Clearcast Digital Media

Interactive TV: Is the future finally here?

It has been said that interactive TV is the future of television- and it always will be. The most commonly used example to explain what it makes reference to "Rachel's sweater", as in Rachel from "Friends", which gives you another idea about how long people have been talking about it.

Imagine you're watching "Friends" and you could click on Rachel's sweater and be able to find out who makes it, where it's available and maybe even buy it right there on your TV. That, in essence, is a key feature of interactive TV. Boston- based Backchannel Media is expanding a test into three New England markets. It will offer viewers programs and ads that feature on screen icons that they can click. Each click sends a signal to the viewer's personal portal which aggregates all the things they have previously expressed an interest in. The next time they go online, they can look up more info. Presumably, this would not just be for commerce but offer the ability to drill down deeper about the content of participating shows.

Online advertising is held to a much different standard than traditional advertising because of its vaunted ability to track engagement and interaction. This might be the first step for television viewership and advertising to be measured in the same way. Fair is fair, right?

Online video vs. Cable- Can anyone win?

It was announced the other day that Comedy Central's "The Daily Show" and "Colbert Report" can now be found on Hulu. (Hulu is the joint venture between NBC and News Corp where you can watch selected episodes of dozens of TV shows online for free. No downloading permitted and there are ads, but, hey...) Viacom, which owns Comedy Central, is the first major network to sign with Hulu since its launch.

Clips of The Daily Show have been available for awhile on DailyShow.com for free. All of which got me thinking: what will this mean for cable TV providers? Sticking with the example of Comedy Central for a second, let's play it out:

Your cable company pays each channel or parent company a carriage fee based on how many subscribers that system has. Those costs are then passed on to you in the form of your insanely high cable bill. (I'm simplifying this, but not a lot.) Now, it is not a stretch to say that "Daily Show" and "Colbert Report" are the flagship shows on Comedy Central. I have no idea what their ratings are, but without those two shows, Comedy Central would turn into a test pattern tomorrow. "Mind of Mencia" ain't keeping the lights turned on over there.

So, imagine you're Comcast. You are paying Comedy Central a certain fee per month to include that channel in your line up. And then you turn around and find out that they're giving it away for free. You see where this is going, right? I am not defending cable companies. That is not the point. The point is, we are starting to see the tectonic shift on how content is delivered and what logically follows is how that content is paid for. This is big, folks. And it will have far reaching ramifications.

UPDATE: Since I wrote this, look at what the BBC is planning. Holy crap!

TV viewership down- and it will stay down

The television upfronts concluded in New York last week and the news was sobering. Six million viewers seem to have vanished and it is unclear if they're coming back. Back in January, right here on this very blog, we predicted that viewers who were alienated by the writers' strike might not come back they way they did after the previous writers' strike. The Business Day headline from the May 12 New York Times wondered "In the Age of Tivo and Web Video, What is Prime Time?" And finally, FOX Entertainment head Peter Ligouri had this clear eyed assessment of the state of prime time TV: "But we should all look at what happened to those viewership levels and be shocked into being more aggressive about our thinking."

The revolution is being televised. Just not on TV.

Change in online viewing habits

On this blog, we talk a lot about the experience. In other words, making the consumption of online content an easy and pleasant one for the consumer, as well as one that adds value. The thinking up until now was that "video snacking," or the consumption of sub 3-minute clips, was the holy grail. Turns out, maybe not so much...

When NBCs "The Office" premiered back in September, it attracted a broadcast  audience of about 10 million, but it also attracted an online audience of nearly 3 million more in one week, according to exec producer Greg Daniels. Nielsen revealed that one in four internet users had watched a full length TV episode in the past 3 months, with a surprising 23% of them in the 35-54 age group.

Watching full length episodes on your computer was the sort of behavior that was thought to be years away. The networks are not thrilled, as crystallized by the now infamous words of NBC prez Jeff Zucker and his unwillingness to trade "analog dollars for digital pennies." The good news for advertisers is that their ads are more likely to be remembered since there are fewer of them and they can potentially be better targeted.

The toothpaste is out of the tube and the networks are holding on for dear life. What have they learned from the music business?

What the writers' strike could mean for online video

The Hollywood writers' strike is now grinding into its twelfth week. I have a lot of friends in LA who are writers who are feeling the pain. But make no mistake: the writers' strike does not just affect writers, but rather an entire industry and tens of thousands of people. As glamorous as the entertainment business appears from the outside, the truth is it is an industry like any other whose continued operation is made possible by regular people with kids, mortgages, car payments and credit card bills.

The last writers' strike was over DVD revenue sharing (mostly) and the writers really took one in the chops. The by-product of that last strike was the rise in prominence of cable TV and reality programming. Indeed, for every loser, there is a winner. Once the average TV viewer starts to get fed up with reruns of their favorite shows, they will start to look elsewhere for entertainment. I have believed since the beginning of the current strike that if it dragged on too long and people began to look elsewhere, THEY MIGHT NOT COME BACK TO TV. Sound far fetched?   

