An interesting and convivial discussion occurred at the Future of Broadcasting event this evening. The subject was, perhaps, unrealistically broad and many of the usual themes appeared: business models, social television, discovery, regulation and rights.

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The Future Of Broadcasting Event

The recent case in Australia of Roadshow Films Pty Ltd v iiNet Ltd (No.3) brings into focus the challenges of policing the internet and the challenges involved in the forthcoming Digital Economy Bill.

Basically the Australian Federation Against Copyright Theft had notified iiNet that their subscribers had been repeatedly illegally downloading Hollywood movies using illegal sites and iiNet had taken no steps to prevent this. iiNet were successfull in arguing that they had safe harbour as they had not “authorised” this infringement. Clearly they were aware of the infringement but had not authorised it.

From a commercial perspective the rights holders and their representatives realise that it is very difficult to chase down hundreds of individuals and would much rather go after a corporation who might be able to pay damages (and legal fees) such as an ISP. From the ISP’s perspective they don’t really want the overhead of shutting down users and also the lost revenue……..cutting off your own customers is never appealing.

Someone is going to have to pay for an anti-piracy service to avoid meltdown in this area but the tough question is who ? The content owners have the most to lose so they should pay something but at the same time there needs to be the ability to shut down the internet connections of repeat offenders as well as remove the ability of the pirates to make money via AdSense.

Policing Piracy is a cost to all in the internet value chain that is not going away – the difficult question is how to fairly allocate that cost.

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Australian Rules

I remember seeing my first HiFi stack and being awe struck (although some of the shine went when I realised that the amp, turntable, radio and cassette chasis were actually all joined together and not the expensive, separate high tech machines they appeared to be). We have been through an age where hardware has dominated, but the result of convergence is that pretty much every hardware device seems increasingly to do what every other hardware device does.

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Zen and the Death Of Hardware

A fascinating week for the digital media industry with Endemol revealing “banker” tendencies by delivering @33% of profits from buying back their own debt from hedgefunds, ITV appoint a new CEO, Sky deliver very strong results plus go 3D and the IPad is launched to mixed reviews.

A few numbers to throw into this – ITV revenues in the first 9 months of 2009 were £1.9 billion, Sky’s recently released 6 month revenues were £2.9 billion…….but wait for it Googles UK revenues in the first 9 months of 2009 were £1.9 billion and the Apple app store having launched in 2007 with 11 apps is now running to 140,000 apps and is estimated to generate £1.5 billion per year.

In no time at all the app store has taken a bit slice of the content revenue pie and the consumer clearly loves it as the IPod touch is likely to soon overtake the Iphone in sales terms and its major USP is the app store.

The rate of growth of Google and the App store is amazing and outside of the highly specific and clearly well executed Sky model the remainder of the traditional UK media industry is left paddling around in the detritus.

The Ipad opens the possibility of digital text and video being delivered to the consumer on a paid for basis – which might actually generate profit for content owners. This is in contrast to the YouTube model which neatly leaves most content owners out of the equation.

Interestingly, very recently YouTube have started to approach their content partners to see if they can offer £ to secure rights and recently secured a deal with the Indian Premier League. However, very few YouTube partners make decent revenues from their channels and it seems that being on the app store offers a much better chance of monetizing content.

Perhaps the app store offers content owners the chance to make £ from their efforts in the digital age and the Ipad offers an interface that will work for text and video. Clearly piracy reamins an issue but Apple look like they have moved one big step closer to an economic model for content owners.

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Has Apple delivered the digital content model ?

Popup restaurants, sales, live events; in the content industry they talk about ‘windows’. A concept started in the sports and entertainments industry is working its way through many other businesses now, such as catering and retail.

There is one thing that temporality brings – the ability to charge. The release of films has long followed a temporal path that is now that is being challenged by technological developments. Movies have to go to DVDs faster than ever, and soon they will never touch a physical medium.

Look at music – a recorded performance is valueless and pirated. A live event has value. Recorded music has been replaced by live music.

My decade and more’s experience of internet TV informs me that this business is even more susceptible to this trend. Live sells. Live events have always been the single biggest driver for internet TV audiences.

Indeed, the lack of efficiency in exploiting temporality is probably the defining business model underlying TV Everywhere (the company not the cliché). VidZapper enables live events as well as on demand video, Rights Tracker helps define windows for content rights and Vidiactive makes content available on the big screen now.

Time is something none of us can control, and as such it has ultimate value. Time is precious and time is what content owners need to pay the keenest attention to.

It is sad to see how few sports events are available in near real time windows. This is a real business opportunity. But the long term value of these events is next to nothing. There is an unexploited long tail at work.

Time has a great lesson to tell to anyone involved in internet TV.

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Popup TV