The future of TV distribution

May 23, 2006 eirikso10 Comments

Chapter 3 of my presentation from the Nordic Media Festival. You find the articles I have produced so far from this presentation here.

Some history

Six years ago I made some slides for a presentation at a big media conference in Stockholm. I suggested that we should have a look at how TV is distributed and take a closer look at the business model. Could new technologies change that model? To illustrate my point I made a comparison with the software industry.

This is how the business model worked when I bought my first license of Photoshop back in 1994. Adobe makes the software. They pack it and send it to the distributor in Norway called Office Line, they sell it to the shops where I buy my box of software. Illustrated by one of the biggest electronics retailers in Norway, ElkjÃ¸p.

For the last couple of years, that model has changed. I buy Photoshop directly from Adobe in the US. The product is delivered trough the net as a download. Both the distributor and the retailer are obsolete (for that kind of product).

This is an example of how the popular show called Friends was distributed in Norway. Warner makes it, the television channel TV2 buys rights and distribute trough cable, terrestial and satellite. Could something disturb this model?

More history – Bob the millionaire

One year ago I made a little comic strip to illustrate how horribly wrong the television industry was trying to deal with the problem of illegal downloads and the fact that the internet started to act as a reliable and high quality distribution model for their content. I include the story in my presentation, but here it is much easier that you simply have a look at the original post.

Okay. So what’s the solution to this problem? Availability. Make content available on the platforms that people use. And now, one year later the industry slowly understand this.

Lost is available through the iTunes music store and ABC are also experimenting with free reruns on the net. CBS put out Innertube after the huge success with SportsLine’s March Madness:

Quote from the Online Reporter:

What added urgency to getting
Innertube deployed, CBS said, was
that CBS SportsLineâ€™s March Madness
was such a success, drawing five million
viewers and sending out 25 million
streams. It was, they said, the
largest live sports event ever on the
Net.

The day after March Madness
ended, CBS executives said, the phone
started ringing off the hook.
Advertisers had been so thrilled with
the results that they were looking for
more Internet entertainment videos.

Warner close a deal with BitTorrent and in general, the industry starts to realize that this internet thing is one hell of a distribution platform.

And yes. There is still a long way to go. Lost is available in HD with multichannel sound on BitTorrent. ABC is streaming in something that is worse than standard definition with regular stereo sound.

So, what’s happening with the business model?

Let’s use Lost as an example. This is how it is distributed traditionally. Touchstone produce. ABC broadcast. Cable companies and other distributors carry the content to the home.

Then ABC bypass the distributors and go directly to the consumer. The observant reader will immediately say that something is missing here. Yes, the broadband provider.

And by some strange coincidence one of the biggest cable providers in the US is also one of the biggest broadband providers.

So, status quo. Nothing is changed. Touchstone produce. ABC broadcast. Comcast carry the content to the home.

But hey. The role that Comcast have as a broadband provider is very different from the role they have as a cable provider. The cable providers have valuable control of the content they deliver. They make the packages, they control the equipment. The encryption. They have the customer relationship. They decide what channels are going into the different packages.

As a broadband company the control has shifted entirely to the user and the content provider. Big difference. New rules. Of course they don’t like it. They try to make bottle necks. They try to limit certain kinds of traffic. It will be interesting to watch this space during the next couple of years.

The broadcaster’s nightmare

The day Warner find a way to earn more money distributing the content directly to you they will do that. Rendering the broadcaster and the traditional cable companies obsolete. Bad news for some television companies that lives entirely of content they buy, package and distribute.

Seriously bad news.

Yes. We still need the broadcaster to reach a big audience. We still need them to get attention to new content. We still need them because the risk capital often lies in the broadcaster. The production company wouldn’t even start producing without a broadcaster. But all of this can change. You won’t see huge amounts of broadcasters die tomorrow, but during the next couple of years some business models and traditional thinking have to be revised.

What’s next

It’s not about distribution. It’s about getting attention. In my next chapter from this presentation I will tell you why we don’t need the broadcasters to get that attention. I will point back to this post about the new face of marketing and commercials and give you a couple of thoughts on the future of the 30 second television ad.

Digg this story here.

