The online video marketplace continued changing rapidly during the fourth quarter. Much of the action centered around the proliferation of new connected entertainment platforms and Hollywood’s rising awareness of the long-lasting impact of Netflix and premium streaming on traditional home video business.
Perhaps the biggest news — and also the biggest letdown — of the quarter was the launch of Google TV. Google and hardware partner Logitech launched the first Google TV device on October 6. The collective groans over what many saw as a confusing and cluttered interface caused Google to do something practically unheard of: tell other hardware partners to delay showings their Google TV devices at CES.
But Google TV wasn’t the only action in the digital living room. Apple announced during the quarter it had sold 1 million Apple TVs, while Samsung continued to show how serious it was about the connected-TV market by releasing its third-generation connected TV and running a $1 million developer challenge for its smart-TV app platform. And while Samsung was the most active of TV OEMs in the smart-TV space in 2010, less than a week after the year ended, at CES, nearly every TV manufacturer had some form of smart TV on display in Las Vegas.
Meanwhile, the superstars of online video continued apace — Netflix and Hulu both saw increases in number of users and videos streamed. However, all wasn’t rosy, particularly for Netflix, as large studios started to grumble about the dirt-cheap licensing deals that Netflix had negotiated a few years back, and warned that going forward, the company would be forced to pay market value for a premium asset.
While Hulu showed its premium service ambitions earlier in 2010 by launching Hulu Plus, the company was still getting acclimated to the paid content waters as it dropped the price of the service from $9.99 a month to $7.99. Luckily for Hulu, it has a thriving video-advertising business to subsidize its paid-content experimentation; the company revealed during the fourth quarter that it expected to hit $240 million in revenue for the year.
And while social TV continues to be a topic of conversation for many, not much progress was made in the fourth quarter. New mashup service VYou showed what happens when you mix Q-and-A with video responses, but on-TV social progress was limited. Twitter, perhaps, had the most interesting work among the major social nets, by showing how it has become the social TV watercooler.