MAD Perspectives Blog

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 Alternatives to Content Socialism

Peggy Dau - Monday, September 22, 2014

Insightful conversations are the benefit of attending conferences. At IBC2014, in Amsterdam last week, I had a number of those experiences. It was interesting to see that nothing really BIG was announced. 4K content, which provides a much high quality image with a high dynamic range of color, continues to be a driver across all aspects of the media supply chain. File-based workflows, which have been under discussion for over 10 years, are still a dominant part of the conversation.

However, perhaps the most interesting conversation was the one, with Colin Dixon of nScreen Media, about content socialism. Yes, you are reading that correctly. To be more specific, this is about content socialism in the United States. What? How could there be any thing socialist in the US? Well, there is and has been for quite some time in the business model pursued by the cable operators. Where else do you pay for something that you don’t want but do so because others may want it?

Colin coined this term earlier this year in his blog about the NBA inflating its license fees with Pay TV networks. US Cable Operators have long benefited from a business model which bundles an assortment of channels together, many of which we as consumers never even watch. The discussion about transitioning to an a la carte model has been debated widely, with those on the business side arguing that the a la carte model would be even more expensive for consumers due to the licensing fees between content owners and cable operators. The assumption is that consumers are currently benefiting from economies of scale in the current licensing agreements.

With this thought in mind, I visited various stands and an alternative became evident. IP delivery channels have become an accepted, valuable avenue for monetization. It was my chat with John Maguire of S3 Group that solidified the following thoughts. When looking at the capabilities at every point along the media supply chain, the focus on IP delivery of content is prevalent. It is evident in solutions focused on capture and transmission of audio and video across fixed, mobile or WiFi networks.  IP networks connect file-based workflows. And, they are the growth channel into the consumer home. So, with all this IP capability, why not create content for IP consumption only?

Why create special interest channels for cable? They appeal to niche audiences who would be willing to pay for access to content. It would be less expensive to create content for OTT consumption only. OTT providers such as Netflix or Amazon Instant Video, could offer specialized content at an incremental fee, thus expanding their revenue base. No, this does not address the concern of content socialization. Yes, this needs to analyzed more fully and I’m sure a lot of smart people have already had these thoughts, but with the increase in online content consumption and the ability to more easily create content, perhaps this is an idea whose time is coming.  After all, it only took 10+ years for video-on-demand to become mainstream or for file-based workflows to be fully implemented by broadcasters.

What’s your perspective?