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A Better Television

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What if you re-invented television using the Internet, with it’s diversity and choice, and made it not just more open but more friendly as a result? Where a creator anywhere in the world could set up their own subscription video channel, supported by fans instead of ads. And where fans could get (and pay for!) just the channels they want, and watch on the device of their choice.

We launched something like that today with two big new additions to Showyou:

A self-service subscription platform where anyone anywhere can build and launch their own subscription video channel delivered over the Internet; and

A Channel Store, where fans get exactly the channels they want, and can directly support the channels they love.

Why a subscription platform? Why not an ad-supported platform?

First, we think there is already a great free, open, ad-supported video platform — YouTube. We weren’t convinced the world really needed another.

Second, we believe that advertising isn’t always the best, or right, option for all creators, all of the time.

Advertising works great for channels that reach tens of millions, or hundreds of millions, of viewers. But what about the programming that’s important and compelling — essential, even — for 1000s, or 10,000s, or 100,000s of fans? What platform was built for them, and help those creators to make a living?

For the last 20 years, the Internet has given us new ways to create things, to express ourselves, to entertain and to inform others. Where it’s fallen short is in enabling creators to make money to sustain their creative work. Many platforms have launched with the following approach: “Give it away for free, we’ll sell (or let you sell) some ads, maybe you’ll make some money.” It’s a little bit like a casino, where the house always wins and sometimes a creator draws a lucky hand.

Over the last 4-5 years, some platforms have been launched that begin to remedy that. We’re honored to share office space with one of those pioneers, Bandcamp, a great service that help artists sell their music (and merch!) directly to their fans and that gives artists a fair shake. We have been inspired by their journey, and also by platforms and services (Kickstarter, VHX, and Patreon to name a few) that help creators get paid, and help them to sustain their creative work.

We launched our subscription platform and channel store today because we wanted to give creators another option, a different kind of platform, that sustains and encourages new and different kinds of programming. That allows creators and producers to entertain, inspire, and inform their fans, and to be directly supported by those fans.

And if we can do a good job of helping creators, we’ll give their fans (and everyone, really) better television. With more diversity and choice, with programming from independent creators from all over the world, making interesting things for us all to watch, and where people experience the joy that comes from directly supporting creators you love, and getting exactly the channels you want.

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What the Diamond Rio Told Us

In 1998, MP3 players were pretty crappy. With 32 MB of flash memory, my little Diamond Rio could hold only a handful of songs. Few people had the foresight to envision a world with a better device, with more memory, let alone to predict how such a device could upend the music business. Everyone assumed the labels would rule the world forever (indeed their revenues peaked two years later).

In 2003, SMS messaging traffic was burgeoning in Europe and Asia, and beginning to offer European and Asian wireless carriers at fat, margin rich stream of revenues. Symbian semi-smart phones were just coming on to the market, but few people had the foresight to envision a world with a better device, one open to the Internet, let alone foresee how these devices might give rise to a world of replacement services like iMessage and $19B apps like WhatsApp that would obliterate the carriers SMS rents. Everyone assumed the powerful wireless carriers would rule indefinitely.

Here we are in 2014, and you see similar dynamic playing out with the television. Today’s tablets and connected TV devices are  the Diamond Rios or the Symbian smartphones of our day; if you’re paying careful attention, and have some vision, you can get a glimpse of the future. But some of the smartest analysts remain unpersuaded by these early developments and are the most bearish about the prospects for change (I’m thinking particularly of Peter Kafka & Ben Evans, both of whom I admire).

The argument they make for the status quo can essentially be paraphrased as follows:

  • Television network & cable executives know change is afoot, they’re smart (“unlike the labels”) and they’re not about to let someone eat their lunch.
  • They control the good content, and the distribution networks, and aren’t about to turn over there business to some upstart interloper (c.f., Intel Media).
  • Consumers haven’t really changed their habits that much; they seem to really like TV and continue to watch a lot of it.
  • Ipso facto, change is unlikely to come.

Their skepticism has some merit. Having been at this for nearly 20 years, trust me, I understand it.

*****

Change rarely arrives in the form we expect; not some zero sum disruption of  new winners and displaced losers, but usually something more complicated and nuanced. The iPod and iTunes store did transform the music industry, but did so with the labels (who, while much smaller than they were, continue to exert dominant influence on the business).

