4 posts tagged “iptv”
If it is true that broadcast networks are becoming just another set of pipes for content, then it follows that they could very well lose their traditional centrality in determining what content gets made. Advertisers will start to want to buy content directly or to make their own. Producers will want a way to tap advertising dollars.
In this environment it seems to me that there is an opportunity to create a marketplace for advertisers to deal directly with producers.Obviously these relationships can and will occur anyway. However just as there is a difference between having a garage sale and using Ebay, there would be an advantage to aggregating those who want to produce content and those who want to buy content.
The ideal would combine the auction/payment mechanics of ebay or adwords with advanced metadata customised to fit the content industry. Advertisers would be able to use this metadata to match up content with what they are trying to sell. Producers could look for opportunities to marry a project to a certain symbiotic brand.
As mentioned below, the system would not lock any party into any preset distribution platform or advertising technique. The producers of LOST could sell a watermark in the first episode to one company, top and tail to another, product placement to a third, then distribute it with the Sunday paper on DVD. The second episode could have a different mix of advertising and be an internet download. These decisions may be strategic blunders - the point is that the system itself would need to be flexible enough to let the market work out how best to proceed.
For the advertisers the advantages would be:
- Cost - no need to pay huge premiums to the networks. International competition among producers who want to build a show/project for you.
- Creativity and flexibility - talk directly to the producers about how the advertising should be incorporated. Alternately, use powerful search tools to wade through the thousands of offerings by demographic, popularity, production team, to find the right match for your product.
- Data - know exactly who is watching your shows, how many times and what other things they like.
- Funding - advertisers looking to get creative means more projects or more opportunity for support of something you're already doing.
- Control - give up as much or as little control to advertisers as you want.
- Access - at present funding is hard to get and controlled by a coterie of 'seasoned' producers. If everyone is on a level playing field the best idea and best team will win.
If my last two posts are on the money, it follows that some real opportunities exist in this space. For one thing, there should be an expansion of content production as advertisers wake up to the fact that they can make entire shows for the cost of 30sec ads. But that's just production - what excites me is the need for a marketplace. Traditionally delegates from channels have gone to XXXX and made bids for the rights to shows under YYYY. If the aforementioned changes continue, this sheltered world is about to be blown right open.
What will be needed is a marketplace where disparate companies can come together and bid for the rights to content. There needs to be a mechanism that brings producers together with advertisers. The idea is for advertisers to be able to make offers right alongside the networks both for shows and for 'pilots' or ideas for shows. So Myer could buy Housewives, Coke could bid on the pilot of the next show from the creator of the OC. The market would work both ways - Ferrari could put up its need for a car enthusiast show, and invite tenders/pilots from seasoned producers.
Such a system would need to embrace regional controls - not to create unwanted distortions but to increase efficiency - there is no point in a purely regional player like Myer buying eyeballs in the US. However, the marketplace would be agnostic about the underlying technology of distribution - if an advertiser wanted to distribute over the internet, DVD, flash drives, mobile phones, or even by buying time on a network, this would become a part of the negotiation.
A lot needs to happen for this to become a reality. For one thing, BitTorrent-type downloading needs to become much simpler. iTunes is showing how easy the interface should be for the end user - if it is anything harder than pressing 'subscribe' or 'download' it is too hard. The living room also needs to be colonised. It needs to be as easy to sit down in front of a Myer sponsored-internet downloaded show as it is to watch the footy. This is because the value proposition will not be as good for advertisers until all content is on an equal footing. Once these obstacles are overcome, piracy will cease to be as much of a concern (at least for advertiser supported content) because the shows will be free and much more convenient to access.
As technology provides new platforms for video distribution, advertisers should start to ask the same question - why does sending my data over these (broadcast) pipes cost so much more than these other (internet, DVD, etc) pipes? In a way, channels 7,9, and 10 are a lot like the mobile phone operators, in that their market position allows them to charge premiums (in this case for advertising) because up until now they have been the only game in town. New platforms will allow advertisers to think strategically about where they put their money:
$XXXXX = the Australian broadcasting rights to a season of a prime time show.
$XXXXXXX = how much the show brings in from advertising per season.
$XXXXXXX = Unilever advertising spend (per year).
New strategies may involve buying the rights to a show and distributing it yourself. Myer could buy the Australian rights to Desperate Housewives and distribute the show over the internet with just a Myer watermark and maybe a quick 'top and tail'. (See "Piracy is Good?" video) Johnson and Johnson (Clearasil) could buy Home and Away, chop it into segments and distribute it over mobile phones.
Alternately, advertisers may want to build their own show instead of an ad. Ferrari could build their own informational car show to appeal to enthusiasts.
These may be terrible ideas, but they illustrate the point that the market for content will go from being a simple linear chain in which channels buy shows and sell advertising space to a multi polar world in which different companies may invest in content for a multitude of different reasons and at varying price points.
It seems beyond obvious that many of the dynamics that have plagued the music industry in the transition from CDs to digital downloads are driving changes in the market for video. A lot has been made of technologies like BitTorrent which allow/require anyone to be a distributor as well as a consumer of content. At the very least, it is true that the technologies needed to produce content have become much cheaper. I tend to think video distribution still has some interface issues to overcome but certainly BitTorrent and H.264 video codecs show that the underlying technologies for cheap distribution exist. This is especially true if the distribution takes place 'in network' as service providers pay a lot more when data crosses over internet backbones.
As a result of these changes it is becoming rapidly apparent that advertising on broadcast television is overpriced. In a way, the situation is analogous to the price of an SMS message. SMS, which is just text, has less functionality than email and has got to be the most expensive form of data transfer on the planet.
SMS = $0.20
Email = $0.0001 (12GB = $70)
The premium probably stems from a lot of factors but at least one must be the small number of mobile phone carriers and networks. Within their walled garden, it made sense to charge as much as people would pay. However as users become more network savvy, it makes sense to ask the question - why does sending my data over these particular pipes cost so much more than these other pipes?
