Breathe.
That’s something TV executives can all do a little easier now that the bottom has fallen out of the technology sector, especially when it comes to streaming media. The sense of urgency to launch complementary streaming applications has slowed as the dot-com frenzy has died down, allowing TV networks and Hollywood studios to pursue the integration of streaming media with their core services in a more circumspect manner.
“The dot-com boom and bust of a year ago was providing a lot of incentive for terrestrial companies,” said Phil Leigh, vice president of digital media with Raymond James & Associates. “Now terrestrial companies can relax, and instead of focusing on speed to market they are focusing on getting the right platforms in place for long-term.”
The continued wait for widespread availability of broadband has provided some additional breathing room for the TV industry, said Erik Flannigan, senior vice president for entertainment verticals at the Walt Disney Internet Group. According to Kinetic Strategies in Phoenix, there were 9.3 million residential broadband users in the United States and Canada as of June 1, representing an 8.2 percent penetration rate. That number is projected to grow to 35 million
by 2004.
Mass acceptance and use of streaming media is still dependent on the availability of high-speed connections, which are simply not ubiquitous enough yet to generate mass adoption and interest in streaming applications, said Jim Stroud, an analyst with The Carmel Group in Carmel-by-the-Sea, Calif.
“As time goes on, we will see streaming media become more popular, and broadband will be key to that,” he said. Meanwhile, TV networks will continue to pursue streaming applications because they provide another means to brand their programming and promote their names. “It’s important to look at every possible way to get content into the hands of consumers, given all the devices consumers have access to,” he said.
The Internet, as a new distribution system, offers the opportunity for the TV industry to gain audiences, develop new products and generate new revenue streams, explained Marty Yudkovitz, president, NBC Digital Media. But, he added, “priorities are determined by scale and timing, and right now it doesn’t have the priority it will [have] later.”
For now, he said, “If we want to grow our business by better serving our audience and our advertisers, we can’t ignore the Internet. It will take longer than most of us would like, but the more we work on it, the faster it will go.”
Another obstacle to the convergence of streaming applications and the TV is the potential for the so-called “Napsterization” of video and the need to protect content. The slowdown in the market should allow Hollywood the necessary time to develop copyright mechanisms to make its digital content more secure. “Technology will evolve to where it is proprietary and each content owner supplies a subscription service only available in a specific decoder as an added layer of protection,” said Mr. Stroud.
In addition, other legal hurdles need to be crossed to ensure that everyone who is entitled to a piece of the financial pie gets his or her compensation, said ABC’s Mr. Flannigan.
He expects ABC will use streaming media to extend the network experience onto the Web, much as it did earlier this year when it offered backstage interviews from the Oscars during the awards show on TV. “That’s not a genius idea, but a real straightforward example of where we can take users that they can’t get on TV,” he said.
Mr. Yudkovitz points out that the collapse of the technology stock market is a far cry from the collapse of the technology itself. “The Internet is a tool. It’s a means to an end, not the end product itself, and in some circumstances it will become an economically viable means to an end.”
Clearly, streaming media will remain an integral part of entertainment and media companies’ distribution strategies in the future. But to what extent, and how beneficial will it be? Electronic Media asked several top media executives to give us their top three five-year predictions for streaming media and TV. Here’s what they said:
Marty Yudkovitz, president, NBC Digital Media, and executive vice president, NBC
1. There will be some distribution of NBC programming via the Internet, but there won’t yet be broad general distribution of NBC content. Some applications, like news, sports, business news, etc., will be offered sooner than other applications, like general entertainment.
2. Infrastructure capabilities will be significantly more fully developed in five years, creating the backbone required for programmers to truly provide streaming media capabilities. But penetration on the TV and in other convenient forms will still be in the growth phase, and a good percentage of homes will still not be able to receive streaming media.
3. Interactive streaming media functionality will increasingly become available on the TV set, offering additional choices to viewers and new advantages for advertisers. The functionality will become more important than the platform or device it is offered on.
Phil Leigh, vice president digital media, Raymond James & Associates
1. The rocket has launched with the advent of personal video recorders such as TiVo. What that means five years down the road is there will be a battle between the TV and PC for control of the video environment. I think shows will increasingly be streamed or downloaded-some onto the TV, some onto the PC. People will want to watch what they want when they want.
2. Product placement will become integrated into TV shows since viewers will skip most commercials. What program originators will have to do is feature products during shows, and TV will become interactive. TiVo will change everything.
3. There is distinct danger of the Napsterization of video. TV networks, cable networks and Hollywood studios will need to offer a legitimate consumer alternative online to thwart the prospect of bootleggers. [They need] to offer something at a reasonable price that is easy to use.
Howard Meltzer, chief operating officer for the new media division of World Wrestling Federation Entertainment
1. The consumer is going to have a massive selection process in front of them, with current content and archived content and a massive amount of choices to make. The consumer will have the power to program what they are going to see when they are going to see it. WWF’s new media division offers 18,000 clips on its Web site, WWF.com, and serves 8.5 million streams per month
2. Many major content companies will move to 24/7 programming. Streaming will accelerate that process, and there will be a greater availability of content on the TV, PC and other devices.
3. Interactive community-building content will become more prevalent. In 2006, a viewer could watch an enhanced TV version of “Gone With the Wind” and interact with the advertisers and the characters through streaming.
Erik Flannigan, senior vice president, entertainment verticals for Walt Disney Internet Group
1. The legal issues that make streaming difficult, such as fees and rights, will be clarified within five years.
2. There will be a nonreality show broadcast by ABC where there would be more content and programming online than on air.
3. In five years, the set-top box will enable a simultaneous broadcast and streaming viewing experience, possibly through a stream offered concurrently in a separate window, he said. In addition, TV watchers will have access to both public and private screens, where they can access private information on a hand-held device while watching the public screen.
Dan Rayburn, director, steaming media, Globix
1. Business models will emerge, such as ad insertion and pay-per-view, as high-speed connections become more ubiquitous, he said. You are going to see people with high-speed access tied into one device-the TV.
2. People will pay for quality.
3. In five years traditional networks will adopt this technology and no longer shy away from it. They
will have no choice. People will demand it. Networks will not stream shows but will offer content online that is not available on TV.
T.S. Kelly, director of Internet Media Strategies for Nielsen//Net Ratings
1. Streaming will enable on-demand TV as the lines become increasingly blurred with the linear delivery of content.
2. The personal video recorder is a means to an end in getting consumers interested in watching on-demand content. As streaming shifts to the TV, PVRs may incorporate RealNetworks or Microsoft technology to allow for the availability of archived content.
3. Networks will offer streamed content on demand on TV as well as on other platforms.
Ravin Agrawal, partner, EastWest VentureGroup
1. Every television content provider will have a streaming strategy for the digital delivery of content. Every business
will have to take the Internet into account.
2. There will be a much wider array of devices on which streaming video can be consumed, which will allow broadcasters to reach audiences in a new way. Devices like TiVo and MP3 players will continue to spring up like crazy over the next five years.
3. Sports will be a huge driver of streaming media. The voraciousness sports fans have for information is phenomenal because of the emotional connection and visceral nature of a game.