News is just starting to leak about a new US start up called Bamboom. It’s website goes through a laborious video explaining exactly what it does, because at first look it’s not obvious. It picks a building in each major town in the US, puts into it a cluster of thousands of tiny TV antennas, each with their own tuners and it will tune them into local broadcast stations and send the results over the internet, to people that live in the area. It is integrated with Netflix too and its servers can route Netflix content to the Bamboom app on a tablet or phone.
It seems a convoluted ‘heath Robinson’ affair (look up the cartoons on Google), but it is intended to get around various US laws ‘ ostensibly one that says that you have to pay a license for a public performance of a movie or TV show, and one that says that if you store content and offer it to someone else, it is a breach of copyright, but if you let their actions store it by remote control, then it is acceptable.
Before we talk about the idea seriously (as if one could) there is a fundamental flaw in this and in other, seemingly similar ideas. There is the Zediva idea of stacking DVDs up in a warehouse and having them controlled remotely by customers ‘renting’ DVDs, and the Ivi idea of broadcasting local TV channels over the internet to anyone, and FilmOn, which had a similar service which has already been forced off the air following a suit from broadcasters. The other two are ‘being’ sued and so far are still in business.
The flaw IS not a legal one, it’s the fact that this type of content availability SHOULD be made easy by the very companies trying to stop it.
We don’t want to argue the merits of Zediva and the fact that the company pays for a copyright license to the content, but doesn’t pay the broadcasters anything. Similarly we don’t want to argue that the national broadcast TV channels ‘give’ away content, and that’s their only business model and that if someone else ‘gives’ it away, surely that means they can claim that more people are watching their adverts. There are arguments on both sides and we can see that. The difference is that the national broadcast channels own the content and they want the right to exploit the content outside of the broadcast window, including the must carry rules that puts it on pay TV networks.
But apart from creating Hulu, a single business, which in our mind is designed to fail, the networks have done nothing about exploiting their content on the internet.
It is true that cable just went ahead and carried local TV channels, and then later were mandated to do so, to keep broadcast channels alive. The same happened with satellite TV. If the same happens with the internet then just anyone will be able to send US TV channels anywhere, and not have to build an expensive network of their own to do it as cable and satellite have done. All that is happening here is that the Broadcast networks want to decide for themselves how best to exploit the internet with content they paid for. And by local channels we most specifically include the signal of affiliates to the national networks ‘ CBS, ABC, NBC and Fox.
At the same time those same channels are trying to sue and sending cease and desist notices to the pay TV operators such as Time warner Cable and Cablevision, trying to prevent them putting the same programming, which they are now forced to carry, onto the iPhone and specifically the iPad.
The truth is that these networks are being dragged kicking and screaming into the 21st century and have finally woken up with the creation of services like Hulu and Hulu Plus. But that’s it.
There are two ways of going about business ‘ the Google way, what might once have been called the Microsoft way, and the Apple way. The Apple way is to do everything yourself. You design the hardware, the chips in the hardware, the operating system, the UI and finally the finished item itself, and then you build stores for it, and then you build online stores for the content. The final product is Apple through and through. The Google way is to write an operating system, preferably with a bit of help from the open source community, and then say to everyone ‘ use it for whatever you like. Microsoft began life like this, and then got increasingly miffed when people did things with its software that it had not planned.
The Broadcast networks are all Apple converts. They want the content. They want to broadcast it and sell ads on it. Then they want to sell copies on DVDs. Then they want to sell more copies on iTunes, and then they want to show some of the programming on their web sites, but they want to be able to stop certain devices (such as Google TV) from being able to see this programming. They want control.
They want every initiative to be theirs, and because of that, unlike Apple, they do nothing first, but copy everything, when they are sure it won’t kill their golden goose, broadcast advertising.
If they went about it the Google-Microsoft way, they would say, here’s our programming. It already has adverts in it. Send it to anyone you like, anyhow you like, just tell us who so we can count the adverts. Or if you take the ads out, then put some more ads in and we want 30% (or 50%) of what you sell, or sell the content for money and we want a percentage. If you have to give the content away and sell the devices, then we want a percentage of the device price. Whatever you do, we get money, but we don’t charge you a minimum up front and we deal with ‘everyone.’
That way they would welcome Ivi, Zediva, FilmOn (which is fine in other countries by the way) and this new business Bamboom. Like App Store programs they’d have 10,000 partners by now.
But actually Ivi, Zediva, FilmOn and Bamboom would never have had a business model, because simple online delivery of all this content would have become an avalanche and their specialized delivery would have been inappropriate to the modern, Facebooked, Tweeted world. Instead of partnering with these tiny start-ups, the established internet big boys, such as YouTube, Amazon, Facebook itself and MSN would all have been partners and TV would have become an internet phenomena 10 years earlier. Connected TVs could have been invented in 2000 if anyone had seen a use for them back then.
But because US content businesses are the most retrograde on the planet, running piracy scared and who stutter and cross themselves whenever they hear the world Internet, this has not happened. Which is why businesses like these start-ups are looking to steal the content out from under their very noses.
Having come up with Hulu, the broadcast networks now have to decide if they even like their own internet child. This Summer they have a chance to re-negotiate with Hulu and can either castrate it with more expensive content deals, and limited live events, or they can offer it the crown jewels. Remember how Movielink was hamstrung and left out to fail by the movie studios? Well the networks may deliver a similar hatchet job to Hulu and its CEO Jason Kilar.
Ironically what Hulu wants right now is the very same thing which these start ups want, it wants content rights it doesn’t have. It wants its founders to give it rights to sell its existing content online overseas ‘ bypassing all the content negotiations that it is trying to go through in the UK and Germany and the rest of Europe, so that Hulu can take off there. It wants to get US broadcasters to sell broadcast rights to UK, German and French broadcasters, without the online content, preferably for the same amount of money. Think what that might do to the their local OTT services like YouView, iPlayer and HbbTV services ‘ without US content (which they pay for) those services would be dead. And Hulu would get all the online business.
This is tantamount to doing the Apple and Google style of business both at once, with Hulu being the Apple version of do it yourself, and overseas broadcasters being the Google version, but not allowed online. Of course that can never happen. Well not right now anyway.
Increasingly, in pay TV, rights are being distributed by platform, and we’re not sure that’s entirely legal. UPC, the Liberty global owned cable TV group which is the biggest in Europe, cannot send content over the internet without paying extra. But it doesn’t buy much content from the US broadcasters, mostly from cable networks. How is it that broadcasters DO seem to get full rights, including online to US broadcast content ‘ so perhaps that will change after all.
The truth is that right now, all that anyone wants to do is play TV on their iPad or other tablet and all these new business models want to facilitate this ‘ but without paying more to the US broadcast networks. And that’s what Hulu is for.
If the US broadcast networks allow that to happen, then all of the content that is sold on iTunes would be unnecessary and paid content would die.
Companies like Bamboom are living on a single idea, and this is that broadcasters cannot afford to buy 24 hours a day of top quality content, they can manage about three. The very existence of online catch up services means that the three hours a day of content that you want to watch on Broadcast channels, is the biggest potential threat to trigger cord cutting at pay TV companies. If you could find 3 hours a day of TV content to watch that you really liked on Broadcast, why would you ever pay $100 a month for a pay TV service? And if you wanted to watch it on your iPad then all you would have to do is buy an antenna and a TV for it, attach it to a DVR and a Slingbox and send it over the internet to wherever you were. But given that less than 1 million people ever bought a Slingbox, it doesn’t matter how many new ideas innovators come up with ‘ consumers don’t want to think about their TV that much.