New media for old
By Kate Bulkley
01 May 2006
Is the mobile phone the new TV remote control? Is the internet the new TV screen? Are video clips made by someone with a camcoder just as powerful in the new, community-oriented media world as the newest, high-cost drama series from the BBC?
The way people view media is changing, both in terms of how and where they consume it and what they expect it to be. This has repercussions for traditional business models. A net-based content maker told me recently that, in the internet world, it's not about the cost of production, it's about the value of the product. This seems to me to be a very prescient distinction and it has implications for how content is funded and sold.
It also turns the assumptions made by traditional media companies on their head. The top-down, big-budget productions funded and delivered by big media will continue but arguments are already raging about how much and how fast this traditional approach will wither in the face of what we still call "new media". New things are happening. From Amanda Congdon's comic, online news show rocketboom.com - made in a New York apartment on a miniscule budget - to video-sharing site Yootube.com, where anyone is invited to "broadcast yourself", this is where all the action is, even if the revenues are notable by their absence.
The change is reflected in the success of new distribution channels. About half of Apple's overall revenue came from its music business in the second quarter, including sales of iPods, songs from the iTunes Music Store and other related products. And according to research from Fathom Partners, 12m iPod videos had been downloaded by the end of February 2006. What sort of content will people consume in this way? Music videos are the perfect mix of music, mobility and video, perhaps followed by comedy and cut-down versions of popular TV shows. Will people download an hour-long, costume drama onto their 2.5-inch portable TV screens? Mostly not. But content is being designed that works well on small screens and that consumers will be willing to pay for, either by watching an advertisement or paying a micro-fee.
The net is clearly growing in importance as a video distribution tool. In the last few months, BBC Worldwide has signed broadband VOD deals with leading ISPs including T-Online, Versatel in Holland, EBismedia in Italy and Telefónica in Spain. These are all countries where TV rights to much of the same programming is already licensed to TV companies. So what will be the effect on broadcasters of having these same shows available online and under another brand?
Channel 4 in the UK sees the threat to its TV brand and has decided to make broadband a key part of its strategy, signing an exclusive deal for ABC hit series Lost and Desperate Housewives. The shows will be made available from a Channel 4-branded website for £0.99 (€1.44) per 24-hour-view, available 14 days after the TV broadcast.
The BBC is also moving into broadband distribution itself. In April the BBC unveiled its "creative futures" plan that includes broadband websites, continuous news coverage to all devices (TV, radio, broadband and mobile) the launch of a VOD player and a commitment to develop "360° cross-platform content". The 5,000-person, four-month trial in late 2005 of the VOD service, recently renamed the BBC iPlayer, proved that on-demand increases the amount of 'TV' people will watch in the evening. The BBC found that the iPlayer extended the prime time window with high usage between 22:00-23:00. Most of the triallists (77%) used the iPlayer as a catch-up tool for programmes they had missed, with 66% using it to watch programmes at a "more convenient time".
Of course the BBC content is free to licence-fee payers, a model that may be harder to sustain in a not-to-distant future when a large number of people may not even own a TV. But the trends toward '360°' and media made by users will continue. In this environment, traditional advertising models are changing to accommodate new devices and new demands. The beauty of the new media world is that on-demand access means that no one's appetite need be ignored. On-demand libraries, such as Amazon's, allow all tastes to be catered to 24/7. The business models for that may seem to be shakier - drawing money from more players over longer time periods - than the traditional ones, but the reach of content is extended to far more potential consumers for a much longer time. This "long tail" business model, combined with the notion that the value is in the usage, not the cost of the original production, is the new media mantra and one that traditional media players are beginning to understand as well.