You Can Be The Next Entertainment Mogul, If You Act Now

We are about to experience the most profound metamorphosis the entertainment industry has seen since the commercialization of television.  It is a huge opportunity for anyone who is willing to jump in with both feet, but you need to start now.

Since the introduction of television into the living room around 1948, the broadcasting industry has been controlled by a virtual handful of people.  Even after commercial cable was deregulated in 1972, the number of companies that control your television has remained relatively small.  This paradigm is about to change in a big way. 

As we know, the Internet allows anyone to transmit content to millions of other homes and businesses around the world.  At first, the limited bandwidth made it suitable only for sending simple written communication.  But bandwidths and transmission speeds have steadily increased to allow for the quick transfer of larger and larger files.  We are now at the point where high definition broadcast-quality files can be transferred almost instantly. 

In this new environment, there are already several inexpensive choices for hardware that will stream high definition content from the Internet directly to a big screen television.  Apple TV, Google TV, Roku, Boxee and several other devices will already bring the Internet to your living room.  With some models priced under $100, a whole lot of those devices are going to be sold this Christmas.  Within a year, watching Internet content on a TV will be much more common than watching it on a computer.

But wait, that’s not all!  The success of the iPad has induced about 10 other major manufacturers, and at least as many minor manufacturers, to create their own version of the portable personal media device.  So, not only is Internet content migrating to TV’s, but it is about to also be in everyone’s hands – literally.  Hundreds of millions of media tablets will be sold in the next few years.  The consumer nirvana of watching whatever we want, whenever and wherever we happen to be, is about to become the societal norm.

The obvious opportunity is that anyone can now be in the broadcast business.  The barriers between content creators and consumers are gone.  We can sell premium content, individually or by subscription.  We can sell advertising and product placements.  We can create entire networks or distribute films, all with virtually no borders or limitations.  The door has been kicked wide open.

What strategies and business models will work?  All of them.  Anything that worked in the tightly controlled entertainment business can work in the new broadcasting democracy.  The scale might be smaller (as the multitude of choices creates a buyer’s market), but the opportunities are there. 

Here are the two keys to success which need to be accomplished as soon as possible.  First, establish strategic relationships with strong players.  In the early days, it will be much easier to get distribution through major platforms as they will still be expanding their offerings.  But as things fill up, this will become much more difficult and costly. 

Second, find your audience and start earning their loyalty.  Consumers will develop viewing habits and favorite outlets.  Establish your style and find the audience that responds to it most passionately.  Keep them happy, and they will tell their friends.

A whole new frontier is opening up right now.  Go stake your claim.  Big players like Tom Hanks, Ben Stiller, Michael Eisner and many, many others are already doing it.  You can do it too, but if you wait another year to get started, it could be too late.  Do it now.

Recorded Programming Has Not Significantly Altered TV Viewing Habits. Will it ever?

Today's Hollywood Reporter carries an article on the impact of digital video recorders (DVR's) on television viewing habits. The article tracks a study on the topic, and makes a couple of interesting points.

First, although many homes (36%) now have DVR's as a part of the home entertainment system, over 90% of TV viewing is still done in the traditional linear sense. The programs recorded on the DVR are generally treated as alternative programming to be viewed when nothing better is currently available. In other words, viewers still ask "What's on?" and when the answer is "Nothing," then they turn to their DVR.

I'm thinking about what might drive that behavior. Perhaps it is the social aspect of knowing that when you are watching a program at its scheduled time, you're seeing it "first" -- at the earliest possible moment, along with millions of other viewers. It is an experience shared by the fans of that program - each in their own home, but watching together.

When you watch a recording of the same show at a later time, psychologically you know that those millions of other people already know what happened. You are no longer part of the "club;" you don't feel like a true fan of the show. True fans like to be on the cutting edge of the developments in our favorite episodic programs. The DVR takes us out of that club.

When other people are talking about the program at the office the next day, we don't want to be left out of that conversation. In fact, we will probably exclude ourselves from the discussion so we don't hear a "spoiler;" finding out what happened before we get a chance to see it for ourselves. We actually lose a real social touchstone by not having watched the program along with the other fans.

The other point which I found interesting was that even though many programs are available on Hulu or other services, 99% of programming is still watched on the television screen, and not on a computer screen. This doesn't surprise me as truly seamless integration of Internet-based programming into home entertainment systems is just emerging. (I had lunch with Jonathan Handel this week and he told me about a spectacular deal he got on a 1080p with integrated web access. With prices dropping so fast, that technology will surely spread very quickly.)

But when Hulu is just another channel on your television, will the true fans still have a desire to see their favorite programs at the earliest possible moment? Honestly, it's a phenomenon I had not considered before now. I have been assuming that digital technology would eventually eliminate the traditional TV model all together -- that programming would eventually just be produced and released for viewing at each consumers' individual leisure -- one giant YouTube of media. I had actually envisioned traditional broadcasting as a dying medium. In reaching that conclusion, I had completely discounted and ignored the social aspect of broadcast television.

Now, I remember sitting with tens of millions of viewers watching the final episode of MASH, knowing that I was likely part of the largest viewing audience ever. I remember the feeling of knowing that most of the country was simultaneously watching those images and experiencing emotions similar to my own. It was very powerful -- perhaps more powerful than the program itself. Yet, in the face of digital technology, I have been assuming that this "social event" quality of popular programs would be inevitably and easily sacrificed to personal convenience.

Sitting all alone at my computer, in a quiet house in the middle of the night, I am now forced to reconsider. Our actions are motivated first and foremost by our emotions, and perhaps there is an emotional component to broadcast television programming that cannot be recorded on the hard drive of a DVR or computer.