I ran into Will Page a couple of weeks ago at FutureMusicCamp. Will’s not just the chief economist of PRS (and a really nice DJ). Actually, he more or less singlehandedly convinced me, that collecting societies don’t necessarily look and act like grumpy relics from the shellac age, but that their people can vividly think outside the box.
Especially one part of his keynote got me thinking. After some extensive numbers crunching, Will declared Chris Andersons Long Tail as wishful thinking. According to his numbers, the idea of the Internet opening the floodgates for a huge diversity of content to make it on the market is just wishful thinking, a mere virtual myth.
What Will did, was analyzing We7 and Spotify in the UK - and comparing this data with a Long Tail curve. Have a look at his April interview in TechDirt. There’s a nice graph right in the middle, and some good explanation on the how’s and why’s.
Now, the interesting part is this: why differ the curves of We7 and Spotify?
… We7 has a strong editorial with excellent artist promotional campaigns, whereas Spotify is editorial free and allows the consumer to graze the field at their leisure. Consequently, you can see that We7 (blue line) is more hit centric with a 90/5 rule and Spotify (green line) is more democratic with an 80/5 rule which, when you step back, is common sense made complicated but it’s nice to see the math adds up!
Right. And this most likely explains the not so long tail of the curves. It’s mostly a matter of user interfaces. Compared to any physical store, all net-based services share one thing: the depth of their catalog. Just imagine your local music dealer (if he still exists), blown up to the size of an IKEA warehouse. Anything, which can be licensed, can be bought.
The problem is: we’re not IKEA talking here, where you stroll through nicely decorated storage areas. A typical media store on the net is more the equivalent of a 20 square meter booth. Yes, there’s this giant warehouse attached. But the shelfspace is rather limited. Look at iTunes: either you know, what you are looking for, and you directly search for it. Or you rely on the best sellers and recommendations.
To unleash the long tail, you would either need a user interface, which IKEA-like unlocks the secrets of your warehouse. Or you find an affiliation model with the original rights holders, which offers curators and resellers some bit of a better cut than relying on a retailer sharing a bit of their slice with you.
Did you know that? Almost a hundred years ago, Paul Valéry invented the remote control: Just as water, gas, and electricity are brought into our houses from far off to satisfy our needs in response to a minimal effort, so we shall be supplied with visual or auditory images, which will appear and disappear at a simple movement of the hand, hardly more than a sign. As a reminder for the historically challenged: back then, “tele vision” was a weirdo futurist phantasy involving a Nipkow disk, placing a phone call started with cranking a bit of electricity out of a Bakelite contraption, and any HTML would have qualified as a typo.
Of course, some things didn’t change at all. Except for the pope, even back then most western men have been wearing (mostly) trousers, cars ran (mostly) on distilled dinosaur juice, and Valéry already had described the future cable ops as utilities.
With Valéry, that’s more or less how Walter Benjamin starts his essay The Work of Art in the Age of Mechanical Reproduction. In some parts, it got a bit dusty. The Frankfurt School has seen some better days. But in very many parts, Benjamin got hyper-accelerated:
Mechanical reproduction is so 20th century, and a bit lame.
But digital reproduction unleashes the powers Benjamin describes, just as the web brings Valéry’s science fictionesque image utility to an ultimate conclusion.
Digital is merciless in its binary absolutism:
0 vs. 1, off vs. on, dead or alive.
But other things have changed, too. Benjamin lived in the magic triangle of a world between capitalism, communism, and fascism. This world was a real mess: weirdo dictators ousting weirdo kings and dapper dukes and crazy czars out of their weirdo fiefdoms (the continental breakfast), megalomanic monopolists/monarchists squeezing out the continents (the anglos saxon model), with hyper-capitalists acting as stateless dictators and crowned heads running commercial empires.
We left at least some of that behind, and good riddance. But our globalized economy, our fully commercialized western life style comes with its own pitfalls. And, coming back to Benjamin and his theme: The most important thing which happenend to The Work of Art in the Age of Digital Reproduction is not a scratch in its aura, but the economic damage towards its creator.
You still could put your hands on Benjamin’s mechanically reproduced piece. The medium was a thingy, a tradable good. But on its way into the networked Nirvana, the work lost this handle to the commercial world. A file is a file is a file. And an unlimited supply of any good means usually bad business. Selling sand in the Sahara. Ice cubes on the north pole. You name it.
