Saturday, April 16, 2011

A possible future of TV

The Story:

TV is becoming more and more fragmented, we have moved from 3 channels of content to having hundreds of channels available in that media, along with hundreds of video sharing websites and millions of content creators.

This is my opinion:

I feel that as video becomes more fragmented and people are more able to avoid marketing attempts advertisers are going to take one of two approaches, either stop sponsoring video creation or work towards getting their content to be unavoidable (this could be anything from product placement to those annoying ads at the beginning of a video that you can't skip past).

Perhaps there is another way. As far as I understand it TV shows are usually made by a process where a person selects one script from hundreds (or thousands) that pass over their desk. After a script is chosen the studio will typically pay for a pilot to be created (or another investor pays for the pilot and you shop that around to studios). Typically at this point a production company will be started if this is their first time making a pilot, if not then the writer is typically part of a production company. If the studio likes the pilot they may decide to pickup or purchase the show (many times with changes to the actors). When they do this, they select how many episodes they want to buy and what they are willing to pay, this is where the budget for a TV show comes in and leads to the quality of the production (shows with high budgets can afford better cameras, explosions, stunts, better actors, etc).

As the fragmentation persists and advertisers pay less to the studios and the studios will start changing their business, or perhaps even go out of business. What if a company started to use the power of crowdsourcing to fund TV shows?

The idea is simple replace the studio with the general public. Instead of funding pilots the production companies would fund their own pilot and if the general public liked the show they could purchase a season. The production company would input all of the information about the show that they had at the time of creating the pilot, including the total budget they were working with, how many episodes they were going to create, episode length, and cost of the season. If they sold enough seasons to hit their budget they would be funded and be able to create their show, if not - it would be a flop.

The company that hosts the videos and makes all of this possible would take a commission from each show sold, probably 10-30%, I am not sure what a television station takes - but I would say that this company would have to take less than standard TV to attract big shows.

Amateurs would also be able to get into the mix, but they would be held to a slightly higher standard to prevent fraud. They would have to fund their entire season by themselves then sell it through this marketplace (still just showing the pilot). A great example of a show that was self funded that rose to being a funded show is "the Guild".

I would say Google is the one sitting in the right position to capitalize on this idea. They own You Tube which is a great backbone for video hosting, Android which could be a great platform for viewing/sponsoring these shows, and their powerful advertising network which could allow for more revenue streams for these videos. Sony, Netflix, and Dish Network are all also sitting in decent positions to take this on as well.

BTW: If I inspired you to make good on this idea I wouldn't mind a royalty of 1%, I am using the honor system here.

Thursday, April 14, 2011

DRM - Huh, What is it good for? Absolutely nothing.

The Story:

Dragon Age 2 was unplayable for 4 days recently, this being the second time in a few months that a server outage has caused this game to be unavailable for those who had purchased it.

This is my opinion:

I feel that no matter how hard companies try to lock down their content, someone will figure out a way around it. I have been playing PC games for over a decade and I can't think of one that has been completely safe from being cracked, hacked, or otherwise circumvented. My theory is that they wouldn't see any more piracy if they made games without any type of prevention, and may even increase sales if they focused the effort and resources in a different direction. People who are going to pirate or benefit from pirated games are going to continue to do that. There is no argument that gaming companies can make to prevent them - it is a choice these gamers have made.

People who want to support a company will do that as well. There are many people who will pirate a game to make sure they like it, and purchase it if they do. This is because the market does not allow for the return of video games (one of the original moves to curb piracy of games). If you can't try it before you buy it, what guarantee do you have that your $20-60 purchase is going to be worth while?

There are other people who are too poor to buy the games in the first place. These people wouldn't be buying games anyway, so they aren't really a drain on the system either - they may actually be a benefit to the system because if they enjoy the game they will tell their friends about it, who may actually purchase the game (unless they are poor as well, and then it won't matter either).

I would say that game manufacturers are pushing people towards piracy. If you had a pirated version of Dragon Age II, it is likely that you wouldn't have been effected by this outage. I have personally downloaded no-CD cracks for games that I have purchased in the past, just so that I didn't have to change the CD every time I wanted to play a different game. That has to be one of the more annoying anti-piracy moves that companies have made over time. Don't get me wrong though, the most annoying is to demand that you have an internet connection to play a single player game so that it can authorize you to play every time. That takes the cake.

I think the people who are punished the most by anti-piracy are the people who actually buy the games. You have to endure whatever crazy thing they want you to prove that you actually own the software. I spend an hour on the phone with Microsoft when I moved a harddrive with windows XP from one set of hardware to another. I didn't clone it, or do anything crazy, I just wanted to use my new motherboard with software that I received when I purchased a Dell computer. I was told that this was a breach of the EULA and that I would have to purchase another copy. Eventually I got them to do it, but it was a pain that took way too long. If I were installing a cracked version of Windows, there is a high likely hood that I wouldn't even have to type in a license code.

Who has the better experience?

Wednesday, April 6, 2011

Blockbuster - Under new management

The Story:

Blockbuster was recently purchased by Dish Network, for $320 Million (though they will likely only have to pay $228, due to Blockbuster's debt).

This is my opinion:

This may be a huge win for Dish Network providing they understand what they are doing with the new brand. My guess is that they could use this partnership to compete heavily with Netflix and Redbox exploiting their relationships with networks and studios to provide content through streaming video and via the mail. I don't know that this is enough to compete, so I would take it a step farther than just building up what Blockbuster had tried before their fall.

The potential for the Retail locations -

Blockbuster has/had 1700 retail locations across the country. I would turn these into Dish Network corporate stores, while retaining the Blockbuster branding outside and adding Dish network branding to the logo. Inside of these stores I would continue to do some movie and game rental, but it would be more about educating customers around how to stream movies using the streaming service (a service which I would build into the Dish Network boxes). I would also use these stores to promote premium services offered by Dish Network and even attempt to partner with a retailer like Best Buy, Wal-mart, or Target to be able to sell TVs from these locations.

I would recommend selling contract TVs (similar to the discounts on Mobile Phones for signing a 2 year contract). TVs that sell for 100-300 would be free, and larger more expensive TVs would have significant discounts, as long as customers sign a 2+ year contract for service. Imagine a free 55" 3D-LED for free for signing a 5 year contract to Dish, how many people would be on board with that.

Crushing Netflix, Redbox, etc.

Netflix and eventually Redbox were the harbingers of doom for Blockbuster. Now that it is under the wing of a larger company it is time to return the favor for these companies (full disclosure I am a Netflix customer and love Netflix instantly streaming). I would start with attempting to offer more content and provide new content as fast as possible to the Blockbuster online side of the business. I would also heavily push for the video game side of the mail business to be an add on to the movie subscription, or perhaps you could have a subscription model where a customer can have X discs out for $XX.XX per month depending on the total number of discs they want and they could choose to divide that between movies and video games. It would provide a Value Prop that isn't offered by Netflix or Redbox (you would also be competing against gamefly, gamestop, and valve/steam).

In addition to adding value props, because Dish is a large company that has revenue streams coming in from many different places, they could also offer the "instant" streaming movies for a price that may not net them any profit, or a slight profit margin to drive their competition out of business (see Wal-mart).

Leverage the Future of TV

With more and more people moving away from traditional TV service this can give Dish the edge they need to be an innovator of the future of TV. This purchase coupled with their purchase of Slingbox could give them the tools they need to make some huge leaps and bounds, I will sit back and wait to see if they can combine their assets to make something greater than a sum of the parts.

Let me know what you think.