The iPhone of iTV

We’ve seen the future of iTV. And it’s purple. Seriously. Yahoo’s Intel-based Widget Channel might become the iPhone of interactive TV. Not because both are based upon a expensive platforms. But because the Widget Channel leverages formatted internet data onto a TV screen. Web surfing on a tv set is just a poor experience. Visualizing targeted data is something completely different.

It’s just like on the iPhone. I don’t browse the NY Times web site in Safari, but I read Paul Krugman on the iPhone app. Same with the Widget Channel. Mostly, I don’t want to search I just need my local forecast now.

Chumby hooking up with Samsung leads into the same direction. Grabbing existing data and displaying them on consumer devices (digital picture frames are just bonsai-sized video displays anyway).

How to Kill Public Broadcasting

German pubcasters are the BBC on steroids. Moneywise, at least. Their combined annual budget dwarfs the GNP of a couple of lesser UN-members. And even hardboiled tax collectors blush at the methods of their fee collecting agency GEZ.

Don’t get me wrong. Strong and independent public broadcasting is an important asset. As seen in the US, a beggar’s banquet of impoverished do-gooders cannot counterweight a fully commercialized brainwash attack. State controlled tv is a terrific tool for thriving populists, post-imperial imperialists, and media savy dictatorships (and definitely not an option).

Still. If you want to collect billions and billions of Euros for the greater good, a well aged argumentation line from the black and white days of the tube won’t do you any good. EU commissioners want to pull the plug (commercial broadcasters will see to that). And the German publishers are finally starting to see a problem with those hidden champion media empires. Because it’s not about here’s print, there’s tv anymore. On the web, all media cats are prey.

The last political fiddlings ended with some strange solutions like this. Yes, the pubcasters can put some their video assets onto the web. But after seven days, they have to be removed. Weird. Even weirder: there are paid deals between mega publishers and mega pubcasters on video syndication. Uhum. Excuse me. Looking at organizational structures of German pubcasters, the micro money passed from WAZ to WDR most likely won’t even cover the process cost. So it’s probably all very strategic. Or maybe just helpless. Redefining public broadcasting for a networked, digital media world it isn’t. (Because, more likely, it will look more like this.)

It’s not helping anyway. Will Münchner Erklärung, the Munich Declaration of the big wigs of German publishing, kill public broadcasting? Nope. We’re more likely talking about assisted suicide anway.

Looking for Soccer Fan Videos

If you are a) into soccer (or fussball or football …) and b) own a cam corder (or a mobile which handles a video a bit better than my SE K610i), you’re invited to put your fan video on, which translates into and is our little video sharing site.
Why are we doing this? On YouTube, MyVideo, Sevenload, there’s already tons of fan related material. Sure. But a) we like soccer and b) we want to put the stuff on our tv channels (don’t try this with bootlegged flash encoded video material).
And not to forget c). Yes, on YouLoadMySevenVideo, there are already some trillions of uploaded videos. So your pretty cool fan action will have neighbors like this one.

TV 2.0?

First thing I have to say: Bertram and Harald did a phantastic job. This is grand. But unfortunately, I’m a bit in a nitpicking mood.

Let’s start with some of the basic assumptions. The assumed basic cost structure for a free tv network doesn’t make too much sense. Yes, the key areas are right: content licensing/production, marketing, and distribution. But distribution is not a variable. At least not, if you need national reach. The more coverage you want, the more you pay. Let’s just assume that German mega broadcaster RTL pays annually about 12 million Euros to reach its tv audience. 9live has almost the same distribution. And therefore pays about the same amount of money. The big difference: RTL has renevnues of round about 2 billion Euros. 9live makes about 60 millions.

This has of course serious implications. The cost of distribution limits the access to the public (as do the technical limitations, e.g. available spectrum). It’s called mass media, because you need the masses to watch (or interact, as it’s the case with 9live). Otherwise, you’re going to be out of business pretty fast.

Pay tv is kind of different. Essentially, as a channel operator you have to convince a gate keeper, that the he should shoulder the cost of distribution, against a revenue share. Joost seems to aim to become some kind of funny in between. A gate keeper for a p2p -based distribution of free tv.

Both approaches pose quite serious barriers of entry. That’s why one of the key factors in tv 2.0 is the lowering of the cost of entry. With web based distribution, you can reach an international audience for zilch. Hey, that’s a start.

