Impact of the Writers' Strike

The strike between the Writers Guild of America (WGA) and Hollywood studios (Alliance of Motion Picture & Television Producers) is in its eight week now, with no end in sight. Issues are more complicated than just the new media compensation rights that has been mostly highlighted by the press. It also includes jurisdictional rights over Reality TV and animation content (refer AMPTP's web-site).

The big questions is: will the strike accelerate transfer of commercial and creative value to the Internet, and if so, how permanent will be the shift?

Only time will tell about the permanency of the shift, which I think is bound to happen. VCs and new media studios are looking to make opportunistic moves during the strike period. According to LA Times, several writers are looking to launch Web ventures to directly reach viewers online, bypassing Hollywood. The strategy ranges from launching their own studio that creates content exclusively for the Internet, to creating a Guild-sanctioned collaborative studio, to leveraging open social networks like Facebook for new programming distribution.

Although some content created for the Web has seen early success (LonelyGirl15, KateModern, quarterlife, Prom Queen), I'd like to see more energy devoted towards original content that truly leverages new media's three distinguishing characteristics: interactivity, and its social and non-linear aspects. This requires tighter scripts and viewer involvement during unfolding of the story. Other new dimensions will emerge over time through experimentation. Compelling storytelling used for traditional content will always matter, and therefore needs to complement the above new skills required for creating original new media content.

KateModern's integration into Bebo generated ~30M total views for its 127 episodes. Michael Eisner's Prom Queen on MySpace had 15M total views across its 80 episodes. These numbers should have guaranteed net profit for both the shows, though as discussed earlier, we're not going to see economic success of hit shows on the TV reproduced for any original new media content anytime soon.

In the long-run, real success would be seen by original content created specifically for each screen - content that leverages uniqueness of user experience and his/her interaction style on each screen. Putting TV content on the Web, and Web content on the mobile phones will not be sustainable. For watching a movie, theaters will continue to provide the best experience, and cell phones the worst. I don't have all the answers on how screen-specific content may ultimately evolve, but it's safe to guess that video on cell phones would take advantage of its voice feature, mobility and constant proximity, while successful Web videos, as discussed above, would leverage interactivity, social and non-linear nature of the Web, that is unavailable on TV.

In the meantime, it'd be great if Bebo's new initiative, Sofia's Diary, a new series on Bebo.com in association with Sony Pictures TV International, can surpass KateModern's success.

Internet video on the TV

The debate on how to bring the vast & rich collection of Internet videos to your living room TV continues. Over the years, several companies have tried, and failed, to sell consumers the third box for their living room (in addition to the cable/satellite set top box and the DVD/music player). The value proposition has simply not been compelling enough (on most fronts: user experience, complexity, cost, etc.).

We thought Apple, the most likely company to succeed, will crack this nut through Apple TV, which was marketed as the 21st century DVD player. In other words, a replacement for one of your current two living room boxes, not an additional third box. Until Steve Jobs called Apple TV a "hobby" - a rather open admittance of defeat.

Can the video game console be the Trojan horse to bring Internet videos to the living room? Microsoft and Sony are definitely betting on it with their IP enabled game consoles.

Can the STB evolve to include the Internet TV functionality?

The intelligence can also move to the TV itself (e.g., new Sony Bravia IP enabled TVs).

The Wall Street Journal this week ran a comprehensive story on this topic. Interviewing several industry analysts and executives, they presented five reasons on why the convergence has failed and proposed solutions for each reason:

1) Too many boxes. Proposed solution: Blend boxes

2) Too complicated (for users to set up the functionality). Proposed solution: Keep it simple

3) Sticker shock. Proposed solution: Set video free (free, ad-supported model)

4) Limited selection (of currently available walled-garden video libraries). Proposed solution: Open up the boxes

5) Slow downloads. Proposed solution: Faster, smarter (thru new technologies)

I'd suggest reading the full WSJ article (subscription required).