My first thought when reading that headline was “well, d’oh”, because it seemed like an oversimplification of the scale of the problem. Sure, if everyone switched over to streaming video for their media consumption, then we’d be in a different position. Trouble is, people generally are watching more television than ever, via more traditional channels than internet delivered streaming content.

Ultimately typical viewers like the type of content they find on traditional television. The secret to success in the new world is more of that type of content. Netflix and Google’s YouTube are all investing in new content because the traditional suppliers (i.e. studios) want ever higher license fees for their existing content.

Instead of tossing a bunch of cash into accomplished shows, Slash Gear says Netflix is heading into theoriginal programming market and YouTube is launching over 100 exclusive original channels, as reported by the Associated Press. However, getting those shows to the level of “The Big Bang Theory,” “True Blood,” or even “Dexter” will be the challenge facing streaming companies. For streaming companies, the money makes more sense if they own the rights to the shows and even create them in the first place.

The issue is pretty clear. Penetrating an existing market, like television, requires a great product, and while Netflix, YouTube, and even Apple have the cash to create a quality television show, that is not exactly the business the companies are known for. Challenging the content landscape is going to be an uphill battle, but it could be the move that changes television forever.

As I hypothesized back in December 2009, if the studios don’t make nice with new players, they have the means to pay producers - those that make this high value content now – directly, bypassing the studio and the networks.

This just in from Variety: Hulu orders first scripted original skein (that’s Variety-speak for “yarn” a.k.a series).

Last week, Hulu disclosed 2011 results that showed growth on both fronts. Hulu revenues increased 60% year over year to $420 million while its sub base reached 1.5 million.

In a blog post announcing his company’s results, CEO Jason Kilar pledged to spend $500 million on content in 2012.

Increasingly it looks like the future for Netflix, Hulu and YouTube is original programming. Do you really think Apple will have another path?

In this episode Terence and Philip discuss the outsourcing of editing jobs, remote (a.k.a cloud) editing and automation in production. What’s happening now and how will it evolve in the near future. Philip also sneaks in a preview of an interesting show he’ll be involved with in 2012.

I have a friend who used to do a large amount of bonus material for one of the major studios as they progressed through releasing their back catalog. He has already noted that, as of about two years ago, that work dried up completely and now is no longer part of his business, which fortunately is still fairly healthy for him.

This is a depressing reality check, and is probably the counter argument to “the year of Transmedia“. Transmedia is seriously expensive to produce!

The same thing that happened to music is going to be true of books. The typical ebook costs about $10 in out of pocket expenses to write (more if you count coffee and not just pencils). But if we add in $50,000 for app coding, $10,000 for a director and another $500,000 for the sort of bespoke work that was featured in Al Gore’s recent ‘book’, you can see the problem. The publisher will never have a chance to make this money back.

Sure, there will be experiments at the cutting edge, but no, they’re not going to pay off regularly enough for it to become an industry. The quality is going to remain in the writing and in the bravery of ideas, not in teams of people making expensive digital books.

The market didn’t really make a conscious choice here, but the choice has been made: it’s not a few publishers putting out a few books for the masses. No, the market for the foreseeable future is a million publishers publishing to 100 million readers. Do the math. Lots of choice, not a lot of whistles. And no bells.

He starts by acknowledging what people thing:

The current and perhaps scariest Bogey Man yet is the INTERWEBS (duhn-duhn-DUHN!). The most recent doom-sayers predict ominously that audiences will “cut the cord” in favor of online video on their iPads, laptops and even on their big screens. The latest example of this gloom-o-logy is on full display in “The Death of Television May Be Just 5 Years Away” by Jim Edwards.

He then presents the evidence that television consumption has gone up by 25% recently because (or despite) many more outlets.

Technology not only did NOT erode viewing, it did the seemingly impossible, it actually created time — a new hour every day, seven new hours every week, 365 new hours — more than 15 additional days — every year. More people watch more television, now, than ever.

Once again, television has just refused to die. It has evolved.

As for those cord cutters… it is true that over the past year, paid TV subscriptions have flattened, or even declined. And, yes, technology has given audiences the power to disintermediate the advertisers who sponsor much of what is produced. These are indeed worrisome trends for an industry that relies on cable subscriptions for an enormous part of its revenues and advertising for most of the rest. It means that those of us in the business must adapt to the changing needs of the audiences we serve, in order to better reflect the value they attach to the programming we provide. We must change or risk becoming a sequel to the music industry.

I’m not entirely convinced the Networks can evolve fast enough, but they are not the essence of Television – the relationship between the producer and the audience is what’s paramount, and there are enough alternate channels being developed (and could be developed) that would make the Networks and Cable Channels as they are currently structured, irrelevant.

