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Real-Time Isn’t Real, Anymore
November 28, 2006
Live TV is rapidly becoming a distant memory.
Even in the entertainment and sports world, Janet Jackson and Dale Earnhardt Jr. have driven network executives to introduce delays into live broadcasts. CNN’s news and ESPN’s SportsCenter are admittedly recorded and rebroadcast -- over and over and over again.
A vast number of cable subscribers maintain service just to catch new episodes of one or two shows each week. Take a moment to scan your cable guide in order to estimate the quantity of original, first-aired programming.
Of the $45 per month subscribers pay for video, at least half is for replayed broadcasts. Essentially, cable companies are already centralized DVRs. The magnitude and value of “re-viewed” content was first brought to my attention by Ken Brown in his paper called “Convergence -- The Future of Broadcast Television.” Mr. Brown -- a beltway strategist -- estimated that over 85% of viewed content is previously recorded. Internet-protocol television can certainly unleash this value.
Network executives recognize and understand the power of refreshed content. During a speech at a recent cable convention, I was asked to comment on the competitive threat of video coming in over the Internet and to discuss potential mitigating strategies.
My response was simply: Invest or delay. Maybe the cable industry’s network-neutrality effort was an attempt to slow the growth of this promising industry, while Google’s $1.6 billion acquisition of YouTube is an attempt to create acceleration.
In just the last 60 days, I have talked with four industry organizations that have in excess of 1 million members. They all have private television channel strategies. Carvel Jones -- an executive with an IPTV company called Visual Media Network (VMN) -- posits that organizations that have very passionate, like-minded constituents will drive the adoption of distributed IPTV models.
“An opportunity exists to create a network when a large group of people have an irrational desire for a narrow genre of content,” said Mr. Jones. From talking to others like him, it appears that there are hundreds of such organizations. Companies such as VMN are designing private, narrow channels for content owners. This trend, which will enable the creation of solitary networks, should find solace with the Federal Communications Commission given its support for a la carte programming.
The distributed IPTV model is radical in that it does not expect customers to watch TV on a computer monitor via fragile streaming Internet connections. Alternatively, media devices -- loaded with content -- will be connected to the customer’s TV. A broadband connection will be used to refresh the content in off-peak hours when the network is less congested.
Akimbo is an example of a company using this technology to deliver both narrow and broad video productions. This model has been fueled by the convergence of low-cost storage, broadband penetration and video compression. A 500-gigabyte drive can store more than 400 hours of video content and costs less than $200. Consider a media system that comes loaded with all 80 episodes of the original Star Trek series, the animated series, and all of the feature-length films. This device -- which would be refreshed with new content on a daily basis -- turns the video port on your TV into a dedicated Star Trek channel. Broadband networks can easily deliver 5-10 hours of fresh programming each week, which equates to about 40 hours of viewing.
Organizations that have very focused content reservoirs see this as an economical way to bypass cable and satellite operators. For the advertising appeal alone, cable companies may be forced to view this as an opportunity instead of a threat to centralized management of content.
Posted by Dwayne Goldsmith on November 28, 2006 | Comments (10)