Commercials gone wild

May 18, 2006 eiriksoLeave a comment

The norwegian website Propaganda has an article out (norwegian) on how commercials now can be distributed through the net and can reach millions of people without the need of televison stations or cable companies. I used the fantastic Volkswagen commercials featuring Peter Stormare to illustrate this fact in my presentation at the Nordic Media Festival, and Propaganda asked me some questions. They have summarized the issues nicely in their article, but I have a couple of points to add…

Last year I posted a short article on the BMW commercial featuring Kermit the frog. A friend of mine, John Andreas Andersen was the cinematographer and I posted a couple of details from the production. At that point John Andreas had a very cool “making of” movie on his web site, but had to take it down after a cease and desist from Disney. Owners of everything regarding the little green celebrity frog.

Ever since, the search “BMW kermit” has been one of the most frequent searches that drives traffic from Google to my blog.

People have a genuine interest for this commercial. They miss the behind the scenes movie and want to know more. BMW hasn’t done anything about this fact. They have a huge audience that want their commercial. Seems like a dream for any marketer.

The making of is up on YouTube (at least at the time of writing this).

BMW had a huge success with BMW Films. A true example of how it is possible to reach out with commercials that people really want. The movies was made for distribution through the internet. They were so popular that they ended up screening them at cinemas in the US and selling a DVD with a collection of all the movies.

What happened to the Kermit spot? Why didn’t they buy the rights to the “making of”? Why is there no information about this spot on bmw.com? What should they have done?

Do like Sony

Their beautiful Bravia advert has been debated and praised by highly trafficed web sites. There is a big interest in the commercial and Sony has done something to meet this interest. They have put up www.bravia-advert.com. A web site with one mission, information and downloads regarding this particular ad. A look at the traffic rank for this site on Alexa reveals that making this site probably has paid off hugely.

I have never seen this commercial on regular TV. Still I know everything about it and have seen it several times on the net. Right now it has 3,4 million views alone on YouTube.

Welcome to a new world of distribution, marketing and the art of getting attention… More on this when I reach that chapter in my series of articles from my presentation at the Nordic Media Festival.

The convergence that makes things difficult

May 16, 2006 eirikso4 Comments

The next chapter from my presentation at the Nordic Media Festival. You find the rest of the chapters here.

People have been talking about the convergence of devices for a long time. And if everything is melting together into one universal device this sounds like something that will be very easy to handle. Problem is that this is not the case. The convergence leads to an abundance of devices that can be used to recieve rich media like video and sound. The computer is turning into a video recorder. The mobile phone is turning into a media device. The TV is turning into a computer. And so on.

This leads to huge amounts of new user situations. Broadcasters have to face the fact that people will watch their program in new settings. At work. On the go. At new times. In a foreign country. At their hotel room. While travelling.

And then you have these young people that are able to do several things simultaneously. They surf the web while watching the TV. And I must admit that the illustration here is kind of old school. I have a remote in my hand in the picture. It should have been my Nokia. A browser, the TV, messenger, skype and the mobile for sending and recieving SMS. All at the same time.

The broadcast industry should start taking this serious. Do tests with synchronized interactivity on the net during a television program. Behind the scenes. Extra information. I must admit it. On several occations I have used IMDB during a movie to find extra information. Now start exploring this possibility.

And, did anyone question my headline “…that makes things difficult“? I hear that way too often. How on earth could hundreds of new devices for playing content make problems? For the broadcaster that has any tiny bit of foresight this is no problem. This is one huge possibility. The surface where you can show your content just quadroupled.

It’s like an airliner that suddenly got huge amounts of new planes, helicopters and space shuttles for free. Not difficult. Not a problem. Slightly challenging, but loads of fun and opportunities.

What’s next?
In the next chapter from my presentation we will revisit my one year old cartoon about Bob the Millionaire and have a look at what the industry has done to meet that absurd situation.

Predicting the future

May 15, 2006 eirikso4 Comments

This is my first in a series of posts from my presentation at the Nordic Media Festival. I will tag them all with “NMF”, so that you can easily find all of them through the “Category Cloud” in my right sidebar.

