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ZillionTV adds movies from Paramount
November 10, 2009 Paramount Pictures has partnered online video provider ZillionTV. Library titles such as In & Out and Ordinary People will be delivered on an ad-supported basis while newer releases will be available as rentals or permanent downloads. As part of the deal Paramount has reportedly taken an equity stake in ZillionTV. Warner Bros, Sony, NBC Universal, Fox, Disney and Lionsgate already have similar agreements in place. In recent months ZillionTV has pushed back the proposed date of its full commercial launch to 2H 2010. The company's primary focus is on deploying proprietary set-top boxes (STBs) through ISPs. However, distribution plans also include direct-to-consumer offerings and embedding the ZillionTV service into a range of connected devices. With all major Studios now on board ZillionTV is set to have a comprehensive library at launch which could include a significant amount of catch-up TV. Movies and TV shows will be monetised using a combination of ad-supported and transactional business models, with the intention that most videos will be free-to-view.
However, it is likely that the company was required to give up equity in order to obtain this content on favourable terms. By taking an equity stake the Studios may be looking for a degree of control over ZillionTV's future strategy and a cut of any revenues derived from, for example, flotation or acquisition should the service gain significant traction within the market. This strategy echoes that seen in the music industry where labels regularly take stakes in online start-ups. But this backing by no means guarantees ZillionTV's success. The Studios' first foray into paid-for online video distribution through JV Movielink generated minimal revenues despite heavy investment and ended with MGM, Paramount, Sony, Universal and Warner selling the store to Blockbuster in 2007. ZillionTV plans to distribute its catalogue through standalone STBs and third party broadband-connected devices. To date many services marketing standalone STBs have failed to build a meaningful installed base because they are typically reliant on consumers paying for a box which only provides access to transactional content. In order to encourage uptake of their STB ZillionTV has adopted a different strategy, giving the box to consumers for free (although users are required to pay a $99 upfront service charge). Alternatively, telcos have the option to subsidise the box in return for a share of ad revenue. In addition, once consumers have the box they will not subsequently need to pay to watch much of the content. Embedding the service into hardware such as connected TVs or Blu-ray players would widen ZillionTV's audience still further but the company has yet to announce any such partnerships. Pages: 0Tables & charts: 0Tags:
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