Will YouTube save the old tube?

On GigaOM, Robert Young makes some bold predictions. According to his post Back to the Future… for Broadcast TV, from the disruptive forces of the Internet, the TV landscape is about to experience another tectonic shift. Just like multichannel cable drove viewers from the big networks to the cable channels, netbased on demand services will take their slice out of the multichannel viewing time. In just about five years, it is likely that most of the hundreds of channels we get today via our cable & satellite subscriptions will disappear and there will be only 10 to 20 “broadcast channels” left standing. Because niche cable networks, many of which are barely treading water now, cannot afford to lose viewers for their linear/broadcast channels.

Really? Here’s why not. Cable is not broadcast. If you look at the balance sheets of those tiny cable channels, it really depends on when they did launch. As a rule of thumb: the older the network, the higher it’s share from the subscriber fees. Which means: real viewership is important. But not that important. As ad revenues are dwarfed by the fees you get from the program packages the MSOs are selling.

And even for the MSOs, the real viewership of those channels is not the top priority. As they differentiate between reasons to subscribe (does anybody watch The Learning Channel?) and reasons to stay (the stuff people watch but would never tell theirs mothers about it).

And, not to forget: watching tv is about generation La-Z-Boy. It took about 20 years to convert network-tv viewers into multichannel zappers. So give me a good reason why they should convert completely in a snap from Seinfeld-rerun watching masses (all expenses covered) into proud decision makers, plowing through the abysses of a plethora of on demand programming, they might even have to pay for (yikes)?#

Of course, all networks, big and small, have to make their decisions on how to thrive and survive in an on demand world. What kind of rights to acquire, what kind of supplementary distribution platforms to choose.

But for smaller cable networks, the imminent threat isn’t the stuff on the Veohs, YouTubes, and the likes. The real threat ist à la carte programming. And the marketing invests which would come with it. That’s why an everything’s-on-demand-over-the-net-tv with a gazillion channels is a no go business district.
And mind that. Right now, YouTube et al mean great business – if you run Akamai or Limelight. But not, if you run a content comapny (not counting free promotion). And not even, if you run YouTube.

Via Digitaler Film

Quaero? Good question.

French mega-blogger Loic Le Meur is making a point. He sees 10 reasons why the French search engine will fail. If you’re not in the loop: Quaero is a very French search engine project, with some kind of a German appendix. It’s (jointly?) run (?) by nimble startups like France Télécom, Thomson, Siemens AG and Thales. The basic idea seems to be transfer about 250 Million Euros in governement funding into the koffers of companies who will not even notice this windfall whilst delivering after five years of major league researching a multimedia search engine, which at least will be able to deliver what BBN’s Podzinger can deliver right now (audio to text) and then some.

But let’s get back to Loic’s points:

1- Can’t spell it.
Stupid names are not a problem. (QED: Colloquially, a sap is a weak or gullible person. Also known as dupe; see confidence trick.) Not owning the domain, either (prevents you from trying to trademark the hard to spell project name).

2- Centralized.
There are no centralized projects on the web that succeed. I know what you mean. But, of course, some exceptions do apply. Most notably: Google, Yahoo, eBay …

3- Secret versus beta.
Somtimes, I think, it’s time for web based beta blockers. Because mostly it’s smoke screening. Look at Google. Services like Froogle are/deserve to be in endless beta. But the secret project (world domination by abducting top software engineers into the Googleplex, introducing them to a 2 month brainwash and then …) is still, well: secret. I guess.

4- No buzz, no adoption.
Wait, Loic. We’re talking 5 year plans here. Quaero doesn’t need any buzz right now (well, we’re buzzing here …) as there’s not even a need yet for a domain for the service we cannot spell as the real product is only supposed to be ready in about 5 years.

5- A galaxy of actors who compete to get the subventions and don’t get much noticed for their latest web innovations
Yes, now it’s getting scary. It’s a powerful roster of partners. But if you want to build the prototype of the car for the mid 21st century, you probably wouldn’t start with talks to Nestlé.

6- Not really international.
‘scuse me. How about Google, Yahoo and the likes? Setting up a sales office in Hamburg, Paris or Munich doesn’t make you an international company. And not being really international is obviuosly not a recipe for disaster.