The iPhone and Android have given us new messaging apps like WhatsApp, Line, and WeChat, and demolished the carriers margin-rich SMS revenues, but in many ways they’ve only deepened our dependency on our wireless networks and the carriers who operate them.

Foreseeable changes in distribution transformed these businesses, gave rise to new empires, and co-opted or bolstered old businesses at the same time. This is the fate that awaits the television business.

As we begin to connect the Internet to billions of TV viewing screens (not just TVs, but also tablets) the television business will be transformed. It would be a mistake to conclude that because the future isn’t yet here, change is unlikely to come.

But it won’t come in the tidy zero-sum disruption narrative we’ve been told to expect. Old businesses will continue to thrive as they take advantage of and in some ways co-opt the new distribution platform.  And big new companies will be birthed.

Indeed, one already has; it’s called Netflix.

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What We’re Building with Showyou

Some announcements from us at Showyou this morning:

1. A first-rate version of Showyou on the web, with the biggest collection of hand-picked videos on the Internet — over 105 million, all picked by our users and their friends and people they follow on Twitter, Facebook, YouTube; and

2. An update that brings our already great Android app to parity with our award-winning iPhone and iPad apps.

These new products, together with the Channel Platform we launched in June and our iOS apps, make Showyou something bigger than an app or website — it’s an end-to-end video platform:

  • Built by viewers, not uploaders;
  • Organized by taste, point-of-view, and interest;
  • That complements and indeed builds on top of existing, fantastic video services from YouTube and Vimeo;
  • But that gives both viewers and publishers choices and options, too;
  • That is mobile-first but works across all the screens and devices that matter to you, including your PC;
  • And that offers an experience that is as easy and fun and enjoyable to use as your TV.

Yesterday, I wrote about who might disrupt TV through the prism of Clayton Christensen’s “jobs-to-be-done” framework.

In case it’s not clear: our ambition is to make Showyou one of those services. We’ve applied for the job of entertaining you. Anytime (but especially in the evenings and on the weekends when you have some free time and want to relax); anywhere; on any device.

What should you expect when you turn on Showyou? That’ll you always find something interesting, entertaining, inspiring, and informative. Something you want to watch; with videos and channels related to your interests, your tastes, or from people who have a point-of-view you appreciate.

One other thing about the new Showyou.com? It’s maybe the most beautiful place on the Internet to watch a video. Enjoy.

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Who Disrupts TV?

A few months ago, @monkbent (Ben Thompson) had a good series of posts about the disruption of TV.  In his last post of the series, he looked at television through the prism of Clayton Christensen’s “jobs-to-be-done” framework: What are the jobs we hire TV to do? [1]

The disruption to TV will happen, Ben argued, when different services come along that do these same jobs better and more cheaply.

It’s a handy framework for thinking through what the future of TV might look like, and applying it some of the disruptors start to come into focus.

For example, many of us have already hired Hulu+ and Netflix — with their reasonably deep catalogs of  on-demand movies and TV shows — to entertain us in the evenings and on weekends. [2] As both of these services continue to grow their subscriber bases, they’ll be able to take on the other jobs cable networks do — fund the creation of great, compelling, original shows. Indeed, Netflix has already had success with House of Cards and Orange is the New Black.

Some people have hired services in completely different categories  — games (on phones or consoles) and social networks (on phones, computers) especially.

At Showyou we’ve felt for a long while that the biggest, most likely disruptive force would be the the massive amount of online programming that is finally being made available on screens we actually use in the evenings and on the weekend — the television and new television-replacement screens (tablets, especially, but also PCs and mobile phones).

That makes YouTube another obvious potential winner in the contest to disrupt TV. And indeed YouTube already accounts for 17% of downstream traffic in the evening  over “fixed access” networks (broadband wires coming into our homes).

But for many, using YouTube instead of TV still feels like too much work, with too little payoff; too much leaning forward when you want to lean back. The conceit of “video discovery” services has been that if you could just organize all this, they’d be among the winners, but that hasn’t happened yet. [3]

Whether you are YouTube or a startup, we think you have to do the following to have a shot at bringing the bounty of the Internet, and disrupting TV as a result:

1. Make your service as easy as TV

A huge part of the appeal of the television is that we don’t have to think too hard. Grab the remote and your off. Stated in a different way: one of the jobs TV does is that it allows us not to think. Your service has to do that too, or it won’t be hired.

