Apr 1, 2014

The Spotifyization of Television: Towards A Newer, Better Business Model


In the broad curve of technological change, the music industry has, for better and for worse, always been a few years ahead of the television industry. And while the very different business models between the two industries translates to very different disruption models, if you want to see where the future of television will net out, you need to look no further than Spotify.

Spotify provides the answer to the question as to how we’re going to be watching TV: will everything be on demand, with viewers sifting through a huge catalog of shows to find something to watch that night. Or will there still be linear TV, where all the viewer is required to do is hit the “on” button and sink back on the couch.

The answer, judging from the success of Spotify and similar services, is both.

Spotify works because it solves all of the various use case scenarios its audience might have.

If you feel like listening to a specific song, Spotify lets you do that, even providing alternate and cover versions.

Feel like listening to a playlist you’ve made yourself, the latter-day version of the mixtape? You can do that too.

Have a friend with really great taste in music and want to listen to their playlists? All you need to do is subscribe— the latter day version of the gifted mixtape.

And finally, if you just want someone else to take over the controls, Spotify provides a variety of curated “radio stations” either through the app or via third party providers like SoundCloud and Rolling Stone.

How does this translate for television?

So if we look at how this plays out in television, we’ll soon see a very similar array of options.

1. Video on Demand (VoD)
 If there’s a particular show or movie you want to watch, you’ll be able to do a quick search and call it up. This will also allow for binge viewing, as you’ll be able to watch an entire season at once or just the 4 episodes that you missed. VOD viewing can be a quick half hour surgical strike, or a long evening of catch-up— whatever suits your mood.

2. Playlists
  Viewers will have their own playlists of TV series they are in the midst of watching, movies they’ve flagged for future viewing and/or repeats of their favorite shows. These will function like music playlists - one show plays right after the next, so there’s no need to go back to the program guide after every episode.

3. Curated Playlists
  These can be from friends or from professional curators and may be around a specific topic: best crime dramas, best of CSI, best of 90s sitcoms— the possibilities are endless. Viewers can watch the entire playlist at once or just work their way through the list one at a time.

4. Linear Stations  
These will function similar to the “radio” stations on music services today and will in large part be curated by today’s cable and broadcast networks. They will have original, first-run content that’s aired at a specific day and time. Users will be able to personalize them by, say, emphasizing certain types of content (e.g. comedies), but some version of prime time will remain in effect because there’s still a lot of love for a shared communal live viewing experience beyond just news and sports.

5. Personalized Linear Stations These will be the oft-cited “Pandora for TV” - the viewer inputs some of the shows or types of shows they like and an algorithm puts together a personalized linear station for them, a combination of live broadcast, VoD and non-broadcast video from alternative providers. Users will be able to set up linear stations for short-form content, long-form content or both.

6. Personalized Accounts While Spotify’s pay service is still in its nascency, we can see the outlines of how a system works where users are charged according to the number of devices they wish to access and the number of individual users they want on each account. This is the wave of the future and while it may not result in any significant financial savings for consumers, it will (finally) enable the roll out of true TV Everywhere.

As with the current music services, how you watch will vary depending on your mood, your time commitment. even your personality. There are people who love the randomness of Pandora, others who want to control their entire listening experience and every variation in between. TV will work the same way and truth is, many of us are already watching it this way: bingeing on series via VOD or streaming services like Amazon, watching live sporting events or NBC’s Thursday night line-up, supplementing our pay TV subscriptions with Netflix, Hulu and other streaming services.

Personalization and Monetization

Personalization will be the buzzword as everyone will have their own TV service that travels with them no matter what device they’re watching on. Though here again, there may be playlists or stations viewers associate with their mobile phones or tablets, given the environment they’re in when they watch on their phone (out of home, on a train, etc.) Recommendations will be key in this new world too, as viewers are looking for new shows to add to existing playlists, new playlists to add to their rotation and new shows on linear channels that become “appointment TV” for them.

Monetization will be key to enabling this new world and the solution is likely to come in two forms: (a) dynamically inserted ad units that run using algorithms that take into account time of day, location, what show is being watched and the user’s prior behavior and (b) straight-up fees which will enable a viewer to watch an entire series without commercial interruption or to access special super-premium content that’s above and beyond the usual fare.

