October 2010

Just Like 1998

 

It was just like 1998 all over again for me, at least sort of.  I was recently interviewed on a digital sub-channel and it reminded me of 1998.  Let me explain.

 

At the NAB Conference in 1998, I was interviewed by Dave Gardy, then of Gardy – McGrath, and now of TVWorldwide, an organization that bills itself as Intelligent Internet TV.  The company specializes in B 2 B and was the Internet’s first TV network. 

 

Gardy was a client of one of our clients and later became a client of ours.  In 1998, Mr. Gardy asked to interview me for a web cast from the show floor at NAB. 

 

Of course, I had never participated in a web cast prior to that.  In fact at that time, few people had.  Indeed, I have no idea if anyone was there in the ether listening or watching.  Nevertheless, I had a sense that I was involved in something brand new and something that at least in concept was about the future. 

 

I was in good company.  Buzz Aldrin was interviewed by Dave right after me and I had the opportunity to meet him. 

 

So, I had a similar sense that I would be involved in the very early stages of something new when I agreed to be interviewed by Ted Chen about Google TV on NBC 4.2 on Sunday morning a few weeks ago. 

 

The concept of the digital sub-channels was made possible as a result of the TV spectrum changes from analog to digital.  Programming is available at other hours on this and other digital sub-channels.  Sometimes that programming is as simple and inexpensive to produce as the weather. 

 

Arriving at the set, we observed a Wayne’s World, early days of television atmosphere, albeit with the latest high tech gear, as Ted Chen and sidekick and weather person Carl Bell were prepping for the program.

 

Everything was certainly organized and professional, but loose.  The show started “about” 7 and ended “about” 8.  Flexibility was the order of the day.  There was no urgency to start and stop precisely on the hour as with conventional TV programming. 

 

In addition to my segment, there were segments that day on internet dating and LA food trucks as well as a band that played children’s songs. 

 

Knowing that all of the networks are expanding their content creation/programming for their digital sub-channels, it was still great to experience it first hand.  In time, there will be a program or two or more that catch on and spark interest in viewers, perhaps the same way that Lonely Girl 15 caught on, albeit briefly, on You Tube. 

 

TV in the 50s was not 24/7 and as such, this is not a lot different.  In time this will change as all new outlets inevitably do or they will fade away.

 

In 2006, we prepared a research paper entitled “The Future of the Living Room” for a client, which, among other things, talked about the range of content that will be available beyond conventional big budget network and cable programming.  Not all content will be produced for the masses. 

 

This de-massification of the media and the age of personalization, concepts written about by many, but most significantly by Alvin Toffler, who was thinking about this phenomenon dating back to the late 60s, is exactly what is going on in the media today.

 

Netflix, Redbox, Hulu, iTunes, Roku and others have become disruptive to the traditional process of delivering content.  Their impact is being felt.  Google TV will undoubtedly impact the ecosystem, too.  Cords are being cut as consumers gravitate to the DVR in the cloud.

 

Indicative of how far along the changes have come, pay TV subscriptions in the second quarter of 2010 decreased by 216,000 along with a loss of 711,000 cable subscriptions.  It is just a fact that as content is available from more sources, some of the traditional sources will lose ground. 

 

In time, all content will be on demand and will be cloud based.  The DECE Ultra Violet system may be the answer based on various demos we have seen and read about the system, enabling a customer to buy it once, play it everywhere, anytime.

 

Stay tuned for more.  The next year or two will be most interesting and at some point we will say it was just like 2010.

 

Trends in the Marketplace

Twitter – From the early days of this newsletter, we wrote about Trends in the Marketplace.  Although our opening essay typically results in positive feedback, it is about items found in this section that people tend to respond to.  I have recently set up my Twitter account, @MartyShindler and will be posting on various news events, articles in the press, etc. that often are indicative of trends or are the seeds of Trends in the Market Place.  We look forward to your following those tweets.

