Viva la Revolution!
Online delivery of video content, a mere dream a couple of years ago, has come of age. Over the last year there has been a massive surge in the development of new content sites. From television and independent films to current blockbusters, a deep catalog of content is being loaded into this new channel, all accessible from your computer.
The idea certainly is not new. Content owners have been trying to develop ways to distribute rich content via the web for well over a decade. Holding them back was the huge gulf of poor bandwidth and limited compression technologies. What was available just a few years ago just didn't live up to the task. Some of you may even recall the initial attempts, blocky, almost imperceptible video images with out of sync audio tracks, something reminiscent of a Chinese Kung Fu movie. Even so, the concept was sound. Crappy video quality or not, it was amazing to watch a movie preview on the web, on-demand. Poor video no longer though, the breadth and complexity of the new video codecs; compression - decompression software, along with the current user base of broadband technologies at home like cable modems and ADSL lines have given birth to a new industry.
The question now becomes; how will the content kings make money in this new world? The emerging forerunners are pay per use and embedded advertising. By some accounts, PPU revenues will reach the $ 6 billon dollars by 2012 and embedded advertising will hit a staggering $ 8 billon mark by the same time. Not pocket change by any measure. In that light it's no wonder that the writer's guild is striking for their fair share of these spoils. With embedded ads, advertising can breathe a sigh of relief. The popularity of DVRs had caused moment of concern for them since consumers were now equipped with the technology to simply record their favorite shows and quickly fast-forward through all the commercials. Now with embedded advertising the consumer is "locked" in to watching the ads in on-line content.
The 800 pound gorilla at this party is still the fact that the content is still being delivered to your computer and there is still reluctance, understandably, from the consumer to use their computer as a means to watch movies and television. Hoping to bridge this gap and moving us toward the true convergence of computer and TV, consumer electronic companies are rolling out new set-top boxes that connect directly to your television and will play back your digital content. Apple, being the dominant player in music downloads, has updated their iTunes platform to include video content, movies, television shows and more. In March of this year Apple started shipping Apple TV, an iPodesk device that connects to your TV enabling you to watch content that you've downloaded from iTunes. Similarly, Microsoft offers both standard and high definition content that can be downloaded to a Xbox game console via their Xbox Live Marketplace.
In an effort not to be this generation's buggy whip, traditional video retail giants are also getting into the game with on-line retail kiosks that have seemingly limitless supply of content. Simply choose the title you want and these kiosks will burn that content on-demand to a DVD for you. You'll never be disappointed again not being able to get the movie you want because they are out of stock. The other benefit is consumers still seem to want something physical when they purchase movies and in this model they still get a DVD.
I would be somewhat remiss if I don't mention another emerging segment of content delivery. Personal handheld devices such as mobile phones, Zune, iTouch and the like. It would seem now that no matter where you are, if you are interested in watching digital content, as long as you have a video enable mobile phone, you will be able to.
Chris Lamb, President, Paragon Media
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