7- A neverending story.
Quaero has been announced as a 5 years project when Google is only barely 8 years old, where will Google be in 5 years when Quaero is finally launched ?
See. It’s not neverending. The life expectancy is exactly five years.

8- Not enough euros.
Outsmarting beats outspending. (Correction: would beat.) In it’s humble beginnings, Google didn’t bath in billions. So in theory, Quaero should have a chance.

9- Subventions euros are not worth venture capital euros.
Uhm, the source of the money is not the problem (in Latin: non olet). The question is: where to put it. VCs and the government share one thing: they’re all about other people’s money. But any VC betting 250 Million EUR to seed a company trying to beat a superrich global market leader with an unproven concept would immediately be awarded with the Nick Leeson Medal in gold.

10- Google is a thousand startups
[…] How many european startups could the Government help launch if these 250 M€ were invested in them ?

And that’s the point. Instead of playing the hare and the hedgehog, they launched a hare-brained single shot.
Why not open source Quaero and engage all individuals who would like to challenge Google’s position ? If the aim is to have an alternative and successful search engine, that it probably the way to go. It’s certainly not by trying to create centralized “multi-heads missiles” in a decentralized World where building communities matter more than the Country they originated from.

Exactly. Or why not seed 250+ search start-ups whilst offering the current Quaero partner a purchase option. Because, it’s a bit like Loic’s ten points. Most of the arguments are somewhat offleading (sez me). But in the end, he delivers his shot.

TV – all Ad-Free, A-La-Carte?

There’s a new (?) meme on the block: ad-based tv is/should be dead. The future of tv is ad-free, no-tier, and totally à la carte. Listen to Steve Rubel of Micro Persuasion fame: As the technology gets more sophisticated and the generation that grew up with the Internet , iPods and always on connections become adults, I see a day coming when a lot of TV content will a) be paid for and b) consumed ad-free. Nice try. But, guess what: a) is already here and b) is highly unlikely to happen.

The fundamental misunderstanding starts with the words as the technology gets more sophisticated. Of course, technology is crucial. But at this point, usage patterns and applied business models are more important.
a) is easy. It’s called pay per tier, and is basically the pretty successful formula which has propelled US-based cable networks from MTV to CNN to Discovery into the global top position regarding multichannel tv. The basic math behind it: a multichannel operator sells easy to understand program packages to the consumer. The programmer gets a certain portion of the subscriber fee and decides by gut and market research in what programs to invest. So why not breaking it down into selling separate pieces of content?
Let’s make a sidestep. In the Boston Globe, Alex Beam toots almost the same horn (at least, according to Steve). Remind me again: Why am I paying $50 a month for services I don’t want? Oh, that’s right. Because the cable TV monopolists say I have to.

The basic principle of a successful multichannel tv environment is simple. Networks are packaging shows into a channel. Cable operators are packaging channels into tiers. According to Beam, selling tiers is just a greedy, oversimplistic one size fits all approach. According to Rubel, selling ad space is just an annoying habit of channels inc., to be broken by the powers of technology. Vivat, à la carte.

Beam proposes. I pay to get 80 channels, about 20 of which I actually want to watch. Hey, Mr. Comcast, let’s make a deal. I’ll pay you, say, $25 a month, and you beam me the 20 stations that I want to watch. Makes a fiver for the connection and one Dollar per channel each. Sounds good, true and populistic. But, unfortunately, not feasible. Ask Mark Cuban. He did the math (trust him, not me: I’m just running my micro tv network somewhere in old Europe – he’s a selfmade billionaire). The big difference is, that in an à la carte world, the cost of reaching an audience is outrageous.

And it’s not just the price tag. Because of the cost of reaching an audience, à la carte  programming favors inherently the big, the established, the incumbents. Mark’s example is the movie market. Look at which content rises to the top in terms of revenues from consumers and visibility. The content from the biggest companies who have spent the most money to market.

OK, you might say. Unbundling tiers might not be that great an idea. But the unbundling of channels into separately sold pieces of content is a technological given. Everybody builds it. So it has to come, it’s already happening.

According to Steve, in the future – as technology progresses – you will have to pay for the best programming, even if it’s carried by ABC, NBC, Fox or CBS. These shows will be sold a-la-carte, as subscriptions or in packages and they will all be delivered over the Internet protocol. Nice try. But technology’s just one (important) piece of the puzzle.

