from the TV Hackday

Had quite some fun at the TV Hackday in Munich. Together with @rjung, we built this litte app here. We called it Pinkelpause, or TV Leaks: a crowdsourced tv ad blocker. Which of course is not blocking any ads, but telling you when the commercials are done and you can safely come back and sit down in front of your linear tv set.

You choose your network, the current show gets displayed. If the ads start, you can click the red commercial warning-button. Some stochastic wizardry later, everybody who checked into the show will have his app set to “commercial break”. During the commercials, the display shows the approximate remaining time of the ad block. When the show comes back, you press the big green button, everybody get’s an alert. Stir in some gamifiction, and that’s it.

What device should this be on?
Mobile, of course. A smart tv app would be kind of self defeating. As watching the app count down would be even more annoying than watching some commercials.

Will we ever take it live?
Most likely, not. The smart phone wielding crowd tends to be alittle bit younger than the typical tv target. And well off tv aficionados do not have an ad problem. They fastforward with their digital video recorder. So we’re maybe ten years late.

Would there be a business model?
Sure. And no, I do not think an ad supported ad blocker is a valid proposition. So …

Looking for Soccer Fan Videos

http://halbzeit.in/files/mediaplayer.swf

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 halbzeit.in, which translates into halftime.in 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 bud.tv 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 bud.tv 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

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.
pipe1.jpg

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.
pipe2.jpg

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 …)
pipe3.jpg

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 ….

Circle Vision

It’s one of those rare occasions, where I could imagine it might be fun to work in the legal department of big olde media. One day you’re writing the TOS for a YouTube-look-alike (how to distance yourself from all this user uploaded content, whilst still being able to monetize the whole load). Next day, you have to ponder how to sue YouTube (how to transfer Google-riches into our pockets because of copyright infringement of user uploaded content).

Seriously. That’s the German situation. RTL Group, Europe’s largest broadcaster, is running Clipfish. Haim Saban’s ProSiebenSat.1 acquired MyVideo.de. And, not too surprisingly, both sites are virtually pornfree – but laden with copyrighted material. MyVideo hosts a large collection of RTL’s German Idol-version Deutschland sucht den Superstar. Clipfish sports a nice collection of TV Total excerpts, one of Pro 7 main shows. Which might be business as usual. If especially RTL wouldn’t usually fight for (or, better: against) every digital bit and byte. Online video recorder, PVRs, ad blocker, you name it. Seems like web based videosharing will be OK.

YouTubed, YouDoomed?

Is Mark Cuban right? In his post The Coming Dramatic Decline of Youtube. Mark is making a gazillion valid points. Yes, YouTube’s “business” is based upon inciting copy right infringements on a massive scale. Yes, the other part is the Come to our website and use our video hosting services, we can party like its 1999 all over again ! And yes, the whole model is fairly easy to copy. Even for the most obtuse copyright owner (at least the technology).

But his obituary for might be a bit premature. Think about it. Mark is wondering, why it is that until Universal Music Group apparently started to put the pressure on them, no one had sued them. Considering the RIAA will sue your grandma or a 12 year old at the drop of a hat, the fact that Youtube is building a traffic juggernaut around copyrighted audio and video without being sued is like…. well Napster at the beginning as the labels were trying t written to figure out what it meant to them. With the MGM vs Grokster ruling, its just a question of when Youtube will be hit with a charge of inducing millions of people to break copyright laws , not if.

Thing is: the YouTube model might have 1999 written all over. But there are some things copyrights holder presumably learned in the past seven years.

– killing Napster didn’t do a thing. Instead of one single (and thereby controllable) place, the darknet became just a little darker.

– offering legit spaces isn’t a sure path to success. Defunct download portals are littering the way back engine and the balance sheets of quite some formidable companies. Sony Connect, anybody?

– a virtual monopoly by Napster would have been nice: take the law stick, and beat them into submission. Try this with Steve Jobs.

Sure, you could build an online radio out of YouTube songs. Sure, you could download everything, too (if you insist). But why bother, as a copyright holder? Make them clean up their act (finger printing for background music, blanket licensing deals), make them bleed, let them do your marketing, and let them foot the bill.

