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Summary:

The barrier to media unbundling is figuring out how to make money if you do unbundle. The first step towards real “unbundling” is to put the viewer at the center of audience building — not channels, shows, or their massive and massively inefficient audience-seeking promotional campaigns.

old tvs

Recently, Om Malik wrote about old media being “unbundled,” just like telecom was. In telecom, once broadband came along, phone calls became just another application, no longer requiring a specially built, just-for-phone-calls network.

With television too, just-for-TV networks (e.g. the video portion of cable systems) are becoming much less necessary. Instead, with broadband access, everybody could just stream or download whatever they want whenever they want to whatever device they want. Television everywhere.

And it’s not just unbundling the shows from the wires (or spectrum) over which they’re delivered, but unbundling the shows from tired and ineffective aggregation – the channels that carry them. As Om points out:

Today, no one cares if … Fox or the USA Network carries House. What matters is House. The show has been unbundled from the distribution network, which in turn has shifted the value to the show and the not the distribution platform.

House has been “unbundled from the distribution network,” but in a grudging, and confusingly inconsistent way. On Hulu Plus (paid service), there’s a five-show inventory offered on an eight-day delay from broadcast, while over on Fox.com (free), five shows are offered on one-day delay for up to 30 days. That’s just for this show, this season. Actual mileage may vary, and we couldn’t be bothered checking Amazon, Apple, Google TV, Netflix, Rovi and who knows what else.

For now, linear TV is still the only way to deliver on television’s fundamental value proposition (and Hollywood’s economic foundation): mass audience reach. So networks still insist on anchoring their marquee fare squarely in prime-time “linear” exhibition, with a bit of Internet tinkering at the margins.

TV as an Application: Overcoming the Curse of Fragmentation

The barrier to media unbundling isn’t so much resistance to unbundling itself as it is figuring out how to make money if you do unbundle.

How do you find, build, and retain audiences big enough to make money while surviving the assault of ever more fragmented distribution and marketing inefficiency? If channels and genres aren’t good enough hooks for organizing content into viewer-understandable collections, what is? The 400-channel universe we already have makes this hard enough, never mind another layer of fragmentation piled on by the Internet.

But show that you have a better, cheaper way to build sizeable audiences irrespective of delivery technology, and even the most retrograde of Hollywood studios will open their doors to consider new exhibition and monetization rights (the cable industry, quite predictably, will be less than enthusiastic).

The first step towards real “unbundling” is to put the viewer at the center of audience building — not channels, shows, or their massive (and massively inefficient) audience-seeking promotional campaigns.

Some time ago, watching TV got more complicated than just watching. It’s now about the entire experience of becoming aware of what’s out there, selecting what you’re interested in, actually watching it, organizing and prioritizing what you watch, sharing it with others, and being reminded and rewarded for staying engaged. And it’s about recognizing that viewers need tools they can use to shape themselves into communities and audiences.

So the second step is to frame whatever new unbundled way of watching TV you’re offering. You might emphasize some functions more than others, you might implement them in very different ways, you might paste together these functions from several sources. But the more lopsided or incomplete your application, the less useful it is, the less sustainably it will build and retain audiences, and the fewer viewer monetization options it will create.

Here are four quick hypothetical examples which illustrate the range of possibilities:

  • Video portal: Hulu — or Yahoo – could be vastly upgraded to provide ways of discovering, keeping track of, sharing, and being rewarded for viewing shows that are widely-dispersed across hundreds of cable channels and web sources and, consequently, are today largely unwatched and invisible.
  • Stand-alone service: A web-based service (with requisite iPhone, Android, etc. apps) could straddle all the major underlying sources of commercial video, including linear TV, but without actually delivering the programs themselves.
  • Facebook TV: Social networks could provide “friend-sourced” discovery, recommendations, sharing and show-provided rewards.
  • Cable plus: Instead of misbegotten DRM and authentication schemes for Internet video viewing, cable set-top boxes could leap two generations ahead of today’s DVRs to provide personalized viewing.

Imagine, too, that television is no longer about monetization through mass audience advertising alone. That each of the scenarios above provides new ways to monetize audience measurement, targeted advertising and promotion, merchandising, bypassing (or complementing) on-air commercials.

Television already is everywhere. What both viewers and Hollywood need are new ways to shape it to their mutual benefit.

Andrei Jezierski recently published “Television Everywhere: How Hollywood Can Take Back the Internet and Turn Digital Dimes Into Dollars.” He is a management consultant focusing on strategy and venture development for media and internet infrastructure companies. He was previously CEO of News Corp. JV/subsidiary Sky Latin America and a consultant at Booz-Allen & Hamilton.

Image courtesy of Flickr user Marcin Wichary.