To quote myself (sometimes, I like that): can $1.99 downloads substitute broadcast tv? Only if you’re a Hollywood producer. Or could you imagine every tv household shelling out $200 a month at least just for watching tv content (and that number’s not even based upon the real tv usage hours)? So even in a virtually broadcast-free world, we’ll have to look for ad support. Otherwise, people will have to find themselves some new (and cheap) hobbies pretty soon.

So one thing is the business model applied to usage patterns. You can’t beat free beer with almost free beer. But free beer and premium imported Pilsener can peacefully coexist. Because they’re catering to different markets.

Would you pay for a download of Jerry Springer? Nobody would. Those who watch, can’t afford. Those who could afford, don’t watch. Would you pay for a download of Desperate Housewifes – if it would have never been aired on network tv? Most likely: not. Because you would never ever heard about it (if somebody didn’t spend some gazillions on marketing). Because it would never ever had been produced (if somebody didn’t wager some gazillions on production).

Placeshifting vs. Mobile Video Services

What’s placeshifting? Services like Slingbox or Orb use your broadband internet connection at home to stream your favorite shows to your PDA, your handset or laptop. If you like the idea, it’s highly likely that you’re not working for a mobile network operator.

MocoNews ha a nice wrap up of a report by ABI. Of course, the handest only moble video offerings aren’t that versatile, compared to Orb’s multidevice approach. But rebroadcasting regular tv shows to a handset is a rather futile approach anyway. First thing: screen resolution and real estate. We’re moving to HDTV in the living room. But you’ll never carry mobile phone with a 60″ screen.

So esentially the fun starts with made for mobile content and services. Looking at the different, German production companies and carriers already produce some stuff, which partially is made for miobile only consumption, partially as some kind of augmented tv service – depending in the time of the day.

In the long run, augmented television services and some time critical content will be the only stuff which will be broadcasted in a traditional way. Everything else will be pushed to devices for local caching. Because storage prices (with virually unlimited production capacities behind) will fall always much faster than bandwith, which is restricted by its spectrum limitations.

Via unmediated

UGC – billions and billions of $ made

Finally, finally I get it. User Generated Content (UGC) is already a billion dollar industry. I mean: look at Google.

Philipp Lenssen of Google Blogoscoped is quoting Google CEO Eric Schmidt from Googles Pressday 2006: “We’re moving to the next state of the internet where it’s all about people and expression” – search is still the focus, he adds.

But why would search qualify as UGC? To quote Schmidt again: The Google “aha” moment for many was when you use their search and say, “wow, that’s amazing.” Eric says these small personal “aha” moments created Google’s viralness, and they’re different for different persons.

Search is personal. Well, maybe not the single word you type into a box and press return. But your search patterns are pretty unique. And with Google Co-op, search results and UGC get a bit closer together.

It might not be ready for prime time (The product is an open platform but it’s very difficult to understand and use right now, even for a geek like me, writes Steve Rubel in Micro Persuasion). But the gist is: you can label websites you like – and people can subscribe to your choices. Everythings going to be integrated into search (as search is just an interface to a collection of information).

Searching the engine already creates you a potentially personal collection of content. Tagging and qualifying those results creates another layer of meta-content – which now can be re-fed into the search engine.
The NY Times quotes Marissa Mayer, Google’s vice president for search products. “A little bit of human involvement goes a long way,” Ms. Mayer said. Which is a cutesy way of saying that algorithms can get you just so far. In a certain way, the geekly kingdom is following the tracks of Yahoo! and its latest buyouts (Flickr, Webjay, del.icio.us …).

As an example: Palatable computer generated restaurant recommendations would be real rocket science. Why? Taste buds are fickle. That’s why the typical consumer recommendation site are quack, too. If you want to have a nice dinner, why would you trust the recommendation of a persons who’s social life (or, at least the part that you’re aware of) is about recommending products and services you’ll never need? Let’s see, how Co-op tackles this.
Google Notebook takes yet another step of blending user interactions (searching, choosing from results, dismissing most of them …) into content. The idea: take the bland results. And let the user pick the best hits and annotate them. “If someone has planned a great Hawaiian vacation with great research into snorkel boats, they should be able to share it,” Ms. Mayer said.

