Wednesday, March 12, 2008

Hulu , TiVo and the HDTV: When will "The Long Tail" Come to the Living Room?

UPDATE: I wrote this entry yesterday originally, focusing on the Hulu launch versus HDTV. Any coincidence that today TiVo launches a direct interface to YouTube accounts? Perhaps not. Post is updated to reflect this new announcement.

A significant wedding anniversary gave our family a reasonable excuse to replace our aging and failing television with an HDTV set which arrived yesterday. Having suffered through years of the old set's fuzzy screen and scratchy sound it was quite a shock to experience faces as big and clear as life and wonderfully crisp audio. But while the senses were definitely doing backflips thanks to this not-so-little toy the cable box still had the same number of channels to flip through, with the same stuff as before - just better looking and sounding. As amazing as the technology behind it may be, it's still just a glorified monitor.

At the same time the world is bracing for tomorrow's much-ballyhooed debut of Hulu.com, the online television portal that will provide DRMed video content from NBC/Universal, News Corp and a network of 50 other providers already pumping out video through its own portal and partner sites. Staci Kramer at paidContent.org notes that there are already more than 50,000 imbeds of the Hulu player at 6,000 Web sites, with content from more than 250 TV shows and 150 clips from major shows already in the archives. It's superficial social integration, but it's a start.

In other words, Hulu is a good step forward for mainstream media outlets to adopt the cable programming model to online markets through user-assisted contextualization of secure content players, enabling a wide proliferation of places in which one can encounter their video content, albeit without any ability to mash it or otherwise do much of anything with it. Archives will also be a little problematic, apparently, with current shows not necessarily being available online indefinitely - at least until they pass off into another economic lifecycle through syndication. In the meantime, Silicon Valley Insider notes that many old-time television shows have found enthusiastic new audiences on the Hulu service, including old chestnuts such as the 1950's series "Davy Crockett" and a less successful 1980s series "Airwolf."

The concept for Hulu has matured quite a bit and is likely to experience a fair amount of success, in spite of its proprietary player dampening the service's ability to integrate much with its partners' platforms. Just the ability to search through archives of traditional TV shows should enable people to gain more breadth in their television viewing far more easily than ever before. But as always old business models hold on to television production like boat anchors on the QE2. The introduction of materials on the service is likely to be slowed by producers concerned about how it will affect DVD and syndication revenues, in spite of the fact that audiences will be more able than ever to reach the content that they enjoy most when and where they want it. In the meantime more than 65,000 videos are posted on YouTube daily, gaining more and more of people's attention bandwidth and creating a competing "long tail" of monetizable content.

Hulu is certainly a step forward for TV producers in search of increasingly distributed audiences who seek out content in the contexts that matter most to them , maintaining a "walled garden" of sorts that replicates the closed loop of content typically distributed on cable TV networks. As it succeeds, though, the services that it's most likely to impact - cable and satellite distributors - may want to ask themselves a key question: why aren't we doing a better job of providing content when and where people want it? With TiVo having announced a direct interface to YouTube downloads and HDTVs having the ability to interface directly to PCs the envelope of on-demand content that's accessible to cable and satellite TV viewers is going to have to become a priority for these companies - as the Web side of their facilities consumes more and more bandwidth for video delivery.

This brings me back to that brand-new HDTV in our family room. It's great that we can see all of these channels more clearly and even get a smidgen of content via on-demand services, but why is there still virtually no integration between cable services and the Web? Why can't I find some video that moves me on the Web, click on an icon next to my "email to a friend" and "embedding code" links that will queue it up for viewing on my HDTV in a TiVo/DVR device? Years after the introduction of TV monitors capable of managing digital video content there's almost no interactivity with those devices and the Web, save for a handful of enthusiasts who hook up their PCs to their home theatre systems. I'll enjoy it for what it is, but it seems as if the most sure-fire way to make sure that cable and satellite TV systems remain relevant is to improve the integration of TV and Web services.

Hopefully Hulu gives cable and satellite companies enough competition that they'll start thinking more seriously how they're going to be able to leverage a Web that's far better able to locate and serve up interesting video content from millions of sources worldwide. As it is the digital interfaces to modern televisions offer home audiences a wide variety of options for people to bypass the monotony of cable viewing and find the content that's most relevant to them in brilliant displays that may or may not require old business models to pay for them.

Instead of focusing on a few hundred channels, most of which are of almost no interest to a particular person, cable and satellite providers should be focusing on being the most efficient download services possible to enable set-top units to be filled with lots of programming that's of high interest to a given audience - then tailor advertising and other services to the downloader, not the program channel. It's a day that's coming sooner rather than later, hopefully - that is, if cable and satellite providers can outdance the Hulu craze and recognize that if they don't out-TiVo TiVo the days of hundreds of subscription channels is definitely numbered.
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