Now, what’s going on with this audience? As a side note: tv networks (as most traditional media players) do not like Google. But the media sales organizations of tv networks do not (yet) feel the sting of Google’s AdSense. Yes, Google is a juggernaut. But the bauty of the text ad system has been, that Google found a whole new pot of gold. Google isn’t making it’s billions with the handful of mega brands, that fill the koffers of the tv networks. That’s why traditional media is much more scared of and the likes. If the media buyers become audience aggregators of their own … As it turns out, it’s not that easy. Especially, because as a media buyer, you’re buying into consistency of reach. Ventures like are, like any new media brand, a risky thing. And don’t forget: one of the heaviest spender in media is media itself.

But back to tv 2.0. OK, web based video lowers the barrier of entry. That’s good. The same reasoning applies to the cost of production. Not because of the web, but because the hard- and software for video production and editing is finally approaching zero. This applies to all areas. With my own company, we’re deploying professional broadcast playouts into cable headends. Unthinkable a couple of years ago. same with professional video editing. HDTV cameras. Post production and 3D animation. You name it.

This is good. But still: producing a video is still quite some effort. Will “moving images replace HTML pages”? Never ever. Producing a video is too much effort for the producer. And, for most parts, watching a video takes is too much equally. Why? Video is a linear medium. You can scan a written page in light speed. Speed watching isn’t that easy.

OK. Enough nitpickin’. Bertram and Harald are of course right. TV is going to change. The means of access to video content are changing. Channels as the main organizers of content access will have to change.

The funny thing is: we really don’t know, what tv really is. Do we define tv by content. Most likely not. Otherwise, we wouldn’t make a difference between tv and DVD. Do we define tv as a technology? That’s probably a bit closer.
It’s tv, if it’s broadcasted and displyed on a tv set. But how about PVRs? With video and DVD, we distinguish between a solid media and ethereal broadcast receptions. PVRs are a virtual broadcast.

tv reception itself won’t change that much. Why? tv is a linerar medium. If it’s good, you watch. If not, you switch. Or tune off. That’s all the interacton you ever need.
What going to change is how you find and access content.

The main difference between tv (as is) and tv (2.0) is the enhanced on Demand factor: on Demand with an URL. Because the URL opens up all other means of access, business models, and social feature you can imagine.

TV2.0 – Digitaler Film

Axel Ehssan Springer

OK, that’s a pretty German thing. Bernt von zur Mühlen asks in the media newsletter Medienbote: Where are the Web 2.0 Portal founders? Meaning: old media has had a tradition of reinventing itself from within. And gives some examples. Like Axel Springer (founder of the German multi billion Euro media empire Axel Springer Verlag). Or Helmut Markwort, reinventing for Burda the weekly news mag sector in Germany. Or Helmut Thoma, building up RTL from a softsex pirate station to Germanies leading tv network. His question: has old media now lost its knack? Instead of buildig up their future from scratch again, they buy their future.

Well, we talked about this one before. Real innovation (as in paradigm shifts) has never been the game for the incumbents. At least not in media. So he’s getting something wrong here. The founders are busily starting up their businesses. And the incumbents are busily picking the raisins. And everything’s just fine.

Pipe classic, Pipe lite

Yes, I like the virtual pipe (thanks, Bertram, for the pointing me to Andy Kessler). But, uhm, what exactly is a virtual pipe? As opposed to a real pipe, virtual pipes try to emulate a lock-in situation. To understand what he’s talking about, we have to remind ourselves that Andy is a) American and b) a VC. His real media pipe looks like a typical cable walled garden to me. Here’s the media, there’s the pipe, that’s your home. In the US, it’s a billion Dollar market. Break up this lock in situation, and you’ll be offering what VCs are looking for.

A virtual pipe is just trying to emulate this lock-in situation. His prime example is convincing. The business model of console games is about a technologywise totally closed shop, built upon the razor model. The more boxes you sell (in the beginning even at a loss), the bigger your reach. And if everything goes well, you make a killing from the software licenses. BTW, brought into perfection by Microsoft. Not with Xbox, but yer olde Windows. As they outsourced the risk of shipping hardware, just keeping the increasing returns business of peddling software.
As it happens, it’s one of the oldest business ecosystems, in regards of media and technology. Edison and Berliner sold their hardware (OK, I doubt the grammophone was ever a loss leader). And started successful software subsidiaries, whose leftovers are now known as the music industry majors.

