Here are some
further notes from today's Stanford Symposium on new networks and
content models. The Symposium was broken into four panels. This is panel 2.
New Media: Is Content Still King?
Rob Glaser of Real Networks pitched his new Rhapsody 25 service - 25 free samples of music per month. Cute. His demo failed. DRM, perhaps?
David Weinberg of Universal Music painted a good strategy for a music label - just 5 years too late! He supports digital music everywhere, as long as he gets paid. Seems that music is done for now, meaning the models are now largely known.
Best so far is Bob Greene of Starz. He pounded home how Starz and HBO own the VOD + payTV + basic/broadcast windows - they own the title from month 3 to year 10. So back off all ye little video bypass ventures! He also showed how subscription is worth much more than a pay-per-view model due to larger user base and recurring revenue model. He also sees the value of the Long Tail, hence is trying to own the library for longer periods of time. New initiatives: Starz on PC (looks pretty useful, done with Real, has 300 top run titles - remember he owns the rights!), and the biggee, Starz on PSPs and other portable devices. Lots of interest in the new personal media players.
Jeremy Allaire, CEO of Brightcove, one of the first of the budding group of "Flickr for Video" companies, pitched an open TV platform he calls Internet TV. The IPTV panel made a point that IPTV is not Internet TV. Right they are - Internet TV wants to bypass the distribution control by cable and telco, IPTV is the way they maintain control and yet adopt to the Internet. He also calls it Long Tail TV but he defines the long tail differently than Starz. Starz's Long Tail means the library of first run content; Brightcove's Long Tail means all the small or foreign stuff that is hard to find. Maybe best to call the first one the long tail, and the second the broad tail, since is not focused on library but breadth. Many obstacles to an Internet TV business model, including getting content rights and being dependent on the very broadband providers it is trying to bypass. It is conceivable that an open STB or equivalent could make this feasible, but better would be a third pipe into the home or into portable media players
Sean Parker, formerly of Napster and most recently of Plaxo, has founded a sleeper social network company, thefacebook.com. Facebook is coming up the tailpipe of the leader in social networking, MySpace. (Friendster has faded.) Has 2.8M active registered users with 65% returning per day, 85% per week and 95% per months. Billions of monthly page views. Real names not fakesters due to tie in to colleges: 45% list their cellphone & even more post their real picture. Consequently, the Facebook social network matches the real world network, and the usage is for real world events and interactions. Is this the next paypal? Or will users drop it after graduation? Enquiring minds wish to know.
His opening point: old media eats up margins - too much to cable, too much to labels/studios, etc. New media can have free content (generated by users), free distribution (piggyback on broadband) and cheap marketing (viral). He is on to something - he defines the long tail as user-generated content. We could call this the How-to-get Tail, given the prime use of social networks, or maybe the Tail Tail, but perhaps better is to call this the Free Tail. We should not underestimate the value of user-generated content, as the interpersonal communications market (telephony) is much larger than the content market. The cost of delivering new media on the web is so cheap it can use an ad-supported model, including self-service ads (online ad placements, bought not sold). The sleeper in here is the localization angle - local pizza ads for college kids, or Craig's List, as examples.
Q&A: is content still king? Rob makes the outstanding first point that the bypass models like mp3.com failed in music due lack of the social interaction required to promote new acts (touring, cross-promotion, taste-making by influencers). David agrees, and notes that the Internet is more useful for established acts. Labels are venture capital for artists, and the Internet does not substitute for it. Then the Starz guy began piling on new media. He commented that crap is crap so having more content is not the answer, free or not. Now the panel was getting interesting! The new media guys sat like couch potatoes when they should have grabbed the mike and asking the Starz guy what leads him to believe that the vast wasteland of TV is peddling anything beyond crap? Crap sells!
They all agreed mobile content would be a big winner. Bono at a recent concert called for people to hold up their cellphones rather than lighters to call for an encore.