And yes, that search-discovery-and-choose process must cover “user generated” content and such. Though this is not as important as making sure access to professional content is seamless.

Continue reading at
http://www.tilzy.tv/news/2008/1/Slight-Modulation.htm

That that isn’t the link to episode one. This is http://www.vsocial.com/video/?d=110535

The other issue, and its been said, is content. First, we’re beyond the era of a guy sitting in front of his webcam being considered professional content and too much of the content out there today is two guys standing in front of a green screen reviewing products. It’s done to death.

We need serialized situation comedies, dramas, reality series, news, etc. Everything that television offers needs to be offered on the internet.

Shameless plug: Lutz and Balls, Paranormal Investigators (http://www.lutzandballs.com) is a new series in development that is a situation comedy in short form (3-8 minute episodes). Perpetual salesmen and slackers, Craig Lutz and Bill Balls lose their corporate sales jobs and set off to get rich quick by diving into the tabloids as paranormal investigators. It’s X-Files meets Bill and Ted… Heck, here’s a sneak peak at episode 1: http://www.vsocial.com/video/?d=114432

When the market allows, we’ll kick it up to 22 minutes just like a full blown 30 minute sitcom on television, but at this time we don’t think the audience is there… yet.

Prove us wrong, though. We’d love to get a big production deal and we’re still looking for sponsors.

You are absolutely right that the distribution method is already setup (in terms of microsoft). And while I agree that a large minority of web savvy citizens would jump at the chance to be a part of internet television (as consumers), I can only think that much of our society is stuck in the baby boom era. Personally, I don’t see my parents, or their friends, hoping on the internet television distribution channel yet. Although if Apple can properly market Apple TV and fix a few bugs, that is the best model for bringing in high quality content to the average home. After all, wi-fi is practically common place in many middle to upper class homes. I feel a subscription program would make the average boomer more inclined to jump on the internet TV band wagon. Possibly something in the vein of Sirius, or Rhapsody, only for television.

Cheers,

Mike
The Issue | http://www.TheIssue.com

ps- any and all feedback is much welcomed on TheIssue.com

When I was incubating TV stations, we looked for opportunities where there was some significant disruption in the chain of the ecosystem I spell out above. In the Czech Republic, it was in the distribution area; we secured one of two national frequencies. In Taiwan, the venture also won a license (the fifth in the country) but that was not enough. The Taiwan venture was successful because it started producing a good proportion (but not all) of its content in Taiwanese vs. Mandarin. The other stations were chiefly Mandarin even though 80% of the population speak the Taiwanese dialect at home. (The reason a station could start broadcasting in Taiwanese was due to the political change occurring in the country at the time.)

So, is the writers strike a sizable disruption in the present TV ecosystem where a new venture could get started? I think it could be — but it depends on what happens with the other three legs of the chair.

The disruption that has happened is that an enormous volume of talent has come available to produce new shows. Furthermore, the incumbent TV platform is not producing new shows. This almost never happens. A new venture could really differentiate itself and secure the ability to produce lots of new content over a prolonged period of time. We can only say this is an OUTSTANDING opportunity. The incumbent TV industry has really left itself vulnerable.

So Step One — The New Venture must secure the talent. VCs should put in, say $100 million (and this is just for starters, the costs will grow fast and), and sign every single writer that they can find. If this were really to happen, watch how quickly the studios would settle, so the New Venture would need to move really fast and sign say 10% to 15% of the writers including some of the best (whoever they are).

Second Step — Distribution. OK, the internet is sufficiently progressed where video can be efficiently distributed to the home. While there’s a lot of work still to do to make this more consumer-friendly, it’s believable that the cable companies are endangered of being stepped over TO THE HOME. However, I believe there’s a bottleneck WITHIN the home — namely the distance between the typical home computer and the typical home TV screen. The solution is easy enough: wireless connectivity, but there’s a sizable re-tooling effort required to equip homes with the right wireless standard and in adopting the typical TV screen to it. I believe this is akin to putting up an antenna or satellite dish and is totally doable — but it will slow down adoption. Speed of adoption will depend on the volume and quality of new content originating from the New Venture — so it will depend in part on signing the most and the best new talent now on strike. So perhaps you’d like to start with a few more $100′s million to secure more talent — it will speed up talent. You’ll also have to spend on some R&D to perfect and endorse some standard, but those are details.

Marketing. Here, the New Venture would face a favorable climate. Creating a new TV company and giving jobs to striking talent would captivate the minds of many, many Americans. The New Venture would most certainly be noticed. But you’ll need bucks for a prolonged, inventive marketing effort. (Furthermore, you’d have to deliver on that imagination, meaning the combination of computer and tv screen the New Venture would be pushing would need to have many new, useful features. I believe this is possible, namely because I have a few ideas in this category that I think would be very useful and compelling but I have not heard them discussed in the industry much. So the R&D budget mentioned above is not small.)

