Thursday, August 18, 2011

Crystal Ball Prediction: OTT Inevitability

Say you're a Telco and you have a few million subs, and are confident you could offer them subscription video services if you could achieve three milestones:

1. Secure licensing rights to a list of live channels and VOD content.
2. Establish a solution quickly to distinguish yourself from the competition.
3. Package a service that is at least break-even on a per-sub cost basis.

Welcome to the future.

Licensing agreements with content providers are possible in the near term as long as platform and geography terms can be reached. OTT infrastructure takes advantage of existing CDN, co-location and other third-party components, allowing for comparatively rapid implementation. A per-sub cost that allows for enough margin to make your offering attractive on the bottom line is the real challenge, though certainly building this monster yourself isn't going to provide more attractive margins.

In my opinion, OTT television is as inevitable as the displacement of satellite distribution by IP alternatives. It just makes sense from a service provider perspective. Centrally managed, monetized and measured offerings, which bring the lion's share of any PPV, subscription and even ad based revenue home to the service provider are attractive on many fronts. OTT offerings are nimble, allowing for quick implementation of new content offerings, revenue models and more. OTT offerings require less intensive architecture to maintain, monitor and support. OTT offerings can also remain "screen agnostic" where end devices are concerned.

For the viewer, there are also potential key benefits of OTT services vs. traditional. OTT offers me the opportunity to order from the alacarte menu every time I "eat" your content. Instead of the laborious task of actively managing my own viewing experience, your solution instead will fashion a content meal for me that is relevant to my tastes, habits, preferences, geography, socio-economic status and other data points. Hence, the content engagement experience becomes highly enjoyable for each individual viewer. Eventually, OTT will usher in the demise of television networks as we know them today. Instead, there will be millions of networks playing any day of the week-networks created by individuals from a clearinghouse of content. Oprah has her own network...why not you? Imagine a huge pool of content that is already highly relevant to you based on the criteria mentioned above. Now, imagine you can play program director with that content, fashioning your own linear channel, which includes several live events throughout the week. Now, imagine that while you're watching one of those live events-a music performance for instance-you see on your screen that three of your buddies are online. Asking them to join you is as simple as clicking an "Invite" icon. This is instantaneous viral audience growth that isn't widely adopted today, but is totally possible. OTT offers not only the delivery...but the inherent behavioral, contextual and demographic back channel that the internet has enjoyed for more than a decade.

I'm lucky enough to work for a company spearheading much of the innovation where OTT is concerned. A quick look at some of our clients like TV2Moro (www.tv2moro.com) will show you where this is all headed. In their case, it helps that their point of origin from an audience perspective was a clearly defined vertical target.

How do your per-sub margins improve as you add revenue streams that were heretofore impossible? My prediction is that soon, they will be attractive enough to justify the expenditure on OTT as an augmentation to and in some cases a replacement for traditional cable television. Crystal Ball indeed.




Wednesday, July 20, 2011

MULTI-Media: Too Many Options

This statement will date me, but I remember when I was the remote control. It was the very early 70's, we had a Zenith television set...maybe a 17 inch screen...with a total of three available channels (unless you count the PBS channel, which was channel 13 in my city).

I remember my father watching the "6 o'clock news" religiously every night. Prior to 6 p.m., the television was mine. "The Munsters", "The Adams Family", "Speed Racer" and other after school fare dominated our viewing in the late afternoon. But when 6 p.m. rolled around, ownership changed. My father would yell "Sean...put that on channel 6 would you"? In response, I would get up...walk to the front of the living room...grab the clunky channel selector and crank it clockwise until the number 6 was selected. Then, just about the moment I sat back down...he would continue with "Hey...can you turn that up a little please"? This routine continued through the evening...with him yelling commands and me responding by moving the channel selector from channel 6, to channel 10 and then to channel 8...and so forth. Rarely would my father request any of that educational programming you could find on channel 13, which was an unlucky number anyway! I was the perfect remote control for my Dad. I was way ahead of my time...voice activated even-with some degree of intelligence built in so that on occasion I could even anticipate what channel my father would appreciate most-before he even shouted a command!

Later, in the early 80's when cable came to town...things changed. Our menu of 3 channels grew quickly to several, then to dozens, then to hundreds. The evolution, as you know...has continued until today when we have literally thousands of choices in programming at any given moment of the day or night. And the channel changer? Well, it's certainly smarter than I was as a 10 year-old...but I'm not sure the experience is better. Why? Too many choices.

