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Quick Jump Menu to this Issue’s Articles March 31st, 2004 Overview Digital Hollywood – Too Much Good Content – Part 1: Importance of Content Protection MTA and ‘the Wonderful World of Color’
Digital Hollywood – Too Much Good Content – Part 1:
by Ken Pyle ([email protected]), Viodi, LLC
March 31st, 2004 Issue
As usual, Digital Hollywood overwhelms with the amount of good content. What I like about this show is that multiple viewpoints are mixed together and, as a result, the panels are excellent. It provides an excellent networking forum as well, as the parties are jam-packed with the hundreds of attendees. The take-away from the first day of the conference is that the business model for how television is supported is going to significantly change over the next few years.
The role of the Digital Video Recorder [DVR] and VOD was discussed in the panel, Transforming Television: From Reality TV, HDTV and Interactive TV, to PVR TV and VOD TV. David Ernst of Initiative Media [he spoke at Viodi’s Fall, 2003 conference] pointed out that television technology innovations have mostly been about consumers trying to avoid advertising. I believe he was the one that characterized the remote control as the first “TIVO”. Initiative’s research indicates that DVR owners skip about 50% of all ads.
According to him, consumers are less likely to skip ads if the content has just been recorded; something like 25% of DVR consumers skip ads within 15 minutes of program being recorded. If the programming is called from an archive, 75% of the DVR consumers will skip the ads. The point is that DVRs are, in the words of Ernst, “a threat to business as usual.” That is, the traditional 30 second advertising spot in jeopardy in the long-term.
There is still a small base of DVRs, however, but Larry Namer from Reality Central and Frederick Bien of Turner Broadcasting concurred that content owners and distributors need to start experimenting now with various business models, so that they will be ready when these devices are truly in the mainstream. As an example, Bien showed a telescoping long-form advertisement that started as a 30 second spot, but could be extended into a five minute long-form advertisement by the customer. In this example, the content was marked, such that the view could resume the “live” programming they had been watching at the end of the commercial.
One of the big challenges that Bien and the other panelists pointed to is the role of standards, so that an ad could be created for one platform (e.g. TIVO) and operate seamlessly on another platform (e.g. Scientific Atlanta). The panelists also concurred that there will be many different devices within the home capable of communicating and displaying entertainment content. Ernst went on to say that he expected that virtually every [home] appliance will have some sort of video monitoring.
And these appliances will be everywhere and in all sorts of configurations. For instance, Bien pointed to Verizon Wireless’ video demonstration at last week’s CTIA show as evidence that cell phone video is becoming real. The upshot of these appliances is that the consumer will have control over when and where they watch content. The disruption caused by the technology innovations will shake-up the traditional networks, while presenting opportunities for upstarts like Namer’s Reality Central, which are able to build new business models from scratch.
There will be continued “hybridization of the Internet with the TV”. Additionally, storage within the network and at the consumer, coupled with the drop in the cost of producing content will allow for much greater specialty programming. It was suggested that, as has been at other conferences, the industry is moving towards a “magazine” model where there will be many channels devoted to niche audiences.
So, why does all of this matter for an independent telco? Clearly, the business models will be shifting in the next few years and it is sure to have a big impact on any telco that is distributing video. Times of disruption are also times of opportunity. I believe there are many ways that a telco will be able to positively participate in this content and programming revolution that these panelists discussed. But more about that in future issues.
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