Yesterday I wrote about a flood of new Internet-based technologies and products that aim to break the broadcast monopoly on TV, potentially creating an open distribution platform for any video content. This, like the smashing of distribution bottlenecks everywhere, could shift consumer taste from hits to niches, creating a Long Tail of demand (yes, I've now programmed those words into a macro to save on finger wear).
Before I turn to how that may change the way we watch, I should correct one point. I loosely described this streamed and downloaded TV as "IP TV" because it uses the Internet as its distribution network. I am now reminded (embarrassingly enough, by an article in my own magazine) that the term usually refers specifically to video served by existing cable and telephone companies using Internet protocols, rather than content streamed across the wide-open Internet by third-party services.
I'm more interested in the latter case--video over the Web--because it's more likely to lead to an open marketplace in which anyone can play. I don't, however, think that an an entirely bottoms-up self-service market such as eBay will dominate. Programming is not a commodity and the quality of the shows, which is the most important thing, is not easy to ascertain without trusted advice and recommendations. Instead, what seems to work best for entertainment media is a somewhat more structured environment, such as Amazon and iTunes, where critics' reviews, customer comments and expert taxonomies can all combine to help people find great stuff fast.
As Thomas Hawk puts it:
"The first major player who builds a team of editors and begins not only publishing the microcontent of the long tail to their platform, but even more importantly builds a comprehensive searchable guide complete with rankings, recommendation technology and other features, will have a huge advantage over the rest of the field."
I realize that this could be SBC or Comcast as easily as TiVo or Netflix, but after seeing the mess the cable and phone companies made of video on demand in its first incarnation, I'm skeptical that they'll move quickly enough and get a critical mass of content. In general it's better to let infrastructure companies provide infrastructure and content companies provide content. But either way, what's most important is that the process of getting video onto these platforms be cheap, simple and transparent.
The best way to do that is to start with a good standard for packaging video to be distributed by such services that can incorporate rich metadata (from keywords to closed captions to full scripts) and, when wanted, DRM tied to some payment system. Needless to say, there are plenty of contenders for this, from the proprietary Windows Media to MPEG4, and no shortage of companies working on ways to extend them. On top of that, there are companies thinking about ways to clear legal rights to video content on an industrial scale so they can package entire libraries for distribution, the way The Orchard does in music.
Coming back from CES, I felt that I had seen the beginnings of a Cambrian explosion in new forms of television, with the momentum of the DVR+broadband+home networking combining to reshape TV as much as cable did two decades ago.
Jeff Jarvis, who has been driving this meme, describes what he thinks is about to happen:
" In the future of exploding TV, a few months away, anybody can create video programming and do it inexpensively with new equipment and tools; they can distribute it online and they can "market" it (that is, it can be found) thanks to metadata and search and links. All this levels the playing field ....I feel the need for a Death of Networks summit. Coffee's on me."
I suspect the outcome will not be a single winner but a wide range of tiers of service, from p2p (read: Bittorent) distribution of Pro-Am content, either free or unlockable for a fee, to commercial services that offer top quality and loads of recommendation features. Some consumers will be willing to pay a premium to stream content in real time; others will pay less and wait for it to trickle into their DVR. And yet others will create a new Napster generation, not just comfortable seeking out exactly what they want to watch online but expecting it to all be there, probably for free.
As Mark Cuban sees it:
"We are about to enter an era where kids can do a search on google, icerocket.com, yahoo and other search engines and get all the video they want of TV broadcasts. Put in a topic. Boom. All the video you could ever want. Put in a name. There it is. Video and transcripts to go with it."
Exciting stuff. Tomorrow I'll write about where this content will come from and what the shift from broadcast to narrowcast to nanocast will mean for the future of Primetime.
I think that we need to "fix the box" because we spent so much time thinking outside it.
Remember, Amazon is a dot-com winner because it made things easier and more convenient. The real Long Tail winners are going to be the ones that make getting what you want almost as easy as changing the channel.
The whole "death of" mantras seem soooo 90's. When EBay and Amazon start threatening Wal-Mart, Target, Best Buy or (insert fav. retailer here), I'll start believing the death of networks.
I see this more as the release from the tyranny of the masses. The blockbuster will continue to exist but instead of being limited to it when going to the theater, I envision more choices when said theaters upgrade to digital projection and distribution, if it'll fill the seats, they'll show it.
The same goes for television. You see the Pro-Am scenario masquerading right now in television, calling itself reality tv. From the consumer side, the networks will figure out how to incentivize people to watch in real-time. Maybe more voting shows like American Idol?
Beating your chest loudly and making sweeping statements does get momentary buzz but I think what is really fascinating is how the transition is going to play out. The real win here is to get consumers to modify their behavior without them even knowing it.
