Internet Video and how the Broadcast Nets are Missing the HDTV Opportunity.

There is an oft repeated business saying that sales organizations should “Go after the low hanging fruit”. The meaning obviously is to close the easy sales before you have to work to climb after the more difficult sales. Its a maxim that is rarely wrong.

For major media companies, and an ever growing list of Web 2.0 video-hosting companies, the low hanging fruit right now is selling advertising around video content available via broadband connections over the net, and to a lesser degree, available through Video on Demand from cable and satellite.

Advertisers want to buy it. They are as ripe as ripe can be and sales-reps are grabbing their dollars before they fall from the tree and hit the ground.

Because there is so much low hanging ad money there for the taking, many in both traditionally big media companies and Web 2.0 firms see it as the money pot at the end of the rainbow that will be the catalyst for future growth. No question its a growing market, But the biggest Internet video bulls seem to forget that what is happening now is not very different than the introduction of Digital Satellite and Digital Cable to viewers and advertisers.

Imagine if all of the sudden there was digital bandwidth available across the world. That anyone who wanted to buy a small dish, or add a digital set top box, could do so and easily receive access to Gigabits of bandwidth. of video. Right to their TV for anywhere from 30 to 120 dollars per month. Imagine what would happen to the TV industry. The change would be incredible. Channels would pop up out of no where. Just about anyone could create a channel and get it distributed across the country. Tens of millions of people would get what would seem like unlimited number of TV channels.

Thats exactly what has happened over the last 12 years. The number of TV channels exploded. The amount of advertising spent on non broadcast TV exploded. But, here we are 12 years later and the distribution of those non network ad dollars goes to the networks that have an audience. Plain and simple. If you had an audience, you could get ad dollars. If not, not. If you are a network that cant draw a .1 for its prime time shows. Forget about it. Its not impossible of course, but you are gonna have to work your tail off to get ad buys.

Work your tail off may in fact be an understatement. Talk to people in the cable industry. TV Ad buyers don’t like to make ad buys that require them to aggregate smaller network audiences. Its a hassle for them to buy 10 different networks, let alone 100 or 200. its a hassle for them to audit the buy. There are actually services that monitor ads to make sure they ran and provide the results to advertisers.

If its a hassle for ad buyers to buy 100 TV networks, how much of a hassle do you think its going to be for them to buy 100 websites and get them audited ? Whats more, what do you think all those Web 2.0 sites who are easily selling video ad inventory today because its a nice experiment for advertisers do when they cant sell their video inventory any longer ? Or when the biggest advertisers tell them they have to work through a publisher network like Yahoo or Google in order for them to get a buy ? Well, the first thing they are going to do is lower their ad prices. Which is exactly what we saw happen both on smaller digital video networks and on websites trying to sell display advertising. Its history repeating itself.

You know who has this figured out ? Google and Yahoo and the major media companies. . They all know that ad buyers are never going to deal with individual websites to buy video ads. They aren’t going to put themselves in a position where they have to deliver and audit video files across hundreds of sites. Thats why Google and Yahoo and the big media companies are so excited about Internet video. They each want to be the one stop for Internet video advertising. They want their publishing networks to be gatekeepers to advertisers.

Google thinks they can monetize ads better and deliver them far less expensively (because of their data center delivery), Yahoo hopes it can do the same. The big media companies know they can bundle Internet video with their cable and broadcast audiences, along with their existing Internet properties to create a more comprehensive solution. Plus, if worst comes to worst, they bundle it as a free add if they need to implode the market pricing of Internet video. Which is exactly what I think they end up doing over the long run. The less Internet video can stand on its own as a business, the less Internet video sites can invest in content and promotion to create an audience and the bandwidth to deliver that content. Thats a good thing for media companies who have to spend millions per episode for broadcast network shows and who get paid by the subscriber by cable and satellite companies.

It also makes it a smart move for them to cross license their content to create a Youtube competitor. Not that i think they can have the social impact of Youtube, or reach their traffic levels. They probably cant But what they can do is drive enough of an audience that they can create a package that more economically and simply lets advertisers reaches Youtube users on non Google properties by combining their Internet, TV and Youtube Jr. sites into a single ad buy. Plus, if advertisers buy ads on their Youtube competitor as part of a bigger package, they aren’t buying from Google. That makes it a smart move.

Which brings me to HDTV.
HDTV is the Internet video killer. Deal with it. Internet bandwidth to the home places a cap on the quality and simplicity of video delivery to the home, and to HDTVs in particular. Not only does internet capacity create an issue, but the complexity of moving HDTV streams around the home and tp the HDTV is pretty much a deal killer itself. Together, internet video is destined for the PC monitor for a long time to come. The only wild card that will have an impact is gaming consoles, but they dint offer access to internet video, they all kill themselves by only offering access to content inside their walled gardens. Internet video won’t replace TV. It wont even complement TV offerings. It will flourish in the office. It will be a fun way to share personal content privately or publicly. It will be Community Access TV.

On the flip side, HDTV is here and now. Its gone from being a future technology that could be cool in our living room to being the King of this holiday shopping season. 10s of millions of HDTVs have been sold and will be sold in the next year. The number of households with HDTVs is exploding. Yet for reasons I cant figure out, the broadcast networks are ignoring the opportunity it presents.

The 4 broadcast networks are really the only 4 companies that create content on a daily basis that can put smiles on the faces of all those HDTV buyers. They broadcast most of their prime time signals over the air and have the greatest reach on cable and satellite HD delivery.

