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.

TV on the web

Three very interesting stories in recent days:

1- Warner Bros is introducing 24 web productions in a range of formats including minimovies, games and episodic television shows. But they have rather dramatically altered their initial strategy of demanding that advertisers bear the production costs from the outset. Instead, they have decided to finance most projects themselves and worry about lining up advertisers to recoup costs later.

Why? Because the content train is moving so fast towards Destination Online (sorry, that was pretty weak) that big companies must abandon their safe, risk-free models. "The shift underlies a growing realization among the big Hollywood studios: Web entertainment is evolving so quickly that they must take on more financial risk to keep up." (NY Times- 10 Sept 2007)

2- Talent agency UTA, which launched digital studio 60Frames Entertainment a few months ago, has now created United Entertainment Group to build brand-specific entertainment properties for consumer brands.

3- LA attorney Kevin Morris, who recently cut a precedent setting deal for the creators of South Park, is now putting together a Sun Valley-style conference to put entertainment and technology people together to bridge the divide between Hollywood and Silicon Valley.

All of these occurrences speak to the growing importance of web entertainment. In my view, there is a huge chasm that needs to be filled and all of these happenings are beginning to address it. Where do professional content producers find an outlet for their work that does not fit into the established 30 or 60-minute model we’ve become accustomed to? There will always be a place for cats playing the piano or people falling on their wedding cakes, just as it’s great that I can download Scrubs from iTunes if I missed an episode and my Tivo broke.

It’s the vast middle ground where the opportunities lie.

Commercials, and the viewers who skip them

A much-anticipated Nielsen report was released last week talking about DVR penetration, such as Tivo, what percentage of users skip over commercials. The conclusion…Nielsen wouldn’t say. The OBVIOUS conclusion… a lot of us.

The takeaway for podcasters and other new media producers was this:
According to an analysis of Nielsen ratings data by Sanford C. Bernstein, live viewership among 18- to 49-year-olds of non-sports, prime-time programming at Fox, ABC, NBC and CBS was significantly down during the season, owing to more people using DVRs to watch their favorite shows at later dates.

In other words, the time-shifting habits are well-formed, meaning all we need to do is continue to provide more compelling content.

Everyone loves stats

I have said many times that the way we receive and consume media is going through a sea change. One thing I don’t see changing, however, is our desire to flop down on the couch and watch TV. It’s in our DNA. Interesting study to be released soon from E-Poll entitled "Multi-Platform Viewing of Video Content" confirms my suspicions:

Those that view video content away from the TV:
    75% view on a desktop
    46% on a laptop
    13% on an iPod

Considering television viewers, 13% currently transfer video content from their computer to their TV. Almost half did not realize that it was possible to do so and 55% of those who watch video content online say they are interested in transferring it to their TV sets.

Well, the devices that make this possible are hitting the market. Now you don’t have to be stuck in front of your computer anymore. Unless you’re downloading at work, of course.

Everyone’s catching on

TV networks are scared to death. They saw what happened to the music industry as it pertained to digital downloads, and they don’t want the same thing to happen to them. Can they fight it? I guess it remains to be seen. But then there’s this from the April 30 NY Times:

"The question probably never occurred to viewers in the 1970s and 1980s, but suddenly it is highly relevant: exactly how much worthwhile entertainment content was there in shows like “Charlie’s Angels,” “T. J. Hooker,” and “Starsky and Hutch”?

The Sony Corporation and its production studio, Sony Pictures Television, which controls the rights to those and many other relics of a distant era of television, have come up with an answer to that question: three and a half to five minutes.

That’s the length Sony has shrunk episodes down to in order to create what the company hopes is an appealing new business in retooling old shows for a new era of entertainment. Sony even has a name for these shrunken slices of television nostalgia: minisodes.

Sony Television is planning in June to introduce an Internet-based service called the Minisode Network, initially offering the mini-shows for an exclusive run on MySpace. (The company may consider establishing a separate Internet channel called the Minisode Network later.)

However and wherever it appears, the network will consist of a lineup of tightly edited versions of shows lifted off the shelves of Sony’s television library. These are not clips of the shows, but actual episodes with beginnings, middles and ends, all told in under six minutes.

As Steve Mosko, the president of Sony Television, described it, “So in ‘Charlie Angels,’ they have a meeting, Charlie’s on the intercom telling them what the assignment is, there’s a couple of fights, and then a chase, and they catch the bad guy. Then they’re back home wrapping it up.”

“T. J. Hooker,” an especially formulaic cop show from the early 1980s, can be seen in short bursts of action as William Shatner interrogates suspects, fires shots and chases bad guys. “Shatner is just hilarious,” Mr. Mosko said.

That sums up the main aim of the minisodes. Nobody expects these shows to captivate anyone with their exciting plotlines, writing or ageless acting. “It’s really campy and fun,” Mr. Mosko said.

What he would like it to be as well is lucrative. Like other holders of vast libraries of filmed entertainment, Sony Television has been seeking ways to squeeze new value out of old assets."

I guess if you can’t beat ’em, join ’em. Another way of looking at it might be "Garbage in, garbage out."