Monetization. going to be tough, don’t kid yourself. Viewers aren’t going to pay much if anything for a subscription at first, and advertisers aren’t going to flock to you, no matter how much of a hit you become in the first year or two. So figure if all goes well, you’ll see some meaningful revenue in year 3 and by year 5, you’ll breathe a sigh of relief that yes, there is actually a revenue model here. And if you do create the computer TV/video model for America, you’ll make a good return. Probably extremely good.

So, what would it take? hmmm…I don’t know, but I’ll take some guesses:

Step 1. Securing the talent is really key. This actually creates a barrier to entry to your competitor — the media companies. always nice having a barrier to entry, kinda like a patent. So you want to spend liberally here. And you’ll have to promise the best talent that you’ll be around for a while so contracts with them for a few years will be necessary. I really don’t know how much these guys make. If I said $100 million over three years, that’s $33 million per year. That doesn’t seem like enough, so I’d say $250 million over three years.

Step 2. Distribution — which is perfecting the home solution — the software that will run the system and give all the new cool features, the wireless standard and adoption to existing and new TV screens. Again, I have no idea, but $150 million over the next 3 years? Also, you might want to subsidize the price of the home wireless system and the adopters to the screen to speed adoption in the home. So, there’s a lot more you can spend here too.

Step 3. Marketing. I have no idea, again, but … $60 million/year x 3 years = $180 million

Step 4. Monetization. The cost here is what are your running costs before you break even? So, the chief consideration will be production. How much are you going to produce? Again I don’t know, but in the first year, I’d say your production costs should be 1/2 of the cost of one of the networks. In the second year, 100% of the typical networks content costs, and in year 3, 150% of a typical network. I am sure there’s someone who can tell me that but I am going to take a stab in the dark and say production costs are a billion a year at a typical network. So over 3 years, make sure you got $2 billion to plow into production.

So, if I do my math right, about $2.58 billion over three years.

Rupert spent a lot more than that to start Fox.

Any takers?

P.S. As I think more about this, it’s actually more possible than I originally think. And I hate to bring up the bogie of Microsoft, but their media center is a lot better than people give them credit for. they pretty much solve the in-home distribution system. They are well positioned to be the ones to secure the talent to make the new shows and put it over their media networks. And they have enough cash for it too. But i doubt they’d have the guts to buck the studios. On the other hand, their media centers could be leveraged by a new entrant.

-Michael
The Issue | http://www.TheIssue.com

When I looked at overseas markets for launching a new TV station, I found I needed to scrutinize the whole ecosytem of the video business, which runs something like this:

content creation ==> distribution to audience ==> effective marketing to audience ==> monetization (advertising or subscriptions)

Evaluating a potential TV venture in these four steps was really crucial, and I think it’s the same for the online video now. Let me briefly go through each step that I used as an evaluation tool, and it will be more clear.

Content Creation. Was there a critical mass of content that I could get my hands on (rights to) that would draw an interesting audience in size and quality (demographics) to make a venture possible. Usually, existing media sops up all potential talent (for new productions) and libraries (existing content) so there’s literally nothing for new players.

Distribution. If there is content, can I transmit it (somehow) to my intended audience? My business was broadcast, so was there a frequency I could get use of? Was there cable in the country, or a satellite platform widely in use?

Effective Marketing. If there is, can I get my intended audience to notice? If a cable or satellite platform exists and broadcasts 100 channels, can I somehow get my audience to notice my single new channel? Usually, this is ENORMOUSLY difficult. And almost always requires a PREPONDERANCE of QUALITY programming.

Monetization. Even if you get to this point, meaning that you found good content, the means to distribute it, get the audience to notice you and watch you (which means you did step one effectively), you still need to monetize the audience you’ve achieved, and sometimes (often) there are reasons you won’t be able to do this. The most common reason is that advertisers demand a certain critical mass, which means you not only have to successfully launch, but you need to launch big. Which means each step (content, distribution, marketing) must be done big — which greatly increases the cost (investment). The second reason is simply institutional inertia. yes, you’re getting a decent audience but ad agency X has been sending Y million in advertising to channel z, and that’s difficult to stop too. In my opinion (perhaps many others’ too) this was one of the chief causes of the first internet bust. Advertising just didn’t keep up with the audience as it shifted to the new medium so fast. it took about 5 years, roughly. If an online video business does emerge (of comparable size to the current TV business), you’ll need to think how the advertising paid to existing networks and subscriptions paid to cable and satellite companies would be switched. It’s tougher than anyone thinks.

So you can see why successful media outlets (TV stations, channels, etc.) are so valuable. There are a lot of forces keeping them in place, and new entrants are VERY difficult to get off the ground.