Bob Iger, Les Moonves, Bob Wright, Peter Chernin, why in the world are your networks not promoting the hell out of the fact that everything looks better in HD ?. Where is the “Congrats, you just bought an HD set, here is how to get our best programming ever , in HD. And oh by the way, if you haven’t called your cable or sat company or hooked up an antenna, you aren’t getting HD. Call your cable or sat company to see what you are missing”

Every study about HD viewing says over and over again that people with HD sets, particularly those who just bought them will tune to HD networks first. Not only do viewers turn to HD first, but more families are gathering around their brand new HDTV that they just bought and are truly excited about. Why in the world aren’t you taking advantage of this opportunity ? This is a unique point in time where you can grab viewers from non HD networks simply by promoting what you are already doing. It could be the year where
broadcast ratings explode because of HD.

Then there is the advertiser side. Sure internet video is the hot sexy thing now. But where do advertisers get the greatest value ? From putting their TV ads on the net ? By creating 10 second spots for pre or post roll and showing them on PC monitors ? Or by creating commercials in HD that look beautiful on the brand new HDTV that millions of homes just installed and are excited to see new programming, including commercials on ? Whats worst, is that by letting your advertisers continue to show commercials in Standard Def, you are making them look clueless to all those new HDTV viewers. How many things could be more brand damaging than looking like you dint have a clue ?

This is a unique point in time for all networks broadcast in HD to push the ball forward. HDNet is going to start a big ad push in 2007. Maybe we can carry the ball, but either way, its absolutely crazy, and stupid to not leverage this opportunity to the hilt.

Last year I said that Disney was brilliant for breaking the logjam and selling their shows on Itunes. This coming year, 2007 will be known as the year Broadcast TV leveraged HD to create a golden age of TV with huge gains in ratings vs non HD networks, or it will be looked back upon as the year Broadcast Networks blew it.

Either way, HDNet and HDNet Movies will be right in the middle of the High Def revolution

55 thoughts on “Internet Video and how the Broadcast Nets are Missing the HDTV Opportunity.

  1. it is a business site for advertising companies: food, products, properties, vehicles, arts, handicrafts, trading, services, events, movies, music, jobs, industry, news, sports, country guide,
    http://www.lafsaadvertiser.com

    Comment by lafsar -

  2. hi
    m mary
    On the flip side, HDTV is here and now. Its gone from being a future technology that could be cool in our living room to being the King

    Comment by lazer epilasyon -

  3. \”This coming year, 2007 will be known as the year Broadcast TV leveraged HD to create a golden age of TV with huge gains in ratings vs non HD networks, or it will be looked back upon as the year Broadcast Networks blew it.\” I just can\’t see how any near-term decision or non-decision by four US networks can possibly make any lasting difference in how consumers will choose to look at professionally produced TV in say 2012. It\’s a quite constrained situation with raw numbers making almost all the important decisions. HD is a lot of bits all of which have to arrive on time. That\’s inherently difficult and suggests that static delivery of big chunks of bits on discs, and broadcast of lots of them at once, will remain the most convenient way to do this for a while yet. But there\’s not that much leverage in the delay – HD viewership requires HD displays, and large numbers of those await LCD and SED being affordable (plasma is dead, says Sony correctly). The vast majority of people are going to keep buying SD displays, which are getting very cheap indeed.

    The important decisions, like whether to put a rightful hefty e-waste disposal tax on cathode ray tubes, and start charging even to dispose of existing TVs, are in the political realm so networks can\’t do more there than lobby. Though they really should… it looks better than lobbying for infinite copyright extension and a mandatory death penalty for \”stealing\” cable.

    It\’s also not up to the networks whether they can keep hooking viewers on their \”hot\” shows, or their fair and balanced news. They\’re already trying as hard as they can to do that now. Trying harder and thinking clearer won\’t help, when you are already doing your best. Finding ways to get the Internet entrepreneurs and amateur content providers may help them, and if the broadcasters leverage their relationships to guilds and artists to facilitate that, they may make major breakthroughs. However, they have never shown that creativity or initiative, and it\’s hard to believe they\’ll acquire it now. Their core business is shaking down the Girl Guides for singing the Gilligan\’s Island theme song. They tend to hire thuggish lawyers and stupid production people who know only to cut costs and dump losing shows from the schedule. Since when do creative, brilliant, collaborative and entrepreneural minds go into slowly dying industries to devote their lives to that?

    The industry has lost its leverage because its lost initiative and other industries, like the Internet, regularly outhink it.
    It\’s only the unimportant decisions like whether to store the static bits on HD-DVD or Blu-Ray or on USB devices (there\’s a strong case for this despite the cost) that really offer much latitude for industry leverage. No insult to Mark, he\’s an entrepreneur and is used to seeing \”impossible\” things happen, even making them happen (and I liked his TV show, especially when primary school kids got to influence decisions). But, a good entrepreneur is mostly choosing his timing, his team, and which of his many good ideas is the most inevitable. S/he doesn\’t expect that edge to last more than say five years. And certainly doesn\’t view broadcast TV and its top executives and money players as a better talent pool than Internet geeks and home video makers and venture capitalists. Anyone who\’s betting on the latter not to outmaneuver the former is simply not looking at history.

    The broadcast networks are a portal to reach the many millions of people who don\’t want to pay monthly bills to watch TV, or simply can\’t, and accordingly use broadcast TV. They watch SD. If they put the money into HD, that\’s another monthly bill to pay for the TV device itself. So short of financing HDTV acquisition for those people, the networks are helpless.

