Apple WWDC 2014/iOS 8

[Canned Goods n Ammo]

The reality is that the WHY of content and consumption is evolving. If the Masters of the Entertainment Universe are missing this it is, in fact, a good thing.

If they are really missing it, and I mean, REALLY MISSING it... the entertainment/content landscape will look entirely different in less than 10 years.

The evolution will be lightning fast as the free market will work quickly and efficiently eliminating slow-to-adapt companies.

[keefe]

If they are really missing it, and I mean, REALLY MISSING it... the entertainment/content landscape will look entirely different in less than 10 years.

The evolution will be lightning fast as the free market will work quickly and efficiently eliminating slow-to-adapt companies.

I think that the step change in technology now unfolding combined with new consumer behaviors will have a dramatic impact on the entertainment vertical. Chico cited "Disney quality" content but he is missing what is happening within key demographics that simply do not value the traditional model.

One of my projects is funded by MS and our team includes the guys who built the Azure stack as well as the Win8 and Surface design teams. The future of content generation and presentation will shatter the current paradigm.   

[ChicosBailBonds]

I think that the step change in technology now unfolding combined with new consumer behaviors will have a dramatic impact on the entertainment vertical. Chico cited "Disney quality" content but he is missing what is happening within key demographics that simply do not value the traditional model.

One of my projects is funded by MS and our team includes the guys who built the Azure stack as well as the Win8 and Surface design teams. The future of content generation and presentation will shatter the current paradigm.  

Perhaps Keefe, though we've heard MS make these claims about many things for the last 15 years and struck out way too often for a company of their prestige.  Apple the same.  We will see.  We have lots of folks from MS, Apple, Google and such that have come over in the last 5 years for various reasons.  Georgio Vanzini being one, former MS'er. 

One thing is for certain, the idea of a $2 app for Disney content or whatever....if that is going to happen, Apple better change their model.  I'm guessing 99% of people here don't realize that Apple gets a cut of 30% of the app revenue.  That means on a subscription service, each and every month they get a cut.  The margins for video are already shrinking like crazy, having to share 30% with Apple makes it that much more difficult.  

[ChicosBailBonds]

I don't know if you're trying to sound dismissive or whatever.

I might be COMPLETELY WRONG, and that's fine. I've been wrong lots of times in my life.

But, pretending like there is NO CHANCE that technology in production, distribution, consumption and personalization change the marketplace is short sighted.

I'm telling you at that price point, it isn't happening.  Either you aren't going to get the quality, or those of quality sure as hell aren't going to sell at that price.  They aren't going to kill their revenue streams by doing that.  No reason to do so.  Disney can't contractually, literally cannot contractually.  A startup might be willing to do it, but at that price point or anything close to it, they are going to struggle.

[keefe]

Perhaps Keefe, though we've heard MS make these claims about many things for the last 15 years and struck out way too often for a company of their prestige.  Apple the same.  We will see.  We have lots of folks from MS, Apple, Google and such that have come over in the last 5 years for various reasons.  Georgio Vanzini being one, former MS'er. 

One thing is for certain, the idea of a $2 app for Disney content or whatever....if that is going to happen, Apple better change their model.  I'm guessing 99% of people here don't realize that Apple gets a cut of 30% of the app revenue.  That means on a subscription service, each and every month they get a cut.  The margins for video are already shrinking like crazy, having to share 30% with Apple makes it that much more difficult.  

Next 100 days should be interesting!

[ChicosBailBonds]

Next 100 days should be interesting!

For many reasons, I would agree

[keefe]

For many reasons, I would agree

Roger that.

[Canned Goods n Ammo]

I'm telling you at that price point, it isn't happening.  Either you aren't going to get the quality, or those of quality sure as hell aren't going to sell at that price.  They aren't going to kill their revenue streams by doing that.  No reason to do so.  Disney can't contractually, literally cannot contractually.  A startup might be willing to do it, but at that price point or anything close to it, they are going to struggle.

I think we're getting too literal again.

I don't know if there will be a specific $2 children's app. It's an just a scenario or idea.

As the cost of content goes up (let's say the average cable bill continues to climb), that leaves an opening in the marketplace for an alternate content provider(s) that can operate more efficiently than it's competitors because it doesn't have the same built in costs (huge studio, salaries, equipment, marketing, PR, etc.).

That's it.

[ChicosBailBonds]

Now THIS, is what could be a deal breaker.  If the courts ultimately rule against the content creators on this stuff, THEN there is an interesting dynamic at play.  Right now, the force everyone to purchase all the channels and thus, passed on to consumers.  We shall see where this ends up.  Round 1 to the distributors and against the content creators.

http://arstechnica.com/tech-policy/2014/06/cablevision-bid-to-end-viacoms-forced-channel-bundling-survives-challenge/

[mu03eng]

We've already seen the model change once in the last 15 years....reality television.  Think about it how much TV content is reality television especially on the lower tier networks?  Would it be fair to say 30-40%?  How much was on 15 years ago, zero?  One of the main drivers I think is that they are so damn cheap to make as compared to the big shows with stars and expensive sets.  Same with the "talent" shows.  It's like an arms race, when one channel hits on a big idea they all jump in the pool.

