Tuesday, January 15, 2008

American Nightmare

Two SEC announcements show how tough the US market is for internet TV technology providers. Both Narrowstep and Roo are making cutbacks focusing on their US operations.

There are a number of issues with the US market: the content market is restricted; a few very large companies dominate the media market and domestic company, theplatform, proved to be a difficult and very capable adversary.It is also more competitive and was badly skewed and distracted by UGC and short form video after the success of YouTube.

The size of the market and the restricted distribution available on broadcast would have, you'd imagine, been a boon to internet TV, but the result was a lack of narrowcast properties taking broadband seriously.

Finally, and perhaps most significantly, has been the reluctance to invest in channel concepts, with the dotcom debacle casting a ghostly shadow over the market. The main reason for investor reluctance: how slow advertising has been to take off and the lack of viable PPV properties, as well as the reluctance of viewers to pay.

And it's not just non-domestic companies that are struggling from what I hear; companies like Maven and Brightcove are some way from being profitable.

So, a gloomy outlook ? Actually, I think not. The US market internet TV market is immature, and as online services develop they will need a more serious platform than YouTube or Metacafe (which are actually distributors) to implement truly commercial business models. The rise of corporate channels will also be a boon over the coming year and beyond.

So, the nightmare may still turn into a dream for some of the system providers.

1 comment:

Anonymous said...

A few weeks ago you rattled off several of the factors reqd. for IPTV success. They comported closely to my own list: compelling content, low cost distribution, market awareness i.e. promotion and an advertising-friendly platform. Getting all those right is a challenge anywhere. Here is the US, content is the stopper. No one owns the channel content we see on our local TV stations as it's shared among local stations, syndicators, networks, advertisers and guilds. Simulcasting the feed from local stations within specific DMAs over IPTV makes all kinds of sense for stations and advertisers. They just can't do it. So we're stuck here with a system that doesn't begin to pay for itself. And no prospect that it will change in the near future or fast enough to help the incumbent broadcasters save their businesses. They won't.