As Steve Rubel writes regarding Co-op: I would love to see them layer in Blogger so that there is some editorial around these results as well. We haven’t seen Notebook yet. But it does already sound a bit like Blogger light. Instead of Blog This, it’s put it in your Notebook.

BBC Web API (beta)

What’s the future of television? Yes, delivering tv via the Internet makes a difference. Like, uhm, the difference between cable, satellite and terrestrial tv – if you just think about the web as just another distribution channel. But te fun part starts, if you take networking more literally. The BBC, mother of all tv networks, is now at the forefront again. And theyre not just opening their archives. The Beeb is sharing some data and releasing a Web API.

Want to build your own Yahoo!BBCwidget? An AJAX-EPG? The BBC Application Programming Interface delivers all the data you need. Program information, schedules, genre listings, you name it. Have just another look at the AJAX-EPG. Built using the BBC Web API and the BBC Multicast Trial, explains the header. Yes the Beeb is heavily into R&D. Because, as Terry Heaton explains, the killer app isn’t “monkey see, monkey do”.

So what, you may say? It’s just marketing material they’re offering here. But that’s what you think. Some broadcasters, like RTL Group, even stopped transmitting DVB-SI infos (which means: the EPG in most set top box won’t get any information (except the most basic like title, start and end time). Their idea: selling the data. OK. But with all due respect: That’s not the future of anything. If you want to monetize your meta data, you either aggregate everything what’s out there – or give them away. Because most likely, you lose more by not binding your audience than via peddling your meta data in 200 EUR chunks.

Via Micro Persuasion

Pubcasting

Time to re-learn some French. Ina, the French Institut National de l’Audiovisuel, is following the lead of the Beeb and opening up their archives. You’ll find about 10.000 hours of programming, either for free or some rather modest fees in the 1 EUR range (so the French are topping the Brits here on a massive scale).

What’s happening here is the re-definition of pubcasting. Way back, they started with black and white transmissions to funny looking wooden tv furniture. Now they’re reinventing themselves into public service content and asset players.

Still missing in this game are unfortunately the players with the deepest pockets. ARD and ZDF, the German pubcasters, prefer to sponsor digital terrestrial TV. Pubcasting on VHF and UHF? That’s the future (of 1963).

Via Gugelproductions

Good moves, bad moves

There’s a good exchange going on between John Hagel and Umair Haque and a couple of other guys. By putting Lost and Desperate Housewives, is ABC/Disney close to finding the holy grail of digital distribution (as Fred Wilson seems to believe) – or is making exactly the wrong move.
So what’s happening here? With putting some successful shows online, Disney as a copyright holder is most likely generating some additional pocket money. That’s just fine.

Same for ABC as the traditional distributor (AKA tv network): some incremental income from some top shows. Makes sense, too.

Of course, Disney/ABC won’t get any multiples in valuation out of that. Producing content isn’t a scalable business model. Bundling, or – as Umair likes to call it: rebundling is. Rebundling is where value capture will happen – at communities, reconstructors, markets, networks – that direct people’s attention to individualized ‘casts. This is where branding will be reborn – and where advertising is already being disrupted, ripped apart, and reborn (viz, Google, PPC, pay per call, etc)
Yes, right. Google’s a good example. It’s an ad sales giant with an attached search engine. Which is either a good example that directing people’s attention to individualized ‘casts is either a phantastic business. Or a nice way of telling you that the value creation spot at this end of the value chain is already taken. (It’s getting scary if you look at MySpace. More users than a medium sized country, more pageviews than sand on mars. And Appalachian thrift store-CPMs. Is there a cure for this? That’s going to be an interesting question for News Corp.)

Hagel’s approach is a bit more sober. Now, there is nothing wrong with remaining a product business in the media industry. If you come up with compelling and engaging products (content), you will still own a profitable business. You may even attract a loyal audience. But the challenge will be to build a scalable and sustainable business. In a world of intensifying competition and proliferating options, that is going to get harder and harder. In most cases, audience “loyalty” is only as good as the most recent product issued.

In contrast, audience relationship businesses take these proliferating content options as an opportunity, rather than a challenge. The more options there are, the more value that can be created by organizing, packaging, presenting and adding to these options for specific audiences. It’s a completely different mindset, skill set, culture and economics.