Can we change that? Sure we can. We already started to melt the poles (which, for various reasons, is not an advisable approach). We tried some crazy DRM-schemes (ankle-high dikes vs. terrible tsunami). We’re messing around with civil liberties (protecting a Lady Gaga recording’s right vs. everybody else’s rights).
Again: can we really solve that conundrum? Most likely not, if we just pretend, that everything has just to stay the same. Mind you, the medium isn’t dead. But it has lost some of its commercial magic. So if you think you might need some new fairy dust pretty soonish, please crank up your Bakelite contraption and buzz me. Otherwise, you might just have to wait a bit for ionicc’s ideas on how to hedge against billions of bad boys copying your creative goods.
We’ve seen the future of iTV. And it’s purple. Seriously. Yahoo’s Intel-based Widget Channel might become the iPhone of interactive TV. Not because both are based upon a expensive platforms. But because the Widget Channel leverages formatted internet data onto a TV screen. Web surfing on a tv set is just a poor experience. Visualizing targeted data is something completely different.
It’s just like on the iPhone. I don’t browse the NY Times web site in Safari, but I read Paul Krugman on the iPhone app. Same with the Widget Channel. Mostly, I don’t want to search weather.com. I just need my local forecast now.
Chumby hooking up with Samsung leads into the same direction. Grabbing existing data and displaying them on consumer devices (digital picture frames are just bonsai-sized video displays anyway).
Could Google dominate the browser market? Sure. And soft drinks, too. But why should they?
Controlling the high carbohydrate industry (canned Google - hear the gulp) might have an unhealthy impact on the physical state of their programmers.
Driving Microsoft into browser oblivion would be even more counterproductive.
The G point isn’t being a software merchant but running a highly successfull ad-based services business.
Dominating the browser markt would be the trophy wife gone burden. But pushing a strictly giveaway market into a frenzy of competion leads to better browsers.
Better browsers mean richer experiences. And who knows more about richness?
German pubcasters are the BBC on steroids. Moneywise, at least. Their combined annual budget dwarfs the GNP of a couple of lesser UN-members. And even hardboiled tax collectors blush at the methods of their fee collecting agency GEZ.
Don’t get me wrong. Strong and independent public broadcasting is an important asset. As seen in the US, a beggar’s banquet of impoverished do-gooders cannot counterweight a fully commercialized brainwash attack. State controlled tv is a terrific tool for thriving populists, post-imperial imperialists, and media savy dictatorships (and definitely not an option).
Still. If you want to collect billions and billions of Euros for the greater good, a well aged argumentation line from the black and white days of the tube won’t do you any good. EU commissioners want to pull the plug (commercial broadcasters will see to that). And the German publishers are finally starting to see a problem with those hidden champion media empires. Because it’s not about here’s print, there’s tv anymore. On the web, all media cats are prey.
The last political fiddlings ended with some strange solutions like this. Yes, the pubcasters can put some their video assets onto the web. But after seven days, they have to be removed. Weird. Even weirder: there are paid deals between mega publishers and mega pubcasters on video syndication. Uhum. Excuse me. Looking at organizational structures of German pubcasters, the micro money passed from WAZ to WDR most likely won’t even cover the process cost. So it’s probably all very strategic. Or maybe just helpless. Redefining public broadcasting for a networked, digital media world it isn’t. (Because, more likely, it will look more like this.)
It’s not helping anyway. Will Münchner Erklärung, the Munich Declaration of the big wigs of German publishing, kill public broadcasting? Nope. We’re more likely talking about assisted suicide anway.
3 strikes an you are out. And out means: out of net access. Just let some lobby-infested politicos go wild in Brussles, and this is what you get.
I spare you the details, but in a nutshell, it goes like this. After having been blasted out of legislation, the lobbyists of Grand Old Media sneaked their hardliner ideas into some amendements of a telecom’s bill. To be sure, Grand Old Media has quite some problems with the not anymore so new but still very digital and increasingly networked media world.
Their solution is coming straight from the Orwellian textbook. We have to monitor everything. So that naughty consumer cannot do naughty things like copying naughty music videos. The emphasis is of course on everything. Which fuels this unholy alliance of “all consumers are thieves - if you don’t stop them”-media mavens and the “all citizens are terrorists - until proven innocent”-faction of right wing hardliners.
Yes, stealing is bad (please do remember: stealing from artists is bad, too). But the 3 strikes-law are populist rubbish. Excuse me. Are convicted shoplifters banned from shopping? Of course not.