The operators who run these multi-platform systems will differentiate themselves the same way the music services currently do: variations in the interface and user experience. To wit, the hand-curated playlists on the Beat Music service is something that could easily be adapted to television and give whoever offered them a competitive advantage.

The future of television isn’t far off, but unlike the music industry, it’s not going to change overnight. There are too many legal restrictions, too many complicated rights issues, too much legacy equipment in the field to see the sort of rapid metamorphosis we’ve seen in other media industries.

It will change though and the challenge now is to actually build it.


Mar 7, 2014

Short Video Clips From Digital Hollywood Panel

I was on a panel this week at Digital Hollywood on 2nd Screen, and Sirpa Aggarwal from Arktan was kind enough to supply me with two nicely edited video clips.

Also featured in the video are Rahul Aggarwal from Arktan, Marc Scarpa from Simplynew and Amaury Blondet from Discovery.






Mar 5, 2014

Monopoly Is Not Just A Board Game


Late last year, I wrote about rumors I was hearing that GAFA (Google/Apple/Facebook/Amazon) had come to the conclusion that the only way they were going to be players in the TV industry was to control their own chunk of broadband access. The thought was, why would NBC sell them rights to content given that the deal would only serve to annoy Comcast or whichever MVPD owned the broadband connection to the end user’s TV. And the way they were going to get their piece of the broadband pie was by convincing Congress that the monopoly the MVPDs had over broadband access in the US was a grave threat to the principle of net neutrality and thus a threat to free enterprise and everything else the American people held near and dear.

So imagine their delight when the confluence of events over the past month has set that very chain reaction in motion. With nary a cent spent on L Street lobbyists.

First, the DC District Court rules in favor of Verizon, declaring the FCC’s current net neutrality rules to be in violation of the Communications Act. And while the actual takeaway was just that the FCC needed to rewrite the rule, some of the mainstream media—and many of those on social media-- seemed to think the court had effectively nullified the entire principle of net neutrality and was giving the MVPDs carte blanche to overcharge innocent Netflix users.

Then came the Comcast/Time Warner Cable merger, which would create a cable behemoth capable of reaching 57% of the U.S. population. And even though (or perhaps because) Comcast never competed with Time Warner for broadband subscribers, the red flags went up again: Comcast was going to control broadband access in the US. They could change the fee structure at will, especially now that net neutrality was out of the picture.

And the drumbeat grew louder still.

The final twist was the announcement last week that Comcast had worked out a commercial interconnect agreement, which, as analyst Dan Rayburn convincingly explained, was a paid peering agreement that had nothing to do with net neutrality. This troublesome fact did not seem to deter many observers who saw Netflix paying Comcast for delivery and declared net neutrality cooked and done.

The panic over net neutrality plays into the current national gestalt that the rich and powerful are happily screwing over the 99% and the government is doing nothing about it. You can see it in everything from Bill de Blasio’s runaway victory in the NYC mayoral election to protesters harassing Google busses in San Francisco. And so the dawning realization that broadband access is, at best, an oligopoly, at worst a monopoly, has now got the public’s attention. Fear that the formerly open internet will suddenly be available only to the highest bidder has left many scratching their heads and wondering why the government doesn’t do something about something so clearly un-American.

There are actually many good reasons for the government to pay attention to broadband. A free national WiFi network would be a huge boon to the economy and put the US way ahead of much of the rest of the world. Unfortunately the same government who built the Obamacare website would be in charge of building this free national WiFi, so be careful what you wish for.

Which brings up plan B, the one that GAFA is allegedly hoping comes to pass: the government decides that Broadband circa 2014 is a lot like Telephony circa 1982 and brings an antitrust suit (or some variation thereof) against the MVPDs and breaks up the monopoly. It’s something that’s easier said than done: would new competitors be required to lay down their own cable? Would existing cable be available by all competitors who’d compete on price and service alone? What about the fiber optic cable that Verizon and (recently) Google have installed? And will all this be obsolete because 5G mobile signals will be strong enough to handle video and data traffic.

Regardless of what happens, the mainstream media has gotten the scent of blood and stories like Comcast/Netflix are going to be hitting the news on a more regular basis as carriers work out deals with content providers. What happens as the sharks circle around is anyone’s guess, but watch as politicians on both the left and the right stake out positions on this to pander to voters who are generally fed up with the current state of the TV industry. Or at least the size of their monthly bills.


