming service costs $7.99 a month. To keep customers paying for unlimited access to its library of films and TV shows, Netflix must maintain its own access to that content. Last month, it announced that it had bought the exclusive rights to a show, “House of Cards,” that Media Rights Capital is producing. This month it paid Lionsgate for the rights to stream archived seasons of the AMC series “Mad Men” and paid Twentieth Century Fox for the rights to the Fox series “Glee,” among others.

But at the same time, the pay cable channels Starz and Showtime are becoming more restrictive about Netflix’s access to their content. Netflix is trying to make the case that its streaming deals benefit all players because when users watch past seasons of shows, they are then more likely to watch current seasons shown by a cable provider or broadcaster. “We hope over time that HBO and Showtime will let us prove this proposition for them,” the company wrote in the shareholder letter.

Referring to its licensing of “House of Cards,” Netflix wrote that it would seek two or three “similar, but smaller deals” for exclusive content.

Mr. Hastings said having shows like “Glee” and, “House of Cards” would “continue to help us get more subscribers, which then helps us to afford to license more content.”

So far, Netflix is the only major player in the online-only video subscription business, but others are playing catch-up. Some cable and satellite operators are bragging about their own video streaming options: last week, for instance, when the Dish Network introduced HBO’s streaming service, HBO Go, it promoted movies that were “not offered by Netflix’s online service.” HBO Go requires an existing subscription to HBO through a cable or satellite operator, so Netflix does not consider it a direct competitor.

But Mr. Hastings acknowledged Monday that “there will be a number of substantial competitors” in the online streaming space in the future. One competitor, he said, could be the Dish Network, which bought the bankrupt Blockbuster in a bid valued at $228 million in cash this month. Analysts immediately suggested that a war between Netflix and Blockbuster could be brewing.

Netflix wrote to shareholders on Monday, “Our competitive strategy relative to other streaming services is simply to grow as fast as we can, so we can afford more content, more marketing, and more RD than our competitors.”

Article source: http://feeds.nytimes.com/click.phdo?i=ac57d46a2079c20cfa148e388ac9f272