[opendtv] News: A Video Business Model Ready to Move Beyond Beta
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Mon, 18 Sep 2006 12:30:15 -0400
http://www.nytimes.com/2006/09/17/business/yourmoney/17frenzy.html?th&emc=th
September 17, 2006
Media Frenzy
A Video Business Model Ready to Move Beyond Beta
By RICHARD SIKLOS
VIDEO mania is in full swing. Amazon is finally doing movie
downloads. Apple is touting a new wireless gizmo to beam movies from
laptops to TV screens. NBC is introducing a video syndication service
that might pit it against Google and Yahoo, and it's joining the
other big networks in putting its shows online for free with
advertising. MTV is working with Google to populate its video content
all over the Web.
It is wholly unclear which, if any, of these or any of the dozens of
other recent efforts that have been announced will break away from
the pack, which is why many of them are couched as "tests" and
"experiments." (Whoever thought up this idea of Web sites forever
being in "beta" deserves a prize as the spinmeister of their
generation.)
Still, a few things are clear from the recent news flow. First of
all: yes, the world has gone batty over video. Thirty-second clips,
three-minute spoofs, half-hour sitcoms, TV dramas that haven't been
shown in decades, rap videos, Hollywood blockbusters and feeds from
TV news outlets big and small are flooding online. The term video
itself is already starting to sound old - the equivalent of songs
before the advent of MP3's and downloads.
The good news - and my second point - is that there's gold in them
there hills. Video delivered over the Internet is clearly shaping up
to be an actual business that advertisers are interested in. The
broadcasting (netcasting?) of television programs and clips on the
Web moves the debate away from Internet-versus-TV because if TV
executives put their best material online and get paid for it, the
proposition becomes Internet-cum-TV.
The research firm eMarketer estimates that video-related advertising
will top $2.3 billion within four years. And let's not forget that
Google is on track to exceed $7 billion in revenue this year - and
that is predominantly from old-fashioned, Yellow Pages-style text
ads. Heck, they don't even have pictures, let alone moving images.
Much attention has been focused on the economics of selling digital
versions of Hollywood movies (like in Amazon's new Unbox service) as
an alternative to DVD sales and rentals and to stem piracy. But what
has yet to be exploited - what Google, Yahoo and many other
aggregators are vying for - are pieces of the $60 billion or so that
will be spent on television advertising in the United States this
year.
NBC's new syndication business, dubbed NBBC, for National Broadband
Company, promises to match up content creators with Web sites that
might be interested in showing the video. All three parties will get
to take a cut of the embedded advertising revenue. There is much to
quibble with about the way NBBC came out of the gate; its executives
dissed most blogs as unworthy of their content and sneered at the
homemade content that is proliferating on YouTube.
On the other hand, any video service using NBBC is nonexclusive, so
there is really no reason not to use it (which explains why little
corners of NBC competitors like Fox and CBS are participating in the
NBBC rollout, through their IGN.com and CSTV businesses,
respectively).
Some aspects of the NBBC concept can lead to head-scratching. If I
have a great piece of video on my Web site, for instance, is it more
valuable to syndicate it through NBBC or to just have it spread
virally across the Web? A simple link will take people to the video
and any ad accompanying it for free. But that's why it's an
experiment.
The clever thing about NBBC, though, is that it's an entirely new
business - to the extent it will distribute other companies' programs
- that is designed to bring in new money. Even if free
advertiser-supported video on the Web takes off, it's far from clear
whether those ad dollars will be greater than the dollars NBC may
lose from viewers who will no longer watch its show on regular TV, or
download or DVD and so on.
Which brings us to Apple's potential convergence-buster, dubbed iTV
(the name is - you guessed it - beta). Betting against Steven P. Jobs
has not been a sound proposition in recent years, but there are
plenty of reasons to be skeptical about whether iTV, which doesn't
actually exist yet, will have the technological wherewithal or enough
compelling content to matter. But it does draw people closer to a
world where inexpensive liquid crystal displays will moot the
long-running debate about convergence because people will just plug
in their cable or Internet or Wi-Fi and do what they please.
"The real win here is in high-value, high-quality, high-definition
content on your TV set," said Josh Bernoff, a vice president at
Forrester Research. "To do that is going to require more than what
Amazon and frankly more than what Apple is doing. We're still waiting
for that device."
Or maybe it's here and we just can't afford it. TiVo last week
brought to market its Series 3 digital recording box, which appears
to have the ability to do everything from record in high-definition
to take video files through a broadband Internet connection either
directly or wirelessly. At $799, however, it's the most expensive
TiVo toy yet.
And if you want to really - really - get your hands on as much video
as one could possibly enjoy, may I recommend the new DirecTV Titanium
service? Introduced recently as the ultimate luxury for anyone who
calls their home a "crib" with a straight face, it's basically
everything the satellite provider has to give for a flat fee of
$7,500 a year.
That means every regular, pay and high-definition channel, every
sports package, pay-per-view movies (at no cost), and a whole bunch
of tuners and digital video recorders to do with as you please. There
is also 24-hour a day "concierge" service for technical help and
anything else.
Best of all, none of it is in beta.
Copyright 2006 The New York Times Company
----------------------------------------------------------------------
You can UNSUBSCRIBE from the OpenDTV list in two ways:
- Using the UNSUBSCRIBE command in your user configuration settings at FreeLists.org
- By sending a message to: opendtv-request@xxxxxxxxxxxxx with the word
unsubscribe in the subject line.
Other related posts: