Jul 132006

After just having read an article at Knowledge@Wharton on the subject, I’m still left wondering really, where is the value of internet video?

Forget about the business models…there first has to be something of value for consumers, which I have yet to see.  The most revolutionary thing I have seen thus far related to the space is TiVo, and that’s really just TV show listings over the internet and a hardware/software combo that records shows.  With this people don’t need VCRs any more; TiVo (or any digital video recorder) can record all of your shows for you, and even suggest similar shows that you might like.  Playback happens using that device without the need for video tapes.  This is real value.

Getting back to internet TV, I still don’t get it.  Yeah, I’ve seen “The Easter Bunny Hates You”, and yes, it is funny and entertaining.  In all likelihood though, I would have gotten an email from one of my friends about it without the need for YouTube or Guba.  These sites are great if you want to waste time flipping through user uploaded video clips in search of something entertaining.  But in reality, I’ve got better things to do.

Guba is a little different though in that it allows you to purchase licensed videos of movies that were released to theaters and DVD.  This still doesn’t cut it for me.  I don’t want to watch full feature length films, or even 30 minute television shows on my computer.  Sure, I could be tech slick and figure out how to hook up a computer to my TV, but again, I’ve got better things to do.  Even if I did hook it up, my bet is that those videos that you can purchase do not show in high definition.  The move from regular TV to high definition – that is real value.

Personally, I’m anxious for the time when I can use my DVR to peruse a mega library of archived television shows dating back 50 years, and every last one is available in high definition with surround sound for download/streaming.  That’s real value.

Finally, I can’t wait for the day that all I need is a single network connection that costs me ~$20/month that I can use simultaneously for my VoIP phone, live or archived high definition television, and internet access.

What do you think about internet TV and it’s prospects?

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  4 Responses to “Internet Video – Where is the value?”

  1. So lemme get this straight, you think it doesn’t have value because you have better things to do than watch the kind of funny short clips that are on there?
    For a lot of people out there they don’t have anything better to do, and they do find value in it as a consumer. That’s why they’re so popular.

  2. The possibilities for Internet TV are endless … Sure its current incarnation does lack a little in quality, but then as bandwidth constraints & compression technology evolve this will become less of an issue.
    The major benefit is for small producers to reach an audience without being tied to networks – This is massive! As is it’s potential.
    I don’t see Internet TV ever replacing HDTV, nor becoming the mainstream media outlet … but as an arena for ‘little voices’ to be heard

  3. I openly admit I’ve wasted a couple Friday nights watching videos on youtube or Google videos but still at the end of the night I just wished I could get that time back. That’s not to say there’s no decent content out there…just that I haven’t come across it in the ~5 hours I’ve spent looking.

    Beyond that I generally fall into the “I have better things to do” category, but I also understand I may not be the target demographic. This is a huge change in how rich media is being delivered to end consumers and the “tween” demographic seems to be eating it up and CAN’T be ignored if businesses want to be successful in this space. Who would’ve thought News Corp would purchase MySpace and RottenTomatoes.com?

  4. My friend, you touch on a lot of subjects in this post all of which constitute the bulk of my professional world – including: internet video, consumer hardware and software, DVR/PVR/NPVR, video on demand, content licensing, consumer watching habits, convergence and what the industry calls the triple and quadruple plays. The only big one you missed was advertising (broadcast/linear, VOD, and internet based video and static.)

    What do I think of internet TV and it’s prospect you ask?
    My answer… Welcome to the future.

    The good news is that the day is definitely coming when you’ll have a $20 internet connection and every service you’ll ever need will be coming through a single pipe – that’s precisely why internet TV is so important. In fact, there’s only one reason you don’t already have it – and it’s definitely not technology. The reason lies in very -very big business and amazingly large sums of money. These are in fact the two things that have been holding back technology adoption and investment in the media industry since the late 1940’s.

    First it was the major broadcasting networks, and then it was the MSO’s (cable companies) that held a stranglehold on all television content (in fact all video content) moving into your home. Broadband internet adoption and infrastructure (95.5 million homes last year – up 13% from the year before and rising) has now- for the first time in over 50 years provided a means for the content providers (NBC, ESPN, CBS, etc.) to freely and easily distribute content directly to the consumer. This concept is so huge it’s mind-blowing. They (and in fact anyone else who wants to create, distribute, and profit from) video based content is now absolutely free to do so.

    Put aside the stupid 3 minute clips of people setting themselves on fire or doing bad karaoke for a second… While people are actually spending time watching that stuff (in Feb. this year, youTube had 9 million viewers, MSN video had 9 million viewers, Google video had 6.2 million, and iFilm’s audience grew 102% over last year), it’s hardly the most interesting pieces of the insanity that has overtaken the world of video consumption and broadcast media.

    The first interesting piece is QOS or quality of service… As you mentioned, you personally are more interested in HD content than SD or even the very low-end, low-quality video clips you get online. The industry would’ve agreed with you as recently as last year, and while there’s still importance placed on HD in terms of bandwidth and storage, this mass consumption of low-quality content on the internet, on your phone, on your iPod, etc. has now got the world reconsidering the importance of HD. (You actually wouldn’t believe the number of people who have bought HD tv’s over the past 2 years and never actually bought the HD service form their provider. They’re actually sitting at home thinking they’re enjoying better, crisper, more exciting HD content, when all they’ve actually got is a new tv. This is both hysterical and sad.) You should also remember that there while there aren’t really major streaming services available online for HD content – there are definitely download services available. Check out Maven Networks, Dave TV, Vongo, etc. Also remember that Gigabit networks are coming. –> Don’t make that face, they ARE coming.

    The second interesting piece is the fact that the traditional set-top-box is dying. Traditionally the cable companies used old, limited, RF based networks at the edge (the last bit of network infrastructure that exists before a stream hits your tv.) Last year Comcast alone invested over $500m in pushing its IP networks all the way to the home. The set-top-box itself was historically based on proprietary hardware architectures, filled with proprietary software and used to do the RF signal conversion in your house. The proliferation of internet based distribution, IP networks, the adoption of broadband internet access, and the creation of standards based “media center” hardware and software by folks like Microsoft, Apple, HP, Sony, etc. will cause the set-top-box to become more of a PC than the proprietary thing it is. This is very compelling and frightening stuff for the MSO’s of the world and we’re beginning to see their reactions. Comcast has just created its new “Interactive Media Division” and experts agree that we’ll probably see internet based access to Comcast VOD content within 12-18 months. Time Warner has already begun to offer low quality web video clips for TV viewing, and next month will launch their “My On Demand” product allowing customers to upload pictures via the internet and watch them on their tv’s. This world is a changing my friend. Whether you want it or not, your TV will be showing you “internet” distributed video within the next few years.

    And, as if all of that wasn’t exciting or intriguing enough, we haven’t spent any time discussing the $2.5b (yes, that’s billion) dollar video advertising market potential forecasted for 2010.

    Later we can also talk about the affects of the massive acquisition and distribution of consumer grade video and imaging technology also responsible for fueling this insanity. Someone just spent $2k on a new video camera, cell-phone (which does pictures and video), and a new still digital camera (which, by the way, also creates video), and their video iPod. People’s desperate need to use all of that crap and justify all those purchases is YouTube’s bread and butter.

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