4GM Media in Action.

Bill Cunningham over at Pulp 2.0 has actually been doing all the things I've been theorizing about with new media. The first novel his company's published, the vampire blaxploitation horror novel Brother Blood, is out on Kindle. If groovy 1960's horror is your thing, Brother Blood's got your swing.




Also of note, of course, is J.A. Konrath's adventure in Kindle publishing. He's leveraged an existing print reputation into a great online business. People like that, as I've mentioned, are going to be the leading edge of new media -- tinkerers with an established base in the old media.

Where do you think media distribution is going? What are the obstacles? Sound off in the Comments.

Altmedia: Netflix WIll Win. And With Your Newspapers, Too.

"Altmedia" won't be a regular thing, it just turns out all my links and discussion today have a theme.

As you may have heard, Netflix cut a deal with Warner Brothers -- they'll delay rental release of WB DVD's for 28 days in exchange for a deeper, wider reach into the WB library for their Watch Instantly feature. Other writers have beaten me to the punch with analysis -- Bill sent over this excellent article:

Netflix's focus on the long term is smart strategy, and complements well the company's near-term emphasis on riding the convergence wave by embedding its Watch Instantly software in every conceivable living room device (e.g. PS3, Xbox, Roku, Bravia, Blu-ray players, etc.). It's also a strategy that benefits Hollywood. By creating a situation where studios preserve as much of their DVD sales as possible (allegedly 75% of a film's total DVD sales occur in the first 4 weeks following release), Netflix is helping Hollywood gracefully wind down and milk the DVD business.

John August points out a lovely side-benefit -- writers get better residuals off streaming than off DVD rentals. (I'm a little fuzzy on the math, but at first glance he seems right).

I have said "Netflix Will Win" so many times now that I should have a t-shirt made. Or at least be getting some bling from them. But I think it's worth looking at this successful model from a print perspective as the tablets now battle it out.

The e-readers are a dead end. I mean, read this description of the Plastic Logic QueProreader's virtues:

One surprise of the presser is the new truVue format for publications that Plastic Logic supports. The standard was developed in conjunction with Adobe, and it preserves some of the style and layout (though certainly not all) of a print publication, with publishers such as Wall Street Journal, Forbes, Huffington Post, Thompson Reuters and more on board.. To get documents onto the device you can print to a "QUE it" printer, as well as drag and drop documents to a "QUE it" droplet on the desktop for automagical document transfers. There's also a QUE application for the BlackBerry, which can bump any email or attachment from the BlackBerry to the QUE over Bluetooth. QUE has partnered with Good for "QUE Mail" and "QUE Calendar," with support for Exchange, Gmail, Windows Live and other email accounts. The device has Bluetooth, WiFi and 3G under the hood, with AT&T providing the wireless data.

You mean I can take any data and easily turn it into a proprietary layout that can only be read on your device? Tell me it isn't so!! And it has some of the functions of a tablet computer, but not all? AMAZING! So instead of reading your newspaper/magazine on its website on my tablet computer, where I can also follow hyperlinks and watch embedded video, I can read the same information on a crippled black and white tablet but, thank God, formatted the way you prefer to present it -- in a shuffling, zombie illusion of print?!!

All this wankerriffic bit of tech does is allow newspapers a last sop to their ego, that they control the information space. Don't get me wrong, I'm not a "kill the newspapers" guy. They still produce and present information, but the idea that deprived of their column layout I'll be set adrift, well, that's just sad.

To a great degree, this is why I defended the Kindle, despite Amazon's rapacious grift (%70/30, favoring Amazon). The column I promised but never had time to do last year was about how Amazon was basically going through the "we now fuck you because we can" phase all new technologies enjoy. They got there first, they had the market share, and so things rolled out in a rather unsurprising way. They will abuse their monopoly as deeply as possible for as long as possible. I was just too jaded to pretend to be offended. Remember when iTunes was all about the DRM? And now, not so much.

This is attributing a very deep game to Jeff Bezos, but there's a nonzero chance that the Kindle was always intended to be a transitory device with a single purpose -- habituate people into buying digital books the way they buy digital music. Skim as much as you can as long as you can off the "early adopters" (alt. definition see: "suckers" "John Rogers") and make downloading books a plausible premise.

