The present and future of post production business and technology

Apple’s new Apple TV and 99c TV show rentals are definitely a step in the right direction but the cost is ridiculous.

Peak, premium, the best there is, content on major networks gets between 25 and 65c per viewer per show in revenue. That’s the top, highest end. So yes, the top of the top could conceivable rent for 99c, but the lesser shows? No way I’m spending 99c to watch a Daily Show (10 to 25c tops).

Last October I did a detailed tracking of what we watched and priced it out in the Apple store of the day. We watched that month an average of an hour and a half a day and the “best price” (taking advantage of Season Pass discounts) was $112.55. With rentals that would drop to $85.14.

Now, Dish (or Cable or whatever) 100 channel plan is around $65 a month, but I can watch up to 640 hours in that month (or record it for time shifted viewing. That’s about 10c an hour, not $1 per show. Of course, no-one can watch or record 640 hours in a month. The American Average is 135 hours a month of viewing (depending on who you ask, this is the conservative, lower end) or around 43c per hour, not per show.

An HBO subscription, with 32 hours of original programming a month equates to about 31c per hour, not show.

Part of what I find egregious about Apple’s new pricing is that it’s 99c for a 22 minute show, 99c for a 44 minute show or 99c for an extended episode. No allowance for the fact that some shows are worth more than others.

I’d cheerfully pay 10c per Daily Show. If I did and Apple too their 35%, that’s roughly 6.5c per show per viewer by 2 million viewers or $130,000 revenue per episode against approximately $35,000 per episode in cost. That’s an improved deal for the Daily Show producers and a fair deal for viewers.  The absolute maximum I’d pay for a Daily Show is 25c and at that I think it’s a rip off.

Friday Night Lights, Mad Men, Burn Notice et al I’d be happy to pay 50-65c but not 99c. Even at that these shows would be better off with this revenue model.

So, nice try Apple but until watching 4-5 hours a day, every day for a month has to be under $60 a month in total for it to be considered a cable replacement. Of course, this may not be Apple’s doing at all. It’s much more likely that the content owners have some ridiculously outsize estimate of the “value” of their content.

Monsoon Multimedia – Vulkano for Macs, iPhones, iPads http://bit.ly/93kGwD

Does anyone know more about this than is in the Macsimum News item and on the company website? It looks awesome:

Consumers can now watch and control any home TV channel through a wired or Wi-Fi (and soon on 3G) connection from anywhere by installing a Vulkano and downloading a free software application on to their device of choice or from the respective app store. They can watch and control live TV and schedule a recording through an included EPG (electronic program guide), transfer, watch and control these recordings at any time on their TV, computers, smartphones or iPad type devices.

Vulkano lets users watch YouTube on their big screen TV and by leveraging UPnP (Universal Plug n Play) they can stream video and photos from their smartphones, computers and cameras wirelessly on to their living room TV without having to use cables. In the near future, Vulkano will offer free service upgrades such as Google TV, Yahoo! Widgets, Netflix, Hulu and others.

The link from the article doesn’t seem to work, but follow http://www.monsoonmultimedia.com/products.html and it does.

Breaking Bad to Fill Year-Long Hiatus With Short Webisodes http://bit.ly/d1lSUH

A great way to keep interest up between seasons of major shows.

These episodes will be available some time after January, when the show will begin production on the new season. “I, for one, am eager to make these little interstitials important,” the show’s star, Bryan Cranston, told Deadline. “I don’t want them to be simply filler or recap, but something that actually moves the storyline forward. If we’re going to do it, it ought to be a real part of the larger show.”

Yesterday’s post about $10 being the “magical figure” for video-on-the-web from prime sources, and I basically said that there’s no way I’d pay for a service that included advertising. I hate advertising: it’s intrusive and about 99.9976% irrelevant to my needs or interests.

I also hate advertising for another reason: it’s an economic intrusion on my life. It costs me far, far more than the benefit that Hulu – or a network – gets from advertising even though they’re charging more than they would normally get from advertising.