But if somebody accuses me of infringing a copyright, I should be exiled from the net? Some Eurocrats do think so.
But so it happened: Pangloss’ take on the affair:
http://blogscript.blogspot.com/2008/07/result-of-imco-vote.html
It’s not about 3 strikes anymore. Just about xraying all digital citizens.
TechCrunch has a pretty interesting write up on this. And of course, it’s not about a settop boxes at all. Think Android For TV, says Erick Schonfeld. Right. Google getting into CE hardware would make as much sense as King Midas getting into copper mining.
Still. With an Android TV, we should finally stop thinking of settop boxes. First of all: what’s an STB anyway?
Now, let’s take a step back. There’s this wonderful new HDTV set you just bought. It probably already has more computing power than NASA needed to put a man on the moon. The descrambling part, well, think CableCard 2.1. You just need a card reader, like the SIM card on a GSM phone. There’s no need for a stupid box to be attached to a smart tv.
And of course, as the history of computing teaches us, the smart tv - if you really want it to become smart - should have something like a nice, stable standardized OS as a foundation. The basics, besides handling all the standard stuff like putting moving images on a screen, would probably be something like
Now. Forget about storage and networks. The really interesting part will be the UI. Why? Well, Google is in the ad business. And the quantum theory of adverising teaches us: an ad nobody looks at does not exist.
Now look at the status quo. In one corner, we’ve got the media sales super giant with a market cap higher than the stratosphere. In the other corner, we’ve got the incumbents: cable MSOs, satellite operators, some DSL, and last but not least: the tv networks and stations. Representing the allocation of the largest piece of global media cake. Backed up with a finely interwoven network of legalese and some well greased, age old business relationships. Don’t try to push some interstitials in between their shows. Because that’s exactly the incumbent’s billion dollar business. And a well protected turf.
So. Where’s your disruptive moment? Your leverage? It’s not that the tv ad sales business is desperately looking for some streamlining.
Now think UI again. And have a look at the Electronic Programming Guides of nowadays: thick as a brick. TV means: you’ve got time to waste, but no screen real estate to do the same. And what does your run of the mill EPG? It wastes your valuable tv-time AND your screen real estate. Instead of waiting for the scrolling listings of the TV Guide on Screen (late 20th century), now (early 21st century) you click, click, click until you might find (or, most likely, not) the craved for nugget of information. Even worse: with all the computing power in your household at its (virtual) finger tips, an EPG stills treats your grandmother with the same relentless indifference as it treats you. For an EPG, The Weather Channel (TWC) comes just after TCM, because it’s spelled like that.
Current EPGs are just plain vanilla displayed data. Not even information, because this would imply some intrinsic value. How comes? It’s a structural problem: “Premium” EPGs, which are slightly better, cost you a premium.
You meaning: the operator. And the question you’re asking yourself (or your market researchers) is: is a better EPG a reason to subscribe? Would it reduce churn? Good question. Your panel won’t be able to answer that. Because they’ve never seen a really good EPG.
Or you meaning, the manufacturer. Mostly trying to keep cost down, down, down. Because if you want to ship units, it’s a really low margin business.
Or you meaning: the consumer. Yes, friends of Tivo, if you’re really good, a company might find some handfuls of consumers, paying a monthly premium. But tv is a mass market. Paying premium is not. Therefore, Tivos are the CE equivalent of a Beemer.
Now how about this. If a well known company offers you (the manufacturer) a piece of software for free (hey, no licensing fees!), which even handles most of the basics things you’re going to have to implement anyway? Maybe you’ll have to add some dollars for hardware. But at least, that’s a business you understand. And it’s still cheaper and it even gives you some leverage with your operator clients. Because it’s not just a better device. There are even some ad revenues the well known company is offering to share with the operator. But wait, there’s more: how about if you (the operator) doesn’t just get a new, incremental business. They’re even throwing in the additional incentive of lowering your cost of operations (it has been nice working with you, Gemstar). And that’s just the beginning.
Sorry. I got carried away a bit. This wouldn’t be Android TV, but Trojan TV. And maybe, you do not even need the operator that hard. As long as you are in the tv and got a net connection. What the heck. As long as your Android powered TV set chats happily ever after with your Android powered cell phone, filling iGoogle with all the behavioral data it needs to serve you the ads you deserve.
If you are a) into soccer (or fussball or football …) and b) own a cam corder (or a mobile which handles a video a bit better than my SE K610i), you’re invited to put your fan video on halbzeit.in, which translates into halftime.in and is our little video sharing site.