Apple’s iTunes takes this model topsy-turvy. The software a.k.a. music is the bait (a loss leader? I doubt that. Maybe micro business). The hardware is the game, and usability, design, and branding the driving forces. The virtual lock-in into the iPodsphere by DRM is actually pretty much non-existent. You won’t see too many poeple filling up their umpteen Gig hard drives with music bought in the iTunes store (S. Jobs could afford that. But could you?). And even then: you still have your desktop application which allows you to unlock the DRMed file. It’s a minor hurdle. But if you bought into the Applespace because of superior usabilty and convenience, this might be the virtual virtual lock in.

Let’s take another step back. Media is a software business. Traditionally, the content is tied to a physical thingy. The model behind is milking a scarce ressource. Spectrum (if you’re a broadcaster), right of way (if you do cable), advertising (hold on – now it’s getting mushy).

Because for some strange reason, capital puts the telco, media, and, entertainment eggs into a single basket. Which only makes sense, if you never worked with a telco AND a media company. Telcos think infrastructure, decadelong depreciations. TV is about yesterdays ratings. And even if there’s sometimes a symbiosis going on, they are as much related to each other as a lactobazillus to my family. Can’t live without both of them, but that doesn’t make me the grand uncle of little acidophilus.

Of course, sometimes the strategic interests of telco and/or hardware companies led them to gobbling up some media properties (what’s content, compared to cash flow?). And, with the notable exception of Time Warner, you won’t see too many fully integrated telco-media-companies. Usually, the telcos wield the stick (Vodafones EBIT dwarfes the combined revenues of the whole music industry). John Malone used to play hardball with his media “partners”, or, remember the Japanes-led invasion of Hollywood? Ted Turner might have been the only media player, who successfully quenched his telco partners for the monies he needed.
In this concert, media plays the second fiddle. And content is as much king as the Green Giant the duke of Broccoli.
Yer olde media equation looks like this:

– raise lots of capital
– hook up with a large entity which controls a scarce ressource (governement, if it’s spectrum or just a license you need, a telco, if it’s cable bandwith, a game console company, if … and so on)
– aggregate/produce and distribute content
– make some money by either selling eyeballs or selling the goods (discs, cable subscriptions, paper …)

With networked media and entertainment, this equation starts to change. The gridlock onto scarce ressources is weakening. Anybody gets global distribution by pressing an upload button. Which might make life kinda complicated for traditional media outfits. But, on the other hand: obviusoly, this new environment seems to serve new media companies Google pretty well.

And so we’re coming back to last posts final question: Is content now really king? Looking out of the window leads to the following idea. Olde media used to pay for content. Google’s positions itself more like an intelligent remote control (at least you do not have to pay for integration, like in the yellow pages). To Google, all content is created equal and just piece of data store in the indices of Google’s server farms. (The YouTube-deal might chance this comfortable postion; suddenyl, it’s all about licensing and copyrights.)

Does this mean, content will be demoted fiscally from lackey to lactobacillus? OK, this might be the logical path from the intern-executed media production style of the early 21st century. But, fair enough. More likely, that’s what happens if you look out of the window and outside everything’s greyish, wet and fall.

Mostly, the de-piping of media pomme1.jpgmeans:
– As abundance replaces scarcity as a driving factor, media’s distributional power is reduced to the power of being a brand. Which, in an environment of abundance, ain’t that bad a position.
– Network neutrality assumed, the media’s gatekeeper position won’t be taken over by the telcos. Or, at least, you’ll have a choice which gated (or open) commuinty you’re going to visit today.
– Meta-media like plain search engines, dedicated search engines plus hosting (ASPs like YouTube, Flickr), social networks et al drives the audience to the content. Old media mostly picks up what’s already on their screens.

But what’s the effect on content? The medium is the package. Which, by it’s commercial needs and restrictions, defines the content. TV shows are produced around commercial breaks. A pop album is defined by the capacity of vinyl records and CDs. Which, after this little excuriosn, leads us back again to last next stop: the content value chain ….