Saturday, January 07, 2006

Video – IP and the Value Chain

If something got quite clear these days at CES was that TV and in general what we call media content is going to be IP and is going to be on-demand. The final argument for those, shrinking in number, of remaining skeptics that insist against all odds to promote other platforms ( TDT for example) was the announcements of Yahoo, Google and Intel. Google partnered initially with CBS and NBA to sell video content on demand of their most popular programs/matches. Yahoo got a similar agreement and Intel is partnering with clickstart to produce and distribute big ticket movies through Internet. Of course it would take us a while to get the 6Mb that high quality video content requires and to get our TV sets connected to the Internet and so … but is clear that the path is being laid out and is Internet in all its variations: wifi, wimax, dsl, etc.. From the consumer point of view that means quite a lot, instead of 10-20 channels in Europe or 100-200 in States will have 100,000 or Millions. Instead of being tied to certain hours for watching our favorite programs or movies, they will be on-demand and instead of choosing from a very limited set of options – they will be almost unlimited. But for the industry that will mean a lot too!! The whole role of distribution is going to change, new distributors like Google or Yahoo are coming to the market and content producers will be able to access them directly. Also distribution cost will go down to a level that will be almost for free for small producers. So an explosion of contents – same as blogging – will be on the net. All that is going to impact the whole value chain of an industry and many of our habits. Once again a technological advancement changes the whole economic picture. For clues of things to come in the future just take a look at myspace and instead of music – put videos!! But besides all that – I’d like to mention two effects that probably are more long than short term and will shape more the generations to come than ourselves. The first one is globalization of contents, contents produced in any place of the world will be able to be watched anywhere without any additional cost. This has many implications, among them that people will most likely produce for bigger audiences with all the implications that this could have for small languages or closed cultures. The second phenomena is control by governments or economic regional powers. It will be increasingly difficult to control information for any economical or political power or to convince the population of maintaining certain type of status that confronts general realities. So – who said that was about tv or movies? As always change-danger and opportunity come together!!


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