30 May 2007, 11:59PM PT
25 May 2007, 12:00AM PT
Closed: 30 May 2007, 11:59PM PT
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In my opinion, the following video-on-demand services will enjoy the largest viewership over the coming year:
As these services grow, content producers will have to quickly adapt their offerings to suit the needs of the community they serve. The following are the issues that I predict will affect content producers in a big way (and hence require them to change):
Worldwide accessibility/licensing of content
Content producers need to seriously and urgently think about how they can make their content accessible to a worldwide audience through the various video-on-demand services that they employ. For example, Joost offers a wide – and expanding – range of video content to US-only subscribers. Non-US subscribers are better off in not using Joost. It’s a shame that the first true quality video-on-demand service is usable only by a select few.
Continuous monitoring and evaluation
Content producers will have to continuously monitor and evaluate the various outlets through which they serve their content on demand. They will have to let go of those services which are really not delivering expected results and equivalently be ready to try new video-on-demand services as they come up. They would also need to listen to and act upon the feedback provided by the ultimate consumers of the videos.
Reliable consumption metrics/statistics
Related to the above point is the tricky question of measuring metrics. There is a lot of confusion surrounding the methods used for tracking online video consumption. It would be in the best interests of content producers to work closely with companies that provide Internet-media consumption statistics (such as comscore and vidmark).
All of the traditional communications channels are being disrupted by the increasing innovations in Internet, Mobile technology and devices that allow consumers to see content how and when they like and create content.
This is happening in Telecom with the increase in adoption of Voice over IP service, in the News segment with the real time updates available through blogs, RSS and news portals on the web.
Of interest here is how technology has started to change how the television media is consumed today.
Terminology
Place shifting – moving the television experience from the normal consumption location (living room, den) and device (TV set)
Time Shifting – not being bound to a schedule and watching the content at a time of your choice
Broadcasting – the accepted general content distributed to a schedule controlled by the publisher
Narrowcasting – the evolving specialist channels, often produced by experts and consumers, not bound to a schedule
On Demand – moving television from push, scheduled by the TV channel, to pull when the subscriber is ready to watch the content
IPTV – television transmitted over Internet Protocol i.e. the internet and the new telecom networks integrated with IMS.
Mobile TV – television channels received on a cellular handset, typically 3G networks
Web TV – the new media for visual content, driven by the early adopters like YouTube. A distribution channel that is facilitating Narrow Casting
How has the television industry already adapted?
The TV industry has always been customer centric. Television has always been a competitive market and the fickle nature of customers and the statistics that are applied in terms of viewing figures mean that the industry has always had to be close to the customer base.
Television has become more interactive with adoption of phone in’s and SMS votes for the likes of American Idol that allow the audience to influence the outcome. There have also been experiments with multiple plot lines and letting the audience determine how the story will change.
This competitive pressure and awareness of the customer leaves the TV industry well placed to adapt to the new challenges of the disruption occurring in the space.
Broadcasting to Narrrowcasting
The old regime of the TV channel buying and packaging content and delivering it through a schedule of programs is under strain to be a compelling model. Today the most valuable commodity, and one that can’t be saved, is forcing consumers to find new ways to view their content of choice. Time, as they say is of the essence, people have to make choices on how to use it.
At the same time many people are looking for and creating niche content. Where Telecom companies have the MVNO model to bundle segment centric content TV channels are starting to emerge that target a specific segment. The Audi Channel, The Golf Channel, UK Food are all availble on digital TV in the UK today. This type of specialised channel will grow over the coming years and it will be fueled by Web TV start ups like Kyte TV and Joost.
The Time Shifting Model
Time shifting is the ability to tailor your own schedule to view your content of choice when it’s most convenient for you. This is not a new model as this is essentially what the common or garden video cassette recorder could do for you.
Technology has created new replacements for the VCR. TiVo, the set top disk device, can be programmed to record your favourite shows and can organize them together for optimal viewing. Many of the providers have created adjunct models that allow for time shifting. In the UK Sky and Virgin have both created the + services, Sky+ and V+ respectively.
The purpose of the service is to allow a subscriber to record one [or more] digital channels whilst watching another. The set top box uses some of the same functionality as TiVo and allows the user to phase the playback and use a catch up facility which allows you to pause the real time viewing and then catch up as the program is recorded whilst you do something else.
The support of time shifting will need to become a central component if TV providers are to survive the competition. The people’s choice of scheduling will be the key need of tomorrow’s subscriber as the other pressures and outlays for time becomes more varied.
The Place Shifting Model
The ability to place shift the viewing is a relatively new innovation that has been facilitated by recent advances in bandwidth of truly broadband ADSL and new channels and technology emerging in to the market.
One of the most publicly known place shifting tools is Slingbox. A simple IP device that captures your feed from your cable or satellite feed at home and transforms it into an IPTV streamed channel. This can then be viewed at an IP address so you can watch your program from anywhere in the world (assuming the bandwidth is sufficient).
Place shifting is already evolving to support any media and screen. This enables you to receive your slung feed on your mobile phone, laptop or any device that can sustain an internet connection.
Place shifting is breaking down borders and blurring the edges of the definition of a nation. The ability to view US content in Thailand that would normally be available is a compelling model for the more mobile communities that exist today.
On Demand programs
Broadcasting generally means that you get a single chance to watch a program. This is not always true as many cable and satellite companies do repeat programming but in the UK where there are less channels it is true that many subscribers have one chance to capture a program (capture could mean watch or record).
This can create conflicts as even the best device allows for recording of two additional channels. The advantage of On Demand programming moves the relationship between publisher and subscriber from “push” (scheduled) to “pull” (user selected).