  1. And why Hollywood does not go on its own? Imagine pixar releasing its productions on its platform worlwide through the Internet. It would make audience and money. Production and distribution could merge.

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  2. Andrei,

    great article! I’m currently working on a stand-alone-service with a deep social integration called tweek. We well start closed beta testing in round about 2 month from now. :)

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  3. Five-show inventory offered on an eight-day delay from broadcast of House is the free Hulu service,Hulu Plus has the current season with no expiration

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    1. Thanks for catching the Hulu v. Hulu Plus error (must have logged into the wrong account). Email me if you’d like a complimentary electronic copy of the book.

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      1. Sure! what is your email address?

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    2. David,

      You can reach me at andrei [at] i2partners [dot] com

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  4. I’ve been saying recently that if cable providers want to rescue themselves, they should allow viewers to build their own packages. Example, any 10 channels you want for $20 a month. So you could have ABC, NBC, CBS, but add to that Comedy Central, ESPN, TBS, USA, CNN etc. That way viewers aren’t wasting extra money on the channels they could care less about and typically just click through to get to the one they want.

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    1. This sounds like a great idea in theory (from a consumers perspective) but will likely never happen for several reasons. Here are two of the more obvious ones… First, many of those networks you listed are owned by companies that own other networks as well. Each of those companies aren’t going to let the fees they generate from the cable/sat/telcos disappear because their delivery has decreased. So as a result, you’d likely see the rates those networks charge increase dramatically enough to make up for the delivery reductions and so all you’d end up with is fewer networks and almost the same bill. Second, it’s easy for people to complain about the cost of TV but what they fail to remember is that those dollars trickle into content budgets. If “a la carte” programming actually happens and the programmers take a hit financially, there won’t be budgets to create the great shows we have today. It’s a little bit of having your cake and eating too.

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      1. Oh i’m not saying I think it will happen. But right, from a consumer perspective it would be great! I totally agree you, just wish I could afford the fancy cable.

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  5. Ha. You mean, ‘Digital Dimes into Dollars’.

    Andrei Jezierski recently published “Television Everywhere: How Hollywood Can Take Back the Internet and Turn Digital Dollars Into Dimes”

    The article taps into the top trend in TV these days but is far from being insightful. Making the a-la-carting of TV shows a reality has scores of challenges that need to be addressed.

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    1. Ha! Thanks for catching that silly transposition in the title.

      Delivering insight in 800 words isn’t always a challenge we can live up to – email me if you’d like a complimentary electronic copy of the book. The circular issue of rights vs. audience building is indeed a tough a la carte challenge.

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    2. Nicole Solis Monday, March 7, 2011

      Thanks for catching that! We made the correction.

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  6. Channels used to bring a ‘brand’ to content. So if some show you didn’t know much about was on a particular channel you would make a judgement about it. This concept of the channel as the brand has disappeared. I feel then natural replacement is peer recommendation. Your friends have a better idea of what you like than any channel. So the question is how does the content industry tap into the peer recommendation model. There are emerging platforms and services which enable this and the creation of custom, personal channels – http://www.vidi.vu being one – but content owners need to step up and embrace this new model.

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  7. David Polakoff Monday, March 7, 2011

    The fundamentals of the channel-distribution business will need to shift. While Verizon and ATT have already introduced competition to the traditional and dominant cable/satellite service providing companies, Verizon claims that their 4G wireless network will be a “modest substitute” for cable/satellite and other distribution choices. Additionally, Alphaline (Sears), Amazon, Apple, Boxee, GoogleTV, Hulu, Netflix, OnLive, Playstation (Sony), Roku, Sezmi, Slingbox, Tivo, Vixio, Vutopia, Xbox (Microsoft), and YouTube are amongst the names with hardware devices and/or internet based products to put internet/wireless accessed content on consumers’ screened devices. Making these hardware devices “plug and play,” offering an intuitive and easy on-screen access to the programming, assuring a reliable and robust on-screen experience, offering a variety of content (and within reasonable access windows to their theatrical and/or broadcast and cable/satellite cast premiere), and at an attractive price, will be key factors in the transformation of the traditional content offering and delivery models.

    – David Polakoff
    http://davidpolakoff.wordpress.com

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  8. Andrei: Looking forward to reading your book about TV Everywhere. In a web2.0 world where consumer expect their experiences to be more seamless and customized, “personalization of TV” from when, where, and how you watch is coming. Right now accessing TV content is a fragmented experience as you point out, and the industry economics reinforce that. I work for an internet TV guide Yidio.com (short for Your Internet Video) that is trying to solve these problems from the viewer perspective: helping you find, watch and share across any network, any screen, any premium service. With new services being introduced every day this problem is only growing, and finding the content you want, is difficult.

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