Mar 2, 2014

Ellen's Selfie: Whose Win Is It?

So Ellen’s Twitter selfie (taken by Bradley Cooper) has broken all sorts of retweet records and the usual suspects are claiming a win for Samsung.

But is it? To quote my friend Todd Walker (on Twitter) “the brand attached to that selfie is Twitter. Not one person's gonna remember what phone was used.”

Bingo.

The brands that will garner a win from this are (in order) Twitter, the Oscars, Ellen, Bradley Cooper. Meryl Streep, Brad Pitt, Julia Roberts, Angelina Jolie, Jennifer Lawrence, and then, maybe, Samsung.

USA Today’s insta-headline reads Ellen, Brad, Julia, Meryl Snap Starriest-Ever Selfie and the article doesn’t even mention Samsung. Ditto the Wall Street Journal's Ellen DeGeneres’s Epic Oscar Selfie Becomes Most Retweeted Tweet

So step one for the brand would be to get their PR people in gear and make sure they're attached to the moment.

Is this a replicable moment that proves the overall viability of social TV? Not really. The confluence of a widely viewed live broadcast (e.g. no time zone issues) with celebrity presence and a Twitter-heavy audience makes it more of a one-trick pony that's a great example of the power of real time marketing and the speed at which something can go viral.


Which is not to say it’s not a win for Samsung. It’s a great idea and far more powerful and buzzworthy than any of the TV spots on the show. But without the direct brand tie-in (and competition from Twitter and celebrity brands, it's not the win 1 million plus retweets would make it seem it is.


Feb 27, 2014

WhatsApp and the 19 Billion Reasons UX Matters



One of the recurring themes you hear from naysayers who are unhappy with Facebook’s $19 billion purchase of WhatsApp is that it does the exact same thing as any number of messaging apps. Which is true. It just does it better and easier.

Take Skype, which is often held up as an app with even more functionality than WhatsApp: it allows texting, talking, and video chatting. But Skype requires you to sign up. It puts the onus of finding friends on you. And as any Skype user can attest, it’s buggy: IMs show up two days after they were sent. Friends online status get updated seemingly randomly with intrusive pop-up messages. And, the interface is often counterintuitive.

WhatsApp may not be breakthrough, but it’s simple and if you look at its core user base, you’ll understand why. WhatsApp didn’t break through with affluent American teenagers, they of the unlimited texting plans and unlimited iPhones— it got its traction overseas, with people whose friends didn’t always have smartphones, who had to pay for each text message, more for an MMS. In that sense, it’s similar to the Chinese WeChat, which is designed to work as well on an older Android technology as it is on the latest version of iOS. The recently announced addition of voice calls should play into that strategy too, provided it works as simply and easily as the chat app. The 40 million WhatsApp users in India and the 38 million in Brazil don’t have the same access to unlimited calling plans the way their American peers do. So a simple way to initiate and receive voice calls that doesn’t feel overly corporate (Skype) should be right in WhatsApp’s wheelhouse.

And while we’re riffing on WhatsApp, let’s not forget that a chat app— of any sort— is fundamentally different than Facebook, which bears a stronger resemblance to AOL circa 1998 than to any of today’s new crop of apps. Facebook allows users to spend hours doing anything but communicating with each other: playing CandyCrush, reading articles, stalking old girlfriends. It’s a win for Facebook because they get to serve up countless ads during your hours-long gaming and stalking visit and it gives people who aren't inherently social a reason to visit the app.

If you’re going to WhatsApp, on the other hand, the odds are high you’re going to communicate with someone. Not browse or dilly dally.

So if Facebook is smart, they’ll keep WhatsApp separate. And just be happy knowing that the Facebook brand gives users the best omnivore app (in the original Facebook) the best photo app (Instagram) and now the best messaging app. As companies from P&G to Disney can attest, there’s nothing wrong with that strategy.


Feb 14, 2014

A Universe Of Their Own: The Real Fallout From The Time-Warner/Comcast Merger


One of the things that got lost in the news about the Time-Warner/Comcast merger was that the day before, there had been no small amount of buzz around an alleged Apple/Time Warner deal where Time Warner was going to allow Apple to create an interface for Time Warner Cable that lived on the Apple TV box and that supposedly the only thing holding it up was the fact that Apple wanted users to be able to authenticate with their Apple ID rather than with their TimeWarner ID.

