IPTV/VoD: The fall of content's kingdom
But how will the story end?
Give it all away free. Pay for it by marrying video-rich, interactive, personalised contextual advertising with back-catalogue on-demand content as Google does with AdWords on the web.
Content in adverts can be matched intelligently to the content in the live broadcast or on-demand title. The viewer suffers an advert of some kind (ticker on screen, loading movie, interstitial), but gets to watch for free. The advertiser pays the content owner directly (per 1000 if necessary) every time the media is watched. They can also upgrade at a later date for an ad-free service if necessary. At a high level it seems to be not just feasible, but a neat answer to a very pressing problem.
There also remains the very tricky issue of regulation of digital content. As dull and dry as it seems, it has the capability to kill businesses, which is why it needs to be taken seriously. Inevitably in all new emerging mediums, regulation is lacking so abuse occurs. When anyone can publish, the normal commercial barriers are removed, enabling anyone to abuse. Other than the difficulties of pinning down exactly where services originate, terminate and are policed, we need to work out who does the policing, how much of it there is and how it will be enforced. Children need to be protected from indecency and the new medium cannot be a means of promoting or facilitating crime. When a television picture is transmitted over the internet or IP network, is it streaming internet video or broadcast television?
And this is what we in the IPTV industry need to start doing very soon if we are to continue on the momentum that has carried this technology as far as it has gone so far. We need to start educating the people who work around this new platform and work hard to solve their problems and ease their pain. There are too many problems being talked about and not enough answers. Really effective answers to those problems rely on intense thought and detailed consideration of each country, region and local environment the technology will be deployed in. If we continue to apply the US cable model to every part of the world, we won't just be foolish, but be staring into an abyss that we could have avoided just by stopping for two seconds to think about our direction.
ISPs have legitimate concerns about scalability and capital expenditure that need to be addressed by content owners. Vested interests mean those concerns won't be addressed for a long time, as they will involve cost on the part of the rightsholders. The only action that can be taken in that circumstance is to play tough and penalise offenders by blocking traffic from their websites and data-centres. ISPs need to act in unity and have a common central voice that fights their cause as the pockets of Hollywood are far greater than their own. The next step for them is raising premiums on traffic from those content providers and if necessary, litigation to get them to listen.
This future we all belong to is something we all need to contribute to, meaning whatever one side gives must be reciprocated by the other in kind. One interesting idea is to give ISPs incentives: a free movie title download for their customers for every illegal P2P download they block. Co-operation will be the only way for both parties to achieve their objectives, as open war will benefit no-one and send back in the direction towards the stone age. ISPs also need a moratorium on content licensing costs to enable them to seed the market for IPTV and video on-demand and drive adoption of these new platforms in whatever guise they are packaged. That means giving them a financial holiday (virtually free for one to two years) on the condition of a longer term contract for the content in the end. Currently it is a case of who blinks first: everyone wants someone else to take the risk, despite everyone facing more than one.
If you're a smaller content owner or rightsholder with ambition, there is a market emerging for you that will give you worldwide spread. Go out of your way to be IPTV friendly and work with ISPs for the first years the medium takes to get started, as you will get to charge better prices as time goes on. Produce in multiple formats, offer cheap licensing with few conditions and do everything you can to get yourself noticed and exposed. Solve the problems they face and do what you can to help them retain their customers – broker relationships with other colleagues and partners in the content industry, offer help with content management and understanding how it all works. Your customers will help you with the technical side of things, but they need to know more about how TV and entertainment works. There's never been a better time to attack and invade Sky in their own back garden.
Licensing as it stands is a nightmare, a spaghetti junction that is becoming harder and harder to administrate and control across a globalised industry that just keeps moving faster as the months go by. As seen in the mobile industry, the aggregation model is springing up in IPTV as a viable alternative to private proprietary arrangements that don't scale too well, even in the open digital network domain. Small players are collecting and representing large groups of content owners and retail brands like YouTube and iTunes are offering shop windows for wide ranges of rightsholders to sell their wares. Pre-packaging, pre-bundling and pre-pricing is currently the most effective and practical way to deliver volumes of content onto digital platforms.