The Evolution of Content Distribution in the Broadband Age

PATRICK SEAMANInternet Broadcast ing & Media P ioneer

THE EVOLUTION OF CONTENT DISTRIBUTION

IN THE BROADBAND AGE

2Copyright © Patrick Seaman, All Rights Reserved

Pre-moveable type Push Distribution Big Media Desktop Publishing Talk Radio Decline of Newspapers Pull Distribution & the

Internet Distribution Evolution

TV Everywhere Content Piracy VOD & OTT Growth Cord Cutting Periscope & Personal

webcasting

OVERVIEW

This White Paper discusses the evolution of media distribution, from its origins in the days before moveable type, through the 20th Century Radio and TV eras, to the Internet and the emergence of Digital Media, Video On Demand (VOD) and Over The Top (OTT) delivery of media over the Internet. Discussion includes:


Throughout the cycle of history, as new Civilizations have risen, they re-invented science and technology.

Then as now, knowledge was power, but secrets were often tightly held and protected. Only select few were entrusted with knowledge.

When those civilizations eventually failed (or great libraries or castles burned), the secret knowledge was lost.

It was diffi cult and slow for knowledge to propagate.

BEFORE MOVEABLE TYPE


Moveable type resulted in vastly cheaper books -- and a steady rise in the number of titles.

Regular newspapers become possible and inexpensive.

The choice of which books or newspapers to be printed was tightly controlled.

A small number of people or institutions were in control of the “Push” distribution.

1ST INFORMATION AGE


Content is designed and created by a small group of people with specialized skills and technical infrastructure.

Publishing editorial control held by few.

Distributed to an audience that has little to no input into what is being published – or how it will be consumed.

PUSH DISTRIBUTION


Print, Radio & TV are diffi cult to produce, requiring expensive infrastructure and specialized professionals and technicians.

Distribution requires expensive infrastructure.

Advances in technology drive gradually lowers production costs.

Consumers increasingly restless with available choices.

AGE OF BIG MEDIA


Advances in personal computer technology create “desktop publishing.”

Production costs dramatically fall.

Faxed and mailed newsletters, created by individuals and “interest groups,” expand the availability of media.

DESKTOP PUBLISHING


The public increasingly demands a voice. In the last 20-30 years, “Talk Radio” has set the stage for the idea of a community “voice.”

Success is Darwinian, driven by what the public wants to listen-to.

Viewed as an alternative to traditional broadcasters where consumers have little voice in what is produced.

TALK RADIO


NEWSPAPER’S DECLINE

1995-1999

iPhone

Initial Broadband Availability

Growth

Consumers find new ways to discover and

consume content


Even before the Internet, newspapers were failing.

The Internet accelerated the fall.

Circulation down dramatically.

Many experiment with paywalls, with mixed results.

Many of the most financially vulnerable have failed, leading to consolidation.

INTERNET KILLS MANY NEWSPAPERS


Traditionally, content distribution was managed by entire industries devoted to the complex process of distributing to

the content consumers. The distributors kept the lions share of the profi t.

OLD DISTRIBUTION MODEL

Content Created

Content Creators (often

paid by distributors)

Complex Distribution Model: Lions

share of profit

“Shotgun” delivered to

broad audience


Traditionally, content distribution was managed by entire industries devoted to the complex process of distributing to the content consumers. The distributors kept the lions share of the profi t.

OLD DISTRIBUTION MODEL

Content Created

Content Creators (often

paid by distributors)

Complex Distribution Model: Lions

share of profit


"It used to be that a handful of editors could decide what was news-and what was not. They acted as sort of demigods . If they ran a story, it became news. If they ignored an event, it never happened. Today editors are losing this power. The Internet, for example, provides access to thousands of new sources that cover things an editor might ignore. And if you aren't satisfi ed with that, you can start up your own blog and cover and comment on the news yourself."

DEMIGODS

Rupert Murdoch News Corp,

MySpace.com, The Wall Street Journal

-- Boyer Lecture, November, 2008


“The media is too concentrated, too few people own too much. There's really fi ve companies that control 90 percent of what we read , see and hear. It's not healthy.”

MEDIA “TOO CONCENTRATED”

Ted TurnerCNN

TNT, TCM, ATLANTA BRAVES,

ETC.

-- Speech to the Commonwealth Club in San Francisco, April, 2003


Technology is "allowing the little guy to do what once required a huge corporation… Matt Drudge has succeeded in challenging all the leading media companies of our day -- including mine."

INFLECTION POINT





Traditional “Broadcast TV,” also called “Linear TV” is now available Over The Air (OTA), on Cable, Satellite and Over The Top (OTA – Over the Internet).

Much of Linear TV now broken up into individual programs and available as Video On Demand (VOD).

Netfl ix, Yahoo, Amazon, HBO, Showtime, etc., now distribute original content created exclusively for VOD

LINEAR, VOD, DIGITAL MEDIA


1.6 billion people worldwide actively watch online video on a variety of connected devices, representing just over a fifth of the planet's population .

900 million people worldwide access TV programming and movies online today.

