Buggy whips & electric cars what's video got to do with it - mediapost
Buggy Whips & Electric Cars: Whats Video Got To Do With It?Sam Vasisht, May 05, 2011 11:30 AMI heard it again at the National Association of Broadcasters convention: Traditional pay TV andbroadcast models are going to go the way of the buggy whip. This was not the first time, nor will itbe the last time that this phrase has been uttered by folks on the online video side of the business.Interestingly, another set of observations I made on more than one occasion at NAB was thedifference in perspective of folks from traditional media discussing online video and those fromnew media companies discussing the same. The new-media folks were for most part aggressivelytouting the buggy-whip scenario of all the disruptions and upheavals that technology is wreaking onthe fundamentals of video distribution and consumption - concluding that the traditional businesseswill go by the way of the buggy whip.The folks from the traditional business side of the industry were defending their businesses witharguments of, well, business. Their position (if I may take the liberty to summarize and thereforegeneralize some), was that the online video business models and revenue flow dont make for goodbusiness at scale -- today. Online video is a good extension of traditional mass media and not areplacement for it. The inter-dependent ecosystem of publishers, distributors and advertisers hasstrong underpinnings that will not change overnight, even if the technologies are there to disruptthe value chain.For many of us in the industry, these two sets of arguments are not new. However, every time Iread commentary on one or the other side of the argument, I realize that people are eitheroblivious of the counter argument, or conveniently choose to ignore it for whatever reason. I dohowever know from firsthand experience that for a lot of people the traditional media food chain isa blind spot.The "buggy whip" metaphor is one that we are all familiar with for sure. The automobile made thebuggy and therefore the buggy whip obsolete. This metaphor comes up innumerable times in thecontext of traditional media versus digital media over the past few years.That got me thinking that actually very few things go the way of the buggy whip these days. Eventhe music industry is still hanging on, raking it in with live concerts and still cranking out platinumstars. Regardless, the woes of the music biz were inherent long before digital media came along,as I wrote a few years ago in Streaming Media. In other words, music industry members were theirown undoing well before digital media appeared on the scene.Rather than apply the dated buggy-whip metaphor to what is happening in video, I think what isgoing on the in the automobile industry today offers a better playbook for our industry. I amtalking about the emerging hybrid and electric car technologies as an evolutionary step and a slowlychanging paradigm. The auto industry is slowly but surely developing and adopting these newtechnologies, and a market is developing around them, even when the economics are not entirelyfavorable. I could go on, but you get the idea. Eventually, it is bound to happen that thetraditional technologies will become obsolete. Meanwhile, the traditional technologies are actually
getting better.But that is only half the story, as is the case within our industry. For many, if not most online videostartups, traditional media is providing the viability for their businesses -- think of most of theOVPs, metadata and discovery companies, online publishers, connected devices, and others. At thesame time online video companies are providing traditional media an extension of their businessinto emerging distribution and consumption trends. This is augmenting the existing ecosystem thatwill expand before it is replaced by the new technologies in its entirety.Lets look at an example of a new hybrid ecosystem: Consumers are purchasing Roku boxesprimarily because of Netflix; Netflix is gaining subscribers by the millions because it carriestraditional broadcast and pay TV programming; Revision3 (and others) are featured on Roku andwill be discovered by consumers on account of that, while they (consumers) bought Roku to watchNetflix and probably would not have bought it to just watch Revision3. Meanwhile traditionalbroadcast and pay tv programming (and some very old archives) are finding new distributionchannels.The two sides of the industry have more in common and more interdependencies than is commonlyacknowledged. The fact that they show up at the same shows and even on the same panels isevidence of that. While competitive tension is a good thing, being able to leverage each othersstrengths is a bigger force. The ones that will have the hardest time riding this rising tide arethose whose businesses rely on a fork lift replacement of an existing paradigm. For the rest, bothin traditional and online video this is a great time to be in media and an unprecedented time ofopportunity to build customer satisfaction and brand loyaltySam Vasisht is the founder and president of 21TechMedia, which provides C-level advisory services, strategy andgo to market consulting to digital media technology companies in the online video space.