We can’t help thinking that there is a huge opportunity out there just waiting for someone to grab it, and create a new TV business model, in much the same way that iTunes grabbed music all those years ago.
Here’s how we see it. Video content will become like a fabric, you will be attached to it over the internet, end to end, from the oldest archive to the newest movie production. It will have formats which are well understood and every device will be able to offer HD and 3D at some level, and most networks will be able to support delivery of most of the formats.
That’s what everybody has been after for some time and it’s what all the recent TV moves, such as the Google experiment with Dish announced
this week and the work that TiVo has done with its new Series 4 devices, are all about.
There is a Bruce Springsteen song called ’57 channels and nothing on,’ which gives the game away. There are, in fact, on most pay TV services, 300 channels now, which dates the song, and still there are times, lots of times, when there is nothing worth watching, nothing which suits your mood.
The simple fact is that we need help watching the TV. Neither zapping, nor scanning an EPG, are good enough any more. Linear TV is there for keeps and there for a reason, it introduces us to new TV experiences, which we can then explore in non-linear ways, such as search and VoD delivery.
But that experience of there being nothing on TV has been around for a long time. Certainly since Springsteen wrote that song, perhaps a lot longer. The invention of the DVR has gone some way to helping us reduce our reliance on linear programming, but at the same time broadcasters have continued creating more and more channels, as if more channels was the answer and slowly they have become a big part of the problem.
So we can see what we like on TV, and then go to a DVR EPG and decide what to record, so that when we come back later there is content that we have theoretically said we want to watch. Usually we don’t though, because the mood we were in when we decided to store that programming, is not the mood we are in now. For instance the late night, ‘I want to watch one more thing before I go to bed, and I am bored, and have no energy and have only 15 minutes,’ mood is rarely the mood we anticipate for viewing TV, but it is often the frustrating experience that leads to song like Springsteen’s.
So we need yet more help. What we REALLY want is an intelligence that says, ‘I know everything you’ve ever watched and I also know what mood you must be in, given your job, sleeping habits and what time of day it is. I also know other people like you, and I know what all your friends will be talking about in the bar tomorrow, so here’s a list of my recommendations.’ And that’s the opportunity.
We first discussed this about 7 years ago, and it was too far ahead of its time. We needed to get Hollywood over its fear of piracy, get most programming online, and we needed to build a bridge between the internet world of the PC and the Television. These obstacles have created a variety of business models, and to this date, when Faultline wrote that 2006 would be the year on the online movie, is still one of the most humiliating predictions we have ever made. It simply wasn’t and for the most part it still isn’t.
That will come true as soon as consumers don’t know or care where the programming is or on which system, or who it belongs to, when it is simply found, and easily triggered. So around 2013 perhaps, or even 2017.
But the building blocks will be put in place this year or even last year, and only become obvious to everyone once it is too late to join in. But the fact that it MUST involve a ‘federation’ of content services, loosely connected to delivery services, with the appearance of being seamlessly integrated, is becoming fairly clear. We cannot wait until ALL content is available from one place under one business model, because that won’t attract all of the people all of the time.
We have to have multiple content sources, working with one or more search engines, which have active help from all the content owners to the extent of there being full and unabridged metadata available for every piece of professional content.
If everyone in the industry agreed with this idea, and were not competing with one another, and we had all the time in the world, and all companies which own content (as in legally control it or actually created it) would make it available, expose it in software terms, in a standard way to other software services. Those other services would create, manage and maintain, search metadata and generic search services. They might all agree a client application that might run unchanged, written in the best language for running on phones, TV sets, PC and any other device you might think of, so probably Java, portable and scalable, operating in a manner where some of the heavy lifting, such as search indexing was always exported to a cloud held server. Such a service would need all the expertise of Apple, using celebrity and friend playlists, recommendation engines, connection to social networks, a safe export of remote control clicks to central servers, some form of negotiation engine which could find you the cheapest copy of the content you want, and water-tight end to end security so that the whole thing cannot be pirated.
The problem is that few agree on what any of those steps would look like, there are no standards in search and all of that would rely on the strength of the brand which takes such a proposition to market.
No. This market will be won by two things. The first is a complete vision of how this model might be achieved, and the second in brand weight from someone that the consumer already trusts, and who other players are scared of.