Here’s why. Typically a major network TV show will garner 25-65c per viewer per show. Very occasionally a top-rating, network-leading show might crack 85c per viewer per show.

Now, an “hour” long TV is is 42 – 44 minutes, not 60. The other 16-18 minutes are advertising. My time to watch those ads has a finite value and it’s not an equitable one at all.

Hulu does not have anywhere near the ad load of a Network but there’s less inventory so the same ads keep repeating in a very annoying fashion. Let’s say that there are 5 x 20 second spots in each 45 minute show. At best Hulu will be getting 65c from those five ads, more likely they’ll be getting a fraction of that, but let’s be generous.

At my charge-out hourly rate, that 2.5 minutes costs me $6.25!!! At my nominal salary rather than charge-out rate that’s still $2.79!! An average plumber would have a $3.33 opportunity cost from the advertising!

So, Hulu Plus wants to charge me $10 a month and then cost me $2.79 for every show to cover my attention to the show. Every single show I watch. Since we watch very little TV, way under 2 hours a day, that’s an additional (using the extremely generous 65c per hour show figure) $78 in revenue to Hulu Plus, although given the size of Hulu’s audience I doubt they get even 20c per viewer per hour show making that closer to $24 in advertising revenue.

But that time has cost me $334.80 for the month in attention.

And that, Hulu, is why you can’t have it both ways.

And before you all start in the comments, watching any TV is an opportunity cost. I choose to do that but I choose not to watch advertising because watching the advertising adds an additional $335 in opportunity cost to watch the advertising.

The cost to me is 4.3 to 16.5 times higher than the benefit to Hulu. I guess I’ve just convinced myself that a Hulu-like service, that I can watch on my TV and covers all programming ever made, will be worth $20 a month to me. Without advertising. With advertising it’s just too expensive.

PS, the numbers supporting advertising still don’t make sense at even more modest salaries. AT $20 an hour, the five Hulu ads still “cost” 83c up against a maximum revenue at Hulu of 65c (and more likely 20c). Monthly opportunity cost at $20 an hour is $59.40 for Hulu’s $79 down to $24 in revenue.

The Lack Of A ‘Golden Ticket’ Business Model Doesn’t Mean You Give Up And Go Home http://bit.ly/axLkMF

Kara Swisher goes to meet with Hollywood Executives who are all looking for a Golden Ticket (Willy Wonka reference) so that they can charge the same monopoly rents they did when they (used to be) a monopoly.

Michael Masnick deconstructs Swisher’s reporting and parses it for us. This is a worthwhile read, even if a little long.

From music to movies to television, the biggest minds here still sound perplexed as to what will finally be the golden ticket to carry them through to the inevitable next era of digital distribution.

That single sentence basically describes the problem. These guys are sitting back and waiting for someone to hand them a golden ticket that replicates the old ways of doing things. That’s not how it works. No one gave the buggy whip makers a golden ticket that let them keep their old lines of business going.

The unnamed executives even ask why the customer always gets to be right. Yep, that’s how far removed they are from any sense of commercial reality. The customer is always right because there’s always someone else that will meet the customer need if you don’t. (Where is my “any program, any time, any device for a fair price” service again? There’s a customer demand for it but the old guard won’t deliver.)

Final words:

The role of the disruptor is not to make life easy for the disrupted. Swisher and these execs seem to be confusing the role of certain folks in the legacy industry with the overall entertainment industry itself. As noted, the entertainment industry is thriving. More movies, music and books are being created. More money is being spent. It’s just that it’s going to different players. There’s no reason to “figure out a way to keep talent from being dragged into the future.” The opportunities and wide open path are there. The problem isn’t that tech leaders haven’t made it easy for them. They have. It’s that these guys are so myopically focused on the way they used to make money they don’t realize that the new opportunities are already there and have been embraced widely by others.

The Shocking Media Habits Of 8-18 Year Olds http://bit.ly/bc1BzP

Henry Blodget takes another look at the Kaiser Family Foundation survey of 2000 families about the media habits of 8-18 year olds. As this group grows, they become “the new normal” for media consumption.