It was going to be a big step forward for Apple and for the Apple TV device in general, particular since that device has been getting a major ass-whupping from Roku. To the point where, as once tech blog articles would refer to “streaming devices like Apple TV and Roku” they now seem to default to “streaming devices like Roku.”

The merger would seem to put as end to that, for as tech writer Jessica Lessin noted in a tweet, “(Comcast CEO) Brian Roberts is more likely to win a gold medal than do a deal with Apple right now.”

It’s not that Comcast is anti-innovation— if anything, they tend to lead the industry. It’s just that they like to do things themselves and that doesn’t leave a whole lot of room for Apple or anyone else.

Take set top boxes: while the rest of the industry regards them as something akin to radioactive waste, what with their high upfront costs, $250 truck roll costs, unreliable installer problems and the like, Comcast is doubling down on set top boxes, actually selling their X1 and X2 platforms (and boxes) to competitors. In Comcast’s view, the set top box is their way to control their ecosystem, and with something approaching a national presence, they are in a unique position to do so. That’s bad news for Apple and any other company who was banking on creating a unique TV platform that worked regardless of which MVPDs content it was displaying.

The same DIY philosophy is behind Comcast’s Xfinity Streampix product, which is positioned as a direct competitor to Netflix and Amazon. Streampix allows Comcast to make use of their extensive video library and access to new movies. But more than that, it allows them to circumvent some net neutrality practices since, for example, the bandwidth used when streaming movies via Streampix does not count towards the amount of bandwidth that certain Comcast customers are allowed before caps set in. And here again, the sheer size of the new Comcast will make this significant and may make Streampix a viable rival.

In both instances, the Comcast-Time Warner merger is a big step backwards for third parties who have been trying to/hoping to disrupt the pay TV landscape. Whether they’ll be able to recover from that, to rally other MVPDs together to present an alternate vision of what TV looks like, remains to be seen.


Feb 12, 2014

Are DVRs Doomed?



While much has been made lately over cloud-based DVR services — from Comcast’s Boston launch to Aereo— there’s another line of thinking that says the DVR may soon be heading the way of the 8-track.

It’s killer? Non-skippable VOD.

While consumers may love their DVRs, no one on the industry side has ever been particularly fond of them. DVRs allow viewers to miss live broadcasts and, more importantly, skip commercials. And even if they’re not skipping commercials, they’re often watching ones that are out of date, their offers having expired, the movie no longer in theaters.

As the networks have come to terms with the whole notion of binge-viewing and making everything available on VOD pretty much immediately, they’ve also come to realize the financial advantage VOD has over DVR.

With VOD, the networks control the interaction. With DVR, it’s the consumer. That means the networks can ensure that their VOD programming has non-skippable commercial slots built into it. And that allows them to continue the current ad-supported television model, possibly even growing it, as VOD also offers the opportunity for dynamic ad insertion— placing current ads in those non-skippable slots, perhaps based on what is known about the consumer, their buying habits, their taste in shows. Which means those VOD slots can become even more valuable than live ones.


And so look to the networks to push the MVPDs who will gladly stick a fork in the DVR. Something they can easily do because other than TiVo, there just aren’t that many independent DVR manufacturers. Most people have DVR through their cable box and if the MVPDs want to kill it off, they pretty much can. Which won’t be that big a deal for consumers if every show is instantly available on VOD. In fact, most people might find VOD a more convenient set-up as they’ll no longer have to worry about recording things or whether the football game ran longer than it was supposed to and knocked everything off schedule.

The catch, of course, is that the networks can’t get too greedy. If they stick to a couple of Hulu-esque 60 or 90 second commercial pods, they will be fine and consumers won’t get all that hot and bothered about the commercial breaks. But if they get greedy and insist on 8 minutes worth of commercials on every 30 minute prime-time show, then I’d look to buy stock in TiVo and anyone else who still makes a DVR.

It’s a tough call too, because there’s such a built-in bias towards greed, towards discounting what the consumer wants.

Once again, time will tell.



Feb 11, 2014

Interviewed on CBC TV About The Future of Television

I was interviewed the other day by Aaron Saltzman from the CBC (Canadian Broadcasting Corporation) about changes to the TV industry. The story ran on Canada's national news last night.
(My bit is at 00:54)