Samsung shuts down its Video and Media Hub, transfers users' accounts to M-Go
M-Go to Take Over Samsung's Movie Business — Samsung Electronics has discovered that making great screens and delivering great on-screen entertainment require different skills.
Context & Ripple Effects
Samsung is handing its first-party movie storefront to someone else's: [[a:|the Video and Media Hub]] shuts down and user accounts migrate to M-Go, a joint venture between DreamWorks and Technicolor that has been chasing exactly this kind of preinstalled-device audience. The framing from Re/code — great screens and great on-screen entertainment require different skills — lands amid a broader pruning week for the company, which has separately confirmed it will end plasma display panel production by the end of 2014.
The story travelled unusually widely for a service sunset: Variety, Engadget, ZDNet, Gigaom and Tech.pinions all carried it on or about July 2, 2014, reflecting how closely the trade watches whether device vendors can run media businesses at all.
First-order effects
- Samsung's existing Video and Media Hub customers lose their native storefront and are transferred to M-Go, which inherits a base of Galaxy-device owners without having paid for customer acquisition.
- Samsung exits direct video retailing, removing a loss-making or underperforming software operation from its portfolio alongside the plasma-panel wind-down it announced the same season.
Second-order effects
- M-Go gains bundled distribution leverage on Samsung devices, strengthening its position against other transactional video stores competing for the same preinstalled slots.
- Other Android handset makers face pressure to answer the same make-or-partner question for their own media hubs, with partnership deals like this one becoming the visible template.
Third-order effects
- If device vendors keep concluding that content delivery is a distinct competence, first-party media stores on consumer electronics give way to licensed storefronts, concentrating the transactional video market among specialist operators.
- The account-transfer model — libraries following users across company boundaries — sets expectations for portability that regulators and rivals alike may treat as table stakes for any store that shuts down.
The trend: Consumer electronics makers are retreating from first-party media services toward partnerships with dedicated video operators, trading control of the storefront for focus on the screen.