An Ignoble Experiment

The Securities and Exchange Commission (SEC) won't take action against Netflix (Nasdaq: NFLX) CEO Reed Hastings over comments he posted on his Facebook page. The Commission, instead, used the brouhaha over the disclosures to issue a report clarifying how social media can, and should, be used when companies communicate material information to shareholders.

Hastings became a potential target for the government agency with a July 3, 2012, Facebook post that announced Netflix had "exceeded 1 billion hours for the first time" the previous month. The company had not officially disclosed this milestone via any of the traditional media and that, in turn, led to an outcry that Hastings had done something wrong.

The SEC took that outcry as an opportunity to clarify guidance it issued in 2008 about using websites to disseminate information to shareholders--as long as those shareholders know where to look. The new report, issued in lieu of taking action against Hastings or Netflix, "clarifies that company communications made through social media channels could constitute selective disclosures and, therefore, require careful Regulation FD [Fair Disclosure] analysis," an SEC statement said.

Most social media, which have exploded since 2008, "are perfectly suitable methods for communicating with investors, but not if the access is restricted or if investors don't know that's where they need to turn to get the latest news," George Canellos, acting director of the SEC's Division of Enforcement, said in a Commission press release. "One set of shareholders should not be able to get a jump on other shareholders just because the company is selectively disclosing important information."

This, apparently, was not the case with Hastings' Facebook posting, which was available to everyone--although it stepped close enough to the line to warrant a further look, the SEC conceded.

"Netflix did not report this information to investors through a press release or Form 8-K filing, and a subsequent company press release later that day did not include this information," the Commission's press release stated.

On top of this, and complicating matters still further, neither Netflix nor Hastings had previously used Facebook to "announce company metrics" and never told investors that Hasting's personal Facebook page might be used to do so, the press release said.

What pulled Hastings from regulatory hot water was "market uncertainty" about social media, the Commission said. The new report aimed to resolve that uncertainty, although it was noted that "[p]ersonal social media sites of individuals employed by a public company would not ordinarily be assumed to be channels through which the company would disclose material corporate information."

"Companies should review the Commission's existing guidance--it is flexible enough to address questions that arise for companies that choose to communicate through social media, and the guidance does so in a straightforward manner," said Lona Nallengara, acting director of the SEC's Division of Corporate Finance, in the press release.

For more:
- the SEC issued this press release

Read more about: SEC, social media
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2. Content aggregation could reduce cord-cutting advantages in short term

By Jim Barthold

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Cord-cutting is only attractive if there's lots of quality content and it's not expensive. Both of those factors could be going away soon--or at lease be substantially diminished--according to Darren Feher, CEO of Conviva, who expects that higher fees and less content will become the norm as the online video space finds its footing.

Rather than enjoying a plethora of high quality a la carte programming, cord-cutters will more than likely be confronted with choices between programming aggregators like Hulu and Netflix (Nasdaq: NFLX), who, in models similar to existing pay TV service providers, will bundle content together with concurrently higher prices, Feher said in a story reported by GigaOM.

"The whole industry is doing a lot of experimentation in places and markets where they are trying to figure out what will work for the U.S. market," said Feher, who knows a little about the industry thanks to his previous day job as CTO of NBCUniversal. "But before that, in the next 12 months there will increasing pressure against cord cutters. The whole authentication thing, where you can't watch content unless you have a cable sub, will be a mess for consumers."

Conviva is caught somewhat in the middle of this new paradigm. The company is working with HBOGo's over-the-top play, including the a la carte Nordic version. But Feher doesn't see that sort of play happening in the United States--at least not yet.

"Inevitability consumers will tell content creators what they want and the content guys will have to respond. There's a whole upcoming generation of 'cord nevers' that the industry has to consider."

That's the future. For now, though, content owners will probably stick to aggregation models that have worked in the past.

Even though cord nevers are growing--"[n]o one brings a TV to college anymore," Feher said--"in the short term there will be a lot more pressure on aggregators like Netflix and Hulu, and the consumer will feel that in less content or higher prices."