No real surprises in the results, but how very different is the audience for broadcast Television where more than half the audience are outside the desirable 18-40 demographic.

Other results from the Kaiser survey:

• Kids consume a heck of a lot of media–and more all the time.  Basically, if kids are awake, they’re consuming media.  And, increasingly, they’re consuming multiple forms of media at the same time.

• Kids’ print media consumption is tiny and falling.

• Kids’ digital media consumption is going through the roof.

Is Television Advertising For Old People? http://bit.ly/aQofqy

With a median age of 51, that makes more than half of those who watch prime time television are outside the desirable 18-45 demographic. More than half outside TV’s desired demographic. Hard to have a hit.

What does this mean for those content creators that rely on that distribution channel? Plan another approach; this one is nearing its use-by date!

So what does this mean for traditional content owners?

First, it means they are losing. They are losing their audience, which will ultimately translate into losing their revenue and relevance. If they do not commit to developing a meaningful audience off television, they will begin to lose their market capitalization.

Read on for implication two (Google and Apple are winning) and three (Technology is king over programming).

As a long term user of an Apple TV (useful when hacked) and reading recently about the Google TV and adapter boxes to come, as well as other ventures into merging “internet Video” and “The lounge room experience”. These approaches almost always have a 20′ interface: one that can be read from the comfy chair remote from the screen.

Apple’s minimalist approach certainly fits that screen factor, but there’s no real way to get Internet content there, other than where there’s a special deal, such as with the YouTube access. But here we run into the fundamental problem with this kind of interface: try searching for a video in YouTube, or heaven forbid (if you’ve hacked the Apple TV with ATV Flash to get a browser), actually typing in a URL!

Yahoo and Google want to bring a “social” presence to the big screen, as do Boxee and others, but I think they’re fundamentally going about it the wrong way.

Why do we watch TV on that big screen anyway? I think there are two fundamental reasons why we watch TV on a big screen instead of a computer screen (and one of them may indeed be bogus): a bigger image and watching socially.

In our household we have an old G4 laptop that serves as the primary media server via an Apple TV to the biggest screen in the house: in the living area. We frequently watch shows on our computer screen instead of the big screen, particularly when it’s a show I might enjoy, but my partner may not. Or I watch old TV episodes while scanning slides or processing images. But we watch some TV together and when we do that, we watch it on the big screen. Why? Because we’re watching communally.

When I’m watching TV communally I’m already involved in a little social networking with the person, or people, across the room. If I wanted to tweet my approval (or not) of a particular program, I wouldn’t want to do that on the communal screen, I’d do it on a personal screen: in my case my laptop.

The big screen argument may well be bogus: where I’m sitting right now I have a view of our main TV and my laptop screen and my laptop screen takes up approximately 4x more of my field of view than the TV. I would have a bigger screen experience watching on my laptop at 3′ than a big TV at 20′. So, for a lot of content, it’s really only the social aspect that requires the large TV.

I simply don’t want Twitter/Facebook etc. on the program screen. (That big TV.) And I don’t really ever want to explore web video on a big screen TV display without a keyboard or better input device.

And the it hit me: Apple and Google (et al.) are going about it the wrong way. The program goes on the big screen. Period. The interface is on our laptop, or iPhone, or iTouch, or (the killer one) an iPad. All have a keyboard for easy entry of urls and search; there are social applications that work just fine on those existing screens.

Trying to put the interface on a screen 20′ away without a keyboard (and wireless keyboards aren’t really an option) is just wrong: not only is it the wrong place, I don’t want to clutter my program communally (which presumably I’m watching because I enjoy it) with social media that’s personal.

The two screen approach makes much more sense. Put the program on the screen – uncluttered like  the program’s director intended – and put the control and any desired interactivity on another screen. An iPad would seem to be perfect for this, but since I don’t plan on getting one, an iPhone or iTouch or Laptop could also run the interface anywhere on the same local area network.

It turns out that an interface designed for a 20′ experience works equally well as a 2′ experience, but with touch and keyboard at hand.

Ironically a display designed for 20′ all works well at 2″ on a smaller display.

