Recent developments in the broadband video marketplace are pointing to an emerging and significant trend: the early formation of what I would term the "syndicated video economy." In other words, I'm seeing more and more industry participants' strategies -- in both media and technology -- start from the proposition that the broadband video industry will only succeed if video assets are widely dispersed and revenue creatively apportioned.
For content providers, the notion of widespread video syndication is a big change in their business approach. In the past year, I’ve observed content providers of all stripes transition from "aggregating eyeballs" to "accessing eyeballs," wherever they may live now or in the future: portals, social networks, portable devices, game consoles, etc. Underlying this shift is the realization that advertising-based revenues are going to fuel the broadband video industry for the foreseeable future. The ad model requires scale and syndication is the best way to deliver it.
This shift by content providers has been accompanied by a loosening of traditional tightly controlled, scarcity-driven distribution strategies -- an acknowledgment that fighting newly empowered consumers is a futile exercise. The evidence of this shift abounds. Consider the broadcasters like CBS Corp. (NYSE: CBS), NBC Universal , and Fox Broadcasting Co. , which through their affiliates (Hulu LLC and CBS Audience Network) are syndicating programming to many portals/aggregators, such as Yahoo Inc. (Nasdaq: YHOO), MSN, AOL Inc. (NYSE: AOL), YouTube Inc. , and social networks like Facebook , MySpace , and Bebo, among others.
Disney's Stage 9 digital studio, which premiered with YouTube, explicitly plans to tap into broadband video hubs, while cable networks like MTV Networks are pursuing a plethora of distribution deals. Additionally, traditional news-gatherers like local TV stations, newspapers, and news services (e.g. Reuters, AP) have stepped up their activity to scatter their video clips to the Internet's nooks and crannies. And the list goes on and on.
More established companies, such as Google (Nasdaq: GOOG), WorldNow, and Brightcove Inc. , are guiding areas of their product development process by the prospect of the syndicated video economy's growth. Taking their cue from the strategy shift among media companies, technology entrepreneurs and investors have ramped up their focus on this market opportunity.
All of this suggests that the eventual "value chain" of the broadband video industry will look quite different than the traditional one (for more on this, I've posted some my slides from late '07 here.)As with all economies, in the nascent syndicated video economy there is vast interdependence among the various players, not to mention shifting market positions and degrees of pricing power and negotiating leverage.
It is far too early to gauge who will emerge as the syndicated video economy's winners and losers. But make no mistake, lots of energy and investment will be expended trying to nurture its growth and exploit its opportunities.
I did go look at your variations of the value chain and it's more like a value maze. :-) It's not exactly linear, which is your point, I think.
I think there is just a more business-model approach to all of this than we saw with music. It's hard to compare because there are some new developments since the early days of downloading music (like YouTube, Facebook, etc.) but similarly disruptive sites such as Limewire and Kazaa were happening in the free-music era.
Whether its savvy marketing or an industry determined to control its destiny, it seems that the video content producers and providers have adopted downloaded distribution in a much different manner than music providers. It may be that the video owners have learned what didn't work, or, I wonder if video content already had a natural advertising and distribution element in it so that this evolution was easier to embrace. In a way, maybe this approach was already in the industry's DNA.
In any event, the business-model approach doesn't exactly seem to translate to easily identifiable business models, but it does seem that the video industry is much more in control of all of this than the music industry was.
It makes sense that the next step would be to integrate more video into the
Internet with today’s technology.I
think it would be risky for some of the leading companies of the Internet to
not steer in that direction.
I for one am keeping a close eye on Hulu as they are be pushing forward with a business plan that many have viewed as childish (mainly the music industry) but seem to be making very notable strides (=making money).
The question of the day is: When are online VOD services going to be easily made available on our televisions? I know Tivo is trying hard to accomplish this task (starting with youtube content) but they often error on the side of caution.
I've noticed many websites popping up that are beginning to offer "Video on Demand". It doesn't seem that they have been developed to the point of perfection for actual use, but I can see all of these www.WHATEVER_VOD.com websites (ex. SpyVOD.com, BETVOD.com, Blue-RayVOD.com, CNEVOD.com, GO4VOD.com, HGTVOD.com, GuysVOD.com, LadiesVOD.com, etc.) becoming very popular in the near future.
Probably surpassing the popularity of the social media sites, from what I can see anyway in the web development and programming front..
It seems as if it's coming to the point where my TV and home PC are converging and I'm loving it..!!
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