Updated: 11/24/2005; 11:36:15 PM.

General networking
Data network connectivity developments, networking business news, and related computing items.

daily link  Monday, May 16, 2005

Piracy is Good?  A long piece on a business model for BitTorrent "hyperdistribution" of video programming.  "Per capita, Australians are the most profligate downloaders of television programming in the entire world, followed closely by the British. While the Americans lag behind, they're still on the chart, in third place. The sea change has already taken place - undoubtedly sped along by the monopoly position of the commercial broadcasters, who, in many cases, act as barriers rather than conduits for television programs. If a commercial broadcaster doesn't show a program, or delays it for years, that's no longer of concern to television audiences: they'll just download it from the Internet. ..

As yet there are no viable economic models connecting the television producer directly to the audience. Industry pundits talk about audiovisual downloads through some system like Apple's iTunes Music Store, and perhaps we'll see something like this in the near future, but this works against the simple fact that people do not expect to pay for television programs. .. [Also, thanks to PVR's and fast forward,] 30-second ads are not a part of television's future. They're too easy to edit out of the viewing experience. ..

the "bug," the smallish, semi-transparent station ID which has become the constant on-screen companion to all television broadcasts [can carry an ad instead, as it does on some sports broadcasts today]. the technique is already in use, and advertisers understand its value. .. advertisers are ready for this. .. As the advertisement-as-interruption disappears, we will see a series of advertisements perhaps running five minutes apiece embedded into the programmme itself. This is easy to achieve technically, and will be palatable to most major advertisers.

if those advertisers are paying between $250,000 and $500,000 for thirty seconds of advertising (in the United States), just a handful of advertisements would cover hyperdistribution [BitTorrent] costs. It's a numbers game: if enough viewers watch a hyperdistributed television program, it is cheaper for advertisers to work with producers, and handle the distribution themselves. Furthermore, if the program is widely popular, it is far, far cheaper to do so. In other words, the higher your ratings, the cheaper the advertising. That's precisely the reverse of broadcast television, and one big reason that advertisers will find this model so appealing.

Although no formal surveys have been conducted, it's reasonable to assert that at least four percent of Australians, two percent of Britons, and one percent of Americans are already using broadband hyperdistribution to get some percentage of their TV programs. Based on my own research, I have found television downloading to be widespread among men 18 to 25 years old, precisely the demographic most coveted by advertisers."

  9:10:14 AM  permalink  

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Copyright 2005 © Ken Novak.
Last update: 11/24/2005; 11:36:15 PM.