Mark Cuban has a great post up on his blog titled The Ala Carting of Video on the Net – Will it lead to disaster ?
I’ve been reading Cuban long enough to know that if he poses a question like that in a blog title, he definitely thinks the answer is yes. I’m similarly minded on the topic but it matters not, the video content producers will likely hang on for dear life trying to squeeze every last dollar they can before ultimately meeting with the same fate as the record industry.
While I always love what Mark has to say, I think in this case I love what Craig Moffet of Bernstein Research has to say more. And it was Bernstein’s “And Now for the News…The Emperor Has No Clothes” that inspired Cuban to write. Unfortunately I have not seen the report, but Cubes cites the money quote which I agree with completely:
Ironically, we are headed down the same self-destructive road for other kinds of traditional media,as well. Five years into the video-over-the-Internet revolution, we have learned two things. First; consumers won’t pay for content on the web, so it will have to be ad supported. And second; it won’t be ad supported.
Ouch. Check out the link above for Cuban’s thinking on the matter.
May 5th, 2008 at 8:19 am
Studio supported shows online do have a future.
First the CPM's for online shows are higher than that of TV shows and will probably get even higher as ads are able to become more targeted. An advertiser will pay more when they are one of 4 ads in a program and an advertiser will pay more when they know their audience is interested in their product.
Second, ads can be attached to clips. 15 seconds of ads for a 30 second clip is a good ratio, especially if the clip was produced as part of a larger program that is also getting ad revenue.
Third, Online video, assuming the rights can be worked out, can reach a global audience much easier. 300 million Americans versus over 6 billion earthlings. You do the math. The only thing content producers would have to take care of is translation; distribution is a non-issue.
Fourth. Old content will continue to produce revenue as long as its online, basically forever. A viewer can blow a day watching an entire season of Arrested Development, content that would just be collecting dust otherwise.
Online video does have a future, if the content producers are smart about it.
May 5th, 2008 at 10:58 am
I think what's going to be destroyed is the current business models of the TV industry, but, like the record industry, it'll take quite a while to happen.
September 21st, 2008 at 6:45 am
Yeah, I’m agree Bill. At least it has to change