Tuesday, April 28, 2015

The Narrowcasting Failure

Around 1996, when I was running a mutlimedia company distributing video on CDI and CD-ROM the internet came along and by 1997 I was doing webcasts for the likes of Shell and Orange, and by 1998 for MTV.

I was convinced that the future of TV was over the internet. After all, delivery of content was a nightmare. You produced for broadcast on a small number of channels, or release on VHS or then DVD. It was a tough business.

So, we enabled delivery over the internet, using technologies from companies like Real and Microsoft and a lot of our own secret sauce.

As a student of film and TV I was convinced that a new dawn was coming, whereby anyone could build and launch their own TV channel. We would see narrowcasting, localcasting and even hyperlocal TV.

Instead an American behemoth came along and pulled the carpet from under my feet.

YouTube is the ultimate narrowcasting platform. Anyone can have their channel, provided you leave that logo in the bottom right hand corner and hand over 90% of any advertising revenue (when I use Google I buy video ads at around £10 and earn around £1).

That was not what I saw back in the day.

I saw a replication of the magazine model, whereby you could publish and make money from a narrow demographic based on their interest or profile, not on their behavior.

Instead, delivering an audience based on nothing more than the last site they visited is rewarded.

Indeed, you are best off making sure that Google cannot see or index your site if you want higher CPMs, but then you will get no traffic from their search, so this is a double edged sword.

Moreover, if you put on a live event there is a huge chance that YouTube will get you again by illegally transmitting the event for pirates, and still no one gets to sue them...

For video advertising from Google I'm currently seeing £1 CPC. That probably means you'll earn around £10 for a thousand hours of video watched and this isn't commercially viable. From a service that is disabling you.

So narrowcasting has been buried by Google, both in terms of platform and delivery and in terms of commercialisation. What is extraordinary is how content and rights owners have fallen for this. This is sheer laziness or ignorance.

Any producer, music owner or rights holder dealing with YouTube is an utter moron and they are being ripped off beyond belief. YouTube pays royalties around a tenth of Spotify; your ad revenues from Google are around 5% of what you would expect if your content was being properly monetised.

But this is the scope of our world. Consumers vote for the cheapest and easiest and then moan.

Narrowcasting has failed because those owning rights are lazy and stupid not entrepreneurial and agressive. You see some great vertical sites such as Pistonheads or Ravelry, but narrowcasting video sites are few and far between.

But all is not lost. Here's an agenda for narrowcasters:

1) Control your own content
2) Distribute across media: social, YT, your own website and third party websites
3) Commercialise yourself, sell your own vertical ads