 

 

Streaming media – The fact that more streaming media services are in place, means that the various bundles and tiers of services that the cable, satellite and telcos are offering or even demanding that their subscribers purchase, will potentially cause more people to consider another source of television/video content.  This has become contentious in negotiations between some of the satellite and cable providers and the content owners as the latter seek higher sub fees.

 

Indicative of this, as reported in a quarterly study by Brightcove, Inc. and TubeMogul, Inc. entitled Online Video & The Media Industry:

 

“More people watching more videos

• The volume of unique viewers accessing online video grew across all media verticals in Q2 by an average of 2.8 percent per month compared to .05 percent month-over-month growth in Q1.

• Viewers watched 11.8 percent more videos per month in Q2 than last quarter.”

 

 

Tax forms – Due to the overwhelming number of people who file their tax returns electronically, the IRS announced recently that for the forthcoming tax season, hard copy forms will not be mailed to taxpayers.  They will be available for pick up at post offices and libraries.  This will save some $10 million annually.

 

 

DVR technology – We love our DVRs, most people do, as appointment TV is dying away.  Almost from the beginning, the sites that people visit on the internet have been tracked, enabling targeted ads.  Now TiVo has announced the ability to measure the percentage of TiVo users who are exposed to a TV program promo and ultimately tune in to watch it.  Nielsen tracks TV watching through DVRs and includes viewers in their stats if the show was watched within seven days of availability.

 

A recent report from Nomura Securities indicated that DVR usage has increased the audience for the broadcast networks by 22% based on day three (C3) ratings, while the cable networks increased their audiences by only 8%. 

 

Most interesting was the fact that the percentage of people who skip commercials on their DVRs decreased from 59% to 53% from the 2007 – 2008 TV season to the 2009 season. 

 

What will happen this TV season as DVR penetration increases? 

 

 

3D – We are fans of 3D and see opportunity in the theater and at home through broadcast as currently defined and through other connected devices such as Blu Ray players.  However, one important aspect of 3D TV that will stifle growth in our opinion is the use of active glasses.  Typically, one pair, and at most two come with the purchase of the TV.  At a price ranging from $129 - $149, buying several additional pair for the family, friends, etc. will end up costing more than the TV itself. 

 

It is no secret that price impacts consumers, especially in these tight economic times.  The same was true for Blu Ray as we wrote in Next Generation Format Wars in October 2007.  Today, Blu-Ray is only at a 17% penetration rate.  There are recent reports from research firms that predict significant growth in the next few years.  Some say that the 17% penetration rate is approaching the tipping point.  If BD grows as predicated much of the growth will be attributable to the desire to get 3D.  HD VOD will, in the final analysis be the route to the home for 3D.

 

Thus, if we do not want history to repeat itself, the cost of glasses for 3D TV must come down in price significantly and the answer is passive glasses, preferably bio-degradable glasses that we are bringing to market through Oculus3D. 

 

Catch a glimpse of the Oculus3D biodegradable eyewear on CNN when resin manufacturer Cereplast CEO Frederic Scheer was interviewed.  Our biodegradable eyewear may be seen near the end of the interview.

 

As for The Shindler Perspective

Once again, Marty Shindler is moderating the 3D panel at the forthcoming Digital Hollywood entitled "Beyond Avatar: The Explosion of 3D - 3D Platform for Feature Films and Television".  This panel will take place on Tuesday, October 19, 2010 at 12:30 PM.

 

Panelists are from AEG, Cinedigm, IMAX, Reliance, Technicolor, USC’s Entertainment Technology Center and Chuck Comisky, stereographer for Avatar.

 

There are a number of co-located events that are part of Digital Hollywood, a conference that continues to grow and attract some of the best in the business. 

 

 

Roberta and I wish our friends, clients and prospective clients continued success and good health.

 

For The Shindler Perspective, Inc.

 

Sincerely,

Marty Shindler

Chief Executive Officer

 

 

© 2010 The Shindler Perspective, Inc.