Friday, September 14, 2007

The Future of Streaming Video

The Wall Street Journal's guest column, '', had an interesting, if misguided piece on the future, or lack thereof, of streaming video.

Robert Cyran, evidently someone connected with the firm/website, writes in today's column that Netflix, among others, is pursuing the wrong technology/strategy, by concentrating on delivering video content via streaming.

Cyran argues that with download speeds allowing storage of a movie in only 20 minutes, more people will buy movies, rather than just view them via streaming. He cites the migration of audio from streaming to the iTunes model as further evidence that streaming can't compete with storage/ownership, once bit transfer rates are sufficiently high.

I think Cyran is dead wrong. Here's why.

First, most people whom I know, other than children, which is to say, adults, don't watch a movie very frequently in a short space of time. The desire to own a movie for frequent viewing is, I contend, not all that common.

However, music is different. We take our favorite music with us everywhere on iPods and MP3 players. I have listened to some songs, I'm sure, many hundreds of times. And will hundreds more. So I own that music.

At the iTunes store, I buy tracks, rather than use alternative systems which make me pay monthly to store rented audio content.

Thus, I contend, the audio example is not relevant to video content. Too, audio tracks are priced less than a buck a piece. It's almost a mindless purchase.

But what about all those sales of movies on DVD? Well, that's different.

When VHS came out, and movies were duplicated mechanically on VCR tapes, buying a copy of a movie was expensive. Some people did that, but it was pricey.

DVDs, in contrast, requiring a much cheaper duplicating process and materials, were, thus, less expensive to buy. The difference between buying and renting would be so small that, at volume retailers such as Wal-Mart, people just bought a copy of a movie, rather than pay little less, and only rent it at Blockbuster.

Now, however, the content is available digitally. On demand.

And that, I contend is the difference.

Now, I know that, in time, any movie or TV program episode I want to view will almost certainly be available somewhere, for 'on demand viewing.' Netflix prices by time, not title, so there's no reason to buy any single title. I can watch the same movie constantly, for no additional charge, other than the time I spend viewing it. Which works out to something like $1.50/movie.

So with all this content coming available as on demand streaming, why would I pay money to own video content I don't view too often, when the same dollars provide me with constant access to any video content?

Personally, I think Cyran has it backward. Even with computer storage devices becoming larger and less expensive, more applications are moving to the 'net. Look at Google's office productivity suite. Even Microsoft has quietly begun moving that way.

Cyran closes his piece with this statement,

"From a technological perspective, a song is similar to a small movie. It is likely that video will follow in music's footsteps."

Cyran may be correct, technologically, but he's totally overlooked the different behaviors people have toward music and video. You may listen to music as passive background filler, but video tends to command your total sensory attention. They're not at all the same, and I don't believe the future of their digital delivery will be, either.


Anonymous said...

We have just been approached by a company called 3B Nexus They have developed a quite impressive video communication portal, it is basically a ‘YouTube’ for investors and companies. What caught my interest was the statistics and potential to build relationships with audiences throughout the world. We are considering using it for marketing and video press releases for our client companies. It would be interesting to know what you think.
A PR Company in London, UK.

C Neul said...

Honestly, it doesn't seem like such a big deal to me. Why this site, and not a dozen others?

Why not place one's video on one's own website? Presumably investors look at a firm's own site first.

It doesn't seem like a YouTube at all, as that is primarily news or entertainment clips.

The one you cite is simply self-promotion. So automatically, I'm sceptical and unlikely to visit it again.