I start the presentation talking briefly about how difficult it is to predict the future of technology. Using an example from the fantastic commercial in an old computer magazine that I found. Saying anything close to “whatever happens in the future, it’ll fit into this space” is bound to look ridiculous after a couple of years.

But is there something that is easy to predict? Something that we can take for granted when we try to figure out what will happen? I think there are.

The quality will be better. If you can stream video over the internet today you can stream it with better quality tomorrow. If you can snap pictures with your phone today you can take pictures with a higher quality tomorrow.

Forcing us to think about issues like “what will happen when everybody can record broadcast quality video on their mobile?”. Following this rule, of course “broadcast quality video” will also be better. We will go from standard definition to high definition. But at some point the quality is “good enough”. An important factor to watch as well. Sony and Phillips failed to understand that CD quality is “good enough” when they decided to spend huge amounts on Super Audio CD.

In the quality discussion you should always keep an eye on what people really want. With the audio question they did not want better quality. They wanted higher availability. And started buying MP3-players…

If you can listen to audio on your computer today you can watch video tomorrow. If you can snap pictures with your mobile today you can record video tomorrow. Simple and very obvious. Still quite difficult to predict. Not the technical part, but again – what people really want.

People will know more. They will demand more. It will be verry difficult to fool your audience. They will redesign your webpage and build services with your content before you can spell greasemonkey.

Region codes for DVDs was a bad idea in 1996. Dividing the internet into different countries is simply ridiculous. Know your audience. Know your local advantage. But don’t try to lock people out. They will break your virtual border.

Next chapter
In my next post from this presentation I will discuss the convergence of devices. The fact that this convergence of devices leads to an abundance of user situations.

Feel free to comment or contact me if you have more factors that you find easy to predict.

My presentation at the Nordic Media Festival

May 12, 2006 eirikso5 Comments

Photo: Bergen, Norway – in May. Shot outside just before my presentation.

I just did a terrible thing. I promised hundreds of people that I would post my presentation here at eirikso.com

Making a promise in front of hundreds of people while everything is documented on tape is a serious obligation. But hey, a little preassure is good for productivity.

The presentation is obviously finished, so what’s the problem? Can’t you just upload the powerpoint to your website? That will take you a couple of seconds…

About my presentation style

I often get questions from people that wasn’t able to attend my presentations if I could mail them my powerpoint. The obvious problem of the fact that powerpoint is a horrible tool that grows your presentation to hundreds of megabytes if you decide to include some pictures makes things difficult, but that can be solved by making a PDF. Still that is not the real problem.

The real problem is that if I make a set of slides that can be read through and give a person that did not attend the same that the people in the audience got, I have made a really bad set of slides. Why on earth would I bother travelling all the way to the venue and spend my time talking if I could solve this by simply mailing my persentation to the people interested?

I try my best to follow the rules from Seth Godin’s excellent little eBook called Really Bad Powerpoint and from what I learn through the fantastic blog called Presentation Zen.

The rule that makes my presentations completely useless as documentation is: No more than six words on each slide

Yes, you will find more than six words on some of my slides. But setting ambitious goals forces you to think through things that extra time and helps you making things as simple as possible.

The obligation

Yes, I will post my presentation here. During the next days and weeks I will divide it into smaller chapters and make one article on each chapter. Posting the slides as illustrations and writing my thoughts on the issues. To make a document that makes sense both as notes for the people that attended and as interesting information for the readers of my blog.

You can read more about my thoughts on doing presentations here: how to avoid making boring presentations

The content

What can you expect? Articles on the challenges of the television inustry, about home entertainment, business models that change, how media centers change the way we use our TV, about how we should change the way we work with television programs and about the fact that the internet is a huge possibility for the media industry, not a threat.

Until then, please feel free to comment here or send me an email if you attended the presentation and have questions or feedback on how it worked out. Did I talk too fast? Are my slides stupid? Do you miss the bulletpoints?

(A note for my regular readers. How was the competition from Matt Stone and Trey Parker? Well, our hall was completely full. People sitting by the wall in the back of the room. I don’t think the South Park guys had any problems filling their hall either, but I am honoured by the fact that so many people chose our session.)

Update:
I have started to post the presentation. You will find the posts here.