2. Focus on “the what” not the “how”

People need to know what specific job they’re hiring you to do. When you say you’re delivering “videos picked by friends,” or “videos from your social networks,” you’re describing the how, not the what. Give people a reliable, tangible, concrete way to understand the programming they’re going to get to watch; how I’m going to be entertained, inspired, or informed by the programming. [4]

3. There is no first screen

People will expect your service to be everywhere. We may still turn to the television more than any other screen, but it’s hold on our lives is slipping with each passing month. There is no first screen anymore. In our house, most video viewing happens across iPads and PCs. The TV is only rarely on. That’s not the national norm, yet, but it’s most certainly the direction we’re headed.

4. Aggregation Wins

You need to deliver something of sufficient value and depth that people will want to use your service multiple times a week, for an hour or two at a time.

Netflix, Hulu, and YouTube of course all do this. The landscape favors aggregators. Not only for the depth of programming they offer, but also the consistency and quality of experience. The winners in this space will need to make simple, fun-to-use services across multiple platforms (iOS, Android, web, and connected tv devices) that connect and interoperate with other online services.

The great, unknown question is how many services we’ll hire to replace TV. That’s where the metaphor of “channels-becoming-apps” breaks down. It’s unlikely we’ll each hire 20-30 apps to replace TV. It seems more likely we’ll hire between 5-10; a few that do the job of giving us premium, subscription-funded TV shows & movies (Hulu+, Netflix, maybe Amazon Prime) and a few to help us watch the rest of the Internet.

The winners, whomever they are, will be giant businesses. The Time Warners, Disneys, News Corps of the future.

NOTES

1. I’d argue it’s this, mainly: To entertain us in the evenings and on the weekends; to give us a way to escape and to relax after a day at work or in school. Ben suggests other specific jobs: to educate us, to inform us, to give us live coverage of sports, and to story-tell.

2. You could be pedantic and argue that Netflix and Hulu aren’t really disrupting TV, they’re simply delivering TV over IP. But the disruption we’re talking about is of cable television and its cost & economic structure.  And Netflix and Hulu, even if they largely deliver traditional television and movie programming, provide a cheaper and better experience than television (watch when you want, on the device you want, where you want).

3. Hunter Walk and I discussed this in an online dialogue in the spring (read our dialogue here and here). Christensen’s “jobs to do” framework might be helpful here, too. It may sound counter-intuitive in this age of abundance, but it’s not clear “discovery” is not a job that needs doing. The problem isn’t that we don’t know what to watch; the problem is that there is too much we want to watch with too limited time. Another problem: media discovery — for video, music, news — speaks to the “how,” but what we want is the “what.” That may sound like sophistry, a semantic argument, but consider Pandora. People often describe it as music discovery. But Pandora consistently, emphatically talks about the what, not the how. That is an “Internet radio” service. The music genome algorithm that makes Pandora work — the discovery part — is a means, not the end.

4. One of the reasons we’ve focused so hard on “channels” with Showyou is to address this. We want you to know what you’re getting — a channel oriented around taste or point-of-view (from a person or publisher you follow on Showyou), or interest (more about this tomorrow).

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Apple’s Secret Social Network

I occasionally blog here about the mobile habits of my 15-year-old daughter and her friends. With two teens in the house, I get to do extensive anthropological research disguised as parenting.

Over the past six months, I’ve seen the following pattern emerge:

Instagram is used in a highly curated, edited way. It’s the public performance of your life.

Facebook is also used in a highly curated, edited way like Instagram.

Snapchat is used  throughout the day for quick status updates (usually in the form of silly selfies).

But the service that she and her friends use most frequently is iMessage. Not SMS. Not WhatsApp. Not Kik. iMessage.

We know that US teens have expressed strong preference for iPhones.  Android phones simply will not do. I think the iPhone is perceived as better, cooler, and (crucially) fancier  — but I also suspect the desire for an iPhone is subtly reinforced by the fact that their peer group is using iMessage.

If this anecdotal trend I’ve observed is indeed widespread, I think the launch of a cheaper 5c could be a powerful move, one that helps to drive lock-in among teens because of the importance of iMessage in their lives.

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The New Remote Control

When our app Showyou was first launched, a number of people described it as a new kind of “remote control for web video.” As we improved and refined our service, people continued to describe Showyou that way. Again. And again.

