I was scanning my Twitter feed and came across this tweet from @AllenChou;
“40% of broadband households watch full-length TV shows over Internet yet TV/Film Distribs not making $”
So I checked out the article Allen linked to. In part it says…
DIGITAL: Study shows industry needs to find better business model By Susanne Ault — Video Business, 11/11/2009
“NOV. 11 | DIGITAL: U.S. broadband households watching TV shows and movies online has doubled over 2008, according to a Parks Associates study.
More than 25 million U.S. households regularly watch full-length TV shows online, and more than 20 million watch movies. Parks singled out free, ad-supported online video-on-demand site Hulu.com as driving people to watch such programming on the Web…”
While this article focuses on distributor’s need to modify their business model to better monetize internet distribution, it brings something more to the table in my eyes.
At a time when media content is produced for many distribution mediums, the question has been how to distribute across platforms. The solution is not more, it is less. The aging infrastructure in America has become a collection of disparate distribution platforms; broadcast television and radio, cable, satellite, internet, and telephone. All of them use different protocols and systems, but they don’t have to.
In the last decade some of the large communications conglomerates have made some headway in providing multiple services over their primary medium. The problem is that all of them are continuing to provide services to the end user on the same disparate and aging infrastructure they started with. Making it even more interesting, all of them use the same data between distribution points, the disparity is in the head-end to user segment.
The answers to monetizing media exists in a wide range of solutions via the internet, pay-per-view, subscription, and more. The best way to get to greater profit margins is to kill off the antiquated mediums and eliminate the expenses in using them. IP based distribution of broadcast television, radio, cable, satellite, and telephone is available via the internet. What needs to happen is a standardization of infrastructure. The user end is simple: provide an Ethernet connection and all of the services are available with little or no changes on the consumer’s end. By choosing a unified and standardized infrastructure media producers/distributors can focus on making the media available and increasing margins.
A simple example is HBO or Showtime. They don’t need cable TV or satellite providers to get their media to market. A simple login to a subscription-based service can grant access to all the media. The advantage to the consumer is lower prices and the ability to select exactly what media they want access to. No intermediate contract obligations to keep the consumer tied to “licensed channels” on a carrier and the benefits of time shifted media; see what you want, when you want it. Media producers have significant advantages, too. The inherent demographic and statistical data, active and accurate viewership data. Quantifiable data for advertisers.
Another example is broadcast media. If a TV station stopped broadcasting its outbound only signal and focused its resources on providing free WiFi for an area, distributed its media via the internet, its programing made available world wide, it would be a greater value to its viewers and its advertisers. It would also reduce its own operating costs and free up the radio frequency spectrum.
Main stream media and large media producers hold the key. It is up to them to make things happen. It requires them to change the way they look at their content, it requires thinking in an Open Source mindset. The larger the number of potential viewers the better. Things like DRM don’t help protect your media, it makes the media less accessible. Likewise proprietary viewers or binding to specific players make your media less accessible, and thereby less attractive to consumers. I purchased the movie UP with the “Digital Copy” disk from Disney. I don’t have an iPod or iPhone, I have a BlackBerry. Because the iTunes/Windows Media Player is only options for viewing the DRM’d movie, it is completely useless to me. So why would I buy a DVD with this “bonus?”
There is nothing wrong with charging for your content and the public recognizes that. If HBO stopped selling its programing to cable and satellite and distributed consumer direct via internet only the content they produce would reach more viewers and provide them with more feedback and data from their viewers with no intermediaries. How would they fare financially? With the die-hard fans of many HBO programs, I think they would exceed current margins in 2 years or less and recoup any costs of the change in business model in less than 5 years.
These kinds of changes would also create new distribution channels for independent media producers. Without the constraints of programing time slots and the possibility of infinite catalogs, channels could purchase or license indi productions directly. It even provides the opportunity to list the property and pay content producers on a residual basis. The possibilities are endless.
Overall, a high quality broadband internet connection should be freely available to everyone, a network of regulated free WiFi and hard line solutions, provided by a consortium of fed, state, and local governments, service providers, media providers, and businesses. Contributors to the national WiFi network get a tax break for being a part of the infrastructure. It’s green, it reduces consumer cost, it reduces provider cost, and it enhances viable infrastructure while removing old disparate technologies. It really is a win win for everyone, but it starts with content providers and infrastructure.
If a cell phone can connect, you should be able to get it all.