Forget about Web 2.0, Internet TV is the next big thing!
In 2003 when the dot com bust was still in the air, it was hard for most people to imagine the next wave of Internet innovation but the signs were all over for those who wished to believe. While the much sought after killer application for broadband never made an appearance, broadband penetration kept growing and in the same time web advertisement was starting to make its comeback. During 2004 the trend was silently accelerating and gaining critical mass and in 2005 it was clear that these two trends are already powering the next Internet revolution - the Internet TV revolution.
While I am sure skeptics are still abundant, there are several indisputable phenomena in the market that make it clear that Internet TV is the next big thing, not web 2.0, not social networking, but Internet TV. You see most of the stuff deemed by people as the next great thing are in fact nothing but the means for the creation of the next big thing. This is true for many of the things people attribute to web 2.0 and it is true to social networking as well. These tools together with the adoption of broadband and the now proven ad-based revenue model for Internet content providers and Internet service providers are the enabler of the revolution. Yet I have to insist again that the revolution itself is not any of those elements, the revolution is as always a better way to do something or a way to do something that was not possible before. In this case we are talking about the delivery and consumption of audio and video content and we are about to list several trends that should convince you that this is where the real action is. All the things we mention are circumstancial since we want to avoid making this article another kind of a visionary analysis of the market but rather stick to the facts and let you be the judge.
While I am sure skeptics are still abundant, there are several indisputable phenomena in the market that make it clear that Internet TV is the next big thing, not web 2.0, not social networking, but Internet TV. You see most of the stuff deemed by people as the next great thing are in fact nothing but the means for the creation of the next big thing. This is true for many of the things people attribute to web 2.0 and it is true to social networking as well. These tools together with the adoption of broadband and the now proven ad-based revenue model for Internet content providers and Internet service providers are the enabler of the revolution. Yet I have to insist again that the revolution itself is not any of those elements, the revolution is as always a better way to do something or a way to do something that was not possible before. In this case we are talking about the delivery and consumption of audio and video content and we are about to list several trends that should convince you that this is where the real action is. All the things we mention are circumstancial since we want to avoid making this article another kind of a visionary analysis of the market but rather stick to the facts and let you be the judge.
- The .tv domain name; It is well known that domain names are a big business. In fact both Yahoo and Google are working with domainers, yes there is even a name for this profession and if you ask me since most of these people are mainly trading in domains, it is time to introduce the term domaineering. While this can be a subject for a separate post the important thing for now is that the .tv domain name is the hottest and most expensive one as indicated by the fact that Verisign has established the www.tv corporation to sell premium domain names for rediculously high amount of money and it looks like they are selling very well! Even non premium .tv domains names cannot be had for less than $30 while .com domains can be purchased for less than $10.
- Internet startups in this area are popping up every days and many VCs are adding partners to help them make investments in new media and Internet TV. There are so many new companies operating in this area that it is really a moot point to try and mention some, so we will just mention TVersity :)
- There us so much content and it is growing very fast. In the begining before the dot com bust everybody was doing Internet TV, but it was too early and no one wanted to watch those small talking thumbnails. During the downturn of the market most of this content disappeared since it was one of the first candidates for cutbacks. Then audio podcasts and later video podcasts, such as Rocketboom, have made their appearance and triggered a big change in the markt. In the same time some new content providers have emerged, realizing that there is a real ooprtunity here, comapnies like ManiaTV were trying to gain marketshare over the big names by being the first to market. Two things happened since then, some of the Indie guys have become mainstream and the traditional players have realized what they stand to loose and started to offer their own Internet content. MTV has launched Overdrive and Uber to undoubtedly maintain market share in light of the many new music Internet TV stations (like ManiaTv) that recently emerged. ABC is making its news available for free as podcasts, and many more names like HGTV, FoodTV, CBS, Reuters, AP have revamped their web TV offerings.
