How much does online video have in common with online music...?
Other than the fact that both mediums consist of a personal, digital media file that can be shared or purchased...not much.
It's no secret that the music industry missed the boat with online commerce as it focused its efforts on copywriter infringement and peer to peer file-sharing with the likes of Napster - so does the same fate await online video?
There are two major differentiators when it comes to discussing these two mediums and their respective business models:
1. Music is listened to over and over. We listen to music over and over while we are usually doing something else. Music is short in format and keeps us company in the background unlike video that you need to focus on. Not that we don't like to buy movies and keep them to watch over again if we love them, but the difference is fundamental. That is why we care about ownership of one more than the other.
2. Music has always been purchased, never rented or listened to for free along with a sponsor message like video. Yes, yes, I know some of you still 'download' music for free, but that is not the point. Anyway, try that with a video file that is over 1 gig.
These two fundamental differences will essentially dictate the commerce model for video moving forward.
In other words, we will prefer to watch video content for free along with a sponsor message like we have been used to. Especially if we only plan on seeing the show once - so why own it? With video, we will also gravitate to rentals as we do now with DVD and VOD once the online technology for this improves. We will still buy movies and TV shows, but not like we do music.
So, what does this mean for the industry? For one thing, Apple better get their act together (I own the stock :-) and figure out a rental model soon - before Netflix or one of the other players improves their interface along with download & compression technologies. As for the studios and the Networks, although it took them a little bit of time to catch onto things, they are well on board with streaming their popular shows for free online - complete with sponsor messages. They will most likely keep the advertising/sponsorship model to themselves and NOT share that with the Netflix and Apples of the world. The Networks will most likely also sell their content and compete with Apple as they already do now in some form.
The good news for video is that the model is healthy and booming, especially for young, aspiring filmmakers who really own the new medium. There will also be entirely new art forms invented for the medium which will give birth to new stars and expressions we have yet to realize.
The music industry may even learn a thing or two...
-----
The truth is that I was scooped on this one by Shelly Palmer, but I started writing this a few weeks back - I swear! Hopefully my perspective adds a thing or two.
I recently met Shelly Palmer, the Chairman of the Advanced Media Committee for the Emmy's who had this and more to share on his blog at: http://advancedmediacommittee.typepad.com/emmyadvancedmedia/
Monday, October 23, 2006
Friday, October 06, 2006
Will consumers accept marketing on mobile devices...
...or will they be willing to pay for content, or want it at all?
Marketers are obviously hoping that we will be willing to accept some form of advertising on our phones. In the United States, the very thought of getting advertising on our handsets is appaling to us. But what if the content was not advertising per se, but sponsored content that we subscribed to? What if a portion of our long distance or roaming calls were free and paid for by a sponsor?
For the most part, mobile content is new to us in the Unites States. Only a very small percentage of the handsets can even play video streams, but that is changing fast. In Asia, watching video content is commonplace. Technology aside, large cultural differences make it difficult to compare the success Asia has seen with mobile content in the United States. For one thing, in Asia, people's cell phones are often the ONLY device they have to communicate with. Unlike Europe or the U.S., most users do not have a computer and rely solely on their phones for everything.
In these countries, subscribing to content is commonplace and a large revenue source for the providers who face continuing competitive pressure on the price of regular voice and data services.
So where is it going...? It is clear that while the U.S. may be behind, the world is watching to see if our proposed ad model will work. Logic sais it will as we accept sponsored programming in other forms of media. But not so fast, phones are different. For one thing, our time is very limited with this device and even if it allows us to get content for free, do we have enough idle time to watch that commercial or sponsored message too? My guess is not. Which leads me to believe the rest of the word has it right on this device and we are barking up the wrong tree.
It does not mean that sponsors cannot participate. Carrier services are a commodity. This is clear by constant price wars and ill-backed claims of better networks. Proprietary content may be the only thing to separate one carrier from another in the future.
ESPN actually had it right despite their mobile phone failure. If I am a sports nut, I might just gravitate to one carrier over another for the best sports content. The mistake ESPN made was trying to actually get into the phone business rather than having their content exclusively integrated with one carrier.
Brands need to find ways to form relationships with consumers in inventive ways on these devices. Providers need to work with brands and content creators to secure proprietary content for their networks or face being placed in the same commoditized marketplace they are in now. Both need to bring us content of value, or we won't be willing to pay for it.
Marketers are obviously hoping that we will be willing to accept some form of advertising on our phones. In the United States, the very thought of getting advertising on our handsets is appaling to us. But what if the content was not advertising per se, but sponsored content that we subscribed to? What if a portion of our long distance or roaming calls were free and paid for by a sponsor?
For the most part, mobile content is new to us in the Unites States. Only a very small percentage of the handsets can even play video streams, but that is changing fast. In Asia, watching video content is commonplace. Technology aside, large cultural differences make it difficult to compare the success Asia has seen with mobile content in the United States. For one thing, in Asia, people's cell phones are often the ONLY device they have to communicate with. Unlike Europe or the U.S., most users do not have a computer and rely solely on their phones for everything.
In these countries, subscribing to content is commonplace and a large revenue source for the providers who face continuing competitive pressure on the price of regular voice and data services.
So where is it going...? It is clear that while the U.S. may be behind, the world is watching to see if our proposed ad model will work. Logic sais it will as we accept sponsored programming in other forms of media. But not so fast, phones are different. For one thing, our time is very limited with this device and even if it allows us to get content for free, do we have enough idle time to watch that commercial or sponsored message too? My guess is not. Which leads me to believe the rest of the word has it right on this device and we are barking up the wrong tree.
It does not mean that sponsors cannot participate. Carrier services are a commodity. This is clear by constant price wars and ill-backed claims of better networks. Proprietary content may be the only thing to separate one carrier from another in the future.
ESPN actually had it right despite their mobile phone failure. If I am a sports nut, I might just gravitate to one carrier over another for the best sports content. The mistake ESPN made was trying to actually get into the phone business rather than having their content exclusively integrated with one carrier.
Brands need to find ways to form relationships with consumers in inventive ways on these devices. Providers need to work with brands and content creators to secure proprietary content for their networks or face being placed in the same commoditized marketplace they are in now. Both need to bring us content of value, or we won't be willing to pay for it.
Subscribe to:
Posts (Atom)
Posts