The Kindle Reader on the iPhone is a very pleasant, efficient interface. This Christmas, Amazon sold more Kindle files than physical books for the first time. Unless I'm smarter than Jeff Bezos (the correct answer, btw, is a hearty laugh), then you'll see Kindle(tm) quickly fall in behind the Netflix(tm) strategy, rushing to become as ubiquitous on as many platforms as possible while Bezos personally dynamites whatever 19th century manufacturing base is churning out the Kindle chassis.

Back in the video world, you can see Apple trying to play catch up to with its offer of a streaming deal with CBS and Disney. CBS, as we've noted before, has a counterintuitively brilliant policy toward online broadcast, and I'll doubt they bite. But this, combined with the conceptual muddle created by the Comcast/Universal deal, all points to a transformative streaming distribution solution occurring years faster than anticipated. The current definition of "Network" is going to die very soon -- why the hell should Disney sequester streaming ABC shows away on an ABC website when it's more likely to be watched on a content aggregator like Hulu or an Apple streaming center, or Netflix? You know who cares about keeping Lost associated with ABC? People who work at ABC. You know who doesn't give a shit about ABC in the new streaming model? The people who own ABC. That does not bode well for the suited humans wandering those halls.

The question is whether services such as Apple and Netflix will help the corporations rebuild something of the monopsony they had over the airwaves, or if the wealth they've built by treating everyone the same (shittily, but the same) will tilt them towards encouraging an open distribution system.

(And once there's a unified distribution system for movies, television, music and books on our computers, are we really supposed to believe that journalism will stay isolated on black and white e-readers? Adorable.)

The big question, I suppose, is when this online distribution plateau occurs, with a.) Netflix owning the brainspace for movies and a heckuva lot of television, b.) Amazon owning the books brainspace, with SOME music and video, but also being a, for lack of a better term, first-instinct purchase point for most online Americans c.) Apple owning the music brainspace, and maybe poaching some television, d.) Comcast owning a whackload of television, not to mention controlling the actual pipe coming into your home ... whether they settle out into a rough, slowly evolving equilibrium, or if any of them go for the kill-strike.

(EDIT: My, it's getting feisty in here already. Good. Definitely want to see your Comments on this one, as I'm trying to hash things out for a longer article. Tell me I'm an idiot, but be specific!)

Remember When I Said Netflix Will Win?

Streaming on iPhone means streaming on Apple Tablet, and all Apple Tablet knock-offs.

We better figure out how to monetize this. Now.

4GM: Consoles, consoles, consoles & Netflix

A little scattered as I'm, you know, running a goddam television show. But the major points are in here for you to criticize and argue over:

British satellite TV network BSkyB is cutting a deal with Microsoft to have their content available on the XBox 360:

Rapid TV News understands that the long-awaited link up between BSkyB and Microsoft’s X-Box is at last going to happen. Full details will be announced tomorrow (Friday, May 29). The unveiling "Experience the Vision' press event will explain more..

... However, providing some sort of BSkyB functionality for Microsoft X-Box/360 users could potentially deliver millions more users in the UK and Ireland to BSkyB.

Do I get a Nikki Finke "Toldja" here? Four years ago I started discussing the idea that American's have an "entertainment space." For too many Americans, the computer is a box in that room over there, and the TV is where I play my games and watch my shows -- and the console got into that "entertainment space" first. Apple had an early lead with its iTunes/studio integration, but bobbled it badly by selling a crippled box. Turns out that while we require our music players to do very little but play music, we demand our video box do a bunch o'stuff. Like play games. And any format of entertainment we might care to toss at it. And bring us shiny new free shows that are, in fact, legally free, on another data stream.

Recent surveys -- whee, actual data -- seem to support the idea that "viewing" habits as we understand them are not evolving radically:

In a nationwide survey of 1,250 broadband households and separate sample group of 250 teens aged 12 to 17, Leichtman found that only 8% of respondents watch repurposed TV shows online, compared with 24% who watch news clips, 20% who view user-generated clips on YouTube and 15% who watch sports news or highlights.

"While online video usage is growing, it is shortsighted to think of this primarily as an alternative venue for watching TV shows," Leichtman said in research notes. "In fact, consumer use of video online remains much more about short-form video."