    It doesn\’t matter one whit whether they do any particular thing this year, with the possible exception of their lobbying choices in Washington and the extremely unlikely possibility that they will somehow agree to open an even-ground dialogue with Internet entrepreneurs and hobbyists of all kinds (even the file sharers) to better serve the public. It\’s easy for me to think of a few dozen ways they could increase their profits and please their advertisers by doing this. But that\’s me. I don\’t work for a broadcast TV network. And I never ever will.

    Comment by Craig Hubley -

  4. \”This coming year, 2007 will be known as the year Broadcast TV leveraged HD to create a golden age of TV with huge gains in ratings vs non HD networks, or it will be looked back upon as the year Broadcast Networks blew it.\” I just can\’t see how any near-term decision or non-decision by four US networks can possibly make any lasting difference in how consumers will choose to look at professionally produced TV in say 2012. It\’s a quite constrained situation with raw numbers making almost all the important decisions. HD is a lot of bits all of which have to arrive on time. That\’s inherently difficult and suggests that static delivery of big chunks of bits on discs, and broadcast of lots of them at once, will remain the most convenient way to do this for a while yet. But there\’s not that much leverage in the delay – HD viewership requires HD displays, and large numbers of those await LCD and SED being affordable (plasma is dead, says Sony correctly). The vast majority of people are going to keep buying SD displays, which are getting very cheap indeed.

    The important decisions, like whether to put a rightful hefty e-waste disposal tax on cathode ray tubes, and start charging even to dispose of existing TVs, are in the political realm so networks can\’t do more there than lobby. Though they really should… it looks better than lobbying for infinite copyright extension and a mandatory death penalty for \”stealing\” cable.

    It\’s also not up to the networks whether they can keep hooking viewers on their \”hot\” shows, or their fair and balanced news. They\’re already trying as hard as they can to do that now. Trying harder and thinking clearer won\’t help, when you are already doing your best. Finding ways to get the Internet entrepreneurs and amateur content providers may help them, and if the broadcasters leverage their relationships to guilds and artists to facilitate that, they may make major breakthroughs. However, they have never shown that creativity or initiative, and it\’s hard to believe they\’ll acquire it now. Their core business is shaking down the Girl Guides for singing the Gilligan\’s Island theme song. They tend to hire thuggish lawyers and stupid production people who know only to cut costs and dump losing shows from the schedule. Since when do creative, brilliant, collaborative and entrepreneural minds go into slowly dying industries to devote their lives to that?

    The industry has lost its leverage because its lost initiative and other industries, like the Internet, regularly outhink it.
    It\’s only the unimportant decisions like whether to store the static bits on HD-DVD or Blu-Ray or on USB devices (there\’s a strong case for this despite the cost) that really offer much latitude for industry leverage. No insult to Mark, he\’s an entrepreneur and is used to seeing \”impossible\” things happen, even making them happen (and I liked his TV show, especially when primary school kids got to influence decisions). But, a good entrepreneur is mostly choosing his timing, his team, and which of his many good ideas is the most inevitable. S/he doesn\’t expect that edge to last more than say five years. And certainly doesn\’t view broadcast TV and its top executives and money players as a better talent pool than Internet geeks and home video makers and venture capitalists. Anyone who\’s betting on the latter not to outmaneuver the former is simply not looking at history.

    The broadcast networks are a portal to reach the many millions of people who don\’t want to pay monthly bills to watch TV, or simply can\’t, and accordingly use broadcast TV. They watch SD. If they put the money into HD, that\’s another monthly bill to pay for the TV device itself. So short of financing HDTV acquisition for those people, the networks are helpless.

    It doesn\’t matter one whit whether they do any particular thing this year, with the possible exception of their lobbying choices in Washington and the extremely unlikely possibility that they will somehow agree to open an even-ground dialogue with Internet entrepreneurs and hobbyists of all kinds (even the file sharers) to better serve the public. It\’s easy for me to think of a few dozen ways they could increase their profits and please their advertisers by doing this. But that\’s me. I don\’t work for a broadcast TV network. And I never ever will.

    Comment by Craig Hubley -

  5. This site have wonderful article.Given below wonderful article.Because there is so much low hanging ad money there for the taking, many in both traditionally big media companies and Web 2.0 firms see it as the money pot at the end of the rainbow that will be the catalyst for future growth. No question its a growing market, But the biggest Internet video bulls seem to forget that what is happening now is not very different than the introduction of Digital Satellite and Digital Cable to viewers and advertisers.
    Visitors visit the given below wonderful site.
    webvideotraffic

    Comment by hayathp -

  6. I agree with your article\”Digital Satellite TV on your PC\”digital bandwidth available across the world. That anyone who wanted to buy a small dish, or add a digital set top box, could do so and easily receive access to Gigabits of bandwidth. of video. Right to their TV for anywhere from 30 to 120 dollars per month. Imagine what would happen to the TV industry Digital Satellite TV on your PC

    Comment by catherine -

  7. I agree with your article\”Digital Satellite TV on your PC\”Thats a good thing for media companies who have to spend millions per episode for broadcast network shows and who get paid by the subscriber by cable and satellite companies http://www.satellitetvpc.org

    Comment by catherine -

  8. Absolutely you are correct, The Tv and Internet video not same at this time but in feature big companies promising that they are ready to provide Live TV on broad band. It\’s a possible one., already I read a site which is claim that it is offering Satellite PC TV with thousands of channels around the globe., I think their is no waiting to view our TV on PC.

    Comment by smith -

  9. Wanna talk about missed opportunity?

    Let’s look at last night’s Super Bowl.

