AO’s “Big Media” panel line-up does more to explain the Valley’s definition of what qualifies, so here it is:
* Bill Gurley, General Partner, Benchmark Capital
* Albert Cheng, EVP Digital Media, Disney-ABC Television Group
* John Edwards, CEO, Move Networks
* Thomas Lesinski, President, Paramount Digital Entertainment
* Michael Montgomery, President, Montgomery & Co
* Todd Teresi, SVP, Publisher Channel, Yahoo!
In such close proximity to Hollywood, “big” + media = video, and it quickly became apparent that the star of the hour for this crowd was Albert Cheng, EVP of Digital Media at Disney’s ABC Television Group, who, it could be argued, just managed to convince his network to be just a bit more accommodating to its audience’s actual viewing habits.
More…Perhaps it had something to do with how intelligently Cheng addressed what his audience actually wants.
“Put what we’ve done in context of three years ago. [then CEO Michael] Eisner made a lot of bold moves,” encouraging what Cheng called “simmering entrepreneurialism. He gave us the license to be bold; think about the consumer.” He did. He said, “I thought a lot about what was happening to the music industry. I wanted to be proactive and think about what consumers are doing” with their viewing time.
That contemplation led to the first network deal with iTunes, a deal that took 48 hours to complete from crafting the deal to allowing episodes to be downloaded. “It put us on the map,” Cheng said, and in the context of being recognized for our “aggressive, pro-consumer stance” on distributing content.
ABC’s enabler is Move Networks, which John Edwards said has served 400 million episodes to date, along with one billion ads. Fielding criticism about why a new player was necessary to do so, Edwards points to the quality of the experience, which he says (and audience bloggers agreed) blows away the competition. Watching an episode on a laptop can finally approximate watching it on TV, even in HD on existing bandwidth, but that’s only the beginning.
ABC will soon allow clip-sharing and posting, which could be the last barrier to video’s Web conversion.
But despite all the talk of transition, Edwards and others reinforced the notion that there are still “two worlds” competiting for video viewers online. Said Edwards, “One is the Internet video world, which has a very Web-oriented display, and the other combines Internet and Television as a business.” The latter, business-oriented model relies on the high quality of the user experience, combined with high-quality content, to support the “right” ad models.
“The gold mine” is at the high end of the spectrum here, he asserted. Of the 12 billion videos that have been viewed, most averaged 2.7 minutes, but long form video, constituting 2.2 percent of the total, has generated 47 percent of the revenue, he said. “Our goal is to deliver 10 million concurrent viewers in a single sitting.”
That could require adapting the platform to settop boxes, mobile viewers – wherever the viewer wants to be. But that will also require much more work on how to measure the audience and how to drive the highest profits per revenue hour, all while protecting content copyrights.
Teresi doesn’t worry about that when Yahoo! is distributing video for walmart.com, but he’s got to do better than that to recoup the search engine’s $150 million investment in Maven Networks. Lesinski from Paramount Digital does. Managing content through the many “sequential distribution” channels at his command is the way studios have milked value from content in the past, but he’s intentionally trying to disrupt that process to figure out how digital channels can reap even more profit from wider distribution without violating current deals or further handicapping theatrical release.
Or, as Cheng described the challenge, “as we evolve over time, how we serve a generation that is moving and maintain the infrastructure for both the old model and the new one over time, while serving both as the dynamics change and figure out where the money goes” – that’s hard.
Lesinski predicted a world in the not too distant future when content would exist in a kind of “cloud locker” with unlimited shelf space, where viewers can watch movies they’d never see otherwise – “any movie on any device at any time.” He looks for innovation in recommendations – technology that can pre-qualify movies and other video experiences for you that you wouldn’t otherwise discover.
Cheng chimed in with his version of Nirvana which would reflect “True convergence, a seemless transaction of content and people on any device, so seemless that you can deliver video and engage with the consumer regardless of what they’re doing, even if they’re on a social network.” He added, “We want to work with people, not against them.”
In other words, for “big media” to survive, there may be room for only one class of Internet video – the kind that puts the user first.
