Lawyer

Number two in a series: I’m following up regarding my previous post focused on last night’s MIT Digital Media SIG, and the panel discussion there entitled “Internet Video Everywhere:  Entrepreneurial Opportunities in Online and Mobile Video.” It was a great panel moderated by David Ryter, and a great discussion afterwards. Last night’s featured panelists were from a mix of companies, and included:

The next major question of the evening was “So what’s the future of long form video now that consumers want anytime, anywhere access?”

For John Puterbaugh at Nellymoser, the current future is about aggregator sites getting pulled in different directions. In one direction you have what Viacom did in pulling Comedy Central off of Hulu, but in the other you have a whole range of innovative production studios starting to take Hulu seriously. Nellymoser has recently been in talks with Lionsgate. According to Puterbaugh, 6-12 months ago Hulu was seen as a small moneymaker, but now many production houses think it could be a monetization engine, if we can get around all the weird rights issues that end up Viacom vs. Hulu.

For Bob Mason over at Brightcove, it’s still about figuring out what the emerging business models will be around long form video on the Web because the money from current efforts is peanuts compared to TV. But that doesn’t stop content creators, aggregators, and broadcasters from stirring the online video soup. Brightcove itself announced this week at SXSW that EMI Music has chosen the company for its online video publishing and syndication platform in North America. EMI Music will use Brightcove’s online video platform to publish, distribute and monetize video content across its website properties and to third party syndication partners.

Joel Olicker at Powderhouse echoed the same business model comments noting that the old revenue structure is gone and the big questions out there are— “With the potential that online video has, how do we make it cheaper for content creators? How do we help them target micro-segments of consumers to deliver targeted content that they will enjoy?” In my follow up discussion with Joel after the event, he was quick to point out that to get a documentary idea to a syndicated channel (such as the Discovery Network) can take from $500,000 to $1 million and most small, talented content creation shops don’t have that kind of capital. They end up getting funding directly from aggregators, and fork away their content rights in the process.

Which led to the next major question from the audience— Is there room for more content aggregators?

Bob at Brightcove sees Comcast as a great aggregator example and questioned if they could do it more efficiently? He also sees the huge popularity of Facebook, which just passed Google as far as weekly US page hits, as a huge opportunity. Can Facebook become a content aggregator? Bob pointed to Discovery Network, which has 16 channels, and aggregates content by buying it from creatives, packaging it, and distributing it (via a distribution network partner such as Brightcove) to its consumer audience. But Facebook presents another type of aggregator, different than the Discovery Network and different than Hulu. It could provide bloggers, for example, the ability to host their content within the platform whereby Facebook acts as the aggregator. All that is needed is a new approach and the desire to re-architect an open relationship between bloggers and the social networking platform.

Joel at Powderhouse pointed out that the networks are getting better at video on demand (VOD) as Americans have moved wholeheartedly to time shifting their television watching. About 90% of what Americans view today can be taped and broadcasters are now repeating that content 4 to 5 times a week on their cable networks. The only live events that seem to get people to tune into and be “in the moment” seem to be sporting events.

Personally, I think Facebook has already become a content aggregator with its fan pages, games, apps and now ad platform. It’s the site to watch out for as far as content distribution. Because it already has a captive consumer audience that not only creates user generated content, but likes to consumer curated and original content as well, it’s in a unique position.  Comcast is an aggregator trying to become a broadcaster with its recent acquisition of NBC Universal, with much of that content coming from external producers and production companies. Facebook, on the other hand, is not a subscription-based model but could go down the ad supported content route, with games and ads as well.

This led to the next question from the audience, and an important one— Isn’t licensing a big issue, is that why there’s such a big focus on exclusive content for mobile, and what’s the future of licensing for content producers?

Joel at Powderhouse quickly pointed out that the production agency’s clients have exclusive deals with MSO’s. If you’re a content provider, expect to spend a lot of time on negotiations, as MSO’s pretty much demand exclusivity in their contracts, meaning you can’t repurpose your content. They, especially cable providers, want a unique product, so content providers spend an enormous amount of time, resources, and money on legal documents identifying every piece of content— text, image, sound, logo, etc. to show that it is free and clear and must provide a guarantee that it won’t show up anywhere else. You might be able to negotiate a clause for separate overseas distribution, or be able to replace the music track in three years, but normally MSO’s are inflexible.

It’s unfortunate that America’s legal system and atmosphere for litigation puts such a strain on content creators, especially smaller ones who do not have the resources (people or cash). It creates a clear budget strain on them, forcing many to underwrite their productions (affecting their creative license?) and sign away their ownership and rights. This may be why there’s increasing interest in original content for both Web and mobile sites that are free and clear of the restrictions seen from MSO’s.

In the next post— mobile TV, online ad networks, Flash vs, HTML5, and where’s it all going!

-Randy Giusto

@randygiusto

@newdigitalcafe

randygiusto@newdigitalcafe.com