- Prmium Web TV content is becoming free and is supported by ads. CNN used to offer their content on the web only to Real superpass subscribers, but this is no longer the case and it has been free for several months now. The AOL Live 8 concert has attracted so many viewers and allowed AOL to generate so much revenue that the big guys got the message. The latest example is CBS, they used to offer NCAA games for subscribers only but have just recently decided to make it available for free. According to them:
"Already the advertising booked for the online product has exceeded the amount of subscriber revenue amassed last year, said Joe Ferreira, the executive producer of CBS Sportsline. "We felt the free model would increase the number of eyeballs seeing the sponsors' messages," he said. Commercials different from those on CBS will be inserted into the streamed games." - Media coverage of Internet TV related stuff is at all times high; The NYTimes has probably been issuesing about four to five new articles related to Internet TV every week. Sometimes they had more than one per day. The latest one at the time of this writing is N.C.A.A. Fans Courted With Free Webcasts. And here is a quote:"CBS switched to the free policy because Internet broadband capabilities have improved, demand among users for video products is growing and advertisers are more willing than ever to support the medium."
- The big names in tech are very active in this area. Apple with Front Row and with the Mac Mini becoming a wireless media player, Microsoft reacting to Front Row by making media center an integral part of Vista and not a separate SKU, Intel with viiv, and of-course Cisco with the acquisitions of Liniksys, Kiss and Scientific Atlanta. Finally Amazon is about to enter the downloads market and offer a free or semi-free player.
- The traditional media companies feel threatened and show initial signs of panic. Their good old business models are about to rendered irrelvant and as we all know if the rich old companies can't beat the the fresh young ones in the market then they simply move the battle to the courtroom. The recent incident where NBC requested YouTube to remove the funny and successful SNL clip is just one example. In the same time they try to buy anything they can just to make sure they are not left behind. NBC acquired iVillage and News Corp acquired Myspace.
- The traditional media delivery companies feel threatened and look for remedies. Of-course Telco TV (AKA IPTV) is one obvious threat but the real smart ones know that cable, satelite and telco TV are all threatened by Internet TV and therefore start to re-invent themselves for this new age. Perhaps, the best example here is DirectTV's decision to offer their content on Media Center without a set top box.
- Portals and Web services are courting the living room. From Yahoo, through MSN and google, it seems like everyone is working hard on creating an offering that goes beyond the PC. This of-course includes on the go services, and as one could see in CES of this year, a 10 ft version of Yahoo is now available for MCE users, and the number of channels on MCE online spotlight have tripled in a few months.
I think one of the next problems will be the lack of a TV-friendly interface for internet content. Most people don't want the classic TV broadcast model with its continuous 24h channels (except for zappers, but they use it more like a shuffle mode), but there is no nice interface to access internet video. The classic web is not very TV-friendly. RSS feeds (with the right clients) may be somewhat close, but there is no good way to find and subscribe to RSS feeds with your TV, and they also lack a DVD-menu-like interactivity that would be desirable.
Posted by
Tim |
1:22 AM
Yes I agree, finding new content is an area that needs some innovation. I think the RSS based approach will gradually evolve to a viable solution and in the same time we will start seeing new ways to discover content based on all sorts of collaborative filters, kind of like Pandora is doing for radio. It is one thing to make it work on a PC, it is a whole of a lot more difficult to make it work via a 10 ft UI, this is why at the end of the article I said 10 years from now and not less, it is going to take time...
Posted by
Ronen Mizrahi |
9:11 AM
Agreed. Web 2.0 is a very nice informal specification:
1. The web as platform
2. Harnessing Collective Intelligence (akin to digg, flickr, etc)
2. Website Integration (Think Mashups, APIs, etc)
3. Tagging - turning data into informationi via tags
4. Rich User Experience (AJAX, etc)
There's more to it, but that's the gist of Web 2.0 to me anyway.
Successful Internet TV implementations will take Web 2.0 philosophies into consideration. The companies that get it will win (good social networking helps too...)
Posted by
digistic |
2:56 PM
Looks like we are getting support from analysts.
Here is a link to an opinion memo published today by The Diffusion Group:
http://www.tdgresearch.com/pdfs2006/TDGOpiniononBroadbandTV31606.pdf
Here is a quote from it:
If judged by the amount of meaningful business activity in this space, 2006 will be remembered as the year BroadbandTV raised its head from the muck and took center stage in the media industry. It’s as if the notion that broadband is capable of powering a new generation of robust video services is moving from “fringe delusion” to “conventional wisdom.”
Posted by
Ronen Mizrahi |
9:52 AM