The global video market adds up to $350B, including industries such as theatrical film, retail purchase/rental, and cable and satellite subscriptions. At Spring 2006 VON, Jeremy Allaire of Brightcove explored how the Internet is transforming TV content distribution:
Allaire sees real physical limitations to the film and television industry. Not only the number of theatres that can support studio ouput, but also the limitations of physical industry. There's a scarcity of spectrum in broadcast and cable, a scarcity of provisioned devices, and the scarcity created by closed or centralized cable system architectures.
This theme of scarcity extends to content, despite the overage of it. Allaire believes that consumer discovery is limited by antiquated cable systems, limited browsing in retail environments, and mainstream advertising and marketing. Word-of-mouth, on the other hand, is the most powerful means of discovery in video distribution.
The vast majority of content on television is not produced by the company marketing or distributing it. Channels are brand marketing wrappers around syndicated content, and must also take on the heavy lifting of both geographical distribution and consumer device placement. The content producer is also limited under this scenario. They have just two choices: find a packager to finance, market, and distribute content, or market and sell their own content. Either process is long and cumbersome.
The content consumer typically has no awareness of the content producer, much less a relationship with the content producer. Allaire outlines the following value chain for producers:
- Identify a content area of interest
- Fund a distributor that matches that content domain
- Convince a cable network to funance series production
- Cable network gets carriage agreements geographically
- Consumers find the network
- Consumer discovers the content offers within the channel
Under this value chain, the economics are a huge hurdle to new channels finding an audience. Networks are expensive to launch (minimum $100M), signing up distributors is competitive, and audience reach is limited by programming guide placement.
Allaire sees the promise of Internet television in its open distribution mechanisms, and in its support for consumer choice. Open publishing and search make it possible for consumers to discover what's meaningful for them on the Web, and Internet TV can mirror this dynamic. Barrio305 was my favorite example from several Internet TV sites that Allaire shared - it was a great showcase for how a content creator could integrate their own programming into an overall themed site, and it allowed for some syndicated items. (I'm also happy to give the Miami shoutout, since I am a South Florida native.) Brightcove is trying to build Internet television businesses, and Allaire is clearly the chief evangelist.
Producers and individual creators are pushing rich media content onto broadband channels. This started on destination sites and Allaire's next steps for syndication would include web portals, destination sites, web affiliates, and syndication marketplaces.
If Allaire is right, we'll see this first take off on web affiliates - they seem ripe for leverage, given how the blogosphere functions. In the blogosphere, viral distribution of user-created content is neatly combined with RSS, and other better-mousetrap means of content discovery. If we move this to video programming, we'll all find our own Digital Life or Ultimate Joe.
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