Providers of note as early providers of the On Demand model are the BBC and Channel 4 in the UK and National Geographic from the US. Although in the early stages the BBC iPlayer will allow access to the BBC archives and current scheduled programs. The Channel 4 service 4oD gives paid access to many of the top programs for download with a limited time to watch the program at your leisure.
On Demand programs enable the Time Shifting model of delivery.
IP and Web TV
IPTV and Web TV are new distribution channels for traditional TV programs. The integration with IMS frameworks offers the option of any media and screen, to include mobile phones, laptops and cable (including Fiber To The Home).
I found a very real use for one IPTV service, TVUnet, when political unrest meant that terrestrial and satellite feeds had been shut down. I used the IPTV service to get live updates from CNN in the US to stay current with events as they unfolded.
Many people think of IPTV as only being laptop or set top box delivery. The same functionality allows Mobile TV to work and this could be the killer application for the new generation of wireless broadband networks either 802.11 or 802.16 WiMax technologies.
Is mobile TV the killer application for 4G WiMax networks?
Web TV is pushing the boundaries more as the ease of production and distribution is creating a platform for niche and specialized channels. The phenomenon of YouTube started a process of innovation and creativity. In the early days it was a mass distribution for short films and creative uses of home video. Today it has morphed into what many see as a platform for pirated content and in some cases pornography. However the groundwork has been laid for a new medium of highly specialized narrowcasting.
Newly launched Kyte TV and the public beta Joost, from the brain trust that created Skype, are good examples of how this medium will evolve. There will be many producers that are looking to increase their public brand by using the new channel for distributing their content. One such specialized channel available on Joost is Australian Food TV, Vic Cherikoff and Benjamin Christie.
Opportunities for the adoption
The industry is ready to adopt some of the models to stay competitive.
The two key dimensions are creating a platform that enables Time Shifting to be as easy as possible. On Demand services will be the core of such services but companies should look to unbundle content and allow the subscriber to package up their own offerings and create their own schedule. Most of the current on demand services are priced by show. The current business model of packaged discounts should be continued but be more flexible to individual tailoring. This is a natural extension on the customer centricity that defines the market today.
The second dimension is to watch the take up of some of the narrow channels appearing on the Web TV distribution network. Rather than look to block the creativity the companies will need to embrace it, learn from it and find a way to utilize it. The current hit on TV is “On the Lot”. A film project that has aggregated hundreds of home made and amateur films with the idea of using the creativity to provide the new generation of directors in Hollywood. The same concept could and should be mapped onto small screen media. The TV networks should be looking to tap the creative sources in Web TV and find a way to package it up for a more mainstream distribution channel.
The Generation Me subscriber will also see a desire to overlay social networking. The maker of TiVo has already enabled a service that allows users to share home made content with their family and friends in the same way that Flickr and Picassa Web allow you to share photos in a more closed environment (opposed to the YouTube public access mode).
The film industry will soon need to face the same reality. Film distribution is ripe for disruption and not being helped by the confusion of high defintion DVD standards. Many of the same technologies influencing TV could be used to reignite the big screen at home. I mapped out one such use for WiMax for the likes of Blockbuster.
Insight by David Mould
As a traditional content producer you'll probably be well advised to consider each of the following aspects of viewership and content production changes now sweeping the media sector:
1) Online video-on-demand services will eventually be driven by advertising but currently they are in a very experimental mode with very weak advertising revenues almost across the board (I'm not an expert in porn sector and this may be an exception to generally not-profitable video distribution systems such as YouTube and Yahoo Video). This experimental nature makes prediction of who will succeed difficult but probably suggests that the big players - most notably Google/YouTube and Yahoo Video, will be the key online video distribution points for some time because they have the user bases and the ability to subsidize the losses. It now seems unlikely that any upstart video service will enjoy YouTube's spectacular success though many niche video distributors may enjoy modest traffic increases over time. Aquisition or partnerships with these services need to be weighed against the advantages of scale by partnering with the big players, which would appear to be the way to go during the current experimental mode to get the most exposure and potential for advertising revenues.
2) Mobile video distribution via IPODs, Zunes, and most importantly Cellular Phone devices will almost certainly explode as video enabled phones become more widely used as the key personal information device. I think the cost of the devices (such as the iPhone) will be a barrier to entry for approximately the next 2 years after which cell phone video will be as commonplace as cellular internet access is now. Customers appear willing to spend much more for cell phone enhancements and enhanced services than for their online equivalents, so this market is likely to be profitable for some time and it would seem deals with Telcos may prove more lucrative than similar deals with online video providers. Establishing vehicles to distribute quality shows at modest, easily billed fees may be an optimal strategy as low quality , free video continues to flood the market.
Strategy point: Consider establishing a "mobile video" production team to provide quality content geared to the mobile market / small screens. The mobile team would use techniques where the small screen experience would not diminish as much from the show as with traditional productions - ie more close ups, dialog, strong emotional storylines and less cinematography elements, big scenes, crowds, etc.
3) In terms of content production changes it is advisable, even without the sweeping changes, to aggressively look for ways to lower the cost of quality video production. As cheap video floods the market it will likely pull potential revenues away from quality videos even if quality remains in demand. Again, it may be advisable to establish an online/mobile video team that would work on more modestly funded projects that will leverage the spectacular cost effectiveness of the internet. For example using existing clips (with author permission and a modest payment) is far cheaper than developing independent content, and the clip "library" online is already extensive.
Joe Hunkins/Joe Duck
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