The Future of Television Presentation

I agree 100%, but one key reason I think we keep “crying wolf” is that legacy studios and broadcasters (the ones that have mainstream content) can’t fully commit to a direct to consumer  unbundled business model. They are too wedded to billion dollar MSO payouts. How do you go to your board/stock holders as a major public media company and tell them that revenue is at risk because you want to be ahead of the curve? HBO and ESPN have a toe in the water but I don’t think they’ll ever really risk their model, even if consumers demand it and technology enables it, and so will get left behind. As a result this disruption gets pushed out further and further. How do you get mature companies to embrace what you’re saying?

Thank you for posting this Mark.  There is a huge shift in media attention share as well.  The TV fights for eyeballs with phones, laptops, tablets, even concurrent streaming video.  This attention fragmentation is going to be a part of future TV as media consumption surrounding video will become mandatory touch points for advertisers.  The increase in time devoted to video content along with the ways people are stacking media is compounding the opportunities for disruption.  I am devoting myself to play in this space!  It’s gonna be huge.

Mark, Last yr I blogged on future of TV and how trends will shape up on consumption of TV content and kind of predicted some disruptions on how the world will move. Link here - http://www.beingpractical.com/2010/06/15/the-future-of-television/ 

twitter.com/beingpractical

I would say HBO has a half pinky toe in the water because you can’t access their IPAD app unless you pay for their service through a cable/satellite company.  Ultimately every channel should have the same offering and they are crazy not to.  ESPN must have done a great job structuring their content deals to be able to put the amount of content online that they do.  In sports though there is always going to be the in market problem.  If you our out of the TV market that your favorite team plays in than it is much easier to cut the cord.

Not sure it’s perfect for the talk, but I think you could explain some of the ways the future is going to happen… and how it’s going to become even cheaper to produce content.

Tech inflection point: High level graphics programming languages

Typically used by artists (Quartz Composer, Jitter, etc.), these languages are about to become more widely used in ways that are commercially accessable. What do I mean? Local TV stations currently spend upwards of $40k for each piece of their broadcast hardware stack. That 40k goes to outdated companies who develop code specifically written for custom hardware boards. Since they have to do all the low-level complex stuff, and have small development teams, broadcast hardware has largely stagnated. It’s expensive, doesn’t work well, and TV stations have to waste a lot of capex for the privilege.

I fully expect someone (me!) will take these higher level languages and will do to the broadcast hardware industry what the iPhone did to GPS devices… it’ll turn the broadcast production hardware stack into software. Cheaper, better, faster, stronger, etc.

However, there is a more interesting part that happens after…

Tech inflection point #2: WebGL + HTML5

The same tools which Local TV stations will use can then be applied to completely new markets, broadly enabling more people to create local TV quality content on a grander scale. Instead of having the output device be some computer hooked up to a video production switcher, the output will instead be a client-based experience. I fully expect video to morph from something that’s shot, edited, post produced, compressed, uploaded, and shared, into a data driven experience where the client does most of the display work that would normally happen in Final Cut Pro.

This is the project on which I’m currently working. It’s a project I’ve been dreaming about daily for 5 years, back when I left working as a broadcast production freelancer for ESPN, TNT, and other sports and news companies, and instead started working at Engadget as their podcast producer. It’s why I eventually went to CNET… trying to create this experience. Now, tech has finally evolved to a point where all of these things are beginning to be possible, and it’s why I’ve chosen to start a company.

Anyone who reads this and is interested in working with me… find me.. I’m @randallb on twitter. I’ve got a beta customer live with some of the stuff I talked about in point 1, and am working on building a company now.

Why do you think video revenue in the future will be controlled by the distributor and not the creator? I think the paradigm will flip and you will end up with websites that aggregate content and are destinations, but the revenue will be controlled by the companies that create the content.

We’re already starting to see many content creators using Wistia,
BrightCove and others services instead of YouTube to host their videos,
so they can better control the experience. I think the real question is
who is going to come up with the embeddable player that provides
effective monetization of video wherever it ends up being embedded on the web.

Just think of apps like Pulse & Flipboard that are aggregators and organizers of content. I think you will end up with the same types of things for video, except video creators unlike the writers will have better control of the experience because video is embedded!

You might want to check out http://www.grassvalley.com if you haven’t already seen them. They do software based solutions for live TV broadcasts. KIRO TV in Seattle uses them.

The in market issue is super annoying, but … my guess and hope … is that MLB will lead the way past that silliness when they realize how much more mindshare and revenue they capture directly from a tablet/phone presenting a local game with embedded targeted and higher margin behavioral ads.

