Ahead of the Curve: Web TV 2.0

As broadband inception continues to grow and bandwidth continues to widen, a new category of cross-platform competition is emerging.  Web TV, which has traditionally been an individual viewing experience, is rapidly moving toward the traditional community experience that television provides.   Tivo has been a first mover in the space, successfully integrating online portals such as YouTube, Amazon Unbox, and CNET TV with their DVR.  Vice President of Content Services, Tara Maitra, said usage has exceeded Tivo’s expectations, with over 60% of broadband-connected viewers using one or more of these services.  To date, the Company has experienced over 30 million YouTube downloads.

Internet giant Google aims to reinvent television advertising in the same way they revolutionized search advertising.  The company has placed former NBC Universal employee, Michael Steib, as Director of Google TV Ads.  Google’s new television platform allows marketers to make on the spot decisions and change them day to day, as opposed to locking in commitments months in advance.  Providing companies this degree of flexibility should translate in to rapid traction for the new platform.  In poor economic climates, it is often the marketing budget that is the first to get slashed.   Though cutting your marketing budget  is a not a very wise long-term decision, (recessions allow best of bread companies to eat up market share) Google is positioned to capitalize off this short-term thinking by providing television advertisers a flexible solution.

Internet research company, ComScore, is also adapting to the new media landscape, telling Fast Company in a recent interview that ”Total audience measurement is the name of the game.”  ComScore now aggregates data from multiple platforms, providing marketers the number of total viewers they are reaching across each platform.  This information allows companies to target the specific platforms and demographics that are generating the most growth, thereby increasing return on investment.

Although it is difficult to define the exact point at which new media and traditional media meet, it is increasingly evident that they will do so in the short-term.  Ultimately, it is the consumer who will make the decision – which is why this landscape is difficult to predict.  We are early in the product cycle of emerging technologies and cross-platform devices which will determine the correct route to take.  One thing that is certain, as this inception grows companies need to stay ahead of the curve.

The Evolution of Netflix

Netflix is aggressively positioning itself to become a leader in online video.  Strategic Partnerships with Microsoft’s Xbox, Starz, and the Roku player are expanding the platforms by which the Company’s content reaches subscribers.  As consumer viewing habits continue to change, Netflix’s streaming initiative provides these subscribers with options.  By embracing more avenues for content delivery, Netflix aims to increase the Company’s value proposition.  However, as the Company shifts focus from DVD to New Media, they seem to have forgotten one critical element… a business model.

Streaming service is currently a loss leader for Netflix.  As in the initiative continues to gain traction, it also continues to rack up costs.  Netflix needs to quickly implement a viable business model to turn this loss leader in to a money maker as it rapidly encroaches on a new breed of competition from companies like Hulu and the recently launched TV.com.  However, it is early in the game and Netflix is taking the right steps.  They have a number of options to generate revenues – from creating a streaming subscription, to revenue sharing, to advertising.

Perhaps the largest problem lies in the content itself.  With only 15% of the Company’s DVD inventory available for streaming, content is a major obstacle.  Netflix online success is hinged on movie studios providing the Company with distribution rights.  Joint partnerships like Hulu and TV.com have allowed Studios to keep all of the money.  Convincing them to grant rights is a difficult battle in which the terms will likely favor the studios.  The Xbox deals of the world are key in providing Netflix with leverage.  Because of this, I believe you will see more of those types of deals.  (Neftlix recently announced partnerships with television makers Vizio and LG at CES in Las Vegas.)

Productions Making Money On The Web

Last Wednesday provided me with proof that the theory of web TV series not being able to make money is wrong… kind of.  The rapidly evolving space of professionally produced web content has peaked the interest of corporate capital.  This is evidenced by Microsoft and Sprint’s investment in the web series The Guild.  Creator/writer/producer Felicia Day spoke at length about The Guild at Wednesday’s Hollwood WebTV Meetup.  Though Felicia was unable to get into the specifics of the deal, she did speak about the evolution of The Guild and broadly about how the deal came to fruition with Microsoft.

The Guild was inspired by Felicia’s addiction to the online videogame megahit, World of Warcraft.  The Guild, which follows a group of gamers, quickly found a loyal audience – season one was supported through paypal donations.  With over 10 million hits, multiple awards, and over 60,000 YouTube subscribers, The Guild has created a powerful web presence.