Why are we doing this? On YouTube, MyVideo, Sevenload, there’s already tons of fan related material. Sure. But a) we like soccer and b) we want to put the stuff on our tv channels (don’t try this with bootlegged flash encoded video material).
And not to forget c). Yes, on YouLoadMySevenVideo, there are already some trillions of uploaded videos. So your pretty cool fan action will have neighbors like this one.
First thing I have to say: Bertram and Harald did a phantastic job. This is grand. But unfortunately, I’m a bit in a nitpicking mood.
Let’s start with some of the basic assumptions. The assumed basic cost structure for a free tv network doesn’t make too much sense. Yes, the key areas are right: content licensing/production, marketing, and distribution. But distribution is not a variable. At least not, if you need national reach. The more coverage you want, the more you pay. Let’s just assume that German mega broadcaster RTL pays annually about 12 million Euros to reach its tv audience. 9live has almost the same distribution. And therefore pays about the same amount of money. The big difference: RTL has renevnues of round about 2 billion Euros. 9live makes about 60 millions.
This has of course serious implications. The cost of distribution limits the access to the public (as do the technical limitations, e.g. available spectrum). It’s called mass media, because you need the masses to watch (or interact, as it’s the case with 9live). Otherwise, you’re going to be out of business pretty fast.
Pay tv is kind of different. Essentially, as a channel operator you have to convince a gate keeper, that the he should shoulder the cost of distribution, against a revenue share. Joost seems to aim to become some kind of funny in between. A gate keeper for a p2p -based distribution of free tv.
Both approaches pose quite serious barriers of entry. That’s why one of the key factors in tv 2.0 is the lowering of the cost of entry. With web based distribution, you can reach an international audience for zilch. Hey, that’s a start.
Now, what’s going on with this audience? As a side note: tv networks (as most traditional media players) do not like Google. But the media sales organizations of tv networks do not (yet) feel the sting of Google’s AdSense. Yes, Google is a juggernaut. But the bauty of the text ad system has been, that Google found a whole new pot of gold. Google isn’t making it’s billions with the handful of mega brands, that fill the koffers of the tv networks. That’s why traditional media is much more scared of bud.tv and the likes. If the media buyers become audience aggregators of their own … As it turns out, it’s not that easy. Especially, because as a media buyer, you’re buying into consistency of reach. Ventures like bud.tv are, like any new media brand, a risky thing. And don’t forget: one of the heaviest spender in media is media itself.
But back to tv 2.0. OK, web based video lowers the barrier of entry. That’s good. The same reasoning applies to the cost of production. Not because of the web, but because the hard- and software for video production and editing is finally approaching zero. This applies to all areas. With my own company, we’re deploying professional broadcast playouts into cable headends. Unthinkable a couple of years ago. same with professional video editing. HDTV cameras. Post production and 3D animation. You name it.
This is good. But still: producing a video is still quite some effort. Will “moving images replace HTML pages”? Never ever. Producing a video is too much effort for the producer. And, for most parts, watching a video takes is too much equally. Why? Video is a linear medium. You can scan a written page in light speed. Speed watching isn’t that easy.
OK. Enough nitpickin’. Bertram and Harald are of course right. TV is going to change. The means of access to video content are changing. Channels as the main organizers of content access will have to change.
The funny thing is: we really don’t know, what tv really is. Do we define tv by content. Most likely not. Otherwise, we wouldn’t make a difference between tv and DVD. Do we define tv as a technology? That’s probably a bit closer.
It’s tv, if it’s broadcasted and displyed on a tv set. But how about PVRs? With video and DVD, we distinguish between a solid media and ethereal broadcast receptions. PVRs are a virtual broadcast.
tv reception itself won’t change that much. Why? tv is a linerar medium. If it’s good, you watch. If not, you switch. Or tune off. That’s all the interacton you ever need.
What going to change is how you find and access content.
The main difference between tv (as is) and tv (2.0) is the enhanced on Demand factor: on Demand with an URL. Because the URL opens up all other means of access, business models, and social feature you can imagine.
Ain’t that smart: Hey!Spread gives you video uploads to multiple destinations. Currently, it’s YouTube, Google Video, DailyMotion, Blip, Metacafe, Photobucket, Yahoo Video, MySpace, and Putfile. Local heroes like Sevenload aree left out (for now). As the nice folks of Particles explain: Spreading videos is something extremely boring and time consuming. Oh so true. And sometimes, it’s even true for watching videos.