« The Importance of Voice | Main | Sam Brannan and George Hearst »
November 08, 2005
The Future At My Door
Today was one of those days where all my meetings went right. I moved the ball forward and on top of it, the universe sent a subtle sign of its intention to align various planets in some form or another in the media future.
I was at a Westin hotel somewhere in the middle of the country and I opened my door to see the USA Today. It’s always there, and I always step on it on my way out unless I see the cleaning people in the hallway – then I feel bad for some reason like I am shunning this little gift from the hotel and I pick it up and throw it into my room on the way out hoping it lands on the bed. Today, though, I looked down and on the front page above the fold was the headline: Future of TV on pause? Companies find better picture, more channels a hard sell.
Now this caught my eye, because that’s a theme I often parrot myself. What good are 500 channels if nothing is on? So I picked up the paper to read on the plane later.
On the front page of the Money section of USA Today are these three headlines:
Cable’s final frontier: People who want less
Tailored, ad-free TV gains ground
File-sharing Grokster plans to go legit
USA Today tapped three veins that lead to the heart of the future of media.
1) People don’t want higher quality or more channels at a higher price. I have a 60-inch plasma TV. It does not look better than the Trinitron I had before. But even when it’s off it looks cool, and I like the flat panel display. HD on my plasma draws attention to my TV’s lack of resolution, and doesn’t improve the experience of watching TV. Nor does the availability of the 10th Cinemax channel make me want to part with an additional $10/month to get it.
TiVo improves the TV experience. User-generated programming is truly useful. I happily pay for that. In the article, Gene Kimmelman from Consumers Union says, “Companies are pushing bigger packages, promoting digital, and not offering what consumers want most: fewer channels at a lower price.” Then, among other salient points, it talks about how the soon-to-launch U.S. Digital Television is betting on giving consumers fewer channels for less. They are backed by Fox, Hearst-Argyle and McGraw-Hill. Smart.
Allow me to further observe that when it comes to mass media, “more and of higher quality” isn’t driving the market. What’s the big media story of the last two years? Blogs. Simple verticalized text-based unvetted thoughts from largely non-professional writers that capture a smaller but highly targeted audience. A medium with a better cost-to-reach ratio there is not. Lower-quality does not mean uninteresting to the masses. There are more people sending an SMS at this moment than there are watching digital cable television.
2) People will pay for, and media companies will support, user-generated programming. Check the first sentence of the second headline: “CBS and NBC delivered another hammer blow to the traditional TV economic model on Monday by agreeing to let some Comcast and DirecTV customers pay 99 cents to watch certain hit shows on demand and ad-free.”
That’s right. It’s not that I have 500 channels and nothing is on, rather, I have 500 channels and nothing is on when I want to watch it. I will pay for control. This is why people still actually go to Blockbuster to get what they want when they want it.
This is an important development to the future of media. I wonder how that TiVo/EchoStar lawsuit is going to play out. Seems more important now.
And, it’s 99 cents for a whole hour-long show to your TV. How does that jive with the “3 bucks for a 2-minute mobisode to your cell phone” pitch?
Well, that’s a matter of distribution cost, right? This sounds like an expensive proposition to me: “We’ll use satellites that orbit the earth to beam TV to people who will buy satellite dishes.” I love when the audacity of capitalism proves out. Does the satellite thing sound more expensive than “We’ll put up a bunch of radio transceivers on telephone poles so people can talk to each other”? The latter lacks a certain je ne sais quoi in terms of its appeal as a business, as do most companies that have in their business plan the word “radio.” It sounds so turn-of-the-century. (The one before this one.) It’s just not sexy like “satellite.” Radios are in New Hampshire. Satellites are in space.
99 cents for an hour of on-demand television, yet today people regularly pay 50 cents to send a still picture to one other person with their cell phone. Does this in any way hint at the massive value of the mobile space? I think it is due to its origins as a communication medium and not an entertainment medium. I think people on the whole are more interested in communicating their thoughts and ideas than they are in simply receiving a story. The exciting part is that those two worlds are colliding. The lines are blurring between content produced by Hollywood and content produced by ordinary people like you and me. In theatrical terms, what we are seeing is a shift from viewing the narrative (TV) to helping with the set design (TiVo) to participating in the narrative (Blogging) to virally sharing in the creation and dissemination of the content itself. (Social networking) Which brings me to...
3) Media companies will devote massive resources to the pursuit of killing the illegal distribution of their content, which may be a good thing
Grokster gives up, and is planning to become a legal download site. Now, nevermind for a moment that it is generally understood that this “win” by the RIAA will not stomp out file swapping on the internet. To play devil’s advocate, if you could distribute content on the net the same way as Grokster, and some would be free and promotional or whatever and the only way you could get some other content was to pay 99 cents for a full-length redbook song that didn’t come with any experience-killing inane DRM crap wrapped around it and all you had to do was click a button and it debited some account that you only see later, would you be cool with that? I would. If it were simple and didn’t make me feel like a criminal, yeah, sure. iTunes is not that, btw.
There are two possibilites that may come from the RIAA suing 12-year-old girls and shutting down piracy sites. On one hand, it is getting annoyingly tiresome and maybe people won’t mind if the party winds down a bit. I feel like there is a giant collective sigh about to be let out: “OKAY, already, you wore us down. We’ll pay a buck for your Clay Aikens art.” On the other hand, it may invigorate millions of lesser-known artists to create and market their music through other channels like MySpace, Xanga and Rabble, effectively diminishing the power of the central media distribution model and mobilizing the masses at the edge of the network who will form their own distribution channels. (That’s what I’m thinking.)
So stand back and look at all of these headlines as a whole and you’ll see the dots connecting to form a sketchy outline of the media future: A trend toward lower production value, increased consumer choice, user-generated programming, mass-market pricing for on-demand media and a move toward monetizing the distribution of content via overlapping personal networks. To me, Newscorp’s acquisition of MySpace is looking shrewder every day.
Posted by Shawn Conahan at November 8, 2005 09:49 PM