Blockbuster is continuing to look for ways to enter the digital age and now is openly courting telcos for content delivery partnerships. Speaking at a Citigroup Media Conference in Phoenix, Blockbuster CEO Jim Keyes is quoted by Reuters as saying, "As we move toward video-on-demand and pay-per-view, Blockbuster is well positioned not only to compete on our own, but also to partner with others." He specifically cited Verizon and AT&T as potential partners.

The rush for finding an optimal way to deliver Internet streamed video is well underway. As of right now the dominant players appear to be Apple, Amazon, Netflix, Hulu, and of course YouTube. Blockbuster wants in. They are looking for ways to leverage their 60 million+ retail customer relationships into some form of digital nirvana. Partnering with the likes of Verizon and others makes good sense, at least in theory. Verizon has already announced their intention to launch a Verizon content delivery network. Accessing Blockbuster’s content library may make sense. "We're very focused on providing a lot of video (content) for consumers who have an insatiable appetite for it, so speaking to companies that provide video content makes a great deal of sense and we should be speaking to companies like this," said Verizon spokesman Phil Santoro to Reuters.

We’re at the beginning stages of the broadbandTV movement. Service providers of all sizes have to get serious about investigating all of their content delivery options – telcos especially. Cable companies like Comcast are moving quickly on this front as well, and already have vertically integrated content relationships to leverage. From a service provider’s point of view, the next couple years will be critical in ensuring a seat at the content delivery table.

It appears as if 2009 may be shaping up as a defining year for broadbandTV – which we define as Internet streaming of video directly to the TV (with or without a STB). There’s been a flurry of activity in the past couple months with, NetFlix, Vudu, and Hulu all getting their fare share of news. Recent interesting news involves Netflix and LG announcing that LG televisions will embed NetFlix players on forthcoming TV’s, allowing LG customers to download NetFlix content directly to the TV, without the need for an external set-top-box or computer. With CES kicking off later this week, we expect to hear similar announcements from other broadbandTV players.

BroadbandTV or 'over-the-top' video has been building significant momentum for the past year or so. So much so, we can now extend 'cutting the cord' vulnerability to subscription pay TV, where consumers decide they don’t need a cable/IPTV/DBS monthly subscription, and instead opt for broadbandTV exclusively. The economic downturn fuels this vulnerability, as consumers look for ways to cut monthly expenditures. We would agree that 2009 is looking like an important milestone in the adoption of broadbandTV – but don’t foresee any material threat to the subscription pay TV model anytime soon.

Two significant hurdles remain before broadbandTV puts a serious dent in the subscription model – revenue and confusion. First, we must recognize that despite the press that broadbandTV endears, the subscription model still reigns supreme to the people that count the most in this debate – content owners. They rake in billions in revenue annually from the subscription model. They will not trade those subscription pay TV 'dollars' for broadbandTV 'dimes' anytime soon, despite the appeal of going direct to consumers. Can you blame them? There’s a reason why Hollywood moves slowly with new technology – they're too busy counting money. Secondly, while broadbandTV is 'cool' to industry analysts and consumer geeks, to the vast majority of mainstream consumers, it’s still too confusing. Disagree – try explaining this phenomenon and its ‘value proposition’ to your wife who may be a school teacher, or your brother who is a fireman, and then convince them to give up Lifetime and/or the Sunday NFL Ticket for it. Good luck. That being said, LG and NetFlix are on the right course. BroadbandTV won’t be accepted by a sufficient number of consumers to have an impact on the pay TV model until such time that it’s idiot proof and doesn’t need an explanations of how to make it work and why it’s valuable. We’ll see significant momentum in 2009, with more 'blue chip' partnerships put in place that help achieve this goal. If anything, 2009 may awaken pay TV operators to figure out how/if they can dominate a broadbandTV world. Can they?

Santa Clara, CA, Dec. 16, 2008 - VUDU today took a major step forward in bringing the Web into the living room by launching the VUDU RIA (Rich Internet Application) platform, a standards-based platform that brings Web-hosted rich applications and services to consumer appliances such as the popular VUDU Internet movie player. VUDU RIA combines the openness and ease of development of Web applications, lightweight hardware requirements compatible with today's consumer Internet appliances, and a lean-back user experience optimized for television. Read More ...

ALVISO, Calif. - December 8, 2008 — After announcing a groundbreaking partnership in October with Netflix Inc., TiVo Inc. (NASDAQ: TIVO), the creator of and a leader in television services for digital video recorders (DVRs), today announced that subscribers to both Netflix and TiVo® Series3, TiVo HD, or TiVo HD XL can now access thousands of movies and TV episodes instantly streamed from Netflix directly to their TVs. Read More ...

DALLAS and SAN JOSE, Calif., Nov. 25 /PRNewswire-FirstCall/ -- Blockbuster Inc. (NYSE: BBI)(NYSE: BBI.B), a leading global provider of media entertainment, and 2Wire, a provider of integrated broadband solutions, today introduced the 2Wire MediaPoint™ digital media player, an easy-to-use, on-demand video solution that offers movie fans instant access through their television sets to BLOCKBUSTER® ONDEMAND content, including thousands of titles from the latest movie releases to classic favorites. Read More ...

