IPTV/VoD: The world that's on its way
Part three: We're only 1% of the way there
There are many people saying they believe they have the answer to the problems the IPTV industry faces. Don't believe them. We can't know every problem that will arise or whether the answers will be suitable forever, or even now. The huge revolutionary hyperbole being spouted by marketing charlatans is coming to be seen as the puffery that it is. On-demand is not a revolution, neither is aggregation as a business model. The simplest example is a common supermarket. Aggregation is the natural and sensible answer when there is massive diversity and breadth of available competing products in a marketplace.
We buy things from supermarkets who aggregate food products on-demand when we feel like it. On-demand is the most natural way of doing things mankind has ever devised. On-demand is the way we already do everything else, and have done for thousands of years. It is not a revolution.
The key question is one Rupert Murdoch is closely focusing on and is a master of. When we have all the technology in place and serving up every piece of content imaginable, how do help people to consume it?
Technology is developed by early adopters for early adopters, and is only made a success of by commercial specialists who natively understand the social anthropology of buying products. Technology assumes customers will "pull" it or "search" for it. Tradition and centuries of experience show we need to "push" it to them in some way, whether through a review by a journalist, pushing a free newspaper in their hand, or bombing them with advertising. If they don't know its there, they can't buy it, use it, or watch it. Websites that provide feedback or notifications to their users have massively higher retention rates than those who assume their customers will do all the work.
The quickest way to observe the generational difference in how people watch television is to study your parents, as they typically sit on their sofa in a virtual coma, Homer Simpson-style, while they are spoon fed.
Prevalence relies on huge marketing budgets, and it will be no different with the next generation entertainment that IPTV provides. No one has given a thought to the QVC and/or Saga audience, who make up the majority of people who got Freeview to its dominant position in the UK television market. Too much choice is damaging and intimidating. Google "glues" web surfing together by helping users to find their way around the web from place to place. TV is a passive social medium used for entertainment, and an experience shared by several people in the same room.
But herein lies a huge opportunity to "add value", as pretentious middle managers would say. With millions of channels, and millions of hours of content, we need help filtering through it to find the things we want to consume. The most advanced websites now do this with a mixture of community rating and recommendation engines that automate the process of making suggestions.
Human intervention will almost always be needed in this process. We may meta-tag every frame, translate audio subtitling into text keywords, and build up all the purchasing profiles we want, but the human condition means we will always need someone to explain and help us find our way around. And the good news is that people are happy to pay for that filtering as it takes away pain and adds quality. Nobody cares how the content is delivered.
To experience the phenomenon of choice and content overload, you just need to visit one of the latest websites based on providing user-generated content (UGC). It'll take a few minutes to get lost in it before you reach for a top 10 or most popular list. These services are reporting a new trend called the "one per cent rule" where one per cent of their users actually generate content, nine per cent moderate it editorially, and the remaining 90 per cent are happy to just be entertained without getting involved in any way. IPTV opens the door for anyone to create their own TV and radio channels, and publish their own content and software applications to anyone else in the world. The technology may be new, but the way it is consumed won't change, nor will human nature.
Even user-generated content itself isn't new. In the UK, one of the first examples was the appallingly bad TV show You've been framed! presented by Jeremy Beadle, where viewers sent in home video clips of them suffering dreadful accidents and/or humiliating experiences for a cheque of £250 in return. If you're planning an IPTV launch, please do not include that monstrosity.