I still believe that the numbers game is still the most potent argument for video on the net vs. traditional delivery.  The content (and money!) will follow the audience.
“For the first time in history, mankind is developing a universal language: video. People now communicate with video on two billion computers and more than one and a half billion television sets, and by 2013 you can add another one billion video-capable people regularly accessing the web from their cell phones. The most popular spoken and written language is English, with 1.8 billion users. Looks like video already wins.” – Dave Marsh http://www.cjr.org/feature/fade_to_black.php

will come once the online audience is large enough and proof points via subscriptions are there.

This is Super Interesting and it opens huge opportunities also for
others than mentioned in the presentation. Again one industry that will
change very quickly to be something else that it is today.

Cool presentation Mark, I am using seme-pro video content in my app, I am trying to build the ESPN of tablets.

Another nice read but is focused on what we call the “On Demand” business model. 

For the business I’m in (www.ipowow.com), we are tapping in to this market, but going for the Live Event TV model which for the networks is the actual sweet spot as they have the distribution solved and are the first point of watching for this (maximum value point) where the Internet is prefect for VOD activities. It will be take a long time for Live TV in this area to change at a global level as there are many layers in this from broadcaster to rights holders(sports) to brands. We are linking the Live TV to the Internet in a second by second second screen model allowing TV to involve the viewer as it happens which is what we call “in the now”. This is like what the networks are doing now with Twitter, but we are at a much higher level as we have built our system to handle 100,000+’s interaction per second using a simple and quick access model, no need to type something.  http://bit.ly/iPowowShowreel

TV’s power is a mass audience at the same time while the Internet is a mass audience over time and the one who can make both work together, will win.

This is my take after 20+ years of running TV tech: 

The Future of Television – Why it has nothing to do with technology.

People want their TV and movies right now, why isn’t it happening?First understand how the TV business worksAdvertising is a big part of the picture, but it’s not really what’s holding back televisionCable & satellite providers pay the television studios for the right to broadcast the television networks, and they do a pay a lotThese fees are the subject of huge negotiations.

 You see them play out in when cable channels are stripped out of the lineup and both sides take out huge ads to blame the other side.These deals are in the billions, and single penny up of down in the subscriber rate translates into millions of dollars over the span of the contracts.Once the television studios get their contracts, they are happy and go try to make hits to make more revenue from advertising.

The cable companies need to deal with keeping subscribers while making enough money to pay off the contracts.  Making a profit is tough and requires hard choices so prices go up, service levels drop, and people start to dislike their cable company, but without many options stay put.Everything was great for a couple decades until the internet shows up.  The classic disruptive innovation that Clayton Chistenson has warned us about.

People make friends with the internet, get broadband connections, try Netflix, Hulu, and Apple TV and rightly ask why can’t I get all my television this way.  For the more saavy, they do.  Between torrents and newsgroups, all most all television in first world countries is available day and date if you have the technical know how and a willingness to break copyright law.But most people don’t do this and want a simple and easy way to get their TV over the internet and give the boot their their cable company.If the demand is there, why isn’t it being supplied?

Well, the cable companies aren’t stupid, they are aware of the internet and it scares them to death.  So the cable companies call up the television studios and tell them, “Don’t put your shows on the internet!”  At first the television studios did this, and illegal downloading got rolling, just like in the Napster era did for the music industry.A few smart people on the television side said, “Umm, hey, we better put some of our shows on the Internet.”  So they did and it was a success.  People were happy, so happy, they even watched ads and put up with intrusive software downloads.  Netflix and Hulu started to hit their stride and become available on pretty much every platform except fax machines.Then the cable companies really freaked out because a small group of tech saavy folks started “cable cutting” and blogging about it.  So the cable companies got together with the television studios and basically said, “We gotta get a handle on this shit before it gets out of hand”.As a result you are seeing smaller windows for free episodes, delays on the episodes that are released, and things like HBO Go being heavily promoted.  The industry calls this TV Everywhere.  In actually it’s TV Everywhere as long as you pay a regular cable bill and don’t cut your cable.You won’t get al a carte choices on cable or be able to buy HBO Go standalone any time soon.  Why?  Because it breaks the entire multi-billion dollar business model that has made many executives rich over the last half century.  No one on the inside wants real change, if it means people paying any less.So if the cable companies and the television studios are against real change, how are are we going to move into the glorious future?Well, the big change is the public change of view on broadband Internet.  Once broadband Internet was seen as a luxury, now it’s seen comparable to water, gas, and electric, as a basic utility to the home.  Sure some people don’t have it yet, but ask most people that have broadband if they’d be willing to live without it.The technology exists today to stream multiple channels over IP to today.  AT&T is doing it already with U-verse, but they charge a lot for it to cover the costs of all that fiber optic cable they hooked up.Several companies are looking at doing Over The Top or OTT services that give you the equivalent of cable TV over your broadband connection.  All they have to do is agree to pay the television studios the same subscriber rates as the cable companies and their get all the same rights.  The television studios are basically arms dealers in the distribution wars selling to every side of the conflict.So what’s holding things up you say?I’m sure that in places like Apple, Hulu, and Netflix, there are elaborate spreadsheets that look at costs, revenues, and potential markets and they just come out in the black yet.  Mostly because the estimated target group of customers just isn’t large enough yet.  But once the spreadsheet shows the projections in the black, look out, change ahoy!Multiple companies will offer basic cable at rates significantly below what the current cable companies charge and people will start moving.  At first the service will have flaws and there will be lots of complaints, but over time it will get better. 

