Mark Suster is a technology entrepreneur turned venture capitalist. He's started and sold two companies, worked at Accenture, founded Launchpad LA and is a part at GRP Partners, the SoCal venture capital firm. So he has his finger on the pulse and recently spoke at the Future of Television (which I missed) about his ten signs that Internet TV is ready to disrupt things in 2012.
I write a lot about Internet TV as it has become one of my main areas here at ReelSEO so his talk was of interest to me. You can watch the ten-minute video below or hang out and read the text summary I've put together below with my own thoughts (perhaps more interesting in the long run).
An Internet TV Boom?
For some reason, he starts off with a negative point stating that we've been hearing talk of interactive digital video since the early 90's. Yes, and now we've got it. Netflix, Hulu and others all offer some social interaction that allows you to connect to others while watching shows. The world of social TV is also rapidly expanding with new second screen apps and places like GetGlue (where are my stickers!) tying the online world to the broadcast TV world.
Then he takes a quick look at several factors he sees as being key to it, like the decrease in capturing and processing of video (which we all know can be done for a fistful of dollars these days though for a higher quality professional setup it might be $1000), broadband penetration and Wi-Fi increases, compression advances, a distributed advertising market, decreasing paychecks for creative talent (that's news to me), consumer behavior that is welcoming Internet video.
You may or may not agree with those factors being relevant or even accurate. Personally I think back in 2005 when YouTube started, there was no Internet video behavior and they built it by making it insanely easy for everyone to both upload and watch video online. So that behavior was built on technology being available. Kudos to YouTube.
YouTube Is The New Comcast
Mark cites YouTube as "the new Comcast" in that they are a massive video distributor. This is true, we know that some YouTube Stars are pulling six figures and that the cost to generate that content is far lower than what the big studios pay for their productions (which means they need to adapt or face extinction I think). Hey Phil, how much does it cost to make one of your show per minute? Maybe Jim from Revision 3 will chime in on that as well. I'm sure it's far lower than TV just like Mark says. There are some series that have gone from being online to on TV. I wonder what kind of massive jump in production costs there was for something like Sanctuary.
How much does it cost you the average ReelSEO reader to make a minute of video?
One of the last things he says is that the digi-kids are watching 33% of their video online and that will only continue to grow. I agree, they will grow up, eventually have salaries and money to spend on entertainment and they will do it online because they are the on-demand digital generation. They know they can get the majority of their content online and not pay for cable. Sports at times will still require a pay TV package, but not always. The NFL is on major broadcast networks. MLB is sometimes but not every day. So cable operators will eventually have to unbundle their channels (YEA!) and rebundle them into smaller packs. I would pay a monthly fee to be able to have channels for my favorite baseball, hockey, basketball, football, soccer teams. But I won't pay for all the teams because it's a waste of money when I only want to watch a single team.
In regards to regular cable packages, I just spoke about it in another article. The broadcasters have massive license fees to keep the cable operators from unbundling but both of them need to sit down and observe the sifting video landscape because their audiences are washing out to the digital sea and we don't need nor want bundles of 100 channels anymore, we can get it all online for free.
Ad Networks Are The Key
He then goes on to say that there could be no online video industry without the distributed ad network. I have to call bullshit because long before there were interactive overlays, massive ad networks, exchanges, real-time bidding and all that, many of you were already out there doing it. Kudos to you guys and gals. Go into the ReelSEO archives and see how many times we talked about "when will YouTube turn a profit," and yet, they are still with us, and certainly doing so now. So there was a lot of online video going on before the big video ad networks came round. I'm sure there was advertising going on, just not in the distributed ad network format.
Yes, video advertising is definitely driving things like online video publishing and certainly is a force behind original web series' production, branded content and even just getting quick, interesting videos up on the web now. So yes, video advertising is a major facet, and is now pushing things along quite nicely, but there were many of you out there blazing the trails to where we are now. Look at all you Marco Polos, Amerigo Vespuccis and Lewis and Clark types! You should all be wearing coon-skin caps and handmade leather shirts!
He totally agrees with me on cable and satellite and likens that industry to the music industry. For years we have been shoveled bundles of crap we don't want, now the music industry allows us to pick and choose and is recovering. Cable and satellite need to unpack their "albums" as he calls them, and allow consumers more flexibility. HEAR! HEAR!
He wraps up his talk with a plug for his own company and work. I don't really see how that is going to drive the Internet TV push, but who am I to bad mouth shameless self-promotion when I do it all the time, right?