Clay Shirky has an interesting perspective in the Collapse of Complex Business Models, that suggests the current power players may end up out of the picture if they can’t adapt – and Shirky’s point is that complex systems can’t adapt, only become more complex until they collapse.

Since ultimately, it’s been brands that have financed Television from the first, I’ve long wondered why it’s taking them so long to realize they no longer need the middle man – the networks or channels – because they can take their message directly to the viewer. Mark Pesce set out the basic proposition in his 2005 article Piracy is Good? which sets out the basic Hyperdistribution philosophy: create the advertising content in conjunction with the program so it is sympathetic and integrated, then distribute it as widely and as far as you can, by whatever method works because the advertising message is integral to the program, and – presumably – targeting the same audience, avoiding the “irrelevant advertising” problem I have.

Now this survey examines what people – potential customers/audience – think about brands sponsoring entertainment:

With further innovation in TV so clearly in demand, we asked consumers if new providers could enter the market, appearing on our internet-connected screens, and if today’s brands would still be relevant, by 2020?

Many consumers agreed that there are “brands that could do a better job at providing TV than some of the TV providers and channels we have now”: 39% agreed, and only 8% disagreed. In the eyes of our viewers, there is clearly room for new entrants to be successful in this market – in particular, major internet, technology and film brands.

Interesting, very interesting.

Starting with an article “Hollywood & the Job Crisis” that leads to be a discussion about constantly changing business model. Right now the model seems to be “how low can you go” which is ultimately self defeating. Where do you go from here? Talent and desire are what will sell. How did post houses get to this, and what will the future hold? What is your Unique Selling Proposition?

Now to be fair, what is being demonstrated is that employees within the studios (and it turns out the some anti-piracy organizations) are indeed downloading unauthorized, copyright material via bittorrent.

You have to wonder that, if the supposed damages done by bittorrent (never proven in any peer reviewed study) then it would be the people working in the studios who felt they should uphold the position of their employers. At least to the extent that they wouldn’t download copyright material on the job!

First up is Sony Pictures Entertainment. As shown below, on this single IP-address alone a wide variety of music and movies have been downloaded. And this is probably just the tip of the iceberg, as YouHaveDownloaded only tracks only a small percentage of all public BitTorrent downloads.

And then:

Another Hollywood studio where it’s not uncommon to download music, TV-shows and movies is NBC Universal. The employee(s) behind one of the IP-addresses at the Fort Lauderdale office in Florida downloaded the first season of ‘Game of Thrones,’ some trance music, a DVD of ‘Cowboys and Aliens’, and much more.

….

And then there are the fine upstanding people at Fox Entertainment checking out the work of a competing studio. Perhaps downloading ‘Super 8′ can be branded as “market research,” but in this instance actually paying for the DVD might be more appropriate.

After all, when Fox notices that one of their own movies has leaked online they quicklycontact the FBI to get the offender jailed. Ouch.

So, I expect there will be mass sackings over this? Unlikely as the position is really “do as we say, not as we do”. I wish I could find the link to a story of a year ago where one Studio executive discovered his children were downloading unauthorized material. Instead of doing what he’d do for any other person – sue them – he was going to give his children “a stern talking to”! Hypocrites.

The terms that best describe Studio or Record Company executives: clueless hypocrites.  My position is that is factual and let them try proving otherwise in a defamation suit!

Torrent Freak has even more examples, and then check out why not even the collection agencies believe in the law.

Update: Could not miss linking to this: ANTI-PIRACY MOVIE ADS CAUGHT USING PIRATED MUSIC  December 10, 2011

Netherlands composer Melchior Rietveldt composed that ominous techno tune for a local film festival after being asked by anti-piracy group BREIN, who are funded by Hollywood. A few years later, he got himself a copy of Harry Potter on DVD and noticed his music was suddenly being used for much wider use than he had originally agreed to in contract. Which essentially means that when they say ‘you wouldn’t steal a television’, that doesn’t quite extend to intellectual property.

Legal estimates put the amount of money Rietveldt is owed by pretty much every movie house on Earth at somewhere close to €1 million. Matters got even worse when the chairman of the board of the royalty collection agency in the Netherlands offered to help recoup the funds – but only if he could take a 33% cut. It’s bad timing particularly for the US, where the Stop Online Piracy Act (SOPA) is currently a hot topic for its intended transferral of responsibility for pirated from individuals back to small businesses and web hosts. After all, if they can’t even look after their own ads, how can they expect anybody else to abide by the law?

An interesting research result from a source that isn’t fully bought and paid for by the Studios, that is, a report that may have some chance of relating to the real world rather than the fantasy land that MPAA/RIAA “research” reports come from.

