There is a disconnect between the two industries that are only now coming together to drive the future of digital media.  These two industries are fist, the interactive industry, including web developers and interactive agencies, which dominated Internet 1.0; and second, the world of high end video production, including film and television producers.  These two industries speak a different language; have different values; look at the world in terms of their own beliefs and attitudes; and engage in different practices that often clash, creating conflict that is difficult to overcome.   But what do we do about it?

                As the use of online video evolves bringing higher production values from the television and film industry they will change how interactive content is created, packaged and consumed.  This natural process will take its own course and time but there are ways to accelerate your own adoption to the changing standards and practices that are already on their way.  Simply becoming better educated about the other industry, either interactive or video/film, is the best way to move your business into the next generation of digital media.

The Interactive Industry

For the interactive world, it is time to overcome some major myths that have grown up over the years, myths that were based on the rules of the game as it was defined by Internet 1.0.  Those rules no longer hold true.  These myths include:

      Content is cheap and easy to produce

      The Internet can only support short form content

      There is no ad format acceptable for video content

      Content should be free (or very, very cheap)

      Search is the ultimate solution for finding content

We will discuss each of these in turn.

This myth came about as a result of a historical oddity:  the early arrival of user generated content (UGC).  YouTube and MySpace experienced phenomenal growth in large part due to the lack of high dollar video content.  The fact that this content was free to the distributors made their business models highly effective… as long as they did not have to compete against professional content delivered on the web.  That was due largely to the fact that there was no advertising system available to monetize long form content.  The interstitial commercial was still several years in the future (that future is now here).   User generated content is cheap and easy to produce, at least to the business that can grab it without paying for it.  Professionally produced video content is neither cheap nor easy to produce.  Production costs per minute of finished footage range from thousands of dollars to millions of dollars.  As high dollar content begins to find its way into broadband distribution channels it will prove what Hollywood has known for over a hundred years:  compelling content is King. 

                This was true of Internet 1.0.  It was true only because there was no technology capable of inserting video commercials into online video, other than live switching into a live stream.  Early attempts to “televise” content on the web failed largely because live streams were unreliable at the time and video quality was very poor.  Some notable failures contributed to holding back the development of broadband television for many years.  Under these rules, even short form content was challenged to find ways to monetize effectively.  The banner ad was clearly not going to pay for video content since banners did not rotate on a page while a viewer stayed put watching the same video for many minutes.  Most people don’t realize that the average viewing time of a web page is only a few seconds.  Banners don’t have to rotate when viewers jump from page to page at these rates.  But video immediately changed this viewing behavior.  You could put a video camera in a radio station focused on the back of a disk jockey’s head and rabid fans would sit there looking at an unchanging video image for hours (we are not joking).  When video keeps eyeballs glued to a web page the Internet 1.0 advertising paradigm is in big trouble.

The pre-roll video commercial was the only other format available to monetize video content and this quickly became hated by everyone.  The reason is simple; it is irritating to watch a 30 second pre roll every time you open a clip that runs for less than two minutes.  This seemed to puzzle some but if you do the math it is quite obvious why this is creates such an unpleasant experience.  A 30 second video represents 25% of the time it takes to watch a two minute clip.  Translate that to traditional television viewing and you would have a 15 minute commercial in front of every hour of programming!  The next conclusion that Internet 1.0 pundits came to is that the 30 second spot is dead.  This is certainly true as far as the pre-roll is concerned when used to monetize short form content.  The arrival of interstitial video commercials will likely breathe new life into the 30 second spot.  Of course the television commercial is going to dramatically change as better ways are created to leverage the interactive capabilities of digital media.  Shorter formats will appear but the 30 second spot is likely to be with us for some time as the television industry moves online.  Whatever forms the interstitial commercial takes, it will usher in a new era in Internet advertising, an era that will be see dramatic increases in long form content.  History may even come to see Internet 1.0 short form content the same way we look at the short silent movies that began the movie industry with the introduction of the nickelodeon at the begging of the twentieth century. 

