The Big Story

Originals just want to be free

This week, a couple dozen media and technology companies tried to wow advertisers at the annual NewFronts. Social media companies like Twitter and Snap and online publishers like Vice Media and HuffPost were joined by a growing number of companies running ad-supported video services, including Samsung, Vizio, Crackle and Roku.

These companies are all benefitting from a massive consumer and advertiser swing to streaming, as I outlined in a feature story Monday: 73% of connected TV ad buyers are shifting money away from broadcast and cable TV, according to a new IAB survey. To convince those advertisers that their particular service is worth spending money on, many of these companies are now starting to stream original content.

• A centerpiece of Roku's NewFronts presentation was Quibi's catalog of originals, which Roku acquired earlier this year. The company also highlighted its recent acquisition of the "This Old House" franchise.
• In a first for the service, Fox-owned Tubi promised to debut more than 140 hours of original movies and TV shows this fall.
• Amazon said it would add a number of scripted and unscripted shows, including a crime drama from "Law & Order" mastermind Dick Wolf.
• Crackle announced a couple of new unscripted shows, including one executive produced by Ashton Kutcher.

Online originals are nothing new, per se. "A lot of [ad-supported video services] have started talking about this incredible new idea they've had called original programming," joked Crackle Head of Programming Jeff Meier on Monday. "We've been pioneering original programming for over a decade."

Yes, but: In the past, investments in original programming for free online services were often more experimental in nature, and frequently had a hard time finding an audience. It's no accident that Crackle's most prestigious original, "Comedians in Cars Getting Coffee," now streams on Netflix.

This particular moment in time does feel different:

• A growing number of networks and studios are making shows for their own free online services.
• There's also more experimentation with windowing and distribution deals, which in turn makes the whole idea of "originals" a bit more blurry. Roku, for instance, is continuing to distribute "This Old House" on PBS and cable, and the show made an unexpected cameo appearance in Vizio's NewFronts presentation.
• There's also a recognition that in 2021, you can't just build your own Netflix with a handful of originals. Case in point: YouTube, which pulled the breaks on its subscription efforts in 2018 because no one was signing up, is now launching MTV-like original programming in front of the paywall.

It's worth keeping in mind that subscription services started small with originals as well. When Netflix debuted "Lilyhammer" as its first original show back in 2012, it didn't exactly aim for HBO-level audiences. Less than a decade later, Netflix is spending $17 billion on content in a single year, with the vast majority of that money going towards originals.

Overheard

"The TV business is a very low-margin business. It's not a glorious business to be in." —Vizio CTO Bill Baxter, explaining during the Next TV Summit why his company built its own data and advertising business.

"If I was Facebook, I wouldn't be trying to create a Metaverse. I'd be trying to use VR/AR to improve (and even revolutionize) social interactions between two people. That's the only way to have a strong foundation for a virtual universe worth living [in]." —Sharp observation from AR and VR artist/mad scientist Lucas Rizzotto.

A MESSAGE FROM MASTERWORKS

When it comes to sources we trust, the masterminds at Harvard are certainly up there… so when they say that at least 20% of your portfolio should be invested in a mix of alternative assets, we're inclined to listen. Meet Masterworks, your passport to the contemporary art market, where prices crushed S&P returns by 174% from 1995–2020. Protocol Next Up Subscribers can skip their 20,000 person waitlist with the special link below.*See important information.

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Watch Out

HTC's plans for Vive VR

On Tuesday, HTC is holding a two-day online Vivecon event to outline the future of its Vive VR line of products and services. HTC has been using its social media accounts to drum up excitement for hardware announcements at the show, but I was able to learn some key details ahead of time.

HTC will announce two new headsets at the show:

• The Vive Focus 3 Business Edition will be a premium headset for enterprise customers; leaked product listings suggest the device will retail for €1,474 ($1,771).
• The Vive Pro 2 is a premium PC headset that succeeds the 2018 Vive Pro, with leaked details suggesting a €842 ($1,012) price point.

I haven't seen any images of the two headsets, and also don't know anything about the specs, but earlier leaks suggest that the Focus 3 will make use of Qualcomm's XR2 processor. Which made me wonder: What else could HTC be working on? To find an answer, I scoured the company's recent patent applications.

• A patent application filed late last year suggests that the company has been working on improved hand tracking.
• Another recently published patent application suggests that HTC was at one point exploring adding vibrating plates to its headsets.
• Yet another patent application details a new set of controllers that can detect gestures via a series of loops you'd stick your fingers through. The controller would allow users to "perform more complicated input functions in VR, which in turn brings out diversified VR interactions and allows the user to play games in a more natural way," according to the filing.

Companies do file patent applications for all kinds of technologies all the time, and don't necessarily turn those technologies into actual products. What's more, HTC has a particularly poor track record even for the things it does announce or hint at. Remember the Vive Cosmos extension that was supposed to enable users to power the headset with a phone?

Still, if I had to pick anything, I'd say the finger tracking sounds the most intriguing, and also doable: Valve's Index controllers already feature 87 sensors for precise hand-tracking.

We'll know more about the two headsets and any other hardware HTC may announce Tuesday.

Fast Forward

• Spotify is getting a Clubhouse feature. During the company's latest earnings call, CEO Daniel Ek likened live audio to the Stories feature every app cloned two years ago.
• On Protocol: Chinese smart TVs are snooping on their owners. Skyworth TVs apparently scanned local Wi-Fi networks to report on users' devices.
• Prime Video now has more than 175 million viewers. That's according to Jeff Bezos, who dropped the tidbit during Amazon's Q1 earnings call.
• Three out of five Steam VR users own Oculus headsets. Not too shabby, considering that the Quest really isn't positioned as a PC VR headset.
• How Netflix and Apple were negotiating over in-app fees. Fascinating look at the back-and-forth between the two companies based on emails disclosed as part of the Epic v. Apple trial.
• Google has launched a new entertainment hub for Android tablets. Makes you wonder whether we'll see something like this on Android phones next.
• Spotify is getting more expensive. In the U.S., only family plans are affected.
• 49% of U.S. broadband households now own a smart speaker or smart display, according to new data from Parks Associates. Another tidbit from the same chart: Garage door openers are now more popular than cable boxes. Ouch!

Auf Wiedersehen

Streaming-video aggregator JustWatch recently launched an interesting widget for Earth Day: The site's Streaming CO2 Calculator tries to crunch the numbers on the climate impact of your Netflix viewing habits. I was curious, so I decided to give it a try.

JustWatch asks you to download your Netflix watch history, which is easier said than done when you have multiple profiles. But after a bit of copy and paste, I got my results: In April, my family's Netflix streams apparently resulted in 53.4 pounds of CO2 emissions, which equals about 100 miles of driving with a gas guzzler. Granted, the math is fuzzy and imperfect: JustWatch does some rough estimates on the length of each show, and it also didn't calculate the impact of all of our Disney+, HBO Max, Amazon Prime and Hulu viewing. Still, good to know that one single day trip can be as bad for the climate as hundreds of hours of binge watching. Brb, need to save the planet for a few hours…

A MESSAGE FROM MASTERWORKS

When it comes to sources we trust, the masterminds at Harvard are certainly up there… so when they say that at least 20% of your portfolio should be invested in a mix of alternative assets, we're inclined to listen. Meet Masterworks, your passport to the contemporary art market, where prices crushed S&P returns by 174% from 1995–2020. Protocol Next Up Subscribers can skip their 20,000 person waitlist with the special link below.*See important information.

Learn more