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Umair, Jarvis, Disney, and Me
I think and write a lot about the future of media. It's a big part of our investment thesis. We don't invest directly in media, at least media the way its been constructed traditionally. But we invest a lot in businesses that are transforming the way media is delivered, consumed, and monetized.
And like everyone else, I rely on others to help shape my thoughts. The most influential thinker for me is my partner Brad, whose ideas I liberally steal from and out on this blog and the Union Square Ventures blog all the time.
After Brad, two of my biggest influences are Jeff Jarvis and Umair Haque.
Jeff has an undending enthusiasm for the explosions that are happening all around us and transforming the world of media.
He's an insider, who knows how the traditional world thinks, but is pushing the transformation forward with his words, and increasingly his actions.
He's the cheerleader for exploding media.
I rely on Jeff for his reaction to important stories, for his words of disgust and joy, and I pay attention to what he pays attention to and notice what he doesn't.
Umair is a thinker, a big thinker, who sees a world of media that we are not living in today, but will almost certainly live in tomorow.
He's not a cheerleader, he's a free consultant, who happily shares his views on important issues with anyone with the brains and guts to read them and understand them.
So it was with interest that I read Jeff and Umair's reactions to yesterday's news that Disney was making its TV shows available for free on the Internet.
Jeff was characteristically enthusiastic. He, like I did, sees this as a defining moment for TV content companies. The move to the Internet is upon us. Jeff calls it "seismic".
Umair, on the other hand, sees this move by Disney as a terrible mistake. He calls it "unbundling withtout rebundling". And he feels that Disney is handing their content to the "YouTubes and MySpaces".
I totally agree with both of them. But my interest in this whole situation is simply to keep moving forward. We can't get to Umair's world of microchunked, rebundled media without the critical first step of freeing the content and focusing on monetizing it with new advertising models.
So after consulting my media gurus, I still come out where I was yesterday morning, Disney has done something big, important, and critical to moving the media model forward. They will certainly have to continue to innovate around their distribution models (for example what about delivering the TV shows in Feeds?). I am certain that Feedburner would be happy to help Disney with that.
But you can't get where we need to go with the content locked up.
It's coming out. And I am excited.
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» Content comes out from aTypical Joe: A gay New Yorker living in the rural south.
I agree with all three. A VC: [I]t was with interest that I read Jeff and Umair's reactions to yesterday's news that Disney was making its TV shows available for free on the Internet. Jeff [Jarvis] was characteristically enthusiastic. He,... [Read More]
Tracked on Apr 11, 2006 9:11:30 AM
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Disney is making its programming freely available on the Web. That's remarkable. It means a major media company has decided to be a risk taker rather than a hedger. Fred Wilson:This is big, big, big. Jeff Jarvis:TV has finally exploded. [Read More]
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Tracked on Apr 16, 2006 1:01:53 AM
Posted April 11, 2006 in Venture Capital and TechnologyComments
Fred: I didn't read Umair as saying they were making a terrible mistake, but, as you say, that they are only making a necessary first step along the path to new structures that truly create edge value. Seems radical, but isn't nearly radical enough to get them where they'll need to get to really play.
Content isn't the thing -- connection is. Otherwise, someone (like, oh, me) will come along and plus up your content with a great remixing/modding play and become a preferred way into & out of your stuff.
Posted by: Brian Oberkirch | Apr 11, 2006 8:02:58 AM
Isn't it kind of eerie/ exciting to know that the media is about to move towards the Internet, and we have a front row seat to it? I'll keep my comment short, but I agree that RSS is going to be a media distribution method, possibly "the" media distribution method of the future. One day I hope to see my TV come with a sticker saying "RSS Enabled" with the little orange and white RSS logo next to it. I'll be checking out Umair and Jeff's blogs in the future, to get insight from people with the same goals as uGather.