                This myth came out of the experience with pre-roll ads, an experience that we have already described as being quite unpleasant.  While many of the broadband television pioneers clearly saw the coming of the interstitial video commercial and the promise of monetizing long form content, many Internet 1.0 pundits refused to believe there would ever be an effective ad solution for long form video content.  Some believed that the perceived demise of the 30 second spot would prevent successful implementation of interstitial video models.  Many saw the future of online video being dominated by a highly interactive environment that would not support traditional television content delivery.  Hulu, NBC’s online television network, is quickly proving them wrong.  The other network television and cable solutions for broadband delivery of full length television shows are doing likewise.  Soon, the ability to monetize long form content will be available to producers of niche content.  That will result in a creative explosion of online video content the likes of which we have not seen.

                This myth comes from confusing Internet 1.0 content with professionally produced video content.  User generated content is rarely compelling, probably far less than 1% of the time.  Sure, you have your favorite user generated videos that have been seen millions of times but for each one of those there are millions of videos that have only been seen by the person who created them.  User generated content has filled professional producers with fear.  We have heard more than one television or film producer decry the onslaught of “stupid cat videos” available on YouTube.  They should be more worried by the arrival of professional producers who know how to make high quality content.  This coming wave of professional content will fracture the entertainment market to an even greater degree but it will also open niche markets to producers smart enough to see the opportunity to monetize content in a whole new way.

Niche audiences will support many different levels of production values.  The medium to high range will always dominate the marketplace.  This has not happened primarily because professional producers have not had the opportunity to access the interstitial ad technology needed to monetize long form content.  That is changing before our eyes.  At the end of the production day, content will not be either cheap or easy to produce.  Compelling content will be expensive and difficult to produce… as it always has been.  User generated content will not disappear.  It will likely continue to be the life blood of social network sites but these sites themselves will lose market share to professional content as it arrives on the scene in greater quantities.

                Search is cool.  Search is groovy.  Search is a great way to find… O.K… we admit it.  We are not that impressed with search technology.  If you have a library of tens of thousands of pieces of content you better have a good staff that is consistently adding metadata to your content with a consistent and logical strategy.  Simply providing the names of the director, producer and actors is just one quite attractive strategy.  If you are dealing with thousands of “stupid cat videos” you probably will be challenged to find a strategy that makes much sense.  That is the problem with building a content library full of just about anything.  Professionally produced content will more likely find its way through well branded distribution channels where the brand itself will have already filter the audience, establishing that critical connection to a niche market.

Beyond this, we believe that a carefully crafted taxonomy is critical in creating a search strategy for your viewers.  That is because the most powerful search engine you have at your disposal is the brain inside your viewers head.  If they can look through a well organized content directory they are likely to quickly find what they want without ever typing in a single search term.  We don’t advocate the elimination of search altogether.   We simply recommend that it follow an intelligent directory listing.  Also create a well defined process for establishing and assigning metadata so that when viewers do resort to using a search engine they will be pleasantly surprised to find results that actually make sense.

The Video/Film Industry

Video production professionals, including television and film producers, suffer from only one preconceived notion about the Internet.  They believe that it is a terrible place for video.  Those attitudes are changing as improved applications, more reliable service and higher bandwidth speeds have raised the bar on what broadband television can be.   Unfortunately, professional producers remain largely ignorant of the potential for creating new forms of digital storytelling in this highly interactive medium.  Being the artists they are this will not likely hold them back for long.  At the moment, most television and film producers see the Internet as only an alternative distribution channel.  They have looked down their noses at it for many years.  2008 has changed that forever.  Today all the major television networks and cable channels are embracing broadband television distribution.  Most of these professionals simply never saw the Internet as a real challenge to their traditional distribution platforms.  They were aware that some visionaries were focused on finding ways to connect the computer to the living room but television and film executives saw this as a useless effort that was bound to fail.  The search for the perfect technology to deliver all forms of digital content throughout the home continues but the battle for eyeballs has already been won.  This came about by a trend largely overlooked by everyone, except our children who are responsible for creating it in the first place.

 While most television and film executives, and Internet 1.0 pundits as well, grew up as children of the television age, our children have grown up as children of the