Curated by: Luigi Canali De Rossi

Wednesday, June 8, 2005

Big Media Overlooks Internet Television? BroadBand Week Reporting

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I am just out of my presentation panel at Broadband Week in Milan, and I am leaving with positive excitement about what I have seen and heard.


The event program, developed by digital communication and online marketing expert Maurizio Goetz, brought together the two key players of the revolution-in-the-making called digital television:
a) The large telcos and media producers that richly populate the Italian market (FastWeb, Berlusconi's own Mediaset, SkyTV, etc.) and which are, in their words and stats, among the world leadership in terms of content options offered in a multiplicity of formats and delivery models (satellite, digital terrestrial
TV, pay per view, video on demand and more),

b) The small, individual voices of micro-content producers and distributors as Bruno Pellegrini's BlogTV, my own TheWeblogProject and the highly disruptive commercial offering by Petra Bauersachs and Guido Ciburski with their fascinating Byte Tornado and Cybersky-TV products. (Byte Tornado is, from what I understand, an evolved version of BitTorrent which does away with P2P greatest limitations: you can't download more than you are also uploading. Their Cybersky-TV provides a P2P technology that allows near-real-time re-distribution of any TV channel with great ease and low-costs. Their small company (less than
10 people working in it) is already quoted in the German stock exchange and it has already run into the ire of local courts which have initially banned Cybersky-TV software use.)

From their rather formal presentations large media and telecom players have openly shown, as any competent observer would have expected, extreme prudence in defining the new marketplaces we are moving into and prefer to profile their offerings not as drastically different with the ones traditionally offered by satellite and cable TV providers elsewhere.

The interactive TV topic hasn't moved much from understanding the value of providing complementary information to any subject or content product being viewed, while overlooking that also this is part of the big movement from push media to information and personalized entertainment pull.
So it is good to see the big telco and digital media providers describe and profile such smart uses of the new media (interactive information provided via a return channel), while still using a V.90 56K modem integrated in the set-top box and apparently completely overlooking the infinite possible convergences with Web-based information and online services.

The big media view and desire is one of creating a dedicated platform, a multi-channel experience either characterized by the breadth of the content inventory available (as FastWeb wants to be) or by a supposed Premium experience made up of unique content that is delivered via pre-paid card or pay-per-view formats.

The one interesting item from the big media executives (Mr Parisse and Mr Catanzaro) was the FastWeb offering for a network virtual recorder. While also Guido Ciburski described a new online product having similar features, FastWeb new offering would allow, according to Stefano Parisse presentation, the full recording of any available content on their digital-distribution platform.

While the service may seem immediately appealing to the unscrutinizing consumer, I immediately felt surprised by the fact that a digital content media distributor would waste huge amounts of bandwidth and storage space for recording something already available in a recorded digital format.

Why not just bookmark it on your servers, I asked? In Parisse words and as I had suspected, it all boils down to supposed legal issues that according to the FastWeb executive would require such a virtual recording technology to be always user-initiated. It beats me as to what real difference this makes and as I insisted a little more in my inquiry as to why not making this more efficient, I was finally given comfort that in reality no true re-recording of the selected TV stream is ever done.

Go figure.

As a perfect example of the typical emerging IPTV player, FastWeb places on its own secure, fast digital network, content from others while literally "inventing" new models to charge for its use while limiting its potential re-distribution. Do you see how much the IPTV player or telecom-turned-into-digital-media- distributor wants to please and protect the traditional value of content as known until now?
These executives appeared yet unaware of the deeper changes taking place in the digital television panorama and not open to consider seriously the likelyhood that the overall marketplace is drastically changing its profile, in a way that requires not just the repackaging of traditional big media content in new formats, but rather a better understanding of the profound shifts from mass media to niche and user-generated media, the profound effects of the Long Tail and of the existance of disruptive new distribution technologies like P2P.

Let me explain: High-cost movie and TV production realities have demanded and rightly leveraged for decades a production and distribution system based on the economy of scarcity made possible by a delivery and distribution system which demanded large economies of scale to turn any profit in.
You would produce a film or TV show so that it would appeal to the largest number of viewers possible. Viewers are somehow "caged" into the viewing experience (and advertising interruptions) by the fact that delivery medium is time-bound and most often location-bound (home, bar, etc.). Viewers can attend their preferred content only at specific times and through dedicated devices (TV sets and movie theaters). The experience is made as standardized as possible for all viewers by providing one standardized viewing format and dedicated expensive equipment to produce it and broadcast/project it.

So, it does make a lot of sense, if you are only looking at the business side of things, that those who wish to turn a profit from such productions, vouch for the minimum common denominator: popular programming that can satisfy the greatest number of viewers while providing large number of eyeballs to deliver interruptive advertising to.

But take now this new scenario.

  • TV or movies need not be viewed anymore on a specific device or location. You can choose if to look at them on your Sony Personal Media Player, large flat computer screen, or on a projected 20-feet large wall display. Any of these approaches costs today less than a $ 1,000 to be owned.
  • TV and movies can be viewed at any time you want. You depend no more on an established programming schedule across a few major channels. All television content is disintermediated and made accessible any time the user wants to access it.
  • The user can truly select from an infinite selection of content, that integrates all of the traditional mainstream commercial offerings with the huge amount of broadcast archives, independent international movie productions, documentaries, art and educational programs created in the thousands each year.
  • An army of new, additional small producers of new media content realize the opportunity and start making their own news, drama, entertainment, investigations with prosumer-level hardware and software tools that are now accessible to anyone.
  • Infinite online storage space and unlimited distribution bandwidth become freely available to small, independent producers. Storing, archiving and delivering full quality productions of whatever genre has now a cost nearing zero.
  • New search, recommendation, reputation and affinity engines help viewers find and select any type of content they want very rapidly. Not only. They allow serendipitous discovery of similar content based on recommendations, user choices, category, age and a lot more. Something entirely unavailable today outside of Amazon and the new digital music libraries.
  • Internet bandwidth increases drastically bringing broadband access to millions of home users in Europe, North America, in many parts of Asia and in some rich regions of the Middle-East and South America.
  • New distribution technologies like P2P, BitTorrent, ByteTornado and others provide extremely efficient and very low-cost alternative to high-quality digital content distribution.

OK? Made a mental picture?

Would you in such scenario bet all of your content cards on traditional Hollywood-like content and low-quality entertainment TV as we have been seeing for decades?

Would you expect that the new disinitermediated viewer, who can watch anywhere, anytime the things she really likes, (and not only the ones made available in the provider programming) would keep choosing the exact same content and entertainment sources you big media have been offering until now?

The Amazon Long Tail data, and the living successful examples of iTunes, Rhapsody and Yahoo Music Unlimited are all based on the full awareness that once the long tail is accessible it become the most significant share of all revenue.

The data are there for everyone to see, and it is amazing how many media people are still completely clueless about such issues.

It is possible that from understanding early the true value and potential of this new paradigm of personalized media consumption, some of these large media and connectivity players could create a service that is not only profitable but which is also seen as ethical and socially useful.
If they will awake in time to take part of the great business opportunities offered by this new media revolution, it is something hard to say.

What I can say rather is that the blue buttoned guys were not there to listen to any of this.
After having made their show, they found it most appropriate to leave instead of listening and confronting themselves with other possible realities.

Good luck.


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posted by Robin Good on Wednesday, June 8 2005, updated on Tuesday, May 5 2015

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