Posted by: James Young | January 12, 2005 at 09:14 AM
I think there is going to be a wide range of sources for individually-delivered video. Just as there is for Web pages.
Much of entertainment-oriented video exists in the form of episodical shows, so if you have watched one or two, you may know that you are likely to want to buy additional episodes. Think Star Trek. Or even the several "generations" of Trek.
Reputatation managers may be less necessary for such episodes, because you will tend to watch "the next."
On the other hand, there's also going to be a large amount of non-fiction and editional video, that may well exist as one-off productions from specialists creating a single video about something they know or care about. Could even be somebody posting a tourist video from a rare vacation spot.
I have created a one-off production myself: a video on paper prototyping in user interface design. It cost $30,000 to make and has sold $35,785 so far, making for a tiny profit. Since it's about a topic that doesn't change very rapidly, this video can continue to sell for another five to ten years, and probably go beyond $100,000 in total sales.
Of course, this is nothing for a TV network, and they could never make a show for as little as $30K. Admittedly, the production values are not NBC (though it's good digital video), and nobody would confuse my anchoring talents with Tom Brokaw. But that's exactly the point: when you go out the tail, being specialized and targeted is what drives value.
Right now, my video is being sold on DVD through traditional e-commerce, but it could easily be streamed directly to people at the exact moment they wanted to learn about its topic. All we need is the payment infrastructure that would allow the bulk of the viewer's fee to be returned to the producer (like I-mode does in Japan for mobile content).
Posted by: Jakob Nielsen | January 12, 2005 at 09:58 AM
We've been monetizing very high quality video in episodic form for several years now with resort golf. Once the streaming capabilities became what they now are, we're able to drive traffic from an existing television series on Fox Sports Network affiliates to a fully functioning web video channel. http://www.golflife.net
Some of our agency clients are creating web video channels in order for their clients to view the VNRs and broadcast hits that the agency has gotten for them.
It is revolutionary and as a veteran sports television producer during the 80s and 90s, I got to witness its beginnings. First, it was post-production to make the leap to tapeless(thank you Avid and Fast). Then it was field production to take the leap to tapeless(thank you Sony). Next it was formatting to take the leap (again thank you Sony for Betamax, Digi-Beta, mini-Digi-Beta and HD). Now it is, as we've all noticed, distribution that is taking the leap. Long live the long tail...
Posted by: Dee Rambeau | January 12, 2005 at 03:59 PM
I think some people are being too quick to sound the death knell of traditional media and other content gatekeepers. We all know that networks are characterized by hubs, and there will probably always be media participants to serve in the role of media hubs / portals. The question really is over who will win out to become and control those new hubs. Note how some traditional players are attempting to co-opt new media players: for instance, in the way that newspapers like Le Monde are attempting to become the jumping-off point for some of their local bloggers.
Additionally, while the explosion of television and other traditional forms of media means that there will continue to be opportunities for the creation of alternative content, traditional companies will retain a role in the production of more polished content, since it will be difficult to best their ability to attract larger sums of production capital.
Posted by: Wayne E. Yang | January 14, 2005 at 02:54 PM
If you watch me watch TV, then you should be able to deliver what I watch when I watch it. There wouldn't be any need to compile metadata and I wouldn't have to search.
Data warehousing managed to prove that certain generals and other officers were involved in the Argentinian disappearances long after the fact, and after they thought they had gotten away with it. This same technology can be applied to the middleground of TV and provide some amazing results.
The taxonomy is in the middle. The programming is the background. And, frequency is the end result of the forground sensors.
On distribution, ...
I've waited a long time for video on demand that would let me watch the Seattle local news, because that was what I wanted to watch. I don't live there, only visited once, and live someplace where nobody, except me would contemplate moving there.
I've searched the web for "Rat Patrol" boxed sets, but that isn't going to happen either. I could watch "Rat Patrol" all day everyday and not get tired of it for a long time.
The last time I lived in a suite hotel, I found myself channel surfing so much that I barely saw any whole show. I live without TV right now and have no reason to own one as long as the DSL is up. I really doubt that there is much of anything that I'd enjoy watching since "Nowhere Man" got cancelled and "Millenium" got too weird. I here there are a few good shows out there, but I never see them when I vist people with TVs.
Niche markets and the long tail are interesting, so thanks for sharing. The concepts apply in many other areas.
Posted by: David Locke | January 15, 2005 at 06:08 PM
A few days ago I stumbled to this website: http://www.kellogg.northwestern.edu/faculty/myerson/research/1189.pdf. It discusses Poisson Games. These games are characterized by incomplete knowledge. They echo cultural gradients and the adoption process that moves a person from not knowing to knowing about and to know how.
I suggest that these kinds of games don't have Pareto distributions or the other distributions in the standard game theory game.
The Poisson distribution has a long tail.
Posted by: David Locke | January 15, 2005 at 06:30 PM