What Kills the Video Star?

We all know the old song, “Video killed the radio star.”  The question now is whether something is killing or at least wounding the video star.  The latest research on video shows, not to my personal surprise, that the impact of OTT video is primarily to increase viewing hours rather than to displace traditional channelized viewing.  What my own models have been saying is that if you let somebody watch video on a smartphone or tablet, the portability of the platform opens video-view entertainment options that did not previously exist, and guess what?  People take advantage of them.

Many would have us believe that traditional television is dead, that Apple and Google are taking over the world, video-wise.  The numbers don’t bear that out, and in fact no respectable research I’ve ever read shows anything but either consistent or even increasing channelized viewing even in the face of OTT.  This proves, obviously, that exciting news is a lot more interesting than the truth, but it also disguises some questions/issues for people who want to make money on OTT video.

People have always told the same story when asked why they’re watching an OTT video.  First reason; they’re where they can’t view a normal TV show.  Second reason; nothing is on their available channels.  Third reason; some friend sent them a link.  To understand the future of OTT video you have to address these points.

I think every generation has at some point leaned back in disgust during a session of channel-flipping and said “TV sucks anymore!”  The fact is that TV is always going to suck for some portion of the population, and in a world where youth has more manipulable spending than their elders do you can expect programming to shift in their direction.  Personally, I hate “Twitter-like” or even actual Twitter feeds superimposed onto shows.  I also hate action shows that spend half their air time developing their characters’ lives.  I have a life; I’m interested in the action.  The point is that all these likes and dislikes are personal and subjective, and producers try to walk a line of keeping every just happy enough not to switch channels.

Where OTT could help is with the cost side.  If we could produce content at a lower cost we could offer content that was more tuned to the personal whims of more classes of viewers.  That would mean OTT might be better than channelized TV in a content sense.  But even companies like Netflix are spending more acquiring content rights than developing fresh content, and so we’re not playing this quality-and-personalization card effectively.

The issue of “can’t watch where I am” is relevant because my data at least suggests that what people watch when they’re out and about tends to be either short clips suitable for viewing on the run, or something they don’t want to miss.  YouTube satisfies the first of these, but the second means getting what’s essentially live TV feeds into OTT.  Clearly that could be done even today in a technical sense, so why aren’t we doing more of it?  Because nobody wants to kill the advertising revenue stream.  If a major sporting event were to support live feeds to portable devices they might lose a ton of money because online ads earn less than TV ads per viewer-minute.  Why?  Because they’re less effective at manipulating purchasing, and that’s because mobile users are more distracted (hopefully) by their surroundings and tune out the ads more effectively.  Not only that, we’re all being conditioned to tune out online ads by being bombarded with them.  Clearly we need more research on how to engage somebody with in-content mobile advertising.

That leaves our last point, the issue of link-sending or “viral video”.  People send others YouTube clips almost a hundred times as often as any other video link according to my numbers.  Why?  Because you probably don’t have to watch for an hour to see what’s interesting.  When you share a link with others you are injecting your thoughts into their context, and unless they can quickly sync with your mindset they’ll not be able to appreciate what you send.  The obvious conclusion is that we need to have accurate metadata indexing of material and also have a way to send a link that includes positioning data on videos if we want to take advantage of viral properties for normal TV or movie video content.  Again this shouldn’t be rocket science at a technical level, but neither of these are common and we’re making particularly poor progress with metadata scene coding, even where it would be easy to use the script to develop it.

So why are we doing badly at promoting a video model we all seem to think is the next big thing?  I think there are a number of reasons.  First and foremost, you don’t dig up all your wheat to plant corn if you’re depending on a crop in the near term.  The transition from a channelized to an OTT-driven video model could well trash the economics of content production, and we have to figure out a way to produce shows profitably or it won’t matter what viewing technology we can support.  Second, you have to develop a video deployment model that’s very agile in terms of viewing support, ad insertion, social-media integration, and even customization of the “overlay” concepts like Tweets.  Right now, we tend to always go for the lowest common denominator approach, and that’s encouraged everyone to sell the platforms short.  We have Internet-integrated TVs now, and most STBs could likely overlay Tweets on screens.  Why then are we sticking content many think are distracting on every screen?

Content is the least-realized of all the operator monetization goals.  Its projects are delayed, its technology is muddled, its proponents at the planning level are losing political credibility.  If we can’t fix the framework of OTT, if we can’t fit it into all the entertainment niches in a profitable way, we’re going to be either watching new reality shows or “I Love Lucy” reruns forever.

Leave a Reply