Recently, Senator Ron Wyden asked CRS if it could explore the state of the movie industry today as compared to 1995 on a variety of different criteria. You can read the full report embedded below, but here are a few key points. First off, despite the industry’s regular attempt to play up its contribution to GDP and employment, the report found that the combined GDP contribution of both the “motion picture and sound recording” industries was a whopping 0.4% in 2009. Back in 1995… it was also 0.4%.

Emphasis is from TechDirt.com.

As for employment, Hollywood loves to claim that it employs millions of people. One popular number is that 19 million people have jobs in “IP-intensive industries.” Of course, we’ve discussed how misleading a term that is, as they lump in all sorts of jobs that have absolutely nothing whatsoever to do with copyright. So, how many people are actually employed in the movie industry? Not that many. 374,000 in 2010 — and that includes both full and part time workers. And that’s really not much different from the 392,000 in 1998. So it’s not like the industry has been losing employees in droves as they imply. Furthermore, that’s only slightly more than the number of jobs that Facebook’s app platform alone is estimated to have created. Hell, we’ve seen reports that have said eBay alone created 750,000 small business jobs. Perhaps Hollywood isn’t as big a part of the economy as it likes to claim.

I like that last line, and this time I’m going to add the emphasis: Perhaps Hollywood isn’t as big a part of the economy as it likes to claim. 

The article goes on to consider Box Office Gross (higher than ever before), so once again I have to ask: Why do we need the Internet destroying, Constitutionally difficult pieces of nasty legislation as PROTECT IP and SOPA?  O right, to give “Hollywood” ultimate power over the Internet without challenge, due process, or recourse.

Once again it really is a case of protecting the MPAA and RIAA from themselves. Every new technology they’ve challenged and hated over the last 100 yours has turned out to benefit their own business. Idiots. That’s all, they’re just plain idiots. Especially the hypocritical Chris Dodds (now head of the MPAA). Now as head of the MPAA he is totally in favor of a “Great Firewall of China” for the USA (government censorship of the Internet) to protect the MPAA.

“When the Chinese told Google that they had to block sites or they couldn’t do [business] in their country, they managed to figure out how to block sites.”

But just a few years ago as a potential Presidential candidate, he seems to have a whole different opinion:

Tell the Chinese government that Google.cn will no longer censor information with Google’s consent. And should the Chinese government not find that acceptable, then Google.cn would shut down its operations. I understand that you’ve already moved all of your search records out of China, to prevent them from being turned over to the Chinese government. But what better way to affirm Google’s commitment to the free flow of information as a human right, than to send this message to a nation with the largest population in the world?

You can view that video on YouTube. So, is Chris Dodds a lying hypocrite, just incredibly stupid or a politician who’ll say whatever they want to get elected, but ultimately follow exactly what their finical sponsors (aka donors) tell them to do and say.

“How do you know if a politician (future, present or former) is lying? There mouth is moving.”  How true that remains now.

MediaPost asks a very good question about the likely profitability to Netflix of reviving Arrested Development, but ultimately Netflix, like cable companies before it, may fund a program that isn’t profitable directly, but indirectly contributes to the bottom line of the whole channel.  Mad Men on AMC is unlikely to be directly profitable for AMC but it raises the profile and perception of the network and is worthwhile as a result.

On the positive side, Ashkan Karbasfrooshan, writes:

What it lacked, was viewers, or at least, enough viewers to please big media marketers, sliding from six million to four million viewers from season 2 to 3.

Mind you, just because those numbers don’t make economic sense for on-air or cable television, it might for Netflix.  Earlier this year, TechCrunch made the case with another cult-classic that was flatlined too soon, according to its fans: “‘Firefly’ averaged about 4.5 million viewers when it was on the air in 2002. Let’s say that Netflix could convert just 500,000 of those to paying customers (who weren’t previously) in order to continue watching the show. That would be a half million people paying at least $8 a month. That’s $4 million a month in revenue. And $48 million a year. And you can assume most would end up as multi-year subscribers.”

After an interesting discussion of why it may not work so well for Netflix, Ashkan is still positive on the idea (as am I):

Lastly, I’ve always argued that with the marginal cost of digital production and distribution sliding towards zero, it remains to be seen if content is a cost center or a profit unit.  It’s possible that “Arrested Development” will become a cash cow for Netflix, as a higher-than-expected percentage of its viewers subscribe to the show — but it’s more likely that Netflix is experiencing the equivalent of a big, splashy marketing campaign that Netflix’s CEO, Reed Hastings, hopes will turn around the company’s sagging goodwill and stock price.

The ten bullet points from Mark Suster’s talk at The Future of Television. There’s good detail in the text summary, and the full 10 minute talk is available on video.

