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.
Thursday, August 18, 2011
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. :)
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?
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?
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