This phenomenon is present not only on the remote control, but in the aisles of grocery stores, the drive-through lanes of fast food restaurants...even the local frozen yogurt place. In the store, I am overcome by cold sweats trying to find the breakfast cereal my wife has asked me to pick up. She wants "Corn Flakes". The problem is...there are about two dozen different kinds of Corn Flake available. When I was growing up...there were "Kellog's Corn Flakes". That's it. Now? Well, there are Gluten Free Organic Corn Flakes, there are "Low Fat Corn Flakes", "Cinnamon Corn Flakes", "Chocolate Corn Flakes"...you get the idea. And is my life really better because of all the choices? To that question, I for one answer a resounding "NO"!

And so it is with media content. The channel selector on my DVR is a vast wasteland of single-spaced choices largely populated by "reality" filler material. To find something that I want to trade a precious half-hour of my life for is next to impossible. If only there were fewer choices, or better yet...a kid in the room who would find the best choices for me based on my demographic profile, my socio-economic status, my geographic location and other data points-and deliver to me fewer choices all of which were highly relevant to me as an individual. My viewing experience would be, well...as effortless as my father's was in the early 70's. The only difference? Today, PBS would be on my short list of must watch content. :)

Thursday, April 28, 2011

NAB and VROI-The Real Value Of Video

Wow, has it been a whole year since I last posted? Time flies when you're witnessing history in the making. My apologies. I've been head-down on some very exciting video driven entertainment, education and information projects for clients. I promise more frequent updates as the year progresses.

At the NAB convention held earlier this month in Las Vegas, it became obvious to me that the field of exhibitors is indeed growing smaller. Shortly after that thought passed, I had another thought that the trait the remaining vendors had in common was that their customers were able to define the bottom line value of the technology they offered. As I meandered down the aisles, I would hear repeatedly in passing "Neat, huh"? or "Isn't this cool"? But it wasn't the booths pitching neat and cool that were filled to capacity. Instead, companies pitching "measurable ROI" and "dramatic reduction in operational costs" and "exploitation of new revenue streams" boasted of the biggest crowds. These crowds, and the companies attracting them weren't really talking about technology, but were instead focused on VROI-Video's Return On Investment.

It's interesting to see this unfold. I began my observations in the early 90's as I witnessed first hand the impact that new video technology can have on an organization. I believe it was 1992 when as a video editor for CNN, I got my hands on a prototype non-linear editor that had been dropped off by a company called Avid. They wanted us to test it. Problem was, it was just a computer. There were no Sony beta decks, routers or other pieces of peripheral equipment. Just a computer. Over the next few months, I spent my lunch hour investigating non-linear editing. For me, the technical and workflow ramifications were immediate. "No more tape! No more boxes of tape"! The creative ramifications came next. "No more linear thought process! I'm free"! But there was a much bigger contribution this suspect computer would ultimately make to CNN as a whole. Turns out, a few years later...the network tossed out all linear editing bays and moved in a similar computer. The network went tapeless. Why? Better peed, lower operating costs, dramatically reduced workflow complexity, tighter integration with other departments throughout the network, and greater creative possibilities. It was all measurable, definable, undeniable. And I think the same thing is true for the future of media management, monetization and measurement solutions. Ultimately, it's not how cool technology is that wins the day. The question that must be answered in order for wide adoption of any media technology is: How measurably positive is the value?

Today, broadcast networks still distribute their live content via satellite distribution. Is this because terrestrial distribution via IP mechanisms can't deliver the same quality? Nope. It's because there are few instances where the ROI of an IP distribution model is clearly defined and undeniable. I feel like we're on the crest of a mountain of doubt though...and about to slide down the other side to a valley of confirmation. Personally, I would be shaking in my shoes if my career hinged on the success of video distribution via satellite. IP distribution is far less expensive, delivers equal or better quality and provides support for multi-screen distribution. Not to mention that it's really tough for a snowstorm or atmospheric nuisance to interrupt the feed. The cherry on top of this technology sundae is that IP distribution over terrestrial networks offers extended global reach and a plethora of new revenue models to exploit. I have clients today who have realized this value first hand, and they are all beginning to aggregate the internal data that will once and for all crystallize that the new way...is a better way.

If you're a video technology provider about to hang a shingle on another trade show booth, it might be important for you to fly up to 10,000 feet or so and look down on the industry. There are mega-trends just being born that will be pivotal in the way your potential client thinks and the decisions they make about how they will conduct business in the coming few years. Is your technology just neat? Or, does it deliver the bottom line impact that can help them be more profitable?

Thursday, February 25, 2010

Revenue Streaming: Moving People To Action With Streaming Media

As I write this, I’m on a plane back to Atlanta from a week in Denver and San Diego. I’ve been consulting with several large companies on their streaming strategy. It’s funny how much more you can learn when you’re face to face with your client. You get to see their non-verbal communication, get to hear their frustration and even tap into things like their tone of voice and tempo of speaking. But you can’t do that 24 hours a day-7 days a week. Or, can you?