-Jason L. Baptiste
Posted by: Jason L. Baptiste | Apr 11, 2006 8:18:14 AM
Agreed. I find that with a lot of Umair's recent thoughts he's skipping a critical intermediate step that may not be ideal but is required (and needs to be celebrated because of the forward momentum it brings).
Sometimes I think that to skip the intermediate steps, and not guide people down the path gradually, is a mistake and brings more harm than good - especially in the short/medium term.
Posted by: Fraser | Apr 11, 2006 8:45:53 AM
So where do we disagree? Yes, it's just a step. And it's not anywhere near the destination. But the fact that ABC was willing to piss off its affiliates, cable MSOs, and retail outlets because it knew it had to in the face of destruction matters. The fact that ad agencies are trying to redefine broadcast as video is important. It's not nearly open enough, which means it won't be nearly big enough.
But when I left the bag lunch at your office about exploding TV, I said that the big networks would not be able to take part in the explosion because they were encumbered by their relations with MSOs, talent, agents, lawyers, etc. That's why I'm so amazed that ABC was willing to break with old constituents. That's why this is such an explosion.
We agree.
Posted by: Jeff jarvis | Apr 11, 2006 7:23:31 PM
No one loves Umair more than me but he's not asking the one real question that matters:
"What does the audience want?"
The edge is a cool place and I really dig it but the ever shrinking mass audience is barely there.
What ABC/Disney is doing is spot on. It's what audiences expect and want. If you told John Public that he can watch shows on his computer for free he will say "cool".
Longterm it might not be the wise move. But it gives ABC/Disney 'the edge' in the audiences mind. (And isn't the audience where the value is?)
Posted by: chartreuse | Apr 11, 2006 8:29:38 PM
I think what Umair is pointing out is that Disney is not making the best use of the attention of the audience. Their model fules indivisual consumption and may have some value but the real value comes through connected consumption and network effect.
Disney has wonderful content and now they have a new medium of distribution, what Disney does not have is attention of users for their new medium. Putting up Video content for isolated downloads perhaps is not the best use of the attention they may get to their new distribution mechanism. The relationship Disney creates with the user is very one on one, the user comes on to the portal gets the content they want and leaves. Now lets compare this to Myspace
The content on myspace is provided by users and users help captivate attention of others users. Its feeding the interaction between the users that powers the whole value chain. Myspace created a sticky affinity consumer space around music, they fueled the user interest and interaction by connecting them around Bands, Myspace parties etc. Allowing users to interact with the bands, around the bands and bringing attention of their peers to the content and Myspace. Now that they have enabled the myspace community to create its own switching costs through the relationships they have built around the myspace brand they are monetizing it in ways that is useful to the users. Adding mobility (Cingular deal), providing ads that do not disrupt their interaction or media experience.
A possible approach for Disney could have been to create interest focus communities that aligns well with their content. Use content as a fuel to generate water cooler chats around their brand, get consumers to build relationships around their brand.
Inspired by Umairs work, ConnectedMix is developing a platform that does just that. While Myspace’s and , Youtubes of the world have been very successful in capturing the attention of the 14-24 age segment, the other varied demographics and user interest are a nascent and untapped market. We enable brands to create interconnected, consumer interest based communities with consolidated backbends. It enables users to build affinity based relationships around the brand and bring attention of their peers to the brand. Further more we provide peer enabled personalized highly relevant information to users from trusted sources, accessible any way any where any time.
Posted by: Lalit Sarna | Apr 12, 2006 6:33:57 AM
I think the idea that television programming companies are going to become social network/content trading business creators is off the mark.
What these companies do best is make great, captivating, filmed entertainment. While there is certainly an enormous opportunity in creating businesses that enable trading, sharing, and social networking of and around content, companies like Disney, Universal Vivendi, Viacom are just never going to be the innovators there. What these media companies WILL do is buy companies that develop these new platforms, platforms that will in effect form the MSO/station network layer for IP media, or partner with them. But I don't imagine that innovation in that area will come from media programming companies.