This in no way contradicts my previous argument about broadcasters creating artificial monopolies by switching 100% to Hulu. The numbers you're seeing here are the results of the failure to embrace that decision. The number cited above is a little useless actually -- a better thing to know is what percentage of teens who watch TV shows watch repurposed TV on computers. But that would emean somebody actually savvy about the emerging business model would have do this research.

There is a parallel in the States to the above BSKyB development -- customer surveys and rumors indicating that Netflix may begin streaming HBO and other quality cable content for an additional monthly fee. This is a bastardized version of cable a la carte ...

... and one of the reasons that I stated, in my last post on the matter, that Netflix will wind up the winner of the future content wars. Netflix has cunningly positioned itself as a pure content company. It will deliver content on a dedicated player, on your XBox, on your Tivo, through the goddam 3000 year old delivery medium of snail mail.

Netflix will give you a movie, or TV show, whatever's available on DVD and now streaming. It does not care, its jobs do not depend on dominating any marketplaces or shares. It's job is to Get You Stuff from People Who Make Stuff. It is catering to strong brands. Better or worse, if I pay for HBO, I know what I'm paying for. I pay for Showtime, I know what I'm paying for. I pay for NBC ... what am I paying for? Kings or My Name is Earl? Dateline or 30 Rock? I like Southland, why am I paying for Last Call with Carson Daly?


If you don't have a brand, get out of the business. Netflix is going to be doing your job better than you in five years.

Netflix is in the prison yard, strolling up to the Mainstream Networks with a sharpened toothbrush clenched in one whitened fist while the Mainstream Networks chat dreamily about how they're gonna go straight and get good jobs when they Get Out. Ain't gonna happen.

Certainly, right now, Netflix is dependent on material produced on other monetized media for it's content. Some people state this fact as a criticism. These people are chimps. That's not a problem. That's smart. In capitalism, letting some other dude pay the bills is a smart play. That border is going to blur as more and more private money moves into production. I would remind you -- Leverage has no major studio. It is coming back for a second season on TNT, a legitimate, well-thought of network. I don't think we're quite at plausible premise yet, but we're getting there.

Network humans vary in quality (we have some very fine ones at TNT) but end of day they are devices through which one transforms monetized eyeballs into financing for content, making their living off the skim. These first attempts at alternate monetization will more often than not fail, but the experiments are getting closer and closer to viability. That need for an intermediary will falter, and that skim will become smaller and smaller. It will never be zero; but it will drop to the point that is the bare minimum to do their job, rather than "subsidizing-giant-useless-buildings-in-the-Valley" levels.

EDIT 5/29/09: And rumors heat up that the XBox/Hulu connection is finally happening. Let me be perfectly clear here -- I've been a longtime optimist on the speed of the transition to digital content delivery, and even I am stunned at how fast things are changing and going to change.

When I say "Netflix" is going to win, I mean (whatever Netflix becomes) or (whoever finally buys/co-opts Netflix).

4GM: The Plausible Premise and the iTunes Monopoly

A while ago Dean sent me this Variety article. The upshot -- the networks are moving to video, but the ad revenues aren't there. Here, for me, are the nut graphs:

So why are the networks investing in sites like Hulu and allowing widespread online distribution of their costly exclusive programs? Because they saw what happened to record labels, which avoided the Internet for years when they couldn't figure out how to protect their old business model. In the process, they lost millions of consumers to piracy and other digital-friendly alternatives. Thanks to faster connection speeds and cheaper storage, accessing video is about as easy now as music was a nearly decade ago when Napster began making headlines.

(SNIP)

Which leaves Hollywood in a Catch-22: If it doesn't follow increasingly wired consumers online, it could lose future generations to piracy, amateur YouTube clips and videogames. But if too many people switch to services like Hulu too fast, the business model of television could collapse.

First off, the phrase "piracy, amateur YouTube clips and videogames" is in the wrong order. Videogames come first in that list of threats.

Where was I -- oh, well, yes. The business model of television will collapse. I'm not bloody HAPPY about it. The business model of television pays me quite nicely, thank you very much. However ...

