Peter Berghammer's Blog

Points to ponder

I came across a very interesting article posted to Techmeme this morning. In essence the article is a summation of a report done by Forrester Research regarding the fate of paid videeo downloads. Although from the perspective of content creators the conclusions of the study have modest impact this study does draw interesting conclusions as to what ultimately could be the fate of for-pay movie download sites, and by extension, the looming battle between DVR, streaming content and proprietary download sites.

The thinking behind the study is simple in that the research results indicate that download mechanisms such as AppleTV have a tough road ahead - and that without the inclusion of sites such as YouTube et al will have limited traction. Furthermore the study indicates pending penetration of ad supported movie downloads with players such as Adobe's MediaPlayer (which will also allow for the playing of advertisements that were originally sold with the video. Other forecasts show that sites such as MovieLink will partner with telcos and that ultimately, DVR sales will be eclipsed by ad supported streaming videos sometime in the next two to three years.

There is certainly a lot to ponder with this research and it certainly comes just before the major battles in this space will be fought. In fact some interesting speculation centered around these issues at NAB 2007 and the view from the investor front was that broadcasters would not allowApple to succeed with movies in the same way that it succeeded with music. Naturally the smart money in on Apple ultimetely incorporating functionality within AppleTV to allow for the "bookmarking", archiving and ultimately playback of net material such as YouTube's offerings.

However the study may also be optimistic (or pesimistic depending on who's side you're on) when contrasting AppleTV to DVR and ad supported streaming. What the research does get very right however is that there is a major battle to be fought for the (for lack of a better term) primary interface point in the home. In other words, the consensus seems to be that whoever controls that primary access point will be the long term winner in the content/broadcast wars. In short, although Tivo may have sown the field, others may well reap the harvest,

The conclusions of the report are extremely interesting for the subtext that perhaps was not fully explored - that of the advertisers and the space they purchased within the downloadable content. It is conceivable that the ad space could be sold many times over and repurposed depending on the age of the content, the changing demographics of viewers etc. In short, ad life would always be new and repopulated with new and more current advertsing. Although the study did not really broach this topic the potential for the ad creation markets to "explode" is certainly worth pondering.

I certainly look forward to hearing from the Cow readership on their feelings regarding this study. The report can be found at:

http://preview.tinyurl.com/3bjfhr

In 1983 the average tv viewer learned how to record the new episode of Knight Rider (for lack of a better example) and watch it the next day, using the handy remote control (wireless?) to scan through commercials. TiVo made it even easier to skip commercials at a faster speed. My new DirecTV DVR, while the user interface is horrible, has a handy 30 second skip button. Once you learn that your favorite tv show has 3:30 commercial breaks, you just hit the skip button 7 times and you can pretty accurately avoid commercials.

Apple TV will allow me to watch YouTube content on my TV? Which YouTube content is Apple thinking would be worthy of viewing on a tv?

Ok smarty pants, what about ads on the internet? There are ads on the internet? Since installing Firefox's ad blocking plug-in, I almost never see an internet ad. What if YouTube starts putting ads on its videos, like iFilm did years ago (thus losing viewers I will bet)? As Ian Malcolm said, "Life finds a way." In other words, the internet finds a way to circumvent whatever the "industry" creates. Do a google search on "youtube download" and you will see dozens of results for easily downloading YouTube videos to a file, to your ipod, to DVD or whatever.

At the moment YouTube is the company to beat. No one knows if YouTube is making Google any money, although I have mentioned Google 3 times in this post, so Google (4) has certainly gotten some free advertising. Ah, there it is, advertising by word of mouth. "Hey, did you see that comercial with the talking goat? I don't know what it was advertising, but it was funny." How many times have you heard that line?

Where am I going with this? I think I am trying to say that internet based advertising must be making someone money, but if people do not like ads, they will find a way to avoid them, no matter how they are delivered.