The Success of the The Guild’s First season, presented the series with many sponsorship opportunities.  Refusing to give up creative control, Felicia passed on dozens of deals… until Microsoft.  Microsoft allowed Felicia to retain creative rights, and in addition to distribution over the web, Microsoft proposed distribution through the proprietary XBox Live platform.  This was the win-win that Felicia was looking for.

The Guild is currently in production on Season 2 and has just released the second episode.  The Guild reaches a global audience, being subtitled in 8 different languages, and sits right next to 30 Rock on XBox Live.  Check out the Felicia’s 3-part interview below with WhedonAge to learn more about The Guild.

AFM 2008: Web Entrepreneurs Conference

The 2008 AFM Web Entrepreneurs conference was hosted by a panel of founders and executives involved with companies such as StrikeTV, BitterLawyer, and ElectricFarm. To be blunt, the event was a dud. The topics covered were highly generalized, lacking the specific examples and application knowledge that I expected. It is ironic given New Media’s “threat” to the motion picture industry (not to mention the event at which the conference took place) that topics were covered on such a surface level. Here are the broad takeaways:

• Knowing your audience it critical – niche is best.
• Sponsorships and brand integration are evolving as a viable revenue model for web shows.
• Seek partnerships with brands who can be organically weaved into the storyline.
• Utilize the wide reach of social networks to attract new viewers.
• Advertisers will continue to be hesitant without a standard metric to measure return on investment.

Though none of these points provides you any specific direction, I suppose it is always good to have them reinforced.

Creating Web Content for TV

I would like to pose a question: If you could find the same type of content on the web versus television, then why would you ever view it on the web?  The web gives filmmakers a limitless amount of creative freedom.  Do not waste this freedom by creating your web project as a stepping stone to an alternate platform, ie: TV and film.  Put yourself in the viewers’ position and recognize that they are not seeking to replicate the experience they have with television and movie theaters. Utilize the web to express your vision with the uninhibited freedom that you intend your story to be told. Yes, the web currently lacks a model for monetary compensation to compete on a scale with traditional platforms.  However, the web provides the most cost effective distribution and widest reach, enabling filmmakers to find their audience.  Focus on developing relationships with your core audience, using the web to directly connect to them.  Leverage these relationships and the reputation that you build to create opportunities outside of the web on traditional platforms.  I am not saying that you cannot generate income from the web – that would be completely false.  I am saying that it is neccessary for filmmakers to recognize that the web’s greatest benefit is broad and inexpensive distribution, allowing you to find and connect to your audience.

Film Distribution & The Industry of Innovation

It is an exciting time in the film industry, a time of immense change. Never before have filmmakers been able to expose and capture audiences with the speed and scale that the web enables. Internet film distribution is shifting the concentration of power toward the many individuals who create content.  This shift empowers filmmakers, providing a distinct advantage to those willing to learn and adopt the tools that the web provides.  However, this broad change is in its infancy, and though it is off adverse interest for Sceneclips to recommend that filmmakers spread their content among many internet film distribution platforms, it is in the filmmakers’ best interest to do so.  As the web continues to develop industry leaders will emerge, providing filmmakers a clear answer of how to best capitalize on the web’s power.  Our advice to the filmmaker is to align yourself with respectable companies that project the image that you as the filmmaker wish to project.  Doing so will help you to find your audience, and ultimately be of the most benefit to you.  As a film industry network serving filmmakers and investors, Sceneclips will do our absolute best to continuously innovate, keeping an open dialogue with our members to address changing market needs.  Our goal is to be that leader.

The Future Of New Media

Last night I attended a new media panel discussion hosted at the SAG headquarters. The panel was entirely composed of SAG members who are diving head first in to new media, creating businesses and launching web series. It is exciting to see content emerging on the web with such high production value – as was displayed at the discussion. Innovative content creators recognize the benefits of internet film distribution, making it easier for them to find their audiences. Take a look at a couple of the webisodes that screened at the event, Horrible People and Let’s Get Laid. For more information about professionally created web content check out Tubefilter.

Horrible People

Let’s Get Laid

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