I’m about half way through The Beatles, the new massive biography by Bob Spitz. Having come of age with the Beatles—I was a freshman in college when their first U.S. album swept over America – it all seemed very sudden. One day it was Elvis and the Ronetts. Next day it was all Beatles, all the time. But in reading Spitz’s book, I got a very different perspective on the phenomenon. From the time John Lennon was introduced to Paul McCartney in 1955, it was seven years of free gigs, grueling road trips and seven day a week performances in Hamburg before they even got their first recording audition. And another year until they broke out into the big time. As is often the case, a “sudden” phenomenon had been a long time in the making.
What in the world does this have to do with Rebuilding Media? Internet video is breaking out big time. After years of Internet video being a postage-stamp sized novelty, it is “suddenly” mainstream. I vividly recall showing a streaming video with RealPlayer (there was no Windows Media Player then) to my inaugural cybermedia class at Temple University in 1996. One student’s hand shot up with a question: “That’s cool. But no one is going to watch videos that are so jerky [it was a dial-up line] and so small.” “Absolutely true,” I responded. “But the importance of this is not where it is today but where we can expect it to be in 10 years."
So here we are 10 years later. Most households that are online use broadband connections. Wireless networks are in place with broadband capability. And cell phones that include the capability to receive video are common. This year may be the year that online video is recognized as a real business, as the established media companies throw their figurative hats in the ring to join the start-ups and innovators.
What’s some of the evidence?
First the new-guy players:
-- YouTube, one of the latest “new kids, rocketed from 3 million video streams per day to 25 million from Jan. 1 to Feb 28.
-- Apple’s iTunes is reporting downloads at the rate of about 3 million per month. Some are free, some are paid for.
-- NarrowStep, a company in the U.K. that provides technology and support for specialized Webcasts, says it is adding two to three new channels per week. Unlike the mostly amateur clips uploaded to YouTube and similar, NarrowStep is being used to create “slivercast” channels that are intended to be businesses. One client, Sail.tv, says it attracted 70,000 viewers in its first month. (payment required for access)
-- The Roo Group hosts or consults for 100 Internetcast TV sites which show 40 million videos a month. One client is YuksTV, which claims as many as many as 200,000 visitors in a month.
-- One of the “old-timers” among the new players is Atomfilms, a home for budding film-makers.
-- Then there is Google, big and wealthy but still a new player in video. Google provides access to everything from archived NBAAll-Star games for $3.95 to “Twilight Zone” classics for $1.99 to many free – and often worth as much— classic clips such as the 49 second "Benito scooping up after his dog.”
-- Last year the site of Major League Baseball, MLB.com, generated $68 million in subscriptions from viewers of 2,400 baseball games.
The traditional media companies have gotten the message:
-- The uber-Establishment Time-Warner’s CNN has been flogging Pipeline, a service that combines real time CNN feed with access to its video archive. It has the confidence to seek $25 annually—less than a subscription to Time.
-- CBS offered the NCAA’s March Madness basketball games on an advertiser-supported basis and had 5 million takers. Much of the pay-for material on Google Video is both current (e.g., “Survivor”) and historical (e.g., “Brady Bunch”) from CBS.
-- The prospects of a new revenue stream have driven Disney, which owns ABC, to agree with NBC Universal to provide “Scrubs”, which the former produces and the latter broadcasts, for sale on Apples iTunes. The significance of this is that it is the first time rival broadcasters have “joined together in a digital download deal.”
To be sure, these are just the tip of the iceberg (sometimes a cliché says it best). And naturally there are skeptics, though often one can see where their bread is buttered to understand:“‘I've never been a believer that we should create channels for all these niches like beach volleyball,’said John Skipper, a senior vice president of ESPN. ‘They just don't pencil out. Because if you have 12,000 people, you can't afford to do it. And if you can't afford to do it, you can't make any money on it.’" But that’s like the publisher of People claiming that you can’t afford to publish a newsletter for 12,000 subscribers. No, not if you use the underlying economics of People.
The folks at Rocketboom.com, which claims “more daily subscribers for original syndicated multimedia content than nearly any other site, including Podcasts,” state it succinctly:
We differ from a regular TV program in many important ways. Instead of costing millions of dollars to produce, Rocketboom is created with a consumer-level video camera, a laptop, two lights and a map with no additional overhead or costs. Also, Rocketboom is distributed online, all around the world and on demand, and thus has a much larger potential audience than any TV broadcast. However, we spend $0 on promotion, relying entirely on word-of-mouth, and close to $0 on distribution because bandwidth costs and space are so inexpensive.
(Hmm, is this last phrase an argument for the carriers in the so-called “net neutrality” debate?)
The role and the business models of these and the many other players are all over the place. None of the new guys bulleted above actually create any content, while all of the old timers do. But the new players, including Google, YouTube and iTunes are providing the facility for all sorts of amateurs, professionals and amateurs-hoping -to-be- recognized- as-professionals to reach an audience.
“Slivercasting” is any way of describing the “long tail” concept introduced in a Wired article by that name in 2004: It refers to the large number of specialized offerings each of which appeals to a small number of people, but aggregate to a large market on the Internet. If each content provider was plotted on a graph along with best sellers, these specialized products trail off like a long tail that never reaches zero, as in the accompanying figure.
Of course, not all these ventures will survive economically, although as we have seen with the blogging phenomenon, in the long tail there inevitably will be some high quality content provided by individuals or entities motivated by other than direct revenue. Still, the implications for the effect of all this on our cumulative time available to spend on individual media programs, products and sites, as well the impact on the slicing of the advertising pie and consumer media budgets is likely to continue roiling and destabilizing the traditional media landscape.
There may be sudden phenomena in nature. But rarely in business. You just need to pay attention.
No comments:
Post a Comment