... right, detour, stay with me. Our favorite new-warfare guy Jon Robb writes about the "plausible premise" in new open-source insurgencies. I'm not going to get into his new warfare theory, but basically what you really need is a plausible premise. i.e. "You can kill US soldiers with IEDs." and then the new Interconnected Marketplace Of Shitty Evil Ideas will solve the problem for anyone looking to kill US soldiers with IEDs.

Or, more succinctly, in order to get the marketplace off its ass to solve the impossible, you have to just pull off the highly improbable and make sure everybody knows about it. Show it can be done, show how you did it, and watch the "marketplace" attack because you've made the "premise" "plausible".

Now what's kind of interesting here is that everybody in TV looks at the music industry collapse as the Bad Story and iTunes as the plausible premise for digital entertainment distribution. iTunes makes money. QED, there is money to be made in digital distribution.

But drawing this conclusion ignores one of the fundamental facts about iTunes -- it is a de facto monopoly. As Clay Shirky writes quite shinily here, a series of lawsuits and circumstances cut off pretty much all other music distribution channels online. Tying the system in to great hardware was the clincher, of course, accelerating the process. But end of day, if you're buying a song quickly, easily and legally in the US, you're buying it from iTunes.

The TV humans are missing the point of this plausible premise -- you can make money off digital distribution as long as you have a monopoly. It's a little shocking that they're missing this, as the massive financial success of the entire television industry up until recently was based on them having a monopoly. A taxpayer-funded monopoly, no less.

Now, let's see how many ways I can watch HEROES right now, off the top of my head:

1.) On NBC when broadcast - ad supported

2.) On NBC.com - ad supported

3.) On HULU - ad supported.

4.) XBOX LIVE - direct purchase

5.) iTunes - direct purchase

6.) Amazon Video on Demand - direct purchase

7.) Netflix - streaming, subscription ... hell, I have no idea what this revenue model is. Oh, and that Netflix is now available on cable boxes and game consoles.

(You'll note that these revenue streams all pay different factions in different percentages.)

This, my friends, is not a monopoly. If you want to continue to do an ad-supported model ("the business model of television"), then every streaming version -- and broadcast is theoretically a really dumb streaming version that's riding on the remnants of the old monopoly -- takes viewers away from every other streaming version. In an extra special bit of stupid, NBC Universal is actually competing with itself by putting streaming episodes on both NBC.com and Hulu. Now I'm sure there are cross-platform advertising bundles in play, but it's still a dilution of the brand.

Ironically, CBS's utter refusal to stream their shows, generally seen in the industry as a failing, is the smart play. You want a CBS show, you either watch/tivo it -- where the ad pricing from the old monopoly still creates at least a framework for monetization -- or you buy it once the advertising bloom is off the rose, and the money filters back into the Viacomm coffers. Or you pirate it. And we have yet to see a single reliable statistic on revenue loss due to piracy.

So what's going to happen?

No idea*. But in the short run the smartest thing for all the studios who already have programming on Hulu is to shut down all video streaming on their network home pages. Hulu got there first and fastest. If you're not on Hulu, get on it, or shut down streaming on your own site to take advantage of what's left of the old model. If you must have broadcast and streaming exist simultaneously, then force the streaming monopoly.

Apple's advantage in iTunes was that they weren't a music company. They could fuck another industry with a clear conscience in order to establish their monopoly. (This, btw, is why Apple TV sucks. They tried to play too nice with the studios) What's tricky is that there's going to be a lot of factional infighting in these companies as we move to the new model, because:

Hulu is owned by the studios who own the networks that Hulu is going to kill.

Ironically, whoever comes up with the Magic Box that moves streaming internet to the TV in a grandma-friendly way will win. This means that if the studios were smart, they'd be hammering at that tech, pouring money into it like mad so they own it, rather than fighting it. Of course, they're content companies, not tech companies, so that's probably not a priority.

And in the end, Netflix will win. But that's another post.

* Well, actually, I think download's going to die or be subsumed into the equivalent of a cable premium fee for "access" to the material. But that's more a gut instinct than an arguable position.

IP Piracy Economics

Via Ezra Klein, an interesting bit of research on the numbers behind the economic damage created by IP piracy. Or lack of same.

"The plural of anecdote is not ..."