Web TV / IPTV / DTV

While we're on the topic of the Future of Online Video, its worth talking about the future of VideoTwittering (or whatever you want to call it) given that Seesmic yesterday laid off some of its staff (rather than redeploying them, the standard gig of a company in growth) involved in content creation. Here's newly ex-Seesmicer Rachael Joy on the subject:

Thanks and Au revoir!email: rachaeljoy@earthlink.net
twitter: rachaeljoyTV
seesmic: rachaeljoy

Somehow I don't think she'll be under-employed for long

(Update: the video appears not to work now - one assumes it has been pulled, or maybe Seesmic's infamous backend system has lost it )

We noted in this post early this year that the cost / benefit analysis for this sort of media makes it a very shaky proposition (as a pure-play, anyway) as video is expensive to serve and consume vs text or audio (in cost and attention) - thus adding your own own content (at cost) is only viable if it delivers extra value, which in the current state of the market is very hard if there is not an obvious target demographic to advertise to. Videocommenting on blogs hasn't really taken off, for the attention issues mentioned above.

So what to do? Seesmic, Qik*, Phreadz, 12Secondtv have all come into this space recently - and there are probably others that I don't know of. Phreadz to me is the most interesting as it is following Twitter's underlying gameplan of being a Unified Comms system rather than just a video commenting tool - ie it allows upload and egress of a large range of formats, including ones such as Slideshare, Flickr, mp3 etc which makes it useful in a far wider number of use cases. Phreadz also started the "threading" (hence its name) of video conversations, which is darn useful in a largely un-searchable world

Which brings me to the next point - the other things videoblogs don't yet do well, and the one that gets this working will win bigtime - is some form of search / filter mechanism so you can find what you want fast. This is what drove the FirstWeb from an arcane scene of swapping bookmarks to one of being able to easily find stuff. If Videoblogs can't do this, a YouTube+Twitter "good enough" will probably kill them.

The other thing that videoblogs need to do is reduce the load on the listener - only a few people are going to hang around listening to some jerk woffle on for 5 minutes for long. In my view there needs to be the "140 character" limit game like 12secondtv has, and preferably some form of karma/trust rating (will this person waste my time) plus - ideally - a form of transcript.

Attention is precious, wasting it is criminal.

(Disclosure - we're in the middle of a large piece of research on the Future of Online Video, report out next month)

*In the comments, Qik's Jackie Danicki points out that Qik is actually a live streaming service (see a report we did on this use here) rather than a videomail service per se, but I have seen it being used for this sort of application - hence its inclusion here.

Given that we're in the middle of a major piece of research on the future of online video, seeing a piece by Chad Hurley of Google/YouTube on The Future of Online Video was very interesting:

Today, 13 hours of video are uploaded to YouTube every minute, and we believe the volume will continue to grow exponentially. Our goal is to allow every person on the planet to participate by making the upload process as simple as placing a phone call. This new video content will be available on any screen - in your your living room, or on your device in your pocket. YouTube and other sites will bring together all the diverse media which matters to you, from videos of family and friends to news, music, sports, cooking and much, much more.

Sounds positively Gatesian, but so far this is fairly standard fare for the video uber alles optimists - convergence, mobile and huge penetration and attention! The only way is up:

In ten years, we believe that online video broadcasting will be the most ubiquitous and accessible form of communication. The tools for video recording will continue to become smaller and more affordable. Personal media devices will be universal and interconnected. Even more people will have the opportunity to record and share even more video with a small group of friends or everyone around the world.

And yet this all appeared on a Google text blog.

The evidence to date anyway is also that this scenario is unlikely to be correct - we use different media for different roles. At Broadsight we use economic analysis to predict future technology takeup potential, (seems to work) and the problem with video is that it is quite a high cost medium - creation, aggregation, distribution and consumption all have higher cost than "thinner bandwidth" media. This means that:

- There will probably always be types of communications that are too expensive to do via video (not just in creation costs, but in listening cost - just like voice mail is far less efficient than email)

- Where video is cost effective, it will still compete with media that is cheaper still, and easier to use in some situations

Video no doubt has comms benefits, being a richer media, but it will be a cost/benefit tradeoff when to use it. Existing comms technologies will also improve, and by definition will probably be easier to use than video. In other words, video will probably not be the most ubiquitous and accessible type of communication going in 10 years. That said, it may be more valuable than the others (looking at the value spread in more traditional media) - assuming they can find a better business model than ongoing Google subsidy.