Verizon announced they are launching their own content delivery network (CDN) to “distribute content that Verizon contracts for directly with content owners like movie studios, TV networks, video rental sites and entertainment services…” The CDN is being phased in through a business relationship with Velocix, a U.K.-based digital asset-delivery network provider. Velocix will provide CDN services utilizing p2p technology to Verizon. "Verizon is now positioned to offer content owners and video distributors a competitive choice in delivering their services to our broadband customers," said Marjorie Hsu, Verizon vice president for network technology. "With our new delivery capability, content owners will be drawn to our networks, and our customers will be the beneficiaries of a broad range of compelling content services."

Verizon joins an increasingly crowded CDN landscape. CDN’s are growing as broadband and high capacity network owners aim to leverage their core networks for the growing business of content delivery to a plethora of network connected devices. By creating their own CDN capability, Verizon and others eliminate the need of contracting with other transport networks to distribute content, thus hopefully increasing margins. Companies like Verizon may be attractive to content owners, because in addition to robust CDNs, they also offer millions of existing broadband customer relationships. The first example of this Verizon collaboration is Starz Entertainment's Starz Play broadband entertainment service, which “provides unlimited online subscription access to more than 2,500 movies and video selections on demand, in addition to a live stream of the Starz premium pay TV movie channel.” It’s yet another example of broadband service providers trying to leverage core strengths for competitive advantage.

ORLANDO (November 17, 2008) – Bright House Networks today announces a significant expansion of its Video On Demand (VOD) services with the launch of a new online destination where consumers can download to own or rent thousands of titles from Hollywood studios and across many cable and television networks. The online video store service, entitled Road Runner Video Store, is available at http://videostore.rr.com. Read More ...

Dallas, Texas, November 10, 2008 - AT&T Inc. (NYSE:T) today announced the public beta of VideoCrawler (www.videocrawler.com), an innovative new Web application designed to provide a better way for people to search for, organize and share online videos and other multimedia content. Developed in collaboration with Divvio, VideoCrawler indexes hundreds of millions of video clips from thousands of sites, with new sites and millions of clips added every day. Enter a search term and you'll receive consolidated results from across this vast index. From there, you can organize your favorites into collections, which you can choose to keep private or share with others via the VideoCrawler site or social networking widgets. Read More ...

Verizon and the NFL announced the continuation of their broadband partnership, which brings NFL Network games to Verizon’s broadband customers. Verizon initially offered this service during the NFL pre-season. The games are available online to customers who subscribe to both Verizon broadband service (FiOS or DSL) and Verizon TV service (FiOS or DirecTV). NFL Network Game Extra features include the ability to choose from multiple camera angles, chat features, a game statistics feed, and on demand video highlights. I would imagine that many users of this service will probably watch both – watch the game on TV, while simultaneously interacting with the broadband version to take advantage of the features it provides. Recent research from Nielsen Media reveals that online video viewing often occurs simultaneously with television viewing (check out my Light Reading blog post on this issue). This service seems ideal for that scenario.

NFL Network Game Extra is a great example of a value added differentiated service. It’s exclusive to Verizon customers, creating an element of competitive advantage. One problem though. I’m a Verizon FiOS customer, with both TV and Internet service. I’m the ideal customer for this type of feature, and would value it greatly. Yet I haven’t received any communication from Verizon notifying me of it. The only reason I know about it is because of my role as an industry analyst and blogger. I called two friends who also are huge sports fans and subscribe to Verizon Internet and TV – neither knew about this service, which started today. What good is a value add service if you can’t even communicate its existence to the very customers who would probably value it the most?

New research by the Conference Board reveals that TV viewership online has nearly doubled since 2006, with nearly one-fifth of Internet homes watching TV online. According to the research, associated television channel websites and YouTube are the most popular destinations for these viewers. "Being able to watch broadcasts on their own time and at their convenience are clearly reasons why we are seeing a greater number turning to the Internet. And, it is the reason why we would expect to see this trend continue,” says Lynn Franco, Director of The Conference Board Consumer Research Center. Other interesting findings from the study include:

• Among online viewers, 43% watch news, 39% watch drama, 34% watch sitcoms, 23% watch reality shows, 16% watch sports, and 15% watch user-generated content
• Among the online viewers, 90% watch online broadcasts at home, 15% in the office, and 6% in other locations

Some of these findings are a little surprising to me. I guess I expected higher numbers. Reading this data makes me feel that all of the predictions of traditional television’s demise at the expense of the Internet are premature. The news is good for programmers, because their websites are the most popular destinations, meaning regardless of the method of distribution, they seem to be maintaining a relationship with viewers. Will that prompt them to try to bypass their distribution partners, including DBS, cable, and telcoTV?