1. The promise has been made for too long, People are cynical

2. The right factors are finally in place

3. YouTube is the new Comcast

4. The distributed ad platform enabled this industry to evolve

5. Internet TV is following the CLASSIC case of the “Innovator’s Dilemma”

6. Cable & Satellite packages will become music albums

7. Mass adoption of Internet video has already taken place

8. TV is the medium people prefer (whether we like it or not) –

9. Video is different than text. It requires unique, creative skills

10. This revolution is starting in Los Angeles.

But, you say, aren’t these the people buying off the politicians and forcing this Internet-destroying legislation through?

They are, but they have such an appalling track record of adapting to technology and knowing how that technology will benefit them, that they must be protected from themselves (and we need to be protected from the damage these bills would inflict on the Internet). I mean it quite seriously.  If Thomas Edison would have had his way, there would be no movie projectors as his business was in Kinescope booths.Scott Kirsner does a great job of pointing out “Hollywood’s” track record of missing technology and opposing what ultimately was good for their business, in Inventing the Movies.

But most egregiously where would the Movie business be today if  MPAA boss Jack Valenti prevailed:

I say to you that the VCR is to the American film producer and the American public as the Boston strangler is to the woman home alone.

Turns out that was not only completely wrong, but Home Entertainment – the business that grew out of the VCR and then DVD – is now significantly more than revenue from movie theaters/cinemas.  If the MPAA had had their way, the biggest part of their business would not exist today.

Based on their track record, the MPAA and RIAA (and associates) are so wrong, so often that they should be protected from themselves.

Take a moment, and consider where the movie business would be today, if the VCR never existed. And think about just how wrong the MPAA was then to freak out about a technology that later saved it. And consider that perhaps we should wait before changing the law to allow the MPAA to kill off the next “VCR” in the digital age. (Techdirt.com)

Opposing SOPA/PROTECT IP also has the advantage of not breaking the Internet, not putting Justin Beiber in Jail (as would be the case if this law was already in place), and not preventing new startups (like Dropbox) from getting established.

Here’s some reading or viewing:

How Protect IP / SOPA Act Breaks the Internet

The folks behind Fight For the Future have teamed up with Kirby Ferguson, who created the excellent everything is a remix series, have teamed up to put together a video about the problems with PROTECT IP/E-PARASITES.

Content Industry Insists E-PARASITE Won’t Rewrite DMCA, But Co-Author Of The Bill Admits That’s The Plan

But, in this case, why don’t we go to the source: Rep. Bob Goodlatte, supposed co-author of the bill, and the chair of the IP subcommittee in the House. When asked about criticism of the bill by Gautham Nagesh at The Hill, Goodlatte flat out admitted that the intention is to take away the DMCA’s safe harbors:

“I think it is unrealistic to think we’re going to continue to rely on the DMCA notice-and-takedown provision,” Goodlatte said.

“Anybody who is involved in providing services on the Internet would be expected to do some things.”

Why All Filmmakers Should Speak Out Against SOPA by Ross Pruden (Showrunner. Moderator of #infdist, The Infinite Distribution Panel on Twitter for discussing the future of film in the digital age.  Mastermind behind http://infdist.com)

There are many reasons why SOPA and other legislation like it should never be passed, e.g., it fundamentally changes how the internet functions, but here are just two things that should get you thinking:

1. In 1999, I was vehemently against media piracy. It was wrong, I felt, to “rip off” artists without their permission.
2. In 2011, I can say with absolute conviction that I was the one who was flat out wrong.

I’ve worked in the film industry for two decades as a screenwriter, director, assistant director, script supervisor, production assistant… I’ve seen a lot of change in the film industry in the last decade and realized at some point that I was witnessing a transition arising from the internet; the same transition that happened to the music industry in the 90s.

Stop SOPA, Save the Internet by Cory Doctorow

Google knows it. Viacom knows it. The Chamber of Commerce knows it. Internet democracy groups know it. BoingBoing knows it. But, the Internet hasn’t been told yet — we’re going to get blown away by the end of the year. The worst bill in Internet history is about to become law. Law is very real here in the United States and legal language is often different than stated intentions — this law would give government and corporations the power to block sites like BoingBoing over infringing links on at least one webpage posted by their users. Believe the EFF, Public Knowledge, Google when they say this bill is about much more than copyright, it’s about the Internet and free speech everywhere.

The Copy Culture Survey: Infringement and Enforcement in the US - Just one of a number of excellent points and observations:

Solid majorities of American Internet users oppose copyright enforcement when it is perceived to intrude on personal rights and freedoms.   69% oppose monitoring of their Internet activity for the purposes of enforcement.   57% oppose blocking or filtering if those measures also block some legal content or activity.