A range of the large consumer electronics companies have formed the Digital Entertainment Content Ecosystem (DECE), the idea being that media will be interoperable across all of their devices, and that it can run in an end to end supply chain. The idea is to be an open version of the Apple iTunes content - to - device supply model (in fact when originally mooted it was called Open Market).

As TechCrunch reports, the consortium includes Alcatel-Lucent, Best Buy, Cisco, Comcast, Fox Entertainment Group, HP, Intel, Lionsgate, Microsoft, NBC Universal, Paramount Pictures, Philips, Sony, Toshiba, VeriSign and Warner Bros. Entertainment. Thast a pretty good representation across the supply chain

Clearly there is an attempt to learn the lessons of the music industry.

Thats the good news - the bad news is the backdoor DRM play. The plan also would provide customers a "rights locker" or virtual library where consumers digital video purchases would be stored for retrieval in a manner similar to accessing an email account. It remains to be seen how benign the DRM is.

This is an opportunity to reduce piracy, IF the players can make the tradeoff for users between DRM/Media cost and Piracy seems like a fair fight. iTunes showed that most users will pay for media if its easy to use and at a fair price. But the behaviours of many of the players to date make us think there is a risk it will groupthink itself into a margin-protection model. The problem with that, as has been shown in spades to date, is that the DRM will be hacked, people can access pirated material. The trick is to make it just too much hassle for the mainstream adopters.

Joost has signalled that it needs to change its business model , as GigaOm notes:

In what is likely to be a major shift in the company’s strategy, peer-to-peer startup Joost is going to stop making its desktop client. The decision to suspend the client is likely to be announced soon, I am told. The company is going to a browser-only strategy, in which much of its content is going to be available through a browser-based player. Joost, I am told, will release a small plug-in that would embed itself in the browser and allow you to grab files using the P2P technologies. The web client is likely to have better quality than average video sites.

As we (and many others, I hasten to add) noted 6 months ago after we had completed an analysis of the Web TV market*, companies that had a business model that was using stuff you could get anywhere else, and had an irritating-to-user approach (DRM'd p2p video being a whole different ball of wax vs low budget p2p audio) risked being:

Low Value, Low Cost businesses - have Subsistence Economics - if they can get very compelling content (niche stuff, maybe porn) and keep operating costs low via viral marketing, low bandwidth streams, minimal chatter in the system, and attract sufficient low rent Ad revenue (I doubt much of this will be subscription) or have an offset model (the moolah is made elsewhere, maybe sell-through of DVDs etc) then it can work

So, they have now moved to a model which is browser based - risk is that it increases overall cost, so unless they can increase content value they are risking being:

Low Value, High Cost - the deadpool. In essence, if they cannot justify an incremental value on the service to attract more / higher value Ads or subscriptions over low cost operators, or the model has intrinsically higher infrastructure and / or customer capture costs, they will fail.

In other words they may as well be tilting (or Joosting) at Windmills unless other things change. Their issue at the end of the day is not really the technology, its the content. There's not a lot, its not great, you can get it elsewhere with less hassle and sans DRM.

So - how then to get content value up? Joost look like they are reaching for the Social Media panacea, but we think it may be too late now. Services like Twitter and Facebook have already sucked up a lot of the Chatterati who would be early adopters (its quite common to chat on Twitter about TV programs in the UK anyway), and iPlayer, Hulu and a string of "download on demand" services have grabbed the quality content high ground - and Amazon is in there now (we pretty much thought a year ago that Hulu signalled the end of Joost's existing business model). We suspect they are not going to get the good content at commercially reasonable prices now - the majors have placed their bets.

One option is enabling people to put content onto Joost that currently is not captured, and do a better quality job than YouTube - ie allow bigger screen video. The "pro-am" coverage by Tuttle Club members of the Greenbelt concert on Qik, or the work done for Seesmic being an example of what pro users could do. And why not buff up a bit of Chrome while they're at it.


The other option is to use the cash remaining to go to places where content values are still very low and use their powerful back end technology to enter them - mobile and gaming machines are examples.
Add value in that way, and then sell to someone who wants to enter is a viable option for a decent exit now, perhaps even a viable ongoing business.

*We will be producing a for-sale report in a month's time on the subject of the future of the Web TV market, based on the consulting work we've done over the last 3 years plus some up to date research.