Over 70% in order to access specific titles.

Over one-third subscribe in order to access original content.

(RELEVANT) CONTENT MATTERS

Source: Parks Associates OTT Playbook, 2015


Video now consumed on phones, tablets, PC’s, and Smart TV’s, in addition to traditional Over The Air, Cable and Satellite.

TV EVERYWHERE


“You know what is AMAZING about VOD (video on demand) ? It gives you thousands of choices and its already connected to your TV. It just works.”

VOD (VIDEO ON DEMAND) &CONSUMER CHOICE

Mark Cubanbroadcast.com

Dallas Mavericks


In 1995, we launched AudioNet (later broadcast.com). It seemed to grow geometrically, and eventually became the largest aggregator and distributor of audio and video in the world, prior to the acquisition by Yahoo at the end of 1999 for over $5billion.

One reason it grew so fast and huge was that people couldn’t get the content anywhere else. People even accepted the then poor streaming experience the late 1990’s bandwidth allowed.

People wanted to PULL what they wanted – not channel surf a sea of content they would otherwise “settle for.”

DISCOVERING “PULL”


Mainstream Content continues to be published by “a few” with large budgets

Smaller producers now leveraging cheap technology to create NICHE vertical interest content.

Mainstream or Niche, consumers choose how, when, and where it will be consumed.

Consumers now funding actual production – not just after-the-fact subscription payments.

TODAY’S PULL

Kickstarter funded “Veronica Mars” movie


Today’s content creators are creating direct relationships with enthusiast audience members, often while continuing traditional distribution in parallel. There is much friction.

EVOLVING DISTRIBUTION MODEL

Content Created

Content Creators

Traditional Distributio

n


Content distributors struggle to maintain control over distribution – Applying the old models to the new.

Consumers rebel – whether it is music, video or games, and Pirate-Pull what they want anyway. Publishers prosecute their customers…

Successful publishers often go direct to consumers, trying to establish direct relationships.

Piracy often shown to be result of content not easily available to consumers.

CONTENT PIRACY


PIRACY AS MARKET RESEARCH

“What's certain is that [piracy] has created a public that is accustomed to viewing content online. We will offer an alternative that is much simpler and immediate than looking for a torrent.”

Reed Hastings,CEO Netflix

-- June, 2015


INTERACTIVE GROWTH

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

2

4

6

8

10

12

14

16

18

7.488.13

9.19 9.45 9.11 8.93 9.25 9.63 9.9510.65 10.48 10.14

11.07 10.910.37

5.56

6.9 7 7.3 6.9 7.3

9.5

11.7

10.1

17.1 16.7

15.2 15.4 15.4

US MOVIE SALES -VS- VIDEOGAME SALES

US Movie SalesUS Videogame Sales

IN B

ILLIO

NS U

SD

Video games are an ultimate consumer “pull” content type.

Source: Statista & The-Numbers.com


VOD GROWTH

By 2013, Netflix and others seriously challenged traditional cable TV


OTT GROWTH

OTT video delivery (“Over The Top”) refers to the delivery of video over the Intenet to connected devices, like smart phones, PC’s, laptops, tablets, or game consoles using free or subscription service applications (“apps”).

Juniper Research forecasts that subscriptions from OTT TV providers, such as Netflix, will generate $31.6 billion by 2019, up from just under $8 billion in 2014.

Streamingmedia.com reports that from May 2014 to May 2015, OTT has grown to $9-12 billion in global Revenues.

Streamingmedia.com also reports that $1.9b of those revenues came from emerging markets.

Advanced-Television.com reports OTT should see 26% revenue growth in 2015, and 24% CAGR through 2019.


OTT CORD CUTTING

Streaming Media Magazine reported in 2013 that OTT subscribers were:

Cutting back on channel packages with pay-TV subscriptions and supplementing with OTT.

51%

Canceling traditional pay-TV subscriptions in favor of pure OTT.

23%

Maintaining their full traditional pay-TV subscriptions and supplementing with OTT.

19%


LINEAR TV GROWTH

Linear TV growth is flat or declining, VOD like Netflix continues to grow.


PERISCOPE & PERSONAL WEBCASTING

The democratization of “Pull” can perhaps be symbolized by Twitter’s mobile personal webcasting app “Periscope.” Individuals have been able to easily use apps like Skype and Facetime as well as Google Hangouts, etc. for various purposes, but Periscope raises the live-streaming bar, for ease-of-use and its ability to deliver to a broad audience from ubiquitous smartphones.


FINAL THOUGHT

To quote Rupert Murdoch one more time:

“Stop whining about the challenge of new technology and “get out in front of it”".





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PATRICK SEAMAN (misc. roles) Yahoo! Broadcast.com Director of Technology Board Member: Broadcast.com Japan Timberwolf Press, CEO Deer Channel, CTO WhichBox Media, COO, CTO Ole’ Media, SVP Strategic Technology

CONTACT / LINKS

PATRICK SEAMANInternet Broadcasting & Media Pioneer

Date post:	28-Jul-2015
Category:	Internet
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