Broadband television – not as big as I had thought???

WebTV 

 

By broadband television I mean TV delivered into the home via the broadband pipe.  It might be watched on the big set in the living room, on an iPod, on a laptop, or just about anywhere but it comes into the house via the internet.

 

The thoughts below are about open services like The Venice Project – i.e. those which deliver content to your broadband connection point and leave the rest to you.  They don’t apply to fully integrated closed services where the service provider provides a set top box and controls the end to end delivery of the service much, as Sky does today (in fact the only difference with Sky would be routing the signal through your broadband connection and maybe your PC instead of via satellite).

 

Reading this morning about the planned broadband TV service from Babel Networks in the FT (no link due to DRM restrictions) it dawned on me that recommendations of the ‘people who like what you like also like this’ type and other ‘social networking’ features might not be much of a differentiator.

 

There is nothing new in these ideas any more, and I would expect to see them in just about every service.  For sure they will be in Babelgum – the Babel Networks service.  Quality of execution of these ideas will vary, of course, but I wonder if the differences will be marginal in the context of the overall service.

 

The three key areas on which services will compete are:

  • Content
  • Quality of video experience (I am thinking primarily start speed and smoothness of stream here, not picture quality)
  • User interface (covers ease of use, convenience, and social networking features)

A lot of well funded companies are going after this market and they will all have experts in each of the areas above.  I am wondering if they will end up in similar places with regard to quality of video experience and user interface, but whether there will be big differences in terms of content.

 

To my mind there are two reasons why people will switch bother with broadband TV (beyond watching the odd YouTube clip) – new content and/or much reduced cost.

 

It seems unlikely to me that anyone is going to pay top dollar to acquire rights to premium content and then make them available very cheaply on the web.  The only logic for doing that would be if you believed it would massively increase the audience, and I don’t see that happening.

 

So our favourite content will remain locked into existing structures (for legal consumption anyway) and we will have to keep them live, and keep paying our subs.  By existing structures I mean end to end service provision from satellite companies, cable companies and their ilk – a new provider like BT might make a dent here, but the overall value chain won’t change much.

 

Therefore – if this train of thought is valid – we are left with non-premium content as the driver for people using open broadband TV systems – i.e. the long tail of professionally produced content or UGC.

 

And that means open platforms with video uploaded by producer and/or consumer – central control of the catalogue of available content will never get there.

 

This starts to sound like YouTube or DailyMotion but with an improved delivery infrastructure and a more developed revenue model.

 

I have arrived here at a much smaller vision than I had been anticipating previously for this sector – but I’m struggling to see premium content getting much traction via this channel shortly.

 

The other possibility of, course, is that TV on the web goes the way of music and becomes all about illegal peer to peer file sharing.

 

FYI – Babelgum from Babel Networks sounds almost exactly like The Venice Project.  They have a peer to peer delivery capability for a full screen video service and plan to launch in March.  The founder is Silvio Scaglia – founder of Fastweb – so he knows a thing or two about internet services.

  • Broadband TV is going to be disruptive to the creation and spotting of hits. Broadband TV lends itself to pilots and short initial series for new shows. It also offers a platform for new producers to get their programs aired.

    It makes it easier and cheaper for financiers to take punts on new shows that don’t necessarily have a known audience or possible audience appeal (i.e. Firefly). Broadband TV also gives new shows a fighting chance to develop an audience where now they have to fight from often poor timeslots.

    Perhaps the biggest opportunity isn’t in the delivery side of Broadband TV but the financing of new shows and the leveraging broadband TV to build success for the show.

  • Broadband TV is going to be disruptive to the creation and spotting of hits. Broadband TV lends itself to pilots and short initial series for new shows. It also offers a platform for new producers to get their programs aired.

    It makes it easier and cheaper for financiers to take punts on new shows that don’t necessarily have a known audience or possible audience appeal (i.e. Firefly). Broadband TV also gives new shows a fighting chance to develop an audience where now they have to fight from often poor timeslots.

    Perhaps the biggest opportunity isn’t in the delivery side of Broadband TV but the financing of new shows and the leveraging broadband TV to build success for the show.

  • nic

    Simon,

    I agree that broadband TV will start in the long tail and by generating hits might move up towards the fat head, and in my view over time the cost advantages of open PC standards will bring all television to this platform.

    You are also right that the TV production industry is ripe for disruption as costs fall and distribution gets turned on its head. I have posted before on the potential of video blogging companies, and also on the challenges in investing in them – ie how you get over the risk of them being hit based and all about one or two key individuals.

  • nic

    Simon,

    I agree that broadband TV will start in the long tail and by generating hits might move up towards the fat head, and in my view over time the cost advantages of open PC standards will bring all television to this platform.

    You are also right that the TV production industry is ripe for disruption as costs fall and distribution gets turned on its head. I have posted before on the potential of video blogging companies, and also on the challenges in investing in them – ie how you get over the risk of them being hit based and all about one or two key individuals.

  • I’m also thinking along the lines of direct investing in the production of new shows. A VC market for TV production if you will.

  • I’m also thinking along the lines of direct investing in the production of new shows. A VC market for TV production if you will.

  • Nic

    I think you are broadly on track….as soon as we’ve got the updated online ad business report done for this month I’m going to brush up the broadband network one, but in a nutshell, broadcast + storage (have you seen how storage prices are dropping) is a *very* efficient way to collect mass “hit head” media.

    The idea above of talent trialling is interesting, its sort of what MySpace does for music. I suspect it works better in the early days than when everyone is in on the act.

  • Nic

    I think you are broadly on track….as soon as we’ve got the updated online ad business report done for this month I’m going to brush up the broadband network one, but in a nutshell, broadcast + storage (have you seen how storage prices are dropping) is a *very* efficient way to collect mass “hit head” media.

    The idea above of talent trialling is interesting, its sort of what MySpace does for music. I suspect it works better in the early days than when everyone is in on the act.

  • High speed broadband has altered the way in which we all have interaction with the internet, mobile broadband appears as though it will have much the same influence, along with the many products and solutions coming on to the market for example smartphones and so forth the web will broaden its reach even more and will bring it more often into some of our everyday life.*