If it’s so unpopular, why is it even in play?  House Judiciary Committee SOPA Hearings Stacked 5 To 1 In Favor Of Censoring The Internet

The five “pro” speakers are the Register of Copryights, someone from the MPAA, someone from Pfizer, someone from MasterCard, and someone from the AFL-CIO. The choice of MasterCard is deliberate, since Visa is against the bill — because Visa recognizes that supporting a bill that requires them to cut off customers based on accusations of infringement is going to be a huge burden, and one that isn’t good for their own customers.

Furthermore, the “one” against SOPA is going to be Google. This is a strategic choice, because the pro-SOPA folks know that Google is easy to dismiss on this topic, because they’ll claim (not accurately) that Google just wants to profit from infringement.

Future Of Music Coalition “Coming Clean on SOPA”

We at FMC want to see the growth of a legitimate digital music marketplace that rewards creators and fans. We support efforts to protect rightsholders online and encourage fans to participate in platforms where CNET’e creators get paid. We genuinely hope that if Congress gets involved that they find a way to support creativity without compromising free expression and innovation. In its current form, SOPA is not that bill.

The Association of Research Libraries and the Association of College & Research Libraries wrote to Congress opposing the Bill(s):

Two provisions of section 201—the definition of willfulness in section 201(c) and the expansion of criminal penalties to public performances in section 201(a)—are troubling. While each provision is problematic in its own right, the two together could threaten important library and educational activities.

Facebook, Twitter, eBay & Other Big Internet Companies Come Out Against SOPA

We are very concerned that the bills as written would seriously undermine the effective mechanism Congress enacted in the Digital Millenium Copyright Act (DMCA) to provide a safe harbor for Internet companies that act in good faith to remove infringing content from their sites. Since their enactment in 1998, the DMCA’s safe harbor provisions for online service providers have been a cornerstone of the U.S. Internet and technology industry’s growth and success. While we work together to find additional ways to target foreign “rogue” sites, we should not jeopardize a foundational structure that has worked for content owners and Internet companies alike and provides certainty to innovators with new ideas for how people create, find, discuss, and share information lawfully online. 

SOPA: Hollywood’s latest effort to turn back time CNET’s Larry Downes comments:

SOPA also includes its own version of another Senate bill, which would make it a felony to stream copyrighted works. The House version allows prosecution of anyone who “willfully” includes protected content without permission, including, for example, YouTube videos where copyrighted music is covered or even played in the background.

While supporters deny that such minimal infractions would meet the bill’s definition of “willfully,” the actual text suggests otherwise. Prosecutors need only demonstrate that the use had a total “retail value” of more than $1,000. To avoid a felony conviction, a defendant would have to prove they reasonably believed their conduct was lawful, as for example someone in a “bona fide commercial dispute” over the scope of a license to use the content.

Joe Biden on Internet Freedom = Anti-SOPA

In a stirring and commendable speech, Vice President Joe Biden makes a clear and convincing — if entirely unintended — case for why the massive expansion of copyright laws through SOPA or PROTECT IP would go against everything America stands for, would harm innovation and be bad for entrepreneurs.

Except just a few weeks earlier he was doing the industry’s bidding.

Congress’s Piracy Blacklist Plan: A Cure Worse than the Disease? Time magazine weighs in

There are many reasons to dislike these anti-piracy bills—from overly broad definitions of what counts as infringement, to how they may shift the burden of policing from content owners to the service providers—yet the proposed meddling with the Internet’s Domain Name System is the most alarming.

Study Shows How SOPA/PIPA Will Harm Investment In Key Innovations

This is quite important to think about in the context of SOPA/PIPA, where Hollywood and the US Chamber of Commerce are seeking to massively change the legal framework around cloud computing (effectively killing the Cablevision ruling and much, much more). The clear fear here should be that doing so will massively chill innovation, job creation and investment. This is why top venture capitalists are so worried about SOPA/PIPA. It’ll seriously chill investment in a key area of the innovation ecosystem. Even worse, this is the part of the industry that’s actually helping the entertainment industry move into the 21st century.

A bipartisan bill introduced last week in the House of Representatives would mark a fundamental change in Internet law, shifting liability for copyright piracy from the infringer to the host website.

It would chip away at critical safeguards that have shaped the Internet as we know it today, and many worry it would make it far more difficult for the next YouTube, Facebook or Craigslist to emerge and succeed.

Rep. Darrell Issa Joins Rep. Lofgren In Saying That SOPA Is A Bad Idea

Ron Paul Comes Out Against SOPA; Joins Other Elected Officials Saying No To The Great Firewall Of America

SOPA Will Have Serious Implications For Sports Fans And Blogs

SOPA will target websites distributing pirated material and illegal online streaming by allowing copyright owners to shut down payments and ads to alleged infringers. Under current law, copyright owners (movie studios and record labels) must go to court to block such sites or demand copyrighted content be taken down. The new legislation allows copyright owners to effectively shut down websites simply by accusing them of having copyrighted materials without permission.