    Ok I am a company marketing exec. I decide to spend $2.6 M for a 30 second ad during the Super Bowl. I spend money on the writers and production of the ad. But to do it in Hi-Def costs just a bit more, so I won’t spend it on that.

    So I run a standard def ad during the Super Bowl. These companies are saying to their customers – WE ARE CHEAP AND HAVE NO INTEREST IN QUALITY.

    Doesn’t that make you want to buy these companies products and services?

    Some of the companies actually ran standard def ads that they “letterboxed”. So on my 50 Plasma they decided to but a huge black box around their blurry. Pure marketing genius.

    In this day and age, how do you run a standard def ad during the Super Bowl? How?

    How are these marketing execs not being called out on this?

    Does anyone care?

    Comment by Trey -

  10. No sei se estou postando no lugar correto:
    Fica aqui o convite para conhecer a cidade de Extrema MG. No site tem fotos da cidade e dos esportes radicais ali praticados, tais como: Paraglider, Rafting, Motocross, Asa Delta e outros.
    Visite: http://www.extremaonline.com
    Obrigado

    Comment by carlosrhrh@bol.com.br -

  11. I know I’m way off the back here, but HD is definitely coming to the internet. No wait, it’s already here. Go to apple’s HD gallery. Those things load pretty darn fast with a cable modem. And my computer can play 1080p no prob. And I’m starting to make my own vids on thesnaz.com in HD. Why not? It won’t be long before everything is HD on the net. Everybody’s buying HD camcorders; they’re going to want to put their vids on Youtube in HD; the delivery mechanisms will follow. To think that HD is some sort of exalted technology that won’t carry over to the net is ridiculous.

    Comment by david -

  12. I know you’re going with your gut on HDTV Mark (and your business sense) but you miss the fact that any kid growing up on myspace or youtube couldn’t give a rat’s ass about anything HD. The issue isn’t quality. It’s the on-demand features. As good as HD “is” or “is claimed to be”, it’s not going to pull us away from “have you seen this yet, see it now” content.

    Comment by Kyle -

  13. We think we’ve figured out how to do HDTV in a Web 2.0 environment.

    Launching in 25 cities this spring, Aftertouch Media is high powered HD content development with an endpoint online, direct to DVD, cable broadcast, and theatrical release.

    A project with the support of Wafian Corporation, The Writers Guild of America, The Directors Guild of America, and The Screen Actors Guild, with a unique Social Networking twist.

    There’s Youtube and then there’s Our Tube.

    Comment by Richard Bottoms -

  14. I think the big players can absolutly replicate youtube. Look at Orkut. Googlemade this instead of buying Myspace and now it is almost as big. Why they didn’t create a competitor to Youtube I have no clue. Maybe because Orkut wasn’t that big when Youtube was up for sale and Google didn’t have confidence in their ability.

    Comment by leather sofas -

  15. Truth: People use Video Recorders to skip commercials.
    Truth: TV Stations currently make their month from commercials (mostly)
    Truth: More and more people are getting PVR’s

    Logical conclusion: Current Model will die.

    So, WHO cares what format content or commercials are in? The whole model is in flux and they know it.

    What’s the average cost per viewer on a network commercial? Let’s say you get 20 million viewers with a $200,000 commercial. That would make it $.01 per viewer (not including production costs). So, the average schmoe viewer watches 3 hrs per day or about 20 hrs a week. Ballpark it at 30 or 40 commercials per hour, and you have that viewer currently costing/making (depending which side you are on) $6-8 per week. or about $25-35 a month.

    Ok, that revenue stream is now dead for scripted television and even in doubt for some non-scripted shows. So, you have two or three directions – move to non-scripted television (in process), move to a pay to carry model (in process at least for HD on some Cable Networks) and possibly a more technical solution.

    The technical solution will/must involve IPTV and streaming. The only quality programs that can survive will either be subscription (HBO) or mandated viewing of advertisements which is only feasible with a techical solution involving a STB and some type program which won’t allow commercials to be skipped.

    Given how much we like to channel surf during commercials etc, I would be on most of the scripted content moving to some type of subscription based model.

    Comment by Jim -

  16. HDTV will not kill internet video. HDTV has no influence on the future of content delivery methods.

    We all need a pc-but HDTV is just like icing on the cake it’s sweet and all-but you’d get sick just eating icing. Don’t get sick! You need to spread that icing on a nicely baked content cake, then eat it. Internet tv/video is that content cake.

    Comment by Benny -

  17. I’m with Ben. I have been an avid mavs fan since I was little and bought an HDTV to watch this season in HD. I was disapointed at how crappy almost all of the non-national games are. I mean fox sports and 21…suck, you would think that these networks would invest in the equipment since they are giving a lot of air time to the games. I hate the national commentators, especially the ones on TNT, but I watch TNT everytime even if there is a local broadcast cuase it will be in HD.
    I also agree it’s rediculous to have nonHD commercials on HD channels. I instantly recognize the company as being behind the times. I also disagree that TIVO or the DVR will make commercials useless. Granted alot of people do fast foward through some of them, people also got up and walked around before and used the bathroom, nobody never made anyone watch commercials. Besides when you are watching sports you better watch it live or you are gonna get the call, or see it on the highlights or bottomline or someone’s blog. Sports are best viewed live, Live means commercials, and thats why sports will continue to be among the highest advertising revenue. Anyway, something needs to be done about the pathetic choices of programming in HD. I’m so glad there I have both your channels because without them most of the time there would not be fewer choices but none.

    Comment by Andrew -

  18. I don’t quite agree that HDTV will kill internet video. The internet is not all about quality alone, but more on instant info.

