Over-the-top video services have been putting mounting pressure to pay TV providers. Apple TV is well received by the reviewers, even though nobody has used the real product. Netflix's stock price just hit a new 52-week high as it expands its streaming service into Canada and its long-time competitor Blockbuster filed for chapter 11 bankruptcy. Amazon is preparing its own streaming service, so does Sony. Everything together depicts the picture that pay TV companies are doomed. The prices for pay TVs' current plans have long been perceived as ripoffs. According to Strategy Analytics recent consumer survey, only 20% respondents say that the value-for-money of their pay TV services exceed their expectations. This is clearly a vital weakness of current pay TV services. But on the other hand, because of the overpricing pay TV providers are able to pay media companies big checks for their content. Everyone loves money. This is the reason why media companies and content producers have been reluctant to give their content to the new online distributors, such as Netflix. The advent of Apple TV seems to have taken a big step in the direction of solving this problem, offering a pretty cheap price for the content to consumers, i.e. $3.99 per movie rental and $0.99 per TV show episode. And because of its power in the consumer electronics and media industry, a lot of the major media companies are willing to participate in the deal in the hope of generating incremental revenues in addition to existing distribution channels. But today Viacom has said that the price for content on Apple TV is too low and they will not participate in the service. Other national broadcast networks owned by NBC Universal and CBS Corp. and all cable networks chose not to participate due to pricing and other strategic concerns. It is a big blow to the fledgling Apple TV service. Fundamentally, it is a confrontation between media companies and consumers, with content distributors being as the intermediary to alleviate the tense. Content owners want more money for their content, whereas consumers want to save money from their entertainment spending. As a result, a lot of consumers flock to Netflix due to its low pricing. But media companies tend to favor pay TV services for their content access, as they pay more. The end of the story is that consumers are not completely happy with Netflix as they don't get new content from it, but pay TV services suffer too, witnessing their subscribers eroding. From economics standpoint, it is not maximizing the social benefit as media companies are leaving the money on the table by sticking with overpriced pay TV services. It is clear though that anyone who can address the $64 million question in the video entertainment industry will lead itself to prosperous growth. And the industry needs a compromise. - Jia Wu

A new Web TV Portal launched in the UK this week. It is made up by the remnants of “Project Kangaroo”, the Web TV joint venture between ITV, Channel 4 and BBC which was blocked by the UK’s competition commission a year ago. After Project Kangaroo stalled, the technology platform was scooped up by infrastructure and media services company Arqiva which is now launching its own Web TV portal named SeeSaw. At launch, SeeSaw is offering 3,000 hours of television content and will be the first major Web TV portal in the UK that offers content from UK broadcasters BBC World, Channel 4 and Five in one place. Content from ITV, however, is notable for its absence.   ITV is believed to be contemplating an exclusive deal with HULU, the American Web TV joint venture between Disney, News Corp and NBC Universal, which is yet to launch in the UK but most likely will instantly become SeeSaw’s biggest rival once it does. Until now, many broadcasters in the UK and elsewhere have done reasonably well from offering their own individual Web TV services but what HULU has made devastatingly clear in the US market is that – given the choice – most consumers will choose a Web TV portal over individual channels' Web TV services. In the long term, there is likely only going to be room for a couple of large mainstream Web TV portals in each market. This is just the nature of the Internet and we’ve seen it over and over again with Google in search, Facebook in social networking and Amazon in ecommerce. The Web TV space is no different in this respect and at the moment it’s very much a race for land-grab and positioning in a nascent but rapidly growing new market. The fact that SeeSaw managed to launch before HULU in the UK market will undeniably give it a head start in attracting users but the real test will come when the American Web TV portal finally launch later this year. Client Reading: European Web TV: Era of Anywhere, Anytime TV Approaches

Microsoft has announced that NBC Universal will provide movies to its growing catalogue of titles available for download through the Xbox Live service in France, Germany, Spain and the UK. The newcomer joins existing studios Warner, Paramount and MGM. The movie library will now total nearly 300 titles, and Microsoft claims that movie sales have doubled since the introduction of the new Xbox interface (NXE) late last year. Microsoft has brought over a team from the US to build up the Xbox Live activities in Europe, which are tracking somewhat behind what’s going on in the US. As I mentioned recently Netflix has had tremendous success with its movie rental service through the Xbox Live service in the US. Unfortunately Netflix doesn’t have a European activity yet, so until a deal with a European aggregator (Lovefilm?) can be signed, Microsoft is having to pull together its own movie deals. As with everything else in Europe, that’s no easy matter as rights have to be cleared in each country separately. Italy had to be excluded for the moment from the NBC Universal deal, for example, because of local exclusivity clauses. The Xbox Live library offers a mix of SD and HD movies, the latter in 720p. We are still waiting for the arrival of 1080p movies, both in the US and Europe. That will be a significant moment, because it will justify what Microsoft has claimed all along: that it doesn’t need to add Blu-ray capability in a world of online video. 1080p movies would obviously be a challenge in terms of file size, in terms of storage and network access, but it’s something Microsoft will have to address sooner or later, in spite of its claims that users can’t tell the difference between 720p and 1080p. Twitter: twitter.com/dmercer15 Client Reading: Digital Media Survey: An analysis of US Online Premium Video Users

...and not before time. The BT Vision Philips set-top box (V-box) has had HD capability built in from day one, as have most IPTV set-top boxes around the world. So it's taken more than 18 months since the launch of the service to offer HD quality. BT's first deal is with NBC Universal "for a broad selection of feature films" on the VOD service. Specifically, that means The Incredible Hulk, Wanted and Charlie Wilson’s War, alongside library titles such as E.T. – The Extra Terrestrial, Shaun Of The Dead and Miami Vice. Prices for new films will be £4.95 and library titles £2.95. BT says they are "competitively priced", but Sky HD Box Office movies are priced at £3.99 so users will soon decide whether £4.95 is too much for a recent release. BT's model for Universal movies is the usual "unlimited viewing" during a 48-hour period. It's good to see broadband television in the UK catching up with other European countries like France (though, as I have pointed out many times, BT Vision is not really "IPTV" - it's IP VOD combined with DTT). It will require a lot more choice of HD content for BT to start deploying its HD service as a marketing weapon, but this is at least a start. BT should also be commended for not falling into the "four-letter word" trap: there is no mention of "full HD" or 1080p. The BT Vision V-Box can present HD content in 720p and 1080i via HDMI. All HD content is encoded and delivered to the V-Box in 1080i. So the UK's Blu-ray fans can rest easy for now. Client Reading: Full HD: Blu-ray Camp Claims Broadcasters "Mislead" Consumers