Video on Demand, The Big Pipe Dream in the Sky

Looking for the Proceeds in TV-on-Demand – New York Times I’ve said for a while not to expect to see true HDTV video on demand for quite a while. More accurately, despite these little recent announcements from Apple and Comcast and CBS and NBC and ABC, etc., do not expect to see anything truly compelling in the video on demand space until the broadcasters have wrung the last nickel out of their antiquated commercial advertising model and people finally refuse to pay up for overpriced DVDs. Until then expect the studios to drag their feet, sue their customers, and make excuses as to why they don’t innovate.

There are so many things that stand in the way of the customer holy grail of any TV, any time, any place it’s hard to know where to being. I’ve pulled a few quotes from today’s New York Times article called “Looking for the Proceeds in TV-on-Demand” to illustrate my point (the Editor’s notes are mine):

“But the road to video convergence is crowded with convoluted business relationships and potential conflicts. Behind the press releases, a major power struggle is unfolding among a wide group of stakeholders – from studios to satellite operators to manufacturers of consumer products – as new ventures are being devised for the digital age.” Editor’s note: There are too many competing economic interests for them to give the consumer what they want.

“”We’ve taken a couple of steps forward, but there really isn’t a clear business model yet,” said David Zaslav, the president of NBC Universal Cable.” Editor’s note: These “baby steps” are designed to appear as though they are sensitive to the idea that people want more choice but in reality are carefully crafted offerings with limited appeal.

“And, not surprisingly, a big point of contention is how the revenue generated by these new services is shared. As a result, only a handful of the most popular shows on television are available on-demand so far.” Editor’s note: Let’s not get f***ed like the way music industry did when they made a deal with Apple.

“Mr. Zaslav and other industry executives and analysts said progress was slow because of the longstanding and often convoluted relationships that exist among the companies that create content, the networks that package and market it, and the distributors who deliver it into households, which can sometimes all be tentacles of the same conglomerate.” Editor’s note: You’re not going to get my content because it comes at a cost to my distribution.

“Also, the broadcast TV networks that reach the biggest audiences and have relied on advertising as their sole source of revenue have had to run on two parallel and seemingly conflicting tracks.” Editor’s note: why change when even our diminishing advertising revenues are still fat by comparison to anything else we could be doing. There’s an awful lot of unsophisticated people who will continue to watch our commercials for many, many years.

“For example, making a popular show available on demand via cable or the Internet within hours of its airing may lead fewer viewers to tune in during its scheduled time slot. That, in turn, would mean reduced advertising revenue and hamper the ability of the local affiliates to promote other shows in their lineup.” Editor’s note: Why can’t people just watch TV the way “God intended them to,” live?

“Notably, the CBS partnership with Comcast only runs until the end of August 2006, an unusually brief period for such an arrangement.” Editor’s note: why commit to something we really don’t want to support in the first place?

“Mutual accusations of greediness are nothing new among the various players in the television ecosystem, but the newest technologies have intensified those accusations.”

“Despite the pressure it is under from digital video recorders and the spread of video on the Internet, television supported by advertising is “a successful model that everybody understands,” said Jeffrey M. Bewkes, who oversees Time Warner’s entertainment businesses, which includes the Turner cable networks, HBO and the Warner Brothers studio.” Editor’s note: people don’t really want to skip commercials, it’s all confusing to use one of those newfangled Tevio type gadgets that all those crazy people have been talkin’ about. If God had wanted you to skip ads he would have built a TiVo into the television set and he didn’t now did he?

“Mr. Bewkes has been championing StartOver, a service developed by Time Warner Cable as an alternative to video-on-demand and digital video recorders. StartOver was introduced in a small test market in South Carolina several weeks ago.” Editor’s note: Groan!

“However, he is skeptical of a future without TV networks as a platform to introduce programs, build loyalty or direct viewers to affiliate programming like local newscasts. “Nobody’s got a crystal ball here,” he said. “But I’m not sure we’re ready to throw out 30 years of television industry economics.” Editor’s Note: If it ain’t broke, don’t fix it Willard. People have been watching commercials just fine for 30 years. Don’t you go out there putting any new fangled crazy ideas into their heads. It’s the way it’s always been and you’ll like it.

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