All it is going to take is one content maker to find a different way and get noticed and the lemmings will want to recreate their own version of that success.

[MU Fan in Connecticut]

I see Chico's company made the local news.  See weblink for photos.

Back9Network Signs Deal With DirectTV, Set To Open Studio
http://courantblogs.com/dan-haar/back9network-signs-deal-with-directtv-set-to-open-studio/

Back9Network, the startup golf lifestyle TV and online programmer, said Monday it signed a multi-year deal for a channel on DirecTV, its first television contract.

Back9, with offices in the Phoenix building and a studio under construction across Constitution Plaza in downtown Hartford, said it will open the studio in August, in time to launch the DirecTV shows in September.  Founder and CEO Jamie Bosworth had told me earlier this year that work was progressing on the $7.5 million studio at the site of the former Spris restaurant, but many people were skeptical it could thrive without a national TV contract.

Back9 has raised about $30 million including a controversial state package of $5 million, and has hired some big names, notably Ahmad Rashad as executive producer and host. Although Bosworth and others at the media company had said they could make it work with an online audience only, a national TV contract was widely seen as the sole route to success.

Rashad will host The Ahmad Rashad Show, a “behind the scenes” look at the world of golf, as one of three, half-hour shows at the core of the Back9Network programming.

The others are “Ball Hogs, “inside the never-before-seen world of the men and women who risk their lives diving for ‘white gold’ in ponds and lakes; and Golf Treasures, which will “follow prominent golf collectors Ryan Carey and Bob Zafian, owners of Green Jacket Auctions, as they travel the globe on a mission to hunt down and acquire the world’s rarest and most sought after golf memorabilia.”

In all, Back9 will produce about 1,100 hours of original programming in its first year, including ten original prime time series and live shows three times a day.

Terms of the DirecTV deal were not disclosed. It remains to be seen whether this deal leads to a cable deal with one of the major carriers, including Comcast, which owns the Golf Network.  Bosworth, who testified earlier this year in Congress about the dangers of the proposed, $45 billion Comcast-Time Warner Cable merger, said Comcast was initially negative about signing on Back9, while Time Warner was warm to the idea — until the merger was announced.

DirecTV is seeking federal approval for its own merger with AT&T, a $49 billion deal that would catapult AT&T into a major position as a TV provider.  It’s unclear whether AT&T would pick up Back9 on its U-verse TV package if the merger were to go forward.

Bosworth had also said that the satellite providers, including DISH Network and DirecTV, did not typically roll out their own new programming. But that picture is changing as everyone from Amazon to Netflix is producing or buying exclusive content.

DirecTV will place Back9 on channel 262, near other lifestyle channels, Back9 said.

“This long-term agreement provides us with a strong initial television distribution-base and sends a clear message to the marketplace of our goal of becoming a fully-distributed lifestyle network,” Bosworth said in a written release.

[ChicosBailBonds]

We've already seen the model change once in the last 15 years....reality television.  Think about it how much TV content is reality television especially on the lower tier networks?  Would it be fair to say 30-40%?  How much was on 15 years ago, zero?  One of the main drivers I think is that they are so damn cheap to make as compared to the big shows with stars and expensive sets.  Same with the "talent" shows.  It's like an arms race, when one channel hits on a big idea they all jump in the pool.

All it is going to take is one content maker to find a different way and get noticed and the lemmings will want to recreate their own version of that success.

Absolutely cost is a big reason why those programs are produced...but even then, the cost of producing a reality show is tremendously higher than a music album or song, which is why I've always felt the comparisons were so out of line. 

The cost of doing high quality shows, about $2.5M to $5.0M per show.  Things like House of Cards...$4.5M per.  Game of Thrones, off the scales, $6.2M per episode.  Reality shows about $150K to $500K per episode, though most are north of $350K that have any quality.  You get into Duck Dynasty, north of $1.3M per episode.  Cheaper, but still worlds more expensive than an album or song, plus you have to fill 24 hours of programming every single day.  That's the conundrum they face.  They need to be able to cover off on what doesn't make it.  If you have songs or albums that crash, life goes on.  Much tougher in the tv biz.

[Canned Goods n Ammo]

Absolutely cost is a big reason why those programs are produced...but even then, the cost of producing a reality show is tremendously higher than a music album or song, which is why I've always felt the comparisons were so out of line. 

The cost of doing high quality shows, about $2.5M to $5.0M per show.  Things like House of Cards...$4.5M per.  Game of Thrones, off the scales, $6.2M per episode.  Reality shows about $150K to $500K per episode, though most are north of $350K that have any quality.  You get into Duck Dynasty, north of $1.3M per episode.  Cheaper, but still worlds more expensive than an album or song, plus you have to fill 24 hours of programming every single day.  That's the conundrum they face.  They need to be able to cover off on what doesn't make it.  If you have songs or albums that crash, life goes on.  Much tougher in the tv biz.

Well, what you've described is exactly why the model isn't efficient.

A. It's expensive
B. It's hard to create good content
c. You need to have a lot of content because you can't just go off the air when you run out of good shows

I'm not entirely sure what the solution is, but clearly we've identified the problem(s), which is step 1.