The people who brought you live online coverage of Olympics, Tiger Woods’ epic U.S. Open win, the Republican and Democratic National Conventions, Oprah’s web casts and the presidential debates share tales from the trenches today at NewTeeVee Live.
- Tom Morgan, Chief Strategy Officer, Move Networks
- Eric Schmidt, who runs Microsoft Silverlight’s monetization and adoption efforts
- Mark Taylor, SVP, Level 3 Communications
- Alex Withers, Director of Digital Media for USGA
Om: Live video is exploding on the web so let’s talk about the business and economics of live video. The cable and telephone companies like to talk about live video breaking the Internet. But today, do you think Oprah can bring the network down?
Morgan: In the old days it might have, but with new CDNs the capacity to scale the business and grow the business is growing exponentially.
Mark: there’s no technical reason the Internet should break. There are technical glitches, but there’s no reason the traffic can’t be carried. However, we need to find ways to encourage people to invest in order to carry that traffic. There may be disincentives to invest for some of those carriers.
Schmidt: With the Olympics we wanted to consume the bandwidth out there, so we provided the ability to throttle up and throttle down automatically at the consumer level to help save bandwidth.
Om: The incremental cost of a viewer is zero on the broadcast world, but the gain is high. On the web side, the incremental cost of a viewer is high and the gain seems to be less. When do you guys start to make money?
Morgan: The quality is there and the costs are moving way down, but the real issue is the ad model. Not going to talk about the costs.
Schmidt: We can deliver the right CPM to cover the costs of delivering the content if you have good contnt and providing the right user experience around that content.
Om: What the cost per person to deliver live events and are people making money
Mark: People are making money. The cost of delivery of the distribution is a tiny cost that can be covered by subscription models or ad models. Broadcast may be free, but the upfront costs can be much less. Your cost-based grows as your audience grows.
Withers: There’s a huge difference in repurposing a broadcast, but if you can add cameras and send additional content, it’s more popular and you have the chance to make money on it?
Om: So how much can you spend and how much do make from these types of events.
Withers: On repurposed streams you’re able to make money, but on live online steaming that you produce you can gain the audience but maybe not make money.
Morgan: We will get better than broadcast CPMs, because we can do better targeting more features and better. This is for repurposed content.
Mark: But even with parity, you’re not going to get to Lost produced and shown only online.
Withers: The trends to move to monetitzation makes this a tough media market and we’re going to have to find ways to gain revenue beyond subscriptions.
Om: Will the slowdown slow down the deployment of live video?
Schmidt: We’re actually finding more people interested in it right now. Ad sales and campaign managers are starting to have better conversations with people to sell ads around these events.
Om: You’re promising live video on the web, how do bandwidth caps and limitations affecting the deployment of live video.
Morgan: Right now, that’s not a problem but eventually as more people turn to the web for TV it could be, but I think the carriers will adapt.
Mark: We’re paid to move the bits that we carry and the last mile guys are trying to do that in many ways. We need to realign the incentives in the whole distribution chain, but tat move isn’t going to be popular and if that move doesn’t choke off demand.
Schmidt: ISPs are still trying to understand the model they need in order to attract the audiences today who want non-linear content. It’s unfortunate that the set-top box market in the U.S. is like it it is today because it’s stifling innovation.
Withers: The cable carriers and the content creators are going to have to adjust our deals to adjust to this delivery mechanism. When web TV is comparable to television that is when I think they’ll flip that switch.
Morgan: We’re spending the most time on business issues, trying to figure out what the best business practice is. We just need to be good at providing high-quality programming into the consumers.
Withers: We also need to get a good advertising model that works well and supports this model as well.
Om: What kind of content will be a hit?
Morgan: Not sure if it’s a replacement or if its things I can’t get elsewhere. In three years time I don’t think there’s going to be a distinction between TV and web.
Schmidt: I think it’s a version of the long tail. There’s a massive amount of content out there in vaults that people could want to watch. The demand is there the disk space is there the quality of the client, and PCs are strong enough. I also think we’ll see more broadcasts of content that isn’t currently delivered.
Mark: On the live front, sports will lead the way, and I want to see more cross border sports. You could also open up events, such as broadcast concerts online. Will likely see more events online even for ever smaller audience.
Om: Large volume or satisfy the niche audience?
Withers: The ROI on the live broadcast for a limited audience may not work, but focusing on more compelling content. You also need to think about what should be live, and what should be on-demand. When we showed Tiger Woods interviews live no one watched them. they wanted them on-demand, but they wanted to see him play live.