Looking beyond the last 50 years

Some thoughts on improving the online ad experience for Video.

It’s actually pretty simple.

Don’t copy TV, a 50 year old technology and medium.

The web is different.

Why is everyone trying to make the web feel like TV?

Discovery. The new Search.

Seth Godin is right, search isn’t very good at making infinite choice, managable.

The problem with search is that most of the time when you use it, you have an idea what you are looking for, you have at least a single keyword.

If you don’t have anything, then what?  What do you type in?

My wife simply gives up.  She sits there on myspace, but doesn’t know what music to look up.  She mentioned recently she is so out of touch with music.. why?  because she doesn’t listen to the radio anymore (due to living in the UK, where we don’t use the car as much as we did in the USA).  So she used to rely on playlists, bestseller lists, those driven by mass media marketing.

There’s so much out media there..  So, what’s the answer?

A new kind of Search.  It’s called Discovery.

Services like last.fm work really well delivering Discovery for music.  They provide recommendations based on previous listening.  It’s easy to dive into a song and decide in the first 5-10 seconds if you like it.  The Discovery service can very quickly adapt to your tastes and refine recommendations.   In fact Discovering new music in this way is fun.  Music Discovery is easy.

TV Entertainment is harder.  Much harder.  A TV show is a 30 minute commitment.  It may take me 30 minutes to decide if I like it.  The plots are deeper, the characters need time to be considered, the evolving story keeps me watching and coming back for more.  There are services like TIOTI, delivering Discovery services for TV.  For a content producer it’s hard.  The longer the show, the longer the commitment from the viewer.

With more and more content being produced, does it make sense producing 30 minutes shows?  Would it be better to produce 3×10 minute shows or 6×5 minutes shows.  As a content producer, would I be better off producing shorter form programming?

Rethinking the Fundamentals of Media Investment – Part 1

Publishers [Studios, Broadcasters, Networks] currently constrain the whole media value system by absorbing the financial risk of investment in media supply, controlling media demand by ensuring distribution scarcity [controlled by them and possibly by regulation]. In return they take a lions share of the value, financial and otherwise. This strategy works.

However, when there is no distribution scarcity and an abundance of media supply, i.e., on the Internet, the model is blown. The current value system can no longer efficiently [and effectively] allocate financial resources to invest in the right Talent to ensure a blockbuster. In fact, the blockbuster can no longer be realised using todays methods.

Any change to the existing model means shifting who participates in the risk of funding media, without guaranteed returns. Looking across the rest of the value system, there are candidates who can take this of investing in supply; the Viewers, the Marketers and the Producers.

A. Viewer Funding. One or more Viewers fund the production of for-profit and non-profit media. The Viewers take the risk, and could have an option and desire to participate in the return. However, funding with an expectation of a return is likely to be treated as a security, limiting the options for how this model works due to regulation.

B. Marketer Funding. One or more Marketers take the risk and fund the production of media (This was how soaps were originally created). The current ROI revenue model for video entertainment, in-stream advertising, is driven by marketer money and this model flips the investment to the beginning of the production process. By committing marketing money up front, and by participating early in the process, marketers have an opportunity to be significantly more involved and relevant to the experience and therefore more than just an interruption to the experience. This however should not mean branded programming and heavy product placement. This is an opportunity to innovate how marketing experiences are created for video.

C. Producer Funded. One or more Producers take the risk and self-fund production. This gives Producers complete control but the only people that can do this are the ones that have funds at their disposal; These are a) Producers with existing revenues to reinvest (high up in current Publisher funded hierarchy) b) Producers with VC backing who are trying to establish a pedigree in the market (there are so many of these today), and c) Producers of user generated content, mostly a labour of love from people with financial and/or time freedom. However, producer funded systems are not financially or creatively scalable as they are inherently limited by reinvestment of revenues. A series of failures, and a Producer could fall just like the Studios today.

So, which will it be? or will a combination of two or all three of the models above?

The re-invention of TV

Like I said before, reinventing TV is about reinventing the whole value system, from the ground up.

Otherwise you are in trouble, like in South Korea where viewers are re-inventing prime time TV.

What does this mean? Well, people aren’t at home watching video on television screens, watching mid roll adverts and being constrained by international distribution deals and windows.

They are off, in the coffee shops, watching downloaded TV on their laptops.

They are revinenting the TV experience themselves and making the distributors economically irrelevant. The coffee shop owners are making money off bagels and doughnuts while the Studios lose revenue from content.

We have a choice…

a) continue to use scaffolding to prop up the existing media value system to try to reverse the obvious decay of TV, decay of Film (in theatre, on DVD), and decay of Music.

b) innovate and reinvent the media value system – redesign the way TV / Film / Music is produced and experienced.

The interests of the viewers/listeners, networks and creative talent are not aligned.

We can sit on the sidelines and come up with new products and services to support the incremental and frankly insipid evolution of media. Or we can challenge the fundamental economic principles and architect new foundations.

What would you rather be doing?