Discovery validates thePirateBay model

On December 12th, Broadcast & Cable ran an article about Discovery Channel taking their long form content offline because it was not a significant driver of their business. From the article:

Discovery CEO David Zaslav, speaking at the conference, said that despite the large content library that Discovery owns, viewers are unlikely to find any of it online in the near future.

"You won't find our long form content on the Web," Zaslav said. "There is no long form business model yet, we will be really careful [in that area]."

Cable networks also have affiliate agreements that often prevent them from syndicating their content online in a timely manner or at all.

I totally appreciate the fact that they are reacting to the Cable Industry as is and due to their carriage agreements are restricted in what they can make available. However, by cutting off the legal channels by which consumers can acquire content digitally they are doing nothing more than validating the model of sites such as The Pirate Bay. Going forward it appears many will have to "steal" their favorite Discovery shows instead of having them available as an ad supported streaming option.

Many cable channels will likely make similar decisions as ad sales teams find it difficult to monetize the available inventory for video products. It's a very music industry like move and to be honest one that is bad for both the consumer (who is becoming more trained to look for streaming media) and the cable network(s) alike.

About those Hulu numbers...

NewTeeVee has a post diving into the Hulu numbers for October/November numbers that raise a lot of questions. I see the internet as providing (for the first time) a valid method to measure audience, reach, and engagement that analog via. Nielsen has failed to do for years. On Nielsen specifically do I believe that a "diary" or other method is a real way to measure what people watch (who would write down all of their channel surfing during commercials?)

On that premise, the high level details we understand is that Tina Fey spawned a significant amount of viewing via. 3rd party embeds/ distribution partners. All of that short form viewing is great but I would be very curious to understand how much long form viewing occurs at Hulu vs. their distribution partners. Since Hulu tends to offer a higher quality experience through their HD Gallery coupled with easy to understand navigation I would assume that more users are visiting the destination for a time shifted experience. On my initial opening point it is highly disappointing that we are still unable to understand the "real" numbers that expose how consumers are viewing content online.

I am positive that Hulu internally has strong analytics/ tracking and this is driving their overall business strategy. They have proven able to monetize their distribution partners inventory very effectively but do they suffer from another YouTube problem which is monetizing embeds? Does Hulu retain a high CPM for a Tina Fey clip that is embedded in this blog or any other? Their strong content library gives them significant leverage on the ad buying industry and if they are able to monetize all channels at a high CPM that would prove impressive. An ad sales strategy focused on reach, especially for Hulu, would prove to be a hidden advantage that their competitors may not be focusing on.

As you read more press about Hulu keep some of the above points in mind; they are slowly changing the paradigm not only for the consumer but for advertisers. All of this of course based on the theory that they are closely watching how you view content.

"Open Social" for BrightCove?

As if TechCrunch didn't provide enough coverage of BrightCove as it was, they threw this one over the fence today. Now, here is the thought I want to provoke: it appears to me that BrightCove is trying to create an "Open Social"-esque platform for end users to develop extensions/apps. Thoughts? If this is true it will be an interesting way for them to drive their business and differentiate it from other competitors. If we have learned anything this year from Apple and Facebook, getting a lot of developers on board (who then get you free press via. their innovations and new features) is an all around good move.

A rapdily changing CDN market awaits us!

First it has been a LONG time since I had time to write an update, for those of you that have been checking in thanks for coming back, and I promise to keep this site updated more moving forward.

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So let's discuss the interesting dynamic that is emerging as the economy falls and the plethora of CDN companies compete for a shrinking amount of opportunities and business. I see a few key fundamental trends that will allow large companies with significant traffic to reap healthy contracts to minimize content distribution cost:

1) Akamai will become more price competitive and will attempt to keep a strong hold in accounts where they already have a presence. After their dismal earnings report, I believe they are moving to a loss lead strategy to put pressure on the CDN market as a whole and will use the recession to drive some of their competition to acquisition (or out of business entirely).

2) Smaller CDNs will start to disappear at a rapid rate. Many will be forced to give away their services in light of competition from Akamai, LLNW, L3, etc; with many startups taking staff reductions their ability to perform under load will be challenged.

3) Rollout of new "dynamic streaming" technologies will be pressured by the CAPEX outlay to enable these new networks. Adobe, Microsoft, and others that are pushing new technology through in this economy will find themselves footing the bill for large scale CDN deployments.

4) An ad downturn will impact the ability to deliver HD content conceptually, but CDN price deflation will end up reducing this barrier. I think this will be the most interesting paradigms to emerge, will most major networks (and sites like Hulu) push MORE HD as their CDN economics become more advantageous?

5) P2P becomes irrelevant. Back to point #1, as far as professional level content distribution goes CDNs will be forced to become price competitive to these technologies.

It's going to be very interesting, and I'll revisit this topic as details emerge from within the industry.