For more:
- GigaOM had this story

Read more about: cord nevers, a la carte
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3. Motive moving ahead with Tablet TV pilot

By Jim Barthold

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Motive Television is going ahead with plans to demonstrate and then roll out what it calls a "disruptive technology"--Tablet TV--that will deliver live broadcast television and VOD to tablets and smartphones, beginning in mid-2013 with a pilot demonstration at KOFY in San Francisco and concluding with a full rollout by the end of the year.

Tablet TV, unlike other online video services, is apparently cooperating with broadcasters, rather than competing with them.

"This technological breakthrough permits tablet users to view all television broadcasts receivable from public and commercial television stations in their city and the ability to time-shift the viewing of these programs." London-based Motive and its American partner Granite Broadcasting said in a statement. "In addition, Motive's patented Television Anytime Anywhere software will make possible video-on-demand catch-up and additional movies and television programs directly to the fastest-growing viewing devices--iPads and Android tablets."

Motive is working with Granite Broadcasting to let consumers view live local broadcasts, record live television with PVR functionality, datacast video-on-demand content and view social media. The technology receives signals broadcast over traditional ATSC digital streams.

The next phase of the project "will underscore the completion of a major milestone," the two companies said in a statement.

The Motive technology "has been in large-scale commercial use in TV broadcasting in Europe since 2009," the companies said.

"The demonstration pilot at KOFY in San Francisco is the next step in readying Tablet Television for the US market introduction," Motive CEO Leonard Fertig said in a statement. "Tablet TV continues to move toward its launch and becoming a significant player in delivering content to the fastest growing segment of television viewing. It will permit the television industry to see Tablet TV in action, prove Tablet TV's technical capabilities in a television broadcast environment, and make our consumer appeal apparent."

For Granite, Tablet TV means delivering "a new way that American viewers can enjoy their favorite broadcast television programs on the exponentially growing number of tablet screens," Granite Chairman Peter Markham added. "As a broadcaster we see Tablet TV as a source of additional viewing convenience for the public and a win-win for the industry."

For more:
- see this release from Motive

Read more about: Motive Television
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4. Report: Online video increasingly drives consumer purchases

By Jim Barthold

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Shoppers who view online video are "174 percent more likely to purchase" than viewers who don't, according to a research white paper developed by invodo, which said the online viewing trend will mature and explode in 2013.

The white paper, entitled "Video Statistics: The Marketer's Summary," comes to the conclusion that retailers must use video to demonstrate their products across a bevy of platforms and must stay tuned to the latest technology and professional services.

"Video generates purchases by bringing shoppers closer to the product. It provides a rich sensory experience (color, motion and sound) along with relevant context (scale and demonstration)," the white paper stated. "Because of this, customers are more confident to purchase."

According to the white paper, consumers expect to see product videos this year and expect them to be readily available without technological restriction.

"Users aren't concerned with form factors, devices or operating systems; they simply want product video available on-demand on computers, tablets, smartphones and Internet-connected televisions," the report concluded. "As new platforms and tools emerge, retailers must make content available across channels in order to maintain needed consistency for the omnichannel consumer."

According to the company's research, 52 percent of consumers say watching product videos make them more confident in their online purchase decision. And, it said, people are willing to watch video to learn what they need to know before making a purchase.

"More than three out of five consumers will spend at least two minutes watching a video that educates them about a product they plan to purchase and 37 percent will watch for more than three minutes," the research found.

The researchers also found that mobile and tablet shoppers are three times as likely to look at a video as laptop and desktop users, with 28 percent of smartphone owners watching videos on their devices in an average month and 49 percent watching at least one product video.

It's gotten to the point, the researchers concluded, that video is important enough that it needs professional attention going beyond the social media aspects that have long dominated the online video space.

"Professionally produced video optimized for eCommerce outperforms user-generated video by 30 percent, delivering a 24.7 percent lift as compared with an 18.7 percent lift for the UGC video," the report said.

For more:
- invodo prepared this white paper (sub. req.)

Commentary: Time Warner Cable EVP Joan Gillman details advanced advertising strategy

Commentary: Don't expect the online video ad market to explode anytime soon

Read more about: advertising
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5. Mashable Partners, Newsy team up on advertising-friendly video

By Jim Barthold

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