A recent study from Burst Media which is instructive but not definitive, shows that 40% of respondents "expect to use the internet more for entertainment purposes if their favorite TV shows are shown only in reruns." I do not believe the internet will replace TV in the near-term, but cable TV was a something of a wasteland and a bit of a joke before the last writers' strike. How many of us now turn to cable FIRST when looking for something to watch?

Here's hoping the strike ends soon, everyone gets back to work and no more pain is inflicted on the workaday folks who make up the backbone of the Hollywood workforce. But remember, every day that goes by without a settlement is another day of lost viewers who will need a hell of a lot better reason to come back to TV than "The Moment of Truth." (I refuse to link to it. If you don't know what it is, consider yourself better off. If you're curious, it'll only take a second to find.)

Reflections on 2007 and predictions for 2008

As the year winds down, we are succumbing to the temptation of trying to put the previous year in perspective as well as try and focus on the year to come. No "best of" lists here, but I did want to pick up on a theme from a recent post, that being the future of internet TV.

There has been some buzz about VC money entering the game as writers and independent content producers try and figure out a way to take their product directly to the people. VC money may follow the potential for new revenue, but there is an interesting wrinkle in the internet distribution model, one that might be easily mitigated.

Success with any entertainment format is all about distribution. You don't need to reach hundreds of millions of people to be considered "successful," just those who are truly interested and passionate about your offering. Any new distribution model will need execution to be successful. It is clear that the hunger for new content and new methods of finding that content exists. But successful entertainment requires people to respond to it. With the new low cost distribution model, production companies would do well to produce several different formats in order to mitigate their risk. Instead of needing to convince a couple of suits to distribute your show to millions, you now need several thousand people to distribute your show to several more thousand. Since it is difficult to predict what will stick (some things never change), it will become necessary to have several entertainment strands working at the same time.

The good news is, distribution costs allow producers to recoup their costs of a pilot much faster. Social media will play an ever increasing and critical role in the distribution of quality content on the internet.

So, our prediction for 2008 is this: web video content will play a larger and larger role in consumers' lives and become as much a part of the entertainment mix as TV, DVD rentals or going to the movies. (Here is a nice summary of 2007 in internet TV from Read/Write/Web.)

All the best for 2008, and we'll be back in touch after the first of the Year.

Embrace the chaos

The future of online content is in the hands of the 1.3 billion worldwide users of the internet. Since mobile phones outnumber personal computers by about 3 to 1, it's all about portable interactivity.

Striking film and TV writers are now looking for ways to bypass the Hollywood studio system and produce and distribute their content directly for the net. The are seeking out VC funding as well as technology partners to make this happen. Advertisers would feel more comfortable with a model like this since it assuages their fears of being aligned with user generated content that might be objectionable or of low quality.

It's a brave new world.

NBC looks to outside sources for programming

Despite their claims that this deal has nothing to do with the writer's strike, NBC has gone out and cut a deal with some independent producers to buy blocks of programming at a much lower cost to fill up their soon to be empty cupboard of shows.

One of the deals was cut with producer Thom Beers, creator of such adventure documentaries as "Deadliest Catch" and "Ice Road Truckers." Writers strike or no writers strike, this is a sage move on the part of NBC to hedge their bets against the continuing migration by viewers to the internet. By making a deal with an independent producer, the per episode costs for a one-hour documentary style show are in the $500,000 range, versus $1.2-$1.5 million.

Networks will continue to beat the bushes looking for low cost and internet ready programming. We see this as a trend that is likely to continue as the cracks in the old model are exposing themselves more and more every day.

Stay tuned...

What does the pending writer's strike mean for online video?

As of this writing, the Hollywood writer's strike might begin as early as Friday, November 2. The central issue for writers is how much they will be paid for digital rights of the content they help create. Having gotten the shaft during the last round of negotiations over DVD sales, which is currently the biggest money maker for studios, they are unwilling to make another bad deal.

The trouble is, no one really knows HOW much online content could or should be worth. The baseline costs for internet video will probably be set, helping to determine how the industry evolves. A couple of options might be paid downloads (a la iTunes store), or free streaming video with ads. But if the price paid for rights is higher than the revenue they earn, it might keep content off the internet, opening the door for other talent. As the NY Times observed, "...bored viewers may suddenly start deep explorations of puppy punting and other specialties of YouTube."

Well, we can CERTAINLY do better than that!

Content creators of the world- this is your chance. Writers, producers, directors and those who never have squeezed through the development door at a major network, and even those of you who have, this could be the moment for a major paradigm shift.

Are you ready?

Boing Boing on TV...sort of

Boing Boing, the self-described "directory of wonderful things," has started it's own online television show. The have come up with a five day a week program, three to five minutes in duration. Boing Boing is one of the most visited blogs on the web for techies and those who are tech-curious.

Great- another online TV show, right? Not so fast. IBM has a three month deal as the show's lead sponsor and Virgin America will be showing daily segments of the show as part of its in-flight entertainment offering. As one analyst put it, "The web, which has been seen as an ancillary medium for brands established elsewhere, is becoming an incubator of media properties that can extend over any number of platforms."

The takeaway here is that as an entire generation (and I don't just mean young people) feels that the platform just isn't important, seemingly small things like Boing Boing can end up playing very large.