PS Consultants - ideas & solutions

Scary Movie!
November 2000

TV phenomena like Big Brother and Who Wants to be a Millionaire prove beyond all doubt that corporations like Time Warner and Sony are wasting their money paying unimaginable sums of money for back-catalogue media assets. (Which means old TV, music and films to you and I). 

Both the above mentioned TV programmes are undeniably cheap to produce, and even pay for their own production costs from viewer premium rate calls. Incredible. They get huge audiences, and crucially, they have created essential viewing by being real time events. This is the sort of TV that networks would die for, since only news and sports otherwise carry the “real time” requirement that makes programme scheduling relevant in a world that is racing towards video on demand and time shifting.

The popular wisdom is that all education and entertainment will be required only on demand henceforth, and there are many new and interesting technologies dedicated to this notion. Aside from the selective availability of DSL and cable, there’s even the prospect of a disk-based home video device that can operated simply at last.

The unanswered question seems to be “ what will the new age cybernauts pay for old media content..?” In the case of the AOL Time Warner deal, the issues are quite convoluted: is this a network operator (AOL has the internet, and Time Warner a lump of US cable) seeking to corral some unique content to drive consumers to their networks..? Or is a content rights operator seeking sell tickets for old shows..?

Do they believe that consumers will pay to watch back-catalogue product, given that there is a non-ending flood of new material across all media, mostly with increasingly sophisticated production quality. Can you see today’s kids paying to watch classic Dr Who episodes when they can immerse themselves in the latest Star Trek..? Those of us of a “certain age” still feel a twinge of nostalgia when a Dalek bumps into the scenery and it wobbles, but modern youth has no appreciation of such historical significance, just laughs and zaps the remote to get to the next channel.

Let’s also now remember what media is all about.

In the US, broadcast media exists for one thing, and one thing alone: advertising. In fact, the UK is one a relatively few countries where public service broadcasting keeps up with the commercial variety, and generally exceeds it in terms of “quality” content. The content that is broadcast is the cheapest possible that is consistent with delivering an audience to create a profitable advertising platform. That’s it, altruism doesn’t exist; if a commercial station produces a “quality programme” (ie one that costs more to produce than it attracts in advertising revenue) then it’s for one reason only – to appease the regulatory authority who might otherwise remove their franchise.

The amount of money involved in the Time Warner/AOL deal is astonishing. Let’s see it in full: $147,000,000,000.00. That’s several times the cost of the entire UK and German 3G cellular frequency licences. And every day that goes past, new films and content are being poured out and into the new channels afforded by the internet.

The tools to create “media” are getting cheaper and more accessible. The task of producing a full-length feature cartoon has not yet been totally deskilled, but it’s really not impossible to envisage someone developing a program to create perfectly viable animation software as shareware, capable of being run on a £1000 PC.

The cost of producing films using the MiniDV format is probably 1000th of the cost of a traditional celluloid behemoth. It’s only Sony’s stubbornness and determination to be awkward that seems to have prevented a complete Vaio production solution from being on sale already.

If you want to scare a media mogul to death, stand behind him and whisper “Blair Witch” into his/her ear. A $50k home movie that out grossed many $100m epics.

Given that you and I are going to be able to push a button and render an episode of Star Wars before long, the only thing that really remains to be overcome is the question of promotion. In other words, how do you get the eyeballs to justify the advertisement rates..? But if your costs of production are a 1000 times less, you need a lot less income. You can probably afford to charge less.

The internet is famous for its resilience through distribution. In other words, lots of little networks that use “self healing” connections mean that there is no one single point of failure . So how about a distributed media industry? Where lots of small but accomplished production units create all manner of content and entertainment.

I rather like this idea – 100,000 producers directly feeding 100 million consumers feels a lot more satisfactory than one – the AOL behemoth – feeding them. But be ready with the smelling salts if you mention this concept within earshot of the execs from AOL and Time Warner. I don’t think it’s what they want to hear.