    Comment by ituloy angsulong -

  19. I receive about 25 HD channels, and the complaint about a lack of HD programming is a bit misguided. The majority of primetime programming on Fox, ABC, NBC, and CBS is available in HD. Same with the three Canadian networks (CBC, CTV, Global). This covers a lot of what people watch. A&E, Discovery, and HDNet offer HD programming around the clock.

    As for sports, I agree that all games should be in HD, and eventually, they will be. Just be glad about the number of NFL games broadcast in HD – NHL hockey fans get very few games in HD.

    Comment by Oliver Dueck -

  20. Mark -

    I was going to ask you when you were going to post about the Metropolitan Opera events that are being transmitted live in HD to theaters around the country (and world), with the debut being today, when I realized that my local Landmark was NOT the theater that had it, it was the Regal megaplex. Hmmm. Want to comment on that? I believe they’re using 2K projection, it’d be nice to hear your opinion on 2K vs 4K too.

    - Chris

    Comment by Chris C. -

  21. Mark: What’s up with Fox Sports SW? My friend and I both own large screen HDTV’s (one LCOS and the other Plasma) and subscribe to Dish network. Your HDNet is fabulous but when the Mavs play and we can’t get to the game the reception on a large screen is horrible. It’s so bad that I’ll channel surf during the game. Is it possible to get them to broadcast in a better signal? thanks and keep up the good work

    Comment by Jeff -

  22. Mark, why don’t you focus more on education?

    How about education on demand? Who could build the Education 2.0 platform? Google or/and a federation of startups? Academic education doesn’t work well. It’s boring, it’s antiquated, it should be fixed. There is a huge market all over the world.

    Wikipedia + blogs + Facebook (social networks) + podcasting + videocasting (YouTube) + Flickr + mobile (cell) phones + gaming + IM + VoIP = Education 2.0

    “Rather than spending 4 years of your life taking a bunch of courses that may or may not really matter in your life once you graduate, you can choose your education on an ‘as needed basis,’ based on your unique interests and talents.”
    http://ben.casnocha.com/2006/09/college_admissi_1.html

    Who is interested in this idea?
    http://divedi.blogspot.com/search?q=education

    Comment by Dimitar Vesselinov -

  23. Faster internet speeds = death of cable tv.

    Comment by tommytwo -

  24. Interesting.
    Actually i believe that HD broadcasts are inherently demographic filter-points, anyone that has HD also likely has the disposable income for other lux items. I see HD advertizing as a perfect way to access and deliver to that premium high value audience.
    Target the money advertizing. Lets talk. Clients like http://aviccinyc.com already have me making HD video loops. High quality stuff looks amazing in HD1080. My number is on my site http://dsmj.com

    Comment by Jeff Johnson -

  25. Mark,

    I agree with you that HD will drive this next wave of TV viewing. I think you may be short-changing the networks however. AT&T is planning to provide HD over IP! As matter of fact, AT&T is planning to provide multiple HD streams to each customer.
    Check out this site:

    http://www.ticktockstock.com

    Comment by George Hightower -

  26. Mark, finally started getting HDNet with Time Warner and I really like it. Only have one complaint and not sure if it’s directed to Time Warner or HDNet, but my TV Guide on my DVR usually listings all the TV listings for up to the next two weeks. However with HDNet, I generally just get the listings for the next couple of days and then it will simply say “HDNet Programming” for the rest of the two weeks. It’s hard to plan in advance for shows when I don’t have enough notice.

    Comment by Wes -

  27. (aside to SportsBlog: regular DVDs have only 480 horizonal lines, vs. HD’s 720 or 1080, which is a huge difference visually – though DVDs still look pretty good on my HD set in progressive scan)

    Mark, I don’t think many consumers care as much as you or I do about resolution, unfortunately. I’m a major video geek and I just happily watched a 90-minute movie (“Threads”, really creepy) on Google Video on my 34″ Sony HDTV, streaming via Comcast Broadband => Wi-Fi => MacBook Pro => HDMI. I’ve watched multiple episodes of 640×480 Lost via iTunes the same way.

    Now these looked, to me, “like crap” – but like i said they were watchable and _they don’t look that much worse than standard-def digital cable_, which _also_ looks like crap but 90% of America doesn’t notice.

    I will be the first off the blocks to invest heavily in whichever HD disc format wins the wars whenever and if ever that happens. However when ITV comes out I will get that too and be happy to spend a half hour a night watching my VideoBloglines (or iTunes community video playlist, or whatever) stream of crap-quality video because – wait for it – 75% of the perceived quality of a ‘video’ is actually the _audio_ – and audio is basically solved for internet broadcasts. Audio quality is just fine on YouTube. How much is the add really for HD when it comes to talk shows, even sit coms? I think that the advantage that internet video really has over the old channel metaphor is greater interactivity, and especially greater scope for developing innovative new ways to pick what you’re going to watch. As cool as HDNET is, will it ever offer the ability for a local music blogger to create his own stream of favorite music videos which I can watch weekly at a click of my sleek little ITV remote?

    Comment by chris m -

  28. “But where do advertisers get the greatest value ? From putting their TV ads on the net ? By creating 10 second spots for pre or post roll and showing them on PC monitors ?”

    Infact, yes to both of those. Being at the PC is an active experience, if an ad takes your fancy you can click a link and learn more, just pop open a new tab and view whenever you like.

    Also, a *real* tracking system is 10x more useful than anything Nielsen have ever produced. Nielsen is the same as Alexa, easily tricked.

    Also, haven’t the majority of cable operators not upgrading sufficiently to plug HD to the masses? Wouldn’t encouraging HD at this stage just play into the hands of the dish networks? Cable will continute to push VOD before High-Def, Dish can’t do that.