Note: The proposed bills do not require anything more than an “accusation”. No proof. No due process, just an accusation.

And now let’s consider some of the ways the industry really lives:

The Secret Behind SOPA Defense: Insist That It Doesn’t Say What It Actually Says

RIAA Explains Its Interpretation Of SOPA; Which Doesn’t Seem To Be Found In The Bill Itself

Warner Bros., Right After Announcing Record Profits, Pleads Poverty In Asking People To Support ‘Grassroots’ Campaign For E-PARASITE Act

Viacom, ‘Decimated By Piracy,’ But Its CEO Got The Biggest Raise Of Any Exec Anywhere

 Viacom chief Philippe P. Dauman topped the charts for the exec with the biggest pay raise in 2010. His total pay was $84.5 million last year — a 148.6% raise on his previous year’s take home. Yes, that’s a $50 million raise.

A Glimpse Of The Future Under SOPA: Warner Bros. Admits It Filed Many False Takedown Notices

Hollywood Front Group Rounds Up 4,000 Letters Sent To Congress, Pretending It’s 100,000

Piracy problems? US copyright industries show terrific health Ars Technica tells us like it is:

Pity the poor people who work in the US “copyright industries.” Battered by a decade of digital piracy and facing even more of it thanks to cheap computers, fast Internet, P2P file-sharing, and online file lockers, the US creative industries teeter on the verge of collapse. You can tell because the industry:

• Pays better than most American jobs
• Has outperformed the US economy through a horrific recession
• Sells record-setting amounts of product overseas, earning more foreign revenue than the entire US food sector or US pharmaceutical companies

Copyright Industries Massive Success Shows That They’re Dying And Need More Draconian Copyright Laws?

Rep. Blackburn, Co-Sponsor Of E-PARASITE, Explains Why Regulating The Internet Is Terrible

Before he was for it, he was against it just a few months back! Do they even now what the legislations says (I vote no, they do not.)

Do The Authors Of The Felony Streaming Bills Even Know What The Details Of Their Own Bills Mean?

All in all, a mixture of incompetence and outright lying. By the way these are only about half the links I have on the subject!

Moving forward, Adobe will offer customers the ability to make, manage, measure and monetize content and applications across all devices.  The company has long been the leader in content authoring solutions with its Adobe Creative Suite® product franchise. Its Digital Media growth strategy revolves around its recently announced Creative Cloud and will enable the company to rapidly deliver new product capabilities and services; penetrate untapped market segments; and increase overall engagement with customers.

The direction was suggested by the recent purchase of Auditude at the beginning of November so it’s good to see it confirmed. What exactly it means for independent creators will become clearer over time, I assume.  Right now the specifics spelled out in the announcement of strategic direction – delivering Creative Suite and beyond to tablets and Cloud, sifting resources from Flash to HTML5, focusing Flash on the “most advanced PC web experience, including gaming and premium video and mobile apps, investing in media monetization and extending its leadership in document services  - all look great but lack details I can comment on.

After that, though, the announcement slips into “pr speak” mode: nice broad goals without detail! Adobe are on a roll with their dynamic media apps and I think this should help consolidate their position among independent producers.

This is a long article but well worth the read as Habib Kairouz runs through a comparison between the ills that afflict the print industry with those that are affecting television as we’ve known it.

It is now widely accepted by the major industry stakeholders, content owners, MSOs, CE manufacturers and new startups that the following trends are unavoidable:

• Consumers will demand linear and on demand, short-form and user generated videos, to be viewed anytime, anywhere and on multiple devices. I believe that companies that build models to meet that demand will win. Those that deny it will go on life support.
• TV rooms in homes will have multiple screens running simultaneously, presenting a much better form factor to interface with the TV set than the traditional remote control. Most new TV-viewing devices will be Internet connected in 10 years.
• A substantial percentage of programming will have on demand, time shifted and interactive capabilities. New formats of programming with embedded interactive applications will emerge, and social TV will take off.
• Advertising will be targeted and personalized, at the individual and household levels, using legacy data from the settop box as well as ongoing rich data being generated every day, unless regulators step in to over restrict that. Smart marketers are already challenging the convention of TV time buying by demanding the same accountability that they are getting in their online buys.

He then goes into why fighting this round of disruption will be even harder than the previous rounds and concludes with:

The question is not if a market disruption is looming. It is. The question is who will lead the charge and end up on top? Will the MSOs be able to innovate and keep consumers tuning in on their terms? Will the digital media houses continue successfully on their transition into the market? Or will smaller players find a way to fill the gap and create the next generation dynasty?

