Internet is changing tv

From NYT:

Lots of Little Screens: TV Is Changing Shape

By DENISE CARUSO
Published: December 2, 2007

Denise Caruso is executive director of the Hybrid Vigor Institute, which studies collaborative problem-solving

INEXPENSIVE broadband access has done far more for online video than enable the success of services like YouTube and iTunes. By unchaining video watchers from their TV sets, it has opened the floodgates to a generation of TV producers for whom the Internet is their native medium.

And as they shift their focus away from TV to grab us on one of the many other screens in our lives — our computers, cellphones and iPods — the command-and-control economic model of traditional television is being quickly superseded by the market chaos of a freewheeling and open digital network.

According to Move Networks, a company based in Utah that provides online video technologies, more than 100,000 new viewers jump online every 24 hours to watch its clients’ long-form or episodic video. During the first two weeks of November alone, more than twice the number of Americans were watching TV online than in the entire month of August.

The shift is proving quite inspirational to digital media entrepreneurs.

“What absolutely convinced me to start a company in this area was when I realized just how large the disruption was,” said Kip McClanahan, the co-founder and chief executive of ON Networks, an online studio in Austin, Tex. “It touches everything — how video content is created and monetized, how it’s distributed and consumed. And it’s a half-trillion-dollar market, if you include the advertising that supports it and the revenue associated with subscriptions, tickets and so on.”

A market that size provides plenty of room for experimentation. Many flavors of technology and programming are being tested, as are some changes in traditional revenue models.

Vuze, based in Palo Alto, and Joost, based in Leiden in the Netherlands, for example, have both developed proprietary software that must be downloaded to view their video programming. In addition to providing programming from established brands like PBS, Showtime, the BBC and A&E, the start-ups encourage new producers to make deals with them and upload new programs to their sites.

ON does not distribute any traditional TV shows. Instead, it works with professional content creators who develop original programs in HDTV. So far, it has produced hundreds of episodes for 25 programs, all of which are available at the ON Web site, as well as through iTunes and AT&T, its distribution partners. They include a dating show, produced in partnership with NBC, and a home-building show called “Mainstream Green.”

Blip Networks, based in New York, is another company working to create its own established brands, providing thousands of short-form videos from all comers. In addition to one-off documentaries like “Gotham Girls Roller Derby,” Blip’s library includes weekly news satires like “Goodnight Burbank,” which drew favorable notice from several mainstream media outlets, including USA Today and The Los Angeles Times.

Blip syndicates its programming to America Online, Yahoo, Google, iTunes, Facebook and other big Web distributors. Vuze, Joost, Blip and ON all share as much as 50 percent of their revenue with the content producers, regardless of distribution medium. “If that model existed today, writers wouldn’t be on strike,” said Mr. McClanahan.

René Pinnell, the director of “Backpack Picnic,” a popular sketch comedy show that came to ON after the troupe produced two pilots that were never shown by MTV, said the online environment is a “really good deal” for many reasons.

“The biggest one is that it allows us a tremendous amount of creative freedom we wouldn’t get in a more traditional media environment,” he said. “The investment is low for them — nowhere near the $500,000 a network will spend on one episode. They can afford to trust us.”

For its part, Hulu of Los Angeles has turned a traditional TV library into a promotional vehicle for, well, more TV. The joint venture between NBC Universal and the News Corporation offers scores of popular prime-time shows from all the major networks and channels, as well as past hits like “Buffy the Vampire Slayer.”

“Because people can watch TV shows when and where they want, they can sample a lot more shows,” said Jason Kilar, chief executive of Hulu.

As a means to that end, Hulu may have persuaded the industry to relax a bit. Hulu’s player allows viewers to create short video clips from the shows they watch and put them in e-mail messages or on Web sites, including blogs, an activity that in the past has drawn nasty letters from copyright lawyers. “This is a key way that we can make sure the content finds the audience,” said Mr. Kilar.

But what happens to the television industry when the traditional way for content to find its audience becomes obsolete?

“There’s a lot of rewriting of the concept of windows in the TV network world today — the timing of when and where shows appear,” said Allen Weiner, the managing vice president for media and consumer technologies for the Gartner Group in Scottsdale, Ariz.

In the old days, after something appeared on TV, its release to other distribution channels was carefully staged — from the timing of reruns to the DVD release to when it would be available on-demand. “We’re seeing all kinds of new windows occurring, and no one knows what the magic formula will be,” he said. “A lot depends on advertiser reaction and on user behavior.”

One closely watched approach is the new online series “Quarterlife,” by Marshall Herskovitz and Edward Zwick, who produced “My So-Called Life.” Episodes first appear on MySpace TV, then are available the next day on Quarterlife.com, and a week later on YouTube, Facebook and Imeem. There is talk that they may even appear later on network TV — but as the last window, rather than the first.

As far as ON is concerned, Mr. McClanahan intends to put his programs in every single window he can find. Unlike other companies, ON optimizes all its shows for viewing on any video-capable device, a feature he calls “lifestyle distribution.”

That’s why he has deals with partners like iTunes and AT&T’s Television, Broadband and Wireless Services, both of which can deliver video programs to multiple devices, from plasma TVs to computer screens and cellphones.

“You can’t expect to control consumers and force them to come to prime time at 7 p.m. on a Monday night,” said Mr. McClanahan. “If the consumer wants it on their phone at 3 p.m. while they’re on the golf course, then that’s where we have to deliver it.”