My company does more than just help people put video or audio on the internet. We move people to action with streaming media. Now, isn’t that a lot more exciting?

Why should you care?

Well, if you have a sales and marketing team that present visually to anyone, anywhere in the world and at any time…you shouldn’t. For the rest of you, I would recommend that streaming media has evolved beyond just being a way to listen to music or enjoy snippets of your favorite sports team or sitcom. It has become a vehicle that can indeed have an indelible impact on your bottom line while establishing a greater sense of community and loyalty among your customer base.

With product videos adjacent to your products online, you can experience dramatic increases in purchases. In presentations to prospects and clients you can deliver your message to global audiences with zero T&E, real time feedback and granular statistical measurement. With user generated content campaigns, you can empower your prospect and client base to provide passionate first-hand video accounts and feedback on how your products and services have impacted them in a positive way. Finally, the click-through percentages realized by exposing prospects to a video via direct email have exceeded 30% with some of my clients! Try doing that with ANY other form of promotion.

With streaming media, you can communicate with dispersed audiences and deliver to them more than just the facts behind your offering. You can do what you can do in person-communicate verbally and non-verbally, solicit real-time feedback and also solicit testimonials and other feedback from them. You can do it without being there…or even being awake. In doing so, you’ll reduce your need to do what I’m going to do in about 20 minutes: Make a mad dash from Gate 22B to 34A! Stream on!

Wednesday, January 27, 2010

The Relevance Of Relevance

What does streaming media have to do with relevance? Well, IMHO-in the near future-everything.

In the early days of streaming, we saw many vertically focused content providers create "channels" and "made for the web" content. I was a senior manager at one such company-way back in the late 90's. Great content was created-but because broadband proliferation hadn't exactly lived up to the prognostications of various analysts...ugh...nobody...well, almost nobody...knew. For those bleeding edge streaming swashbucklers who had a voracious appetite for any streaming content...the fare consisted of postage-stamp-sized digital horse'dorve's (is that how you spell that?)...not the type of content we see today.

Fast forward a decade, and my company is pumping H.264 live streams to desktops, laptops, digital signage, iPhones...even 60 foot theater screens! The bit rates are now pushing well beyond the "broadband" streams of 1999 (around 300k for the really big consumer pipes of the day)...today, we speak in M's not K's. The point is that the pipes have gotten big enough so that content can now reach nearly anyone on the planet. But wouldn't it be better if that content reached viewers for whom it was highly valuable, meaningful and....here comes that word: Relevant????

That, my friends, if I may be so bold to play an encoding Edger Cayce...is where streaming media is headed. In the next decade, it won't be that you can reach an audience that will be most impressive...it will be how well you can reach an audience for which your content is highly relevant...that will win you the blue ribbon.

Guy comes home at night, walks into his house where he has 20MBIT speed down from his ISP. He's got the incoming wires or wireless...hooked to every appliance with a screen. But, since he only has two hours a week to spare...or just 30 minutes twice a week...he wants to make sure that his viewing time carries with it an extremely high ROI. He wants a relevant viewing experience. And guess what? Because the content that the matchmaker software he has tied into his TV has is tied to more demographic and behavioral data than the U.S. Government has on him, the system has lined up his programming choices from top to bottom based on how relevant it is for him when measured by that data. Since this data is constantly updated...a more granular profile of this "guy" is developed over time. Hence, his viewership experience becomes increasingly less frustrating over time as he is presented with media that he is very eager to see (because it is highly relevant!).

What does this mean where revenue generation is concerned? Well, CPM's become, dare I say...irrelevant! Why? Because if I'm a maker of fine ties...and I'm putting my ad on whatever the service is that's pushing this content to this "guy" via that broadband streaming system that's tied to that wacky relevance-machine...I am willing to pay a premium...not for numbers of eyeballs...but for QUALITY of eyeballs. "Mr. Advertiser, would you like our pewter package that will blast your video ad to one million completely distant and luke warm mothers of three who are suffering with overwhelming credit card debt. Or, would you like our platinum package, which will make sure your ad for ties plays in front of a much smaller number of metro-sexual guys with a tie fetish who are rich and love to watch clothing design content and repeated re-runs of "American Gigolo"? Hmmmmm? We have a new term: CFR. Cost For Relevance.

So, there you have it. In the future of streaming media, there's more going on than just being able to get content to any device. "Who's" device will be the next measure of success. And that is why relevance...is relevant!