My bet is on companies that will embrace rather than fight the trends, control at least one end of the value chain (content or consumer interface) and build sticky or proprietary assets such as viewing data and recommendation engines, billing or storage of personal content. Only time will tell, but one thing is for sure, we’ll all be tuning in (on multiple devices) to find out.

The entire article is a through provoking read and great background as we try and divine how and where we’ll make money in production in the future.

The trend toward basing creative endeavors on templates has been a trend for many years, culminating in Hollywood’s use of its history as templates for its current production. Is it a case of profit over creativity?

Whether this is a good or bad thing depends on whether you value your personal creativity, or you’re pushing a budget to get a project finished.

If you’ve got a post-production nightmare let me know in the comments so I can make sure I address it in my “Avoiding Post Production Nightmares” DV Expo session.

Felicia Day has had some success in the online video with her The Guild series. Initially fan funded (poorly) and now sponsored (by Microsoft is my memory is accurate) Felicia has a reasonable position as both a participant in the traditional TV series world (Buffy the Vampire Slayer) and online. She asks the question on Google Plus:

There is a basic principle working here (scary, if you’re in the TV business) that I’ve personally been dealing with on The Guild with a mere 2 DAYS! delay of releasing content: People want content immediately, wherever they like to view things. They don’t care if you’re trying to pay production bills, they don’t care if it’s the only way to fund things, they want it NOW, they want it CONVENIENT to them personally. Whether this is a reasonable attitude or not, it’s what people are used to in this day of streaming on demand, and it’s only going to get worse, because cord-cutters are getting more and more common. Long view=not good.

and then cuts to the fundamental question a lot of us have been trying to answer:

So my question is: What happens to all those shows when they fragment like that? Who is gonna pay to produce them? What is the future? (And “funded by viewers” model is not the answer, only 1% of people ever really contribute, and the up-front costs of producing video are WAY higher than making a record or a book, etc. Believe me, I understand this personally.)

Techdirt’s Mike Masnick is another that has been trying to fathom the funding future for creative endeavors, admittedly more focused on music than video, but that’s largely because the music business is further down this path, and has somewhat simpler structures for bands and solo artists than the group effort that video production usually entails. He posits:

But on to the larger point of what happens to video in a fragmented world? Well, I sense that it’s going to be awesome. As with music and books, it will allow all kinds of niche productions to show up, which would simply never make it at all in a “network” world. In fact, this is already happening — and Day’s been a part of some of that with things like The Guild and Dr. Horrible. As for how to fund it, well, again there are a variety of options. One of the things that changes is that there’s no longer “one clear path,” but that hardly means there’s no way to make money. It may take more experimentation, but there are all sorts of options, mostly involving a hybrid of models.

For years, of course, we’ve talked about how the new business models are built off of the formula of connect with fans, while giving them a valuable scarce reason to buy, and that certainly applies to video as well. In the past, for example, we’ve listed out 10 forms of scarcities that can help you figure out good “reasons to buy,” and most of them apply to video as well. Let’s take a look:

He then lists 10 scarcities that we can “sell”, given that we cannot sell (ultimately) the digital abundance. The whole article is a great read. It’s not the full answer by any means, but I think the “future truth” will be that there is not one path nor one way to get funded.

It’s an interesting interview about Brad Bird’s (and Pixar’s) creative process, but I flagged it for the headline, which leads to the second question:

GB: Pixar is widely admired but, really, rarely copied. Why do you think that is?

BB:  Everyone in Hollywood says they wish they could do it like Pixar, but they really don’t. There’s no secret at Pixar, but there is a belief in letting people pursue something with passion and take chances, and most of Hollywood, really, doesn’t like that. It’s too scary. Some studio executives will say they love obsessive creators who take risks, but really most of them would rather play it safe. Projects cost a lot of money and people would rather follow patterns they know and make things safe and accessible. Hollywood wants there to be a math formula for making hit films. To make something really great and different and interesting means taking risks and following these ideas in your head.

Both book publishing and film/television are industries that were built on scarcity, that are being disrupted n an age of non-scarcity. That’s not to say that there isn’t success and money to be made in the traditional businesses, but book publishing is an interesting place to look for parallels to television (particularly).

In “olden” times book publishers approached writers, offered them an advance against royalties, to write a book. Somewhat more dramatically than the budgetary pressures on television production, the advances offered to writers in the video technology and techniques space have dropped to about 20% of what was being offered as an advance a decade ago.

Given that even those advances really didn’t cover the time it took to write a book, book writing was done for profile/career rather than from the publisher. In fact an author makes more from the Amazon affiliate commission (for sales in a State where Amazon still has affiliates) than from the publisher for the sale.

I went for “self publishing” a few years ago, starting with some PDFs of Final Cut Studio tips and on to some more serious book writing: most recently Conquering the metadata foundations of Final Cut Pro X. I’m selling both PDF versions and print versions (thanks to Amazon Createspace): pdfs directly and print via Amazon itself.

