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Current Issue: June-July 2008
TechSpeak
The media is in the message
by Tom Nolle
Years ago, the FCC made a basic, logical decision: to regulate a particular media based on it being media, not on how it was delivered. Television delivery over broadcast and cable is still television. We’ll have to remember this in 2008 as we move into IPTV.
Any benefit of video over IP will depend on whether the use of IP allows us to change the nature of the video experience, not because IP is somehow more suitable. If we assume we have one video service model, the best technology to deliver it would be the cheapest one that could support the experience with proper service quality. In countries where broadband speeds are high, broadband IP would certainly be a candidate. But where broadband can’t carry TV naturally, the cost of making IPTV work might not be justified–unless it’s better TV and not just "IP" TV.
What’s "better TV?"
Apparently it’s not what networks are delivering today, because viewership is down and networks are rebating ad revenues for lack of audience share. A quick survey showed more than three of four viewers think there are more commercials, more reruns, less quality–and this was before the writers’ strike.
We may be focusing on the wrong issues when we talk about the evolution of video to online. Crummy shows are crummy over IP, cable, broadcast, FiOS or satellite. Avoiding them is mostly a financial issue; if you have money to hire stars and produce good stuff, people will watch. The money comes from advertising, which may wane if quality does. Some in the media are saying the current situation could create a downward spiral, an evil feedback loop of falling revenue driving falling quality driving further revenue declines.
They say VoD is the future model, but does that help? Spreading viewers across the 19 or so channels the average household watches regularly creates 19 content strategies, each with a smaller chunk of the ad budget. If every consumer has a private lineup of favorite shows selected across all available content strategies, how will the dollars to produce everything divide?
YouTube the answer?
Today YouTube is a diversion and it can be socialized in the market’s youth segment, but some astonishing improvements in production quality are needed before YouTube breaks into regular weekday night programming. Some quality YouTube producers will spend a hundred grand on production equipment and dedicate a year to filming an hour episode if somebody pays, but who will?
The Internet training us to instant entertainment gratification may be the very thing changing our video viewing habits. The people who used to watch the best thing are increasingly looking for something not "best," implying the best of a bad lot, but at least "good." IP can deliver that, but so can broadcast, satellite and cable.
Personalization
The issue we will face in 2008 and beyond is coping with personalization: more diversified, quality, polished content production to satisfy individual taste. By 2010 we’ll need about five times the number of professional video producers we had at the start of 2007.
We’ll also need changes in how advertising works. Online advertising isn’t blotting out traditional broadcast advertising. VoD is blotting out traditional broadcast. This permits more precise ad targeting, but the ad industry won’t get more of a bite of the retail revenue than it does today. We must determine how to distribute that money when we’ve moved from three networks to 300 million or more virtual networks made up of show-picking individual households, and in a single generation.
The interest today in mobile advertising is a reflection of the shift from home-phone to mobile-phone dependence. Advertisers are already giving discounts to people who send cell phone photos of ads or billboards, because that shows the consumer actually looked at the ad.
Interactivity
It’s very likely the most meaningful trend in TV and video won’t be IP, but interactivity. People will play games with commercials because that way they watch them. Interactivity is coming to TV with the digital transition in 2009. Could broadband TV or content delivery take it even further?
The secret sauce for IPTV won’t be just IP but a new dimension in interactivity; a dimension that’s getting submerged in simple delivery technology issues that won’t by themselves mean anything at all.
Tom Nolle is president of Cimicorp. manager@cimicorp.com
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