Wednesday, October 14, 2009

Turn Your Video Streams Into Revenue Streams

When I hear clients repeatedly tell me that they are looking for ways to monetize their content...and learn then that their strategy is based on running ad network pre-rolls, I can't help but roll my eyes. Why? Because ads only equal money...if there are enough eyeballs looking at them. I will suggest to you that revenue generated by your content...should be generated not by your measly share of a rev split with an ad network...but by your content itself!

How?

One word: Syndication.

It's a Universal law that there is a "butt for every seat". The content you create, especially if vertically focused and of a high production quality...is missing a large audience because you aren't syndicating it.

In the late 90's, I left CNN because I thought the Internet offered exponential opportunity to reach audiences for whom a given piece of content could be extremely RELEVANT. After all, the Internet offered up a way to identify individual potential viewers...and play eHarmony with them and media content that would be relevant to them. One missing ingredient ruined the whole idea: only about 8% of the available audience had a broadband connection!

Fast forward a decade and we don't have that problem anymore. And if you're a content creator or content owner in possession of content that is aimed a a given vertical audience...then the sure way to generate more revenue with that content is by offering it up as added value content to online portals who cater to the same audience your content does. By making your content available to such destination portals, you access an ever-widening number of eyeballs. If you do it right, you can create a true win-win with the portal owner-helping to make their property more valuable, while at the same time-growing an aggregate audience for your content. With the enormous numbers of eyeballs you will aggregate via your own syndicate network...you will then be able to generate attractive rates on any promotion served up with your content. You will also garner new revenue from licensing fees.

Want to know more about how to tap into this vast unclaimed revenue? Just shoot me an email and we can talk about it. Stream on!

Monday, August 31, 2009

What's Your Definition Of High Definition?

Every one's talking about streaming in "HD" these days. Ha! Do you mean in 720p, 1080i, HDMI...what? Truth is, most folks probably don't know. The other truth is-just because your streaming video is in the 16X9 aspect ratio and captured at a high bit rate...doesn't mean it's "HD". Sorry. Someone had to tell you.

In 1984 I had my very first media job-as an apprentice sound engineer at "Star City Studios" in Lansing, Michigan-a known hotbed in the media world. My title was a bit misleading, as all I seemed to do was set up microphones and amplifiers for scores of bands from Michigan State University who would come to record their one hit wonders. This, is where I got my first lesson about high definition. That's right. I learned my most important lesson about HD video...in a sound studio.

One day, while plugging in and checking levels on the microphones for a fantastic punk band called "The Obnoxious Pigs", I found the lead singer's level lower than the other members. So, I reached over to the mixing board...and pushed the fader on his channel to the top. The VU meter on that track told me the level was now o.k., but a screaming voice in the background from the real sound engineer told me otherwise. "Dude, you can't get a better signal that way! You have to amplify from the source...THROUGH the chain...to the recorder". I got my very first lesson that would later be called G.I.G.O. during the dot com era. The engineer went on to explain that amplification of a substandard signal enhances the volume of not only the good parts of the original signal...but all the bad parts as well. "You're making a crappy signal...more crappy!" he yelled. Instead, I learned to improve the signal at the source (in this case, the pre-amplifier for the mic)...and then work my way downstream. And so it is with HD streaming video.

If you want to REALLY stream HD video...well, you have to begin with an HD source. What does that mean? Well, loosely...a source video signal that boasts 720 to 1080 scan lines...and is either interlaced or progressive scan. Then...you need to capture that source with a video capture card that is able to handle the size of that incoming signal. These are expensive. You probably don't have one. Truth is, most people are capturing in standard definition. They are just bumping up the bit rates to make the overall signal clearer. If you really want to simulcast your HD sporting event in HD smooth streaming for instance, you will need a pure HD signal path from the downlink (assuming the downlink signal is truly HD), to the production switcher, to the matrix switcher, to the distribution amplifier, to the capture card, to the final streaming file output. If you don't have all this...you aren't webcasting in HD.

On demand in HD is even more fun. Do you know how big a one-hour HD file is??? Around 20 Gigs. And what of the resulting stream size? How does a low quality option of a 5 megabit stream sound? Hmmm. That's probably a bigger stream than the bulk of your viewers can handle. What to do! C'mon fiber! C'mon fiber!

The truth is: HD video is possible, but not practical-yet. Now, you can stream a fantastic looking Windows Media stream in 16X9 at around 1.5 Megabits. If you use HD Smooth streaming, you can push a 5 Megabit, 2 Megabit, and several lower quality streams...and the player will dynamically adjust for each viewer. Or, you could do a great job pushing a high bit rate H.264 stream from a Flash Media Encoder. Is this HD? Well, that depends on what your definition...of high definition is.