Now, I’ve written before on what you need to know and handle for yourself if you’re going to self publish, but for me it’s worked out well, with returns commensurate with the time invested in writing the book, so I get both a decent financial return and the profile/career boost as well.

The television industry, like print before it, has many levels between creative and customer – in fact it confuses the customer relationship because the broadcaster and cable companies’ customer is the advertiser, not the audience. These levels cost the consumer, but when the technology limits supply (of airwaves or cable channel real estate) it can be justified.

Until technology bypasses the control and allows print authors to go directly to customers, and still have access to the biggest book distribution channel in the world for physical books (and increasingly their digital equivalents). Although nowhere near as complete, we’re seeing a similar disruption to the television and film industry that will play out over the next decade as the print industry transforms ahead of it.

All the things that a publisher (substitute network mentally) provided for me as an author now have alternatives. As I wrote in the article referenced above, you will need to find an editor to peruse your work (unless you’re supremely confident) and someone to lay it out, but there are tools for that, or services at very reasonable prices. Even cover design can be done by template or service (through Createspace). The other things a publisher did for an author – printing, access to distribution and publicity – are things I can do myself or through Createspace and its competitors. Print happens on demand (and for very small number provides an interesting PR tool); by filling in some web forms the book appears in the Amazon catalog and publicity really fell to the author beyond the publisher sending out a press release at the time of publication and organize some interviews: things any competent author can do for themselves.

And without a large upfront investment required, funding the book is nowhere near the problem it was. Now, with film or TV production there’s generally a crew to fund as well, so the numbers will be bigger, but ultimately I think the same type of disruption will affect studiio film and television production.

Thanks to technology (and some work on my part) an independent has had the best selling Final Cut Pro X book in Amazon for June, July and August 2011. (Because there are no other print books being sold for Final Cut Pro X!)

A good take on budgeting and how the “It takes at least $300,000″ rule may not be as rigid now as it once was. Writer Edward J Delaney goes through six fundamental shifts that have changed the equation:

1. Scarcity is gone (It’s easy to produce with digital tools)
2. Abundance diminished investment certainty (the irony of democratized production making funding more difficult)
3. The market has broadened (it’s not just broadcast TV any more)
4. The economies of scale are diminishing (smaller docs are becoming the norm)
5. The math is changing (well, that’s the premise of the piece)
6. It will always be a labor of love (even if Michael Moore is rich).

The argument is logical and reasonable. He concludes:

These days, with competition that simply did not exist 30 years ago, filmmaking  has to be the labor of love that makes you want to do it despite the financial headaches. The trash truck is coming down the street as I write, and those guys are not, I suspect, engaged in a labor of love. But most of us, in whatever profession or pursuit we choose, should be if we can.

Author Aleks Krotoski starts out with the importance of story.

Stories are memory aids, instruction manuals and moral compasses. When enlisted by charismatic leaders and turned into manifestos, dogmas and social policy, they’ve been the foundations for religions and political systems. When a storyteller has held an audience captive around a campfire, a cinema screen or on the page of a bestseller, they’ve reinforced local and universal norms about where we’ve been and where we’re going. And when they’ve been shared in the corner shop, at the pub or over dinner they’ve helped us define who we are and how we fit in.

But “… the process of telling a story doesn’t have to be unidirectional” and that’s given rise to “multi-media” or “transmedia” storytelling.

But the tools they use to tell tales are evolving, becoming more modular and tailored, more participatory and more engaging than just the printed word or the moving image. The new form of storytelling that’s coming from a digitally enabled cabal moves beyond reinterpreting a text for radio or screen.

….

Frank Rose, author of The Art of Immersion: How the Digital Generation is Remaking Hollywood, Madison Avenue and the Way We Tell Stories,believes this is exactly what people want from their story experience. “The kind of multi-way conversation that the web makes possible is what we’ve always wanted to do,” he says. “The technology finally enables it.”

Rose celebrates the way that the new kinds of storytelling brings audiences together to traverse plots, but recognises that there are challenges for consumers and for creators: “It’s very different when you have a medium that forces you to engage with other people,” he says, reflecting on the arc of a narrative that is necessarily more complex, multifaceted, and demands more flexibility. “You don’t know if you’re going to have to tell a story for one hour, two hours or 10 years.”

The article goes on to describe examples of extended storytelling. It has always been true that technologies enable new ways of telling or sharing stories: from verbal only, to scribes and the elite literate sharing via scrolls and the like; to the advent of the printing press and later widespread literacy; on to radio, TV, film and video right up to the Internet age of multiple venues for stories.

Paul Berman, writing for Wired, would prefer you didn’t call it “Transmedia” though!