Saturday, August 26, 2006

Broadband as Proof of Concept

The media industry in the UK is in a fair bit of turmoil. ITV has lost its CEO and has yet to appoint a successor; Telewest:ntl are being stalked by private equity investors; the BBC is, as ever, all over the place; RTL's Five is launching new channels left, right and centre..

It reminds me of the old Chinese curse: "May you live in interesting times".

Lessons learnt in the UK will soon apply to the US and elsewhere in the world. so this isn't a parochial issue.

I think that many of these media companies would do well to look to their counterparts in the publishing world, where fragmentation and the threat from low barriers to entry were overcome two decades ago.

Broadband is a great place to trial new services, which might end up on more traditional distribution channels such as cable and satellite. After all, if you can't build a following and a business from a channel that can reach two hundred million people, what chance have you got in the 'real world' of media ?

The cost of launching an online channel is typically one tenth that of a traditional channel - however, if it is to succeed, the content costs cannot significantly be reduced. Self-produced content is all very well within the right context, but as Channel 4 as proving with their current viewer generated service 'Whatever', what works on Youtube doesn't necessarily work on traditional TV.

Online broadband service suffer from massive under-investment in content and editorial and place far too much emphasis on technology at the moment.

They should think like publishers, get editorial and sales teams in place, and build a business from the bottom up. Going back to basics is going to be tough for companies where innovation usually consists of commissioning a copycat reality TV show..

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