Aug 31, 2011

Taking Control: Miramax Shakes Up Social TV

One of the most revolutionary-- and terrifying if you’re a cable operator-- developments in Social TV was announced just last week: Miramax Studios launched its own Facebook/iPad/GoogleTV app. 

The app gives you access to some of Miramax’s greatest hits - Pulp Fiction, Good Will Hunting - on your TV, PC and iPad. And while payment is currently only via Facebook credits, that’s likely to change soon.

The app is still in beta, but if it succeeds, it may well change the way video content is distributed, making it more like print media, where the content creator is also the content distributor. (e.g. The New York Times creates content and then sells it directly to consumers in both digital and analog form.)

In many ways, this feels like a return to TV’s roots: TV was originally free, supported by advertisers, and for the price of a rabbit ear antenna you could watch all the broadcast networks in your area. The networks created their own entertainment, news and sports content, which was delivered directly to consumers, with no middleman involved.

The advent of cable TV in the late 70s and early 80s brought in the concept of a middleman: you got vastly improved reception and a wider variety of stations, but you had to pay the cable operator to watch what had previously been free.

The difference in quality between cable and over-the-air broadcasts was vast enough that most Americans gladly parted with the $300 - 600 a year the cable operators charged them.
While broadband video content has been available since the early days of the internet, it’s only been in the past year or so that the quality of internet-based TV (IPTV and OTT) has improved to the point where the difference between broadband and cable is negligible, particularly around long-form, high production value content. So why not sell your own programming directly to consumers again?

There are a number of reasons, actually, the main one being the cost of driving consumers to your site if you lack the name recognition of a  Miramax and their first-mover advantage.

But the point is you can. And that vastly changes the relationship between the middleman and the content provider, giving the latter much more leverage over the relationship.

Next up, we’ll look at why content creators may want to create bespoke second screen experiences for their fans, something that either sits on top of the EPG or exists as its own separate entity.

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