It’s clear that this vision must be from someone who has all the technical wherewithal to deliver it without being a major threat to the existing broadcasters and/or Pay TV operators. Probably a technologist. The idea is already fragmenting. One company might do this to the detriment of all the Pay TV companies, but to support all the free to air TV and national broadcast channels. It might work differently from one country or geographical region, to another, based on what else is already available there. While another company might carry it out to the detriment of broadcasters but to help Pay TV operators.
The truth is that it needs to be done to stimulate vast and accurate video consumption, and not kowtow to any of the existing TV brands, any of which might have their head in the sand over modern business models.
After all, we are talking about a future where linear TV is probably reduced to 50 channels in any one given territory, down from 300 now. Where content creation and the video exploitation chain has moved away from the common DVD player and theatrical release and less and less people go to the cinema, because they can get the same content on the internet. Where advertising has shifted almost entirely to the internet and become interactive and easy to track its effectiveness. A future when Pay TV has come down in price to the point where it is no more valuable to run a Pay TV business, than a bit carrying network. We are talking about a future where a content company in Beijing can carry out business with a consumer in the US or Europe, and vice versa.
But we have to build on what we’ve got. A start up is not going to come along and bring a business model that no-one has thought of and make a success of it. Because in order to allow a company to cause that amount of mayhem in broadcast and pay TV markets, this effort must be led by an existing brand, or multiple brands. It must connive and bully and niggle at conventional business models, focus on what the consumer wants, not the dying businesses of the old world of content and be as determined and focused as Steve Jobs was when he forced iTunes on unwilling record labels. Whoever does it must accept no compromise and must go after partners who are currently losing the TV battle, because those which are currently winning it, would never sign up for such a devastating effect on content that is likely to come out of this.
If a broadcaster would build this, it might look like Hulu, or like the BBC iPlayer or Canvas, or the European HbbTV. If a pay TV player was to invent this it might look like TV Everywhere. If an internet giant was to build this it might look like YouTube or another search engine. If a company like Skype was to build this it might look like Joost. If a telco was to build this it would be identical to IPTV, paid and QoS compliant, an IP walled garden in the home, with an App Store tacked on the back. If a TV maker such as Samsung, Sony, Panasonic or LG built this, it would look like a set of technical standards, and an App store which talks over Wi-Fi to multiple in-home devices. Actually it would be the same if Apple built it, because it partners with Telcos and it IS a device maker.
So it is possible that NONE of these are the right answer. Not Google, Microsoft, Apple, Comcast, BSKYB, the BBC, Fox or NBC. It could just as easily be a company like Cisco, or NDS or TiVo or Sling Media or Amazon or someone else trusted either by the consumer or by all of these organizations. Intel and Nokia, with their MeeGo operating system may suddenly have created OS which is just as at home on a PC, TV, set top and phone, so perhaps these two have the vision to drive this transition.
In the same way that this week start up SiBeam has taken control of HD video wireless across a room, where it has done so because all the powerbrokers in digital home networks do not feel threatened by tiny SiBeam, the answer might be a smaller player, with strong intellectual property, which remains no threat to anyone. Except that it NEEDS some power to inflict a business model that is painful on all the others. It could even be Facebook maybe.
This week TiVo, Samsung, Sony and Google have all made steps which show they are aware that the next big thing is this federated video content model. Samsung is offering an integrated App Store and Content Store for all its devices, Sony has made reference to one that is coming. Google has revealed a live experiment with a pay TV underdog in Dish, while TiVo has cut an international deal with Conax to export technology and is already doing this for some of the leading US pay TV services.
They each have a claim, and they each have an approach and if anyone asked us today who has the strongest claim we would say Google or TiVo, but ask us again next week and the sands will have shifted.
Because the winds of change are most definitely blowing. TV broadcasters make too little money, and their market is shrinking. Movie makers are losing seats in cinemas and losing DVD sales. Pay TV is stagnant and more focused on the triple play than re-inventing TV, which is why it has come up with a convenient model like TV Everywhere, which simply keeps the status quo alive. We know that the status quo is about to disappear with Over The Top video, so that’s pointless.
Try this exercise. Write down all the big and small independent brands out there in this space, the ones known by consumers and the ones known by all these other players. Delete the ones that have not had an innovation for the past 10 years. Ask yourself how they would strong arm any of these markets. Delete any which have too much of a vested interest in the status quo or who are too reliant on an existing TV market leader. Are there any left? Well it’s one of those ‘ let us know which one you think it is.