What media companies need to focus on is preparing their content development operation for the emerging platform, creating a business model that exploits the emerging platform, and looking for investment opportunities through with they can profit in the longer term from these emerging platforms. That, it seems to me, is exactly what Disney's doing here. But expecting these companies to reinvent themselves as Internet-based social networking companies is like asking NASA to go into the sheet metal fabrication business.
Of course many of these media conglomerates today own high-sunk cost, wireline based, physical distribution networks (TW cable, for example). Those lines of business are the most threatened by IP-based, peer traded media distribution. But efforts to wed content to physical distribution nets to online distribution Nets have run into all sorts of trouble, not the least of which is FTC anti-trust concerns (see AOL TW). Furthermore, wireline media connectivity is a living fossil.
In addition, prior attempts by media companies to buy into netcentric redistribution schemes (remember BMG and Napster) have been completely disasterous as the internal goals of the media companies compete with the internal goals of the networking companies they acquire.
Of course telecoms--owners of vast wireline nets--are finally getting into the entertainment distribution biz, but not in the entertainment creation biz. It's beyond their expertise.
If, as we all seem to believe, media needs to be platform agnostic, free to roam the network of networks, available to end users for all fair use at the time, place and device of their choosing, then content creators need to make sure their content is positioned for that environment--that means it can be traded on some platform Disney buys into, but also posted on YouTube and function to Disney's benefit either way. I think Disney's right on the mark with embedded marketed in freely tradeable content not just for tomorrow's media universe, but for today's.
Posted by: Jason Chervokas | Apr 12, 2006 8:16:10 AM
TV can look to how people manage their music collections for hints as to "what people want". How about using metadata to create playlists. As a user, what if I want to watch all TV shows with William Shatner as a guest star, or all television appearances of a certain band as a musical guest. I'm sure TV folks could look at Tivo usage to come up with some ideas. The ultimate desire on my part is to get what media I want in whatever form, whenever I want it. I don't feel I have to even own the content as long as I have control over its consumption.
Posted by: Mr. K. | Apr 12, 2006 12:43:19 PM
"I think the idea that television programming companies are going to become social network/content trading business creators is off the mark."
I am not sure if the idea is that off the mark any more. Inertia may keep big media giants from innovating, Fear of competitors sweeping away the market is going to fuel the hunger.
“ News Corp. Has New Pitch: Generation Fox”
“Fox's president-ad sales, Jon Nesvig, who attended last week's presentation, said: "We basically talked about the 12-to-24 year olds and the different platforms that reach them. The emphasis was on MySpace.com, IGN.com and the network and syndication and the Mobizzo people. This company is still dominant [in capturing the young adults]." “
Much like the advent of Internet or email, a proven technology with mass interest becomes a de-facto standard and/or necessity. Companies Like Myspace and Facebook are proving the value of engaging consumers with your brand. 18-24 age segment is great as they are technology savy and early adopters. However media companies have a varied demographics of user. Embracing this paradigm and proactively making efforts to replicate it across all there consumer demographics will position media companies more favorably than simply sitting back and creating content.
Posted by: Lalit Sarna | Apr 12, 2006 3:18:44 PM
Lalit, I see this media companies embracing the platforms by buying them, a la newscorp and myspace, or buy using them, but not by building them for themselves.
Posted by: Jason Chervokas | Apr 12, 2006 9:25:13 PM
One other thing, to clarify my point. Companies that create content need to have as their goal ubiquitous content availability--the content has to be out there and useful on any and all platforms consumers might choose now and in the future.
If, for example, Newscorp were to try to use Myspace as a proprietary distribution platform for Fox programming they would severely limit the potential audience reach. Sure, exclusive Simpsons video trading on Myspace would build value in Myspace, but diminish value in The Simpsons online. So, while programing nets will be able to build profitable business lines by purchasing social networking and file trading businesses, in the end their interest in expanding content reach and their interest in expanding the value of the new network wind up as competing, not complementary goals.
Posted by: Jason Chervokas | Apr 13, 2006 7:33:05 AM
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