Straight consultant thinking. But in any product business, loyalty is tied to your most recent product. It’s more a question of product life cycles. Designing and producing a car is a 25 years effort (including the after sales market). Media is about 5 minutes of fame. That’s why brands like Oldsmobile can experience quarter of a century long near death experiences. Media products die much quicker (anybody remembers The Sweet?).
Audience relationship is definitely a right angle. And from a consistency of performance perspective, the quantity of options to be matched with a as big as possible consumer base makes perfect sense. But the real power
of media and media production is the chance of hitting upon the perpetuum mobile of inherent brand building.

No media buying involved. You ARE the media (at least, if you keep all those necessary rights, handle distribution well …) In those cases, audience relationship building isn’t about matching and hedging. It’s about product-defined relationships, delivering emotional frameworks for people to live with.

Mobile video: yes. Mobile TV: hmm?

Cellphone companies like Sprint, Verizon Wireless ad Vodafone, have been aggressively promoting mobile video services, which cost an average of $10.70 a month for access to sports, news and weather clips. More than a quarter of cellphones now in use can play such videos. But only 1 percent of wireless subscribers are using their phones to watch them, according to a recent survey by the NPD Group, a market research firm.

The good news is: No problem, probably about the same amount of people talk on a regular basis to their tv sets. Which might not qualify as making a phone call. But watching a sports event on matchbox sized screen ain’t television either …

No, really: broadcasting to handsets via mobile phone networks is a weird idea anyway. It’s either a failure – or punished with network congestion. Mobile broadcasting via DVB-H or DMB makes at least some technological sense. But building the infrastructure is scariliy expensive.

Mobile media is personal media: portable radios are on the shelves since more than 40 years. But Walkmen and iPod are dominating the streets for a reason, not dirt cheap FM receivers. Data storage is getting less and less expensive. And that at much quicker pace than bandwith pricing. So yes, mobile video is a runner. But mobile tv – a bummer.

Via NY Times

Is IPTV TV or … ?

Is IPTV real TV or something else? If you think, that’s a highly hypothetical question, you’re not following in the recent dealings and wheelings of Deutsche Telekom and DFL, the German Soccer League.

The dry facts. DFL sold the Pay TV and Free TV rights to the German Soccer League for a whopping 220 Million Euros per season to Arena, a subsidiary of a larger German MSO. Pay TV provider Premiere, for the last umpteenth years the single source of major league live soccer, got snubbed (and a decent rubbing on the stock market).

Meanwhile, Deutsche Telekom got an other asset from DFL. The Internet rights. So far, so good. But now it seems, DFL oversold a bit. Arena is claiming to have some IPTV rights, too – as long as they just stream their productions. And at the same time, Deutsche Telekom seems to have some plans with Premiere. Which, depending on the exegesis of the contracts, might reach pretty far. Just imagine something like an encrypted IP datastream, broadcasted via satellite to a tv settop box.
Seems like, DFL underestimated the power of the IP protocol. Obviously, DT wasn’t interested in paying 45 Million Euros for some PC based geek TV. What they’re already selling is a 49 Euro settop box for bringing IP-based VoD movies onto your tv set. The next step (coming this fall and this soccer season) is some real IPTV, based upon Microsoft’s tv foundation. Essentially, it’s a virtual overbuild (if you’re a cable MSO). Essentially, its tv++ (if you’re interested in the tv dimension of the technology). Essentially, it’s a heavyweight’s muscle play. In Europe, for defending the voice and high speed data access market. (For US carriers, it’s about securing voice and gaining on data.)

For rights holders, this means interesting times. Because new money is flooding into the market. But be aware. First thing: For the telco giants, premium content is merely a marketing expense, not a crucial business affair. A couple of years ago, the music industry saw mobile operators as the digital white knight. Until they realized something quite frightening: the EBITDA of a carrier like Vodafone equals the annual turnover of the wole global music industry. Ooops.
And as the DFL example shows: going digital means, that your traditional licensing models are going down the drain. Selling tv and online rights doesn’t make any sense anymore, if your tv has online access. We’ll have to find different ways to differentiate. Screen resolution might be a way to go here.

Via FTD Bundesliga schürt Ärger der Telekom