Tuesday, May 15, 2007

Looking into online videos' future

Online video is hot. According to Cachelogic, TV shows, YouTube clips, animations, and other video applications account for more than 60 percent of Internet traffic, and some experts say that within two years it will be 98 percent.

In fact there is so much happening in this field that people are discussing chances of legal P2P networks and two-tier internet happening in near future.

The new Forrester report is out and it attacks iTunes as it did before.

The Forrester report says,
1. The paid video download market in its current evolutionary state will soon become extinct, despite the fast growth and the millions being spent today.

2. Television and cable networks will shift the bulk of paid downloading to ad-supported streams where they have control of ads and effective audience measurement.

3. The movie studios, whose content only makes up a fraction of today’s paid downloads, will put their weight behind subscription models that imitate premium cable channel services.

Is it only me who fails to see any vision in this report?

For starters, it is a bit too far-fetched to think that enough buzz will be created so that people will stop buying downloaded video and go en-masse for ad-supported online video.
That is old media’s ultimate wet dream.

Looking into the future is a hard job.
At best, these reports are high on vague generalizations and aim to create buzz for a particular piece of technology or idea.

The ultimate idea is always to sell overpriced analysis that you can always find easily on Google.

The ongoing DRM controversy tells us that consumers like to have control over what they buy.

Moreover, consumers like owning content. That is why we have so many iPods, DVDs and so on.

In future, we might be carrying our favorite content with us.

While 1.5 billion iTunes songs have been sold, subscription-based services have flopped so far.
When you diss iTunes, aren’t you discounting the huge iTunes user base as well?

Analyzing what the old media corporates would do won’t cut in a world where people have far too many choices over their media diet, and far too many ways in which you can access your choices – PC, Net, Mobile, TV, iPod and like, Apple TV, Tivo, Bittorrent, and so on.

Why not analyze what the video consumer would like to do?
Therein lays the clue to how our sons and daughters will access their media.

1. There will always be people who don’t mind advertising interrupting their viewing and those who abhor it.
The 'ad time per hour' rate on TV varies anywhere between 10-20 minutes per hour.

2. There will always be people who like to watch high-quality video on their TV (using DVD, Apple TV, iPod, downloaded material) and those who don’t mind watching online video of indeterminate quality.

3. Some people will go for paid-for downloads, others for streaming and few will go in for subscriptions (subscription based service haven’t made it till now.)

4. When you say that ad-supported shows are in, how do you make sure that there aren’t million channels online, along with a million formats?

5. It would be too simplistic that the TV channels and the movie studios will be the biggest aggregators online as well, in view of the challenge posed by the likes of Youtube and other layers, who have an installed base. What stops them from starting a comedy channel?

6. Then there is the cost issue.
smart consumers will compare costs for downloading shows, for subscribing to cable programming and for online net usage, and other choices before making a decision.

7. And there is the technology issue.
What is there to stop people from finding an online version of Tivo that removes the ads as the show is being streamed? A user can easily move to the next Firefox browser tab while an ad is being shown on one show.

8. If pay-per-view is dead and how do you explain boxing shows, porn, educational shows and other niches?

9. The download option is always available to those who prefer to be master of their destiny, people who must have their own channel.

10. The Joost effect is to happen soon, so I cannot say how the concept of ‘view whatever, whenever’ will influence models of existing broadcasters and movie producers.

11. What happens to the superstar economy?
The present model of broadcasters is also based on paying huge amounts to sport stars, TV stars and movie stars.

I would like to know more about what effects the online revolutions have on the situation. Or, will it be that the Mathew effect holds sway in all forms of activity?

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At 3:03 AM , Blogger merjoem32 said...

Online videos I think have a lot of potential as tools for Internet advertising and marketing. the number of people alone that are watching them provides a large audience.


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