That all being said, does the writers’ strike afford the opportunity to create a new paradigm (so to speak, I hate that word) in the video viewing business. I originally said no, but, actually, it just might. I’ll describe how it could in my next post.

But it won’t be for the faint of heart. You’ll have to be as brave as the media entrepreneur Rupert Murdoch — who has done all this time and time again.

If you’re looking for the next model for TV, you might want to look at overseas markets. In some of these markets, notably Korea and Taiwan, the media industry is less entrenched with multiple and conflicting interests, and so new technology is more easily adopted and better models launched.

Just as Asia and Europe have more advanced mobile systems, I believe they are more likely to incubate the model that replaces our current TV model.

@Alan – no worries on mis-spelling my name, I do it too :) Thanks for the contact info and good luck with your talent search!

@Jon – thanks for the link.

@joe – that link does not work.

@Eric – thanks for the links. And, yes, I am waiting to see when 42 minutes of content (an hour long show) really uses the Internet as a viable distribution channel to reach a million viewers. I’m hoping that format is not conducive to 18 minutes of commercials…

@Rob Long – Thanks for the great insights. Good luck on the strike, I wish you well.

@Adam – thanks for the great comments. Please bring us some unique content from your side of the globe!

No and Yes is the short answer.

NO: Our parents, the babyboomers are too entrenched in the couch experience and in content being scheduled and delivered. We’re currently faced with a mass of content online with no discernible way of selecting the best, nor the most relevant to our needs. It’s this problem or growing pain that will keep them glued to the sofa and the remote. This is a generation reared on an editorial and trusted voice, the TV Guide of yesteryear or the weekly papers with their ‘Top Picks’ of the day’s viewing, whilst Gen XYZ (not sure what we’re calling ourselves now) rely on collective aggregation and filtering, on peer recommendations.

YES: It’s youth we should be focusing on, web soaps like LG15 and it’s brood are merely the first iteration of a new form of entertainment

I worked as Creative Director of Europe’s largest talent agency for 10 years and have seen the incumbent industry battle and fail to understand the web savvy, they are more interested in preserving the status quo and we’re seeing only reluctant steps by the majors to address this.

What we need is content and content creators, if anything we can hope that some studio writers will find a new creative outlet in online programming. Nurture them and we’ll see a seismic shift.

Adam

I’m a writer — currently on strike, and incredibly ambivalent about it — and I’m not sure I’d call this an inflection point, because I think that the entertainment business is always in some kind of slow-rolling revolution. But I don’t know anyone in the entertainment business — and I’ve been working as a writer and producer for a long time — who doesn’t anticipate huge disruption in the next few years. That said, I don’t know many people in the entertainment business who are afraid of this, either. Things are going to get shaken up, sure; but when things shake up, a lot of money and opportunity shakes loose, too. And Hollywood is made up, essentially, of a lot of one-man corporations. Put it this way: Hollywood is a great place for individuals to get rich; I’m not so sure it’s so hot for shareholders.

So, can I suggest a strategy? In Hollywood, currently, failure costs a lot of money. An unsold 1/2 hour pilot costs about $2 million; a failed 1/2 hour series costs about 6x that. And features, boy — it costs a lot of money to find out that the public doesn’t want to see your movie!

The web, among other things, radically lowers the cost of finding out whether what you’ve got on your hands is a failure or a potential hit. And so any strategy should lever off of that basic advantage.

Try everything. Remind yourself that hits are impossible to engineer, or reverse engineer. We don’t know — we’ll never know — in advance what the audience (whatever the demographic) wants to watch, wants to get obsessed by, will set up fan sites for, will pay premiums for, will wait in the rain for. The web, though, can give us a better sense, and for a lot less money, whether or not a project is worth pursuing. So, try everything. If rolls of the dice are cheap, for God’s sake, roll the dice! That’s the great capital advantage the web has over Old Media — the very people (like me) who are striking right now demanding guaranteed minimum payments from big studios (and those come after the huge fees our agents and lawyers negotiate for us) will work for free on the web.

I don’t know about inflection points, but I know a terrific arbs opportunity when I see one!

I talk a lot about this on my blog, http://www.roblong.com, and I’m even launching a crowdsourced animated show venture, at http://www.dondog.com. Because, you know, try everything…

@Frank – thanks for the links. Some interesting content there!

@5tacos – you’re right, I’m still waiting to point my Mom to something that she wants every week on the Internet in the same ways she watches “Desperate Housewives”.

@cosmos1980 – interesting take. The big networks seem to be using Internet video to supplant DVRs. Watching old shows on their websites have ads that you can’t skip and allows them to monetize their content without paying distribution fees (although they do have to pay for the bytes delivered).

@Matt – good point about the game consoles. I’m still waiting to see if that really happens, but clearly the technology is there.