    Comment by Adam Cains -

  29. Given 5 to 10 yrs., NEC’s Ultra HDTV (7680×4320 pixels), and wireless to any capable appliance, will be de rigueur. Beyond that, the human eye does not see much improvement, sans 3D Holographic imaging.

    Businesswise, it’s sports, panoramic long-form movies, plays & docs, XXX, online & console video gaming, AND COMMERCIALS, in this new Ultra format, that will get most of the attention . . . who cares what the newscaster or Leno looks like! ;-) Beyond that, there’s medical & industrial inspection imaging, but not pertinent here re consumer entertainment utilization.

    Watch for older legacy still copyrighted & public domain b&w movie content colorized [& upconverted to Ultra], granting NEW 95 year copyrights. And you’ll end up buying all those terrific Disneys still again . . . from Betamax to VHS to LaserDisc to VCD [Asia only] to DVD to HD/BluRay DVD to Ultra HD DVD.

    I love capitalism!

    Comment by Shelly Jacobs -

  30. Spot on Mark! Networks have to get on this bandwagon real soon! HDTV sales topped all estimates this holiday season, that alone is reason enough for networks to grab their share. They should take the lead of KQED and Discovery, who lead the pack in quality HD programming.

    Comment by Ram -

  31. There is no content on television anymore.

    Advertisers run the show.

    Books have no commercials,thank god.

    Comment by Flapjack Charlie -

  32. I have HD and frankly I’m not too excited about it. The reason? A majority of shows including the nightly news are all in non-HD format. How can the networks push something that they really don’t support technically?

    Comment by Lee -

  33. Wow! This is a very meaty post on Internet advertising and the impact of HDTV. I think you are absolutely right about the future of advertising for Internet video. The low hanging fruit is just about gone. Advertisers will demand to only buy ads through a reputable publishing network. I think you are wrong about HDTV killing Internet video, but that is a whole subject unto itself.

    There are three sides to the Internet advertising puzzle; the Advertisers who pay for it, the Content Publishers who create or aggregate the content and take the money, and the Consumers who watch/read the content and click on the ads. We are Consumers so we tend to look at everything through that lens. Google has been successful because it has found a way to satisfy all three sides of the equation.

    Web Advertising – Advertisers get to target their ads and only pay when a consumer clicks. The millions of small web site content publishers (long tail) get an automated way to put ads on their sites and let Google collect the money and pay them a royalty. Consumers get a great search experience free of ad banner clutter, and actually find the targeted text ads helpful.

    Radio Advertising – Google will take the same model to radio advertising with its dMark Broadcasting acquisition. Initially there will be very little ad targeting. The main “value add” will be the ability for the advertiser to efficiently place and track ads on lots of different radio stations, all from one console. The radio stations may be able to auction their ads to the highest bidder, rather than use ad sales people to sell off a rate card

    I think Google will apply the same model to Internet Video. YouTube is a starting point. Then Google will apply the same model to TV, Newspaper, and Magazine advertising.

    Google is all about making the advertising process efficient for advertisers and content providers. Search was just the first implementation.

    See my blog for more details and insights on this.
    http://dondodge.typepad.com/the_next_big_thing/2006/12/will_google_dom.html

    Comment by Don Dodge -

  34. It’s the content stupid! The reason the networks aren’t hyping HD is because they have gutted the production quality of TV and they see HD as a cost, not a creative opportunity. Do we really need HD to see which damn case has the $1,000,000 in it? Will American Idol be any better in HD?

    Now if the networks took the time to create some action dramas or sci-fi programming that really looked incredible on HD, then we might have a program worthy of demanding HD ads on it.

    Until then, the only thing that really looks better from the networks in HD is sports. And yes Mark, you are right about this missed opportunity. How cool would it be to see some really brilliant HD advertisements for cars & trucks during games. Or travel ads. The networks have a clear way to target homes with disposable incomes, yet they show us the same stupid ads you get on standard def.

    Keep up the great work – love the blog. I hope the networks read it!

    Comment by Gary -

  35. We’re not ready to stream hdtv, we don’t have the bandwidth or connection to be able to do this on mass. Internet video will remain as long as we have http://www.youtube.com and http://www.dailymotion.com and live tv sites like http://www.freetube.us.tc . So I don’t think it’s really dead.

    Comment by TV Online Dead? -

  36. A blog entry on the Donald gets tons of responses. A blog entry on technology gets a lot fewer posts (although this one came out right around a big holiday). Guess the Donald is popular.

    Comment by wailea -

  37. While I’m not sure that HDTV will kill internet video I do agree with you on most points.
    I bought a nice 42″ HDTV (on a college budget none the less) and have been scratching my head over HD content ever since. I absolutely love HD, the picture is goregous. There is nothing like watching your favorite sports teams in HD. But still today HD content is realatively rare. Why are not all sports events (at least pro sports) broadcast in HD. On NFL sunday I usually find myself watching at least 1 or 2 games in standard definition. And by that I mean that I watch the HD channel and all I see is a standard definition game, and I usually switch to another game just because it is in HD.
    I also find myself only browsing through the HD channels for things to watch. (2 out of a total of 9 HD channels are HDNet and HDNet Movies, and 4 of the others often show standard definition content, so a big THANKS for giving me HD 24 hours a day)
    Most of the time when I watch TV these days I only watch my recorded shows, and I really only record shows if they are broadcast in HD, with the exception of Scrubs.
    I feel I am paying more for HD broadcasting while I don’t even get full HD.
    And I still get those annoying standard definition ads that tell me how beautiful my TV picture could look if only I would buy a HDTV. Nevermind the fact that the only reason my TV looks like crap at the moment is beacause I have to watch a standard defintion ad on a HD channel.