If you’re not totally bored re Apple v Adobe re Flash MC Seigler “Adobe You Brought An Advertisement To A Gun Fight” http://tcrn.ch/9PjWYp

Adobe, no one seems to want to say this to you, but I will. Stop it, you’re embarrassing yourself.

You’ve just spent God-knows how much money on an ad buy that blankets much of the technology press (including this site). It’s a strange passive-aggressive message that just makes Jobs’ aggressive-aggressive post from a few weeks ago seem even more forceful. And it’s transparent. But worst of all, it won’t work. You must know this.

Jim Whimpey also has his say about who is really “open” and who is claiming to be open but isn’t:

Adobe: not open, claim to be.

Apple: not open, don’t claim to be, contribute heavily to that which is truly open.

I’ve just been reading my daily round of news, and there’s still more on the whole “Flash v HTML5″ or “Flash v H.264″ thing and I’m just arrogant enough to believe I can contribute something here.

Flash is an interactive player that produces a consistent result across browsers and platforms. That’s why publishers like it. But most Flash use is at a very basic level: a simple video player. That is also why early QuickTime interactive programmers liked to use Flash (yes, as a QT media type) for controls and text as QT text did not display consistently across platform.

Flash is a player and not a codec or file format. The current iteration of the Flash player plays:

• the original “Flash video” format, which is sequential JPG files, up to 15,000 a movie
• Sorenson Spark, the first real video codec for Flash; based on the very ancient H.263 videoconferencing codec it did not produce good video quality.
• On2 VP6, a good, high quality codec now owned by Google with their purchase of On2. Still not a bad choice for Flash playback if you need to use an alpha channel for real-time compositing in Flash.
• H.264 in MP4 or MOV (with limitations) format. Licensed from Main Concept (now owned by DivX).

Note that those same H.264/MP4 files can be played on Apple’s iDevices using the built-in player; or using the <video> tag supported by HTML5 in Safari or Chrome (and IE9 coming sometime).

Flash as a simple video player is probably dead in the water. Flash for complex interactivity and rich media experiences probably will continue for a while, at least until there are better authoring environments for the more complex interactivity provided in “HTML5″.

That brings me to HTML5, which is not a simple player but a revision of the whole HTML tags supported by browsers, that allow native video playback by the browser without plug-in (the <video> tag); local storage (similar to Google’s temporary Gears offering, now replaced by HTML5 support) and a whole bunch of other goodies. Add to this CSS for complex display (and I mean complex – mapping video to 3D objects in the browser, for example); Javascript for interactivity and connectivity to remote servers/databases; and SVG (Scalable Vector Graphics) for creating graphic elements in a browser (useful for interface elements in rich media).

Javascript used to be very slow and not even comparable to the speed of interactivity possible in Flash, but over the last three years all Javascript interpreters have become massively faster, making complex software possible in the browser. (Check out Apple’s implementation of iPhoto-like tools in their Gallery – online version.)

Summing up: HTLM5/CSS/Javascript is already very powerful. Check out Ajaxian for examples on what is already being done. For simple video playback, Flash is probably not the best choice. MPEG-4 H.264 video AAC audio probably is the best choice. For rich interactivity targeted at anything Apple, build it with HTML5/CSS/Javascript – it’s the only choice. It is also a powerful one: Apple’s iTunes Albums are essentially HTM5-based mini-sites; iAds are all HTM5/CSS/Javascript based and not lacking in rich interactivity or experience.

If you’re building a rich media application to connect with a web backend targeting mostly desktop computers, then Flash could still be the best choice.

For building Apps for iPhone, iPad: use the Xcode tools Apple provides free. While Adobe might be complaining to the Feds looking for “anti-trust” sympathy, they won’t get it as Apple is nowhere near dominant in any market, which has to be proven before taking up the point as to whether or not they have abused a monopoly position. Apple are not the dominant smartphone manufacturer; nor dominant MP3 player, nor dominant Tablet manufacturer. (Ok, they probably are dominant in MP3 players and Tablets but they are not, by definition, a monopoly, and Apple will work very hard to ensure they never are.)