At least, that would be true for the whole music industry. If you’re a nobody, YouTube might make you a star. If you’re a soso-somebody, YouTube put’s your videos On Air (whilst MTV is even rejecting your emails). If you’re a big act, you make YouTube pay. So everyone’s a winner.
With video content, it’s a bit more difficult. The basic difference: if you like a song, you’ll listen to it over and over (until your next door neighbor threatens to call the cops). Moving images is different. Watching the same movie over and over again is all you need if you’re in the three to nine age bracket. Otherwise it’s pretty straightforward: you watch it, you dump it (or collect it, and never watch it again).

Videos are like jokes: you heard the punch line, and that’s it. And don’t try any reruns on me (heard/watched this one before). That makes the video sharing ecosphere a bit more complicated. Let’s try to structure it a bit. It’s mostly about one time events vs serialized entertainment. For serialized stuff, the YouTube are a sure winner. People take out snippets they like. The best ones get traction and multiply by themselves. With one time events, it depends on your goals.

Just some ideas thrown in: Most theatrical releases need the big screen anyway. Maybe a director’s cut on DVD would be fine, too. But a pixelated Flash movie on a PC screen? Movies can gain a lot. Look at Borat – The Movie. Ali G.’s everywhere, from MySpace to vSocial to veoh. Legit posts mixed with user uploads. Hey, makes me want to watch the real thing.
Shorts can make you famous. Film and people aggregators like YouTube can’t make you rich, but make you famous. But if your business depends on selling just this one film, you’re dead.

But what’s that supposed to YouTube? The rumors of its death are slightly exaggerated. But if they don’t get a hold on a whole lot of stupid money pretty soon, they might just wish those rumors would have been true. Because dredging along is a rather exhausting exit.

The changing media business model

Forrester’s Charlene Li wraps up a panel she led on The changing media business model. I’m probably overreacting here a bit, as the idea of panels like that usually is to scare the s**t out of the incumbents to generate some fresh consulting business (hehe). And with most of the things she’s mentioning in here post, I would agree 100%. But then I read this paragraph, which I find a bit misleading.
Media companies in the past derived their value from either: 1) their distribution channel; or 2) the content they created. I believe that in the future media companies will generate the bulk of their value from serving their ability to aggregate and serve audiences better than the competition.

Well, some media companies already do that. As an example: It’s the core asset of any tv network. Owning a distribution channel is important; the channel we’re running reaches about 1.2 million German households; nice to start with, but the real battle is definitely somewhere else. In digital tv, network capacity is already almost a commodity And with IPTV, it definitely is.
So it just might be, that some top tier production houses will join the ranks of aggregators. If your brand, derived from relentless on air promotion (AKA scheduled programming on a major network), is strong enough, you’ll now have the chance become your own audience aggregator.

Unfortunately, the big question ist still lumbering: even if you aggregate a sizeable audience, how are you going to convert eyeballs into revenue? Look at YouTube. Billions are watching. But where’s the scalable business model? AdSense as the poor man’s answer for media sales can’t be taken serious as a solution. And cutting some special deals with some media houses makes good PR, takes a lot of time and probably barely covers the legal cost of reviewing the contracts.

Thing is: your business model depends on your place in the media value chain. In b2c it’s either product sales or ad sales. In b2b it’s either product sales or selling services.

Where would you place, for example, digg? Again, AdSense is nice, but. Now let’s look for an equivalent in traditional media.
How about this (I’m not sure whether Kevin likes this comparison): a TV Guide for the techno-cognoscenti audience, based on a recommendation engine, which tracks certain explicit behaviours?

Now, let’s look at the TV Guide model: b2c product sales (the printed guide), ad sales (the printed guide, the web, tv), b2b services (tv guide on screen), b2b product sales (EPG data) and so on and so on.
A great company, an undisputed global market leader in it’s field. But still: just an aggregator of meta data to tv content. The real business lies somewhere else.

So let’s be careful: most of the stuff we’re talking here about is meta content. Important, yes. And, combined with the (technical) cost of production and distribution being in free fall, good for quite some tectonic movements.

But let’s be reasonable: Give me a camcorder and iMovie and a broadband connection, and I will compete with “Americas Funniest Home Videos”. But I take any bet that nobody reading this comment will be a able to produce a full season of “Desperate Housewifes” in his past time.

So back to Charlene Li: The goal of the panel: to give “traditional media” attendees an idea of how new technologies are changing the way consumers interact with media. Yup. Makes more sense. The panel on the changing media business model is postponed.
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