    And while I do find a purpose for internet videos, (Who really wants to watch some of the videos on YouTube in HD, there is just some stuff that was not meant for perfect clarity.) I find myself seeing HD trailers online and I wish that I could watch it on my TV instead of my laptop, and if do decide to watch it on my computer I don’t have the patience to wait an eternity when all I’m going to watch is a trailer. I probably could have downloaded the whole movie in divx.

    Bottom line: HD content is beautiful, I want more of it. And I’m done with SD content, it might as well be streaming from the internet.

    Problem is that people really aren’t using their HDTVs for HD content. Just like Jack Perry from TitanTV writes here: http://blog.jackperry.com/pt/blog/default.aspx?id=106&t=Searching-for-HD51-hours-3-cities-doz
    I see HDTV with SD content on them all the time, no wonder people think their TVs at home look better than HDTVs.

    Comment by Ben -

  38. What? I didnt see anywhere in your article that said HDTV will kill internet video except where you said that HDTV will kill internet video. IV to mee isnt about watching movies online in some grainy flash frame, but about watching searchable, second soundbytes to minutes news clips. It is about filtering out a bunch of garbage advertising too. And it is not just a playground for multibillion dollar media moguls but anybody with a video camera can post a video and compete on the same terms as anyone.

    “Apple’s ITV is promising and Microsoft (a client of my firm) is making the same push with Windows Vista. The TV is undergoing a renaissance but the sources of content will come at from all directions.”

    The killer would be to join internet video and regular video. I would love to browse something like google-video on my regular tv and hopefully have a better quality picture. You do that, and the whole concept of video and tv changes.

    And not to mention the HDTV expense, I think you are living in the clouds.

    Comment by Berlin Brown -

  39. good blog

    Comment by khush -

  40. How’s this for an idea: HDTV over the Internet using P2P technology
    - full 720p and 1080p video
    - distributed with BitTorrent
    - Creative Commons licensed
    - no DRM
    - no ‘Hollywood’ involvement
    - plenty of models in bikinis to make sure folks are watching
    (perhaps a play borrowed from ‘Bikini Destinations’)

    http://www.mariposaHD.tv

    Comment by Diego -

  41. “HDTV is the Internet video killer. Deal with it. Internet bandwidth to the home places a cap on the quality and simplicity of video delivery to the home, … “

    SAY WHAT?!?!?!!?

    You’re forgetting that internet video is already lower resolution than standard NTSC or 480i. So what difference does HDTV have that suddenly makes it antiquated? It doesn’t; people watch internet video because it offers what they can’t get from broadcasts.

    While I agree that HDTV will probably never be sent via today’s internet, current ATSC is 20 megabits, which isn’t *that* fast. And since many consumers are time-shifting, the possibilities of non-linear transmission through the current internet is a very real possibility.

    Comment by JT Axan -

  42. Mark,

    I’m curious as to what your thoughts on the emerging battle between Blu-ray and HDDVD. Which do you see becoming the next major format?

    - T

    Comment by Tacchi -

  43. Bless you this New Year from the city of Jerusalem, the city of Jesus Christ, although I am a Muslim Guy, but this did not prevent the celebration of the new year and the birth of Jesus Christ-peace be upon him, I wish prosperity and happiness of all the inhabitants of the land and freedom for people in the occupied Palestinian territories.

    Palestinian Gifts Online store

    Comment by Freedom way -

  44. One of the reasons for the lack of promotion is that so much of the promo time is controlled by the local stations, and they’ve been dragging their feet on switching to HD for local news, even though they’ve seen the same research you site. It’s crazy: People watch shows they don’t like, just because they are HD.

    You are right, though, a little promo, especially after this Christmas, would go a long way. And you are right about the ads, and the way to prove that point is with the counter example. For instance, the Apple Shuffle ad just pops off the screen. All the non-HD ones are just a reason to change the channel.

    The advertisers spend all that money on research of their message, and they don’t even read the research about the way people watch HD???? I don’t get it.

    True videofiles know, by the way, that the only way to get an uncompressed HD signal is to get it over the air. A great way for HDNet to get some great press, and devoted users would be to broadcast over the air. I know this is a hassle because you have to deal with the FCC 50 or 100 times, but if those crappy Spanish and shopping stations can do it, you certainly could. Great way to put some external pressure on the cable and sat guys, too. Read more here: http://creditcardvc.com/2006/free-your-tv-do-not-pay-for-cable/

    Lastly, why are you posting on Christmas Eve? I ate some bad, too rare tri-tip, so my family doesn’t really want me around. What’s your reason?

    Your humble typist,

    -Scott

    Comment by Scott Yates -

  45. “As far as advertising, homes with HDTV and HD boxes are also more likely to have DVRs. It doesn’t really matter if the commercial is in HD if the fast forward button is firmly pressed, anyway.”

    I have to agree with Paul here. HD commercials are nice, but I FF past most with my handy HD Tivo.

    I don’t see the marketing benefit here long term.

    Comment by Lamarr Wilson -

  46. And the bump-up just isn’t that great. I have a perfectly good TV right now. Why go out and spend another $2,000 or more for something where there’s no programming (not yet a ton of it). And even if there was, it’s a luxury advantage to have HD.