The reason the rates will stay high is all of the ‘most favored nation’ deals that are in place. If a studio cuts a deal to Netflix, they have to lower the rates to Time Warner, Comcast, etc. They won’t change their 5 year billion dollar projections, even if the house is on fire.The cable companies will panic because it will become nearly impossible for them to compete.  Why?  Because a large part of your cable bill pays for all those cables in the ground, multiple headend offices, and even satellites in space.  The OTT providers don’t have to pay for any of that, they just need to meet their biggest costs, subscriber fees.  This is the real reason behind the battle for Net Neutrality.  The existing cable companies see this coming and don’t want to become the ‘dumb pipe’ that just supplies broadband Internet and nothing more.  They want to find some way to make the OTT providers pay distribution costs, just like them to maintain the overall business model.  Net neutrality has nothing to do with censorship or choice, and everything with propping up the existing television business model for the next few decades.This probably won’t work since cable companies have pretty much the worst reputation of any service industry out there.  The general public will soon accept the cost of broadband internet as an essential cost and stop thinking of it as part of the cost of entertainment.  They will finally get a chance to give the finger to the cable companies they’ve been hating for decades and be able to switch providers easily.There will be much wailing and gnashing of teeth by the existing cable companies, but in the end it will likely result in the splitting of the companies into broadband internet providers that act more like your electric company and television distribution companies that don’t require you to use their cable only.When’s it going to happen?  Not sure, I can’t see those spreadsheets.  But rest assured, there are multiple engineering teams actively working on how to best pull off a OTT service.The secondary effect of this will be Americans demanding the kind of broadband service that is commonplace in Japan and South Korea with 100MB/s speeds in every home.So don’t buy into any of the hype of technology breakthroughs leading to a new era of television.  All the innovation needed is already in place.  It’s simply a matter of a spreadsheet showing a profit instead of a loss and we will make one giant leap into the future of television.Sure, the details are a little more complicated than I describe and there are plenty of talking points by the entrenched players as to why they can maintain their hold on the consumer.  Go ahead and ponder their points on way Blockbuster to rent some movies or to your local music shop to buy some CDs.

When is the video out for that presentation?

Interesting, this is. 

Thank you, I do.

Really a fantastic comment, thank you

Mark, the other dynamic that would be interesting to talk about is the interplay between, and relative growth trajectories 0f long-form vs. short-form content.  Does more time spent watching video online mean more people are watching movies or even tv shows online or is the growth coming mainly from consumption of shorter form content?  The answer has a significant impact on content producers as well as the revenue model underneath video. 

great post! i liked it!

I am seriously juiced about the disruptions taking place in all traditional media formats.
Although I have always been a consumer of modern media…I have never really trusted alot of it.
The notion that the “gates are crashing” and the gatekeepers are becoming irrelevant is exciting to me.

Great job yesterday at PCE

Too early to say. Many people are building apps for social TV now. We’ll learn over the next few years what consumers really want.

Because brands & agencies don’t shift spend easily. There is an entrenched system in TV advertising and online has some risks and problems in measurement. It will gather steam in a few years.

Lots of questions but here’s my views:
- 5.3 is TV, not online
- people like watching more than reading
- so the future of the Internet will reflect life in general
- but the formats will change (22 minute TV format is based on limitations of distribution / the need for linear programming)
- your definition of a good experience will change from that of the next generation
- everybody would agree that watching in a movie theater is the best but also the highest cost so production quality and video quality is always a function of price & convenience.
- 17 hours is per MONTH, not day
- I focused on US because that’s where I live / invest. I thing you could have replaced US with Western World trends. I have not thought about developing world trends. Some day I hope to.

I think it will be many things, not one
- ad supported
- subscription
- pay-per-view
- selling products