The present and future of post production business and technology

Although it doesn’t seem like a big announcement, Yahoo users who own a TiVo can now program their TiVo from the Yahoo TV guide. No big thing because TiVo owners have been able to do that for years, so it’s only a minor additional convenience until we read some of the fine print and plans for the near future.

And in the coming months, possibly before the end of the year, Yahoo’s traffic and weather content, as well as its users’ photos will be viewable on televisions via TiVo’s broadband service and easy-to-use screen menu.

So now Yahoo content (pictures, traffic and weather for now) is available on the television with television/PVR/DVR ease of use. Remember TiVo already have many components of the digital home experience with TiVo to go to take digital material from the TiVo drive to PCs, DVD-R and portable media players.

Where it gets interesting is to project forward. Yahoo consider themselves a media company evidenced by the formation of the Yahoo Media Group back in January 2005 and an orgy of hiring media executives for the division since then. The purpose of the Yahoo Media Group is to “significantly strengthening our content pillar”. In April they hired Shawn Hardin, who, according to ZDnet, “Hardin has previously worked in television and the Internet, holding executive positions at NBC and Snap.com.”

Although Yahoo has been vague about its plans for the Media Group, it’s built a team with a strong balance of “Hollywood” and “Web” backgrounds and it’s perfectly reasonable to expect that it has some big plans…

Oh, let’s not forget Yahoo Video Search. In competition with Google video Yahoo are building connections to a library of independent content. I’m sure the Yahoo Media Group are building a library of mainstream content: Santa Monica is not that far from Hollywood!

Now to my conjecture. TiVo has about 3 million subscribers. TiVo is linking with Yahoo to display Yahoo content via the TiVo device, direct to the living room. Aren’t there many people planning/desiring to bring Internet-delivered “TV” into the living room, right where the TiVo box is already sitting? Akimbo, DaveTV, Brightcove all seem to be going down that path with a dedicated box and service. Apple with its FrontRow and Microsoft with its Media Center PC are approaching it from the other direction.

But none have the penetration in the living room that TiVo does right now.

If the relationship with Yahoo goes just a little further then what’s to stop Yahoo delivering video content direct to the TiVo under some form of pay-for-view or subscription model? It seems self-evident to me that this is really about a much bigger play for the living room and part-and-parcel of the Yahoo Media Group’s efforts. Yahoo could launch with 3 million subscriber boxes already in place. A number that would bring much cheer to Akimbo, DaveTV or Brightcove’s investors if they ever achieve anything close to that. Apple and Microsoft (and its partners) have to get the computer moved into the living room, although don’t be surprised to find Apple taking a page from TiVo’s book and integrating a tuner, program guide and simplified iTunes into a future “Mac mini” with video output to sit under the TV. When they’re ready, of course.

Given that TiVo are somewhat struggling right now, it’s not far fetched to consider Yahoo buying TiVo? With a market capitalization of around $300 million TiVo wouldn’t be hard for Yahoo to swallow, or even Apple (as rumored earlier in 2005). Only time will tell, but when Yahoo buys TiVo, remember, you heard it here first!

From recent announcements and manoeuvrings, it would seem like there are two content creation industries: the one that sees new forms of distribution as an opportunity to promote and extend brand, and the other that feels every new use, every feature has to be charged for - including, if the MPAA gets its way on Capitol Hill, some that have been free to date.

For the moment I only want to consider what some call “high value” content. Without wishing to denigrate videoblog/RSS subscription content and the important opportunities it opens for non-mainstream content, the industry I’m talking about here is the network/movie company/record company hegemony who make the content that the mainstream enjoy, and pay to enjoy: television, movies and recorded music.

In a week where Apple announced one million sales of videos through the iTunes store in 10 days and NBC said they will be releasing the nightly news free; the MPAA have been working hard in Washington to re-introduce the Broadcast Flag legislation, defeated in May 2005, with super-enhancements. Blu-ray has gained support from more studios because their Digital Rights Management was more draconian than the competing HD DVD camp, and Sony are in trouble for their spyware-based CD DRM. See my recent blog article When a good format “wins” for all the wrong reasons. Another take on the MPAA resurrection of the Broadcast Flag is at the Electronic Freedom Foundation .

Clearly a good part of the mainstream content creation industry considers the only way to protect their content is to lock it up, but even the MPAA has no delusions that they will actually prevent large scale piracy. As quoted in the Cory Doctorow article at Boing Boing above, they believe it will “keep honest users honest” or more accurately, prevent honest users doing what they do now - watch, store, time-shift, space-shift or format shift - without permission and payment in the future. I believe that they are really so caught up in their own world viewpoint that they cannot see how that will drive people to pirated copies that have no restriction. They are surely realistic enough to figure that all DRM will be broken. If you can watch it or hear it piracy can happen.

DRM will only cause dissension and force people toward pirated copies of the content. Actions like Sony’s that open holes for worms and viruses to take over the computer, without warning people that it’s installing such problematic software will likely cause law suits that diminish the reputations of the companies. In short, there’s nothing to be gained by excessive locks and controls on content. It will, if nothing more, drive people further from existing sources, to new and developing alternatives. Every failed mainstream movie, opens an opportunity for an independent. Every locked down TV broadcast opens the way for episodic entertainment delivered direct to customers that can be directly charged with micropayments or supported by advertising.#

Apple have established a beachhead with $1.99 television episodes (similar to the cost-per-episode of the DVD release, although not as high quality*); NBC are using a “top and tail” advertisement to support the free nightly news videos. There are new payment alternatives coming that will, in turn, open new production alternatives. It’s time the MPAA, RIAA and their associates stop treating their customers as criminals, and embrace new technology - use some imagination (OK, that’s a stretch for Hollywood I know, at least based on recent movie releases) and find the opportunity. If they don’t others will, and the losers will be the entrenched industry. Who knows, that could be the best possible outcome.

# Further thoughts on these ideas are in my February post.
* The iPod is capable of higher resolution video so I suspect that the 320×240 size was chosen deliberately to not compete with DVD sales. At that quality it’s better than VHS but less than DVD quality for most content.

And finally, just to demonstrate the utter stupidity of the “DRM crowd” - Sony have not only done themselves huge PR damage with their rootkit virus-like protection that opens the computer to other viruses based on the protection installed by Sony, but it will do nothing to prevent piracy as there are 20 million or so Macs that can rip the files off those CDs without any protection: the rootkit protection only works on PCs!