Blog Post

Vudu Goes Box-free for Entone

“Over the top” video services carry the implication of going behind the backs of existing television operators. But two of the (admittedly smaller) players in IPTV and web-delivered video on demand are teaming up to give us a glance of what a united future could look like.

entone-janus-vudu-uiEntone, an IPTV set-top box and service provider, is announcing today it has teamed with Vudu to offer the latter’s library of 14,000 movie and TV titles, including 1,500 HD films.

The offering marks Vudu’s first “embeddable” version of its software sans its own hardware. The company, which has been through multiple price reductions and layoffs, looks to be moving in that direction: “[W]e want consumers to get access to Vudu through the devices they already have in their home,” said Edward Lichty, the company’s EVP of strategy and content.

The joint Entone-Vudu offering, which is supposed to launch at the end of June, will behave just like Vudu — same delivery software, same selection, same prices — but without the proprietary Vudu remote control.

Entone is also looking to sign more deals for web-delivered content, said CEO Steve McKay. He thinks he can accelerate adoption of the services by making them more easy to access. “You’re asking the consumer to buy special-purpose devices,” he said of other solutions like Roku, Apple TV (s AAPL) and ZillionTV.

Entone has about 200,000 customers of 70 U.S. phone companies using its IPTV devices today, and they are all expected to have access to the Vudu service. Vudu has not released sales numbers.

Further reading/watching: We posted a video interview with McKay last October.

12 Responses to “Vudu Goes Box-free for Entone”

  1. timekeeper

    Remember – there is a seemingly never ending supply of VC money behind these ventures.

    From where I stand, Hollywood is being short sighted. Instead of driving the solution and crafting a profitable industry model, they are cherry picking and sucking these new IPTV companies’ coffers dry, in turn, trying to keep their traditional business models intact. Don’t let this Hulu initiative fool you. It’s a scratch on the surface of what they could/should be doing.

    The current IPTV value proposition is twisted and seems to work like this:

    IPTV Company announces $25m in funding. There’s a hook – no one gets it all at once.

    1st tranche gets them into development
    2nd tranche upon completion of pre-production proto
    3rd tranche upon signing of tier 1 or tier 2 content supplier.

    Here is where it all falls apart. You’ve mentioned this on NewTeeVee in the past. Hollywood is charging more for some premium titles than they are letting these IPTV guys sell them for – a loss leader they call it. The problem is, the IPTV guys don’t care if it is good business or not. Sign up a tier 1 Content Provider (CP) get your next tranche. Where is the paying customer in all this? Buying a non-transferable digital only movie for $16.95 that can only be watched on proprietary hardware or renting them for a ridiculous $4.99 for 24 hours. It’s a digital download – these should be micro-transactions!

    Also, in traditional broadcast models, broadcasters license/acquire a piece of content for a certain amount of time and money. Risk and Revenue get transferred to the broadcaster. From there, the broadcaster sells advertising and puts the proceeds in their pocket. In the IPTV realm, CP’s are looking for minimum guarantees, advances, and a rev. share. There is no money left for the IPTV company to make a profit. But, as I stated above, the economics of this market are so twisted, profit for the IPTV Co. is not critical. Signing a new deal to get your next tranche is the goal as the customers are not buying.

    Someone is going to figure this market out and create a business model that works. It will involve shortening the value chain, delivering more profit to the CPs, providing great value to the viewer with revenue left over for profit for the IPTV Co. Democratize distribution, bring the producer and consumer closer together, and make it easy. Only then will the money will start to flow.

    TK

    PS: Ditch commercials – they are sooo 1950’s.

  2. timekeeper

    It’s Akimbo all over again. The people at VUDU must be running scared to abandon their hardware platform, which they invested millions to develop, in order to find some revenue. It won’t be enough to get them out of that deep hole they’ve been digging – massive R&D on proprietary hardware, large inventory investment, Best Buy training and inventory…I’d hate to be their CFO right now. The VC’s must be on the horn daily.

    Why do people think they are smarter than the previous failures in a market when they end up doing the exact same thing? You are supposed to learn from the mistakes of others and improve upon the model. Not everyone wins but the model should evolve.

    VUDU’s juju is starting to smell like moo doo.

    TK

  3. I like that Vudu is working on embeddable solutions, but I’m still going to avoid Vudu myself. It just doesn’t make sense to spend the money on their hardware (or someone elses) and then get locked into their content eco-system. If Vudu supported things like MKV, DivX, Hulu, Netflix and other outside content providers, then the product would be 1,000 times more appealing, but when consumers content is held hostage by the device maker, it’s a recipe for disaster. What happens if Vudu goes out of business (a very real possibility apparently)? Consumers lose access to the content and end up with a door stop. If Vudu loses a contract, then consumers lose the content. I don’t want to own a proprietary box, I want to own something that works with any cable or satellite provider and supports all forms of digital content. Instead of trying to double dip on fees, Vudu should quit trying to monetize the content side of the business and make their hardware attractive enough that people might actually want to buy it.