    Comment by basketball -

  47. I think HD is one of those push-pull issues: do the companies that manufacture HD TVs market the heck out of them, or do broadcasters create HD programming, or do the cosumers demand it? I don’t think the consumer demand is there yet. It will be, but it is slow to grow to a critical mass to almost force manufacturers and programmers to provide for the consumers.

    Comment by basketball -

  48. I think this is all being made too complicated…

    Make an HD TV / Monitor for under $200. Give it plugins from the cable networks, or a PC (wireless… whatever!).

    Content owners, push your content however you want. W/ a TV / Monitor for under $200, add revenue will go nuts because everyone will have one and can watch.

    This is all marketing, plus a little innovation. Some fat cats with old TV systems want to keep their money, and new mediums are going to threaten that. Those fat cats are the ones that can influence the R&D and the marketing dollars. If they stay fat, I don’t think they’ll push to hard. So, Mark, keep pushing like you are. But, push the hardware dudes the hardest to figure out how to make a screen that looks good for a lower cost!

    Comment by Toby Getsch -

  49. I have to disagree with the previous post from (Doug)… You can now get a 32inch HD LCD TV for $699 or even a 42inch now for $999 at Best Buy which is probably the range you paid back in the day for your 36inch SDTV. Plus, if you’ve ever really experienced true HDTV the picture quality is so much better than the standard channels that I also find myself not spending much time on those channels and most of it finding programming in HD. Also, most cable companies like Comcast offer the HD channels at no extra cost or at most for a few dollars/month.

    As far as replacing all your movies… that’s really not necessary considering most movies are already at 720 lines of resolution and most movies aren’t currently for sale in HD, so it’s really not worth replacing any of those movies. They’ll still look great on most any high quality TV.

    My point is it’s really not very expensive anymore to upgrade to HD and that was quite apparent as I stopped at Best Buy yesterday to get a last minute gift and as I walked past the LCD and Plasma wall which had well over 50 TV’s on it…. there were probably only a handful of them left in stock. This was definitely the HDTV Christmas.

    Bryan

    Comment by Sports Blog -

  50. I don’t think it’s so black and white. The networks, even in HD, only provide a limited scope of viewing choice, choice that is provided with web. It seems to me what people want is a combination of both, all available from the same screen.

    As far as advertising, homes with HDTV and HD boxes are also more likely to have DVRs. It doesn’t really matter if the commercial is in HD if the fast forward button is firmly pressed, anyway.

    Comment by Paul McEnany -

  51. Maybe a little off topic here but I’m gonna rant anyways on the topic of free choice in deciding what we are viewing I just want to ponder one thing that drives me mad as it relates to the NBA video experience. I have NBA League Pass and we all know that each team has a broadcast team and every game is broadcast to that respective “home” area. I’ve paid $180 to follow my favorite team night in and night out, out of area, yet I still don’t have a “choice” in which broadcast I can view. It is a toss-up every night if I can enjoy my teams perspective and insight or endure the oppositions broadcast. If I am in Tampa, FL and I want to watch the Mavs-Nuggets game and the Mavs are my favorite team shouldn’t I have the option of watching the Mavs broadcast and listen to their game announcers? It would make sense if I go to NBA broadband and click on the Mavs-Nuggets game to have a separate link to each team! The NBA is so ass-backwards is their marketing of NBA League Pass it blows me away, how stupid are the people who run NBA video? Haha, they don’t even have a customer service number you can call and give feedback or report problems. As a marketing communications grad. student and NBA fanatic I am taken back by how poorly this service is marketed and operated giving the opportunity the NBA has to reach its target audience. What the hell is wrong with these people, its almost like they outsource NBA League Pass marketing and operations to some company that knows nothing about the NBA and its core consumers! Give us the option to watch and listen to the teams we want and have paid a premium price to follow all season!

    Comment by ht -

  52. I don’t agree nor disagree; however, I can not justify the cost of an HDTV ready television over my 36″ Toshiba with a great picture. Nor can I justify replacing all my movies (I don’t have too many) with Blue-Ray. Nor can I justify the cost of HDTV services while I’m spending such little time actually watching television anymore.

    Lastly, as a single-dad, I can’t afford all of that either. Don’t take it for granted that everyone is moving in that direction simply because you can afford the economics. I’m not saying that’s what you’re doing… I just think it might be.

    Respectfully,
    Doug

    Comment by Doug Karr -

  53. One more thing :-) Video podcasting/RSS should be part of HDnet’s marketing initiatives. It would be great if we can sample the content so that we can yell at our cable provider to carry you (mine doesn’t). Further, when PC to HD streaming gets bigger we won’t need to care if our cable provider is fighting with nets like the NFL Network. We will be able to choose what goes on our TV deck, not the telcos/cablecos.

    Comment by Steve Rubel -

  54. Mark, what about content coming in from the computer to a HDTV, either from pros or amateurs? Surely this is part of TV’s Golden Age II, no?

    Apple’s ITV is promising and Microsoft (a client of my firm) is making the same push with Windows Vista. The TV is undergoing a renaissance but the sources of content will come at from all directions.

    Granted, the PC to TV experience is nothing (yet) like hi-def content, but it vastly expands the set into an open platform. Couple that with Moore’s law and the TV will become a focal point from all directions. More here – http://www.micropersuasion.com/2006/12/how_the_tv_will.html

    Comment by Steve Rubel -

  55. Even if the few broadcast networks stick around and fair well, which they prob. will do, they already lost control. They wont be able to keep their place in the long run because content will raise up in the future based on the quality of the content, not PR, $ and gate keeping.

    Delivering in HD would be great for them but I don’t think it’s going to save them.

    Comment by Drew -

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