That wasn’t an accident — we bet big and early on Apple TV and Airplay. Indeed, we began work on Showyou literally the week Airplay to the Apple TV was announced, and we have always thought that the phone and the tablet would be the gateway devices to the TV. We wanted — and still want — Showyou to be a service you can use and enjoy on your tablet or phone, or that you can use to control your TV.

We’ve learned a couple of things along the way. First, while we still totally believe that this is the future of TV it’s been slow going so far. Apple TV is still in many ways a hobby product for Apple. Airplay is not yet mainstream. And it’s still way too clunky and cumbersome.

More importantly, we’ve learned that the television is just another screen, not necessarily the “first” screen. As I tweeted with my friend Mark Donovan yesterday, the first screen is now just the screen you happen to be watching. Sometimes that’s your TV, sometimes it’s your smartphone or tablet or your PC. For years people expected some grand unification of the proverbial “living room” with some magical device that brings everything together. But instead  the opposite has occurred;  we now watch video on a wider range of devices, in a wider range of places. The combination of new devices and new services has liberated us from the couch.

So it’s with that context I took in the Chromecast announcement yesterday. Until we have the device in our hands, can play with it, can build services around it, it’s too soon to say if it will be as disruptive as reported.

Still, I couldn’t help but get excited (and feel a little tinge of vindication) with Google’s announcement. If nothing else, it’s confirmation of the vision we latched on to two three years ago. Google has joined Apple in putting their chips down, in a big way, on the tablet/phone/pc as the gateway to the TV. If the device works as well as advertised, and gives developers as much control and power as reported, it should be hugely disruptive. And if nothing else, this ought to focus the folks at Apple on the need to make Apple TV more than a hobby product (one assumes this is in the works).

And all of this activity further weakens the moat built up around the TV — a moat that has largely kept the Internet out. It’s no longer a question of whether Internet-delivered programming will get to the TV or how. It’s just a matter of  when we reach the tipping point (i.e., where we start to watch more programming over the Internet than via cable & satellite).

The $35 Chromecast and $99 Apple TV also make this clear: your new remote control isn’t a device, it’s a set of services. Aggregators with economies of scale. Netflix is almost certain to be one winner (with the most paying subscribers for a video service on the Internet) and YouTube another (with the most viewers for free, ad-supported programming). There will be a handful of others; other big subscription-focused services (Hulu, perhaps a few others around sports) and other big, free ad-supported services.

Over the past couple of years, some folks thought you could become the new remote control by building a better app, or having a nicer interface. That’s necessary, but not at all sufficient. We’ve always felt that winning in the new world, being one of the remote controls you use, would require more than a nice interface. That you’d have to make it incredibly easy to tune into the things you like, that you care about. And that requires lots and lots and lots of data to do it right, to do it well.

The services that win will be the services with the best data. I’m bullish about Showyou for many reasons, but among the biggest reasons we think we’ll be one of the key remote controls is the data we’ve been stockpiling. More on that soon.

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Moments of Truth

Of all the things in Reed Hastings’ letter to shareholders that made the rounds yesterday, I loved this the most:

Our North Star is to win more of our members’ “moments of truth”. Those decision moments are, say, on Thursday 7:15 pm or Monday 2:40 am when our member wants to relax, enjoy ashared experience with friends and family, or is just bored. They could play a video game, surf the web, read a magazine, channel surf their MVPD/DVR system, buy a pay-per-view movie,put on a DVD, turn on Hulu or Amazon Prime Instant Video, or they could tap on Netflix. We want our members to choose Netflix in these moments of truth.

This is what all of us in the video space focus on; or should be focused on. We talk about this a lot at Showyou; indeed, I wrote the following on this blog in December 2012 when we launched Showyou 4.0:

It’s 9PM. You’ve worked all day, made it home for dinner. And now you just want to chill. Grab a beer, plop on to the couch, and unwind for a bit. What do you do?
Most of us grab the remote and turn on the TV.
Some of us have started to dial up Netflix, Hulu, iTunes or TV Everywhere for our fix.
And more recently, particularly in homes with iPads or other tablets, we’ve had a third option — tuning into the Internet and all the glorious programming on it.

What’s exciting to me, what keeps us working hard, is that this huge new market is wide open for services and apps that help you tune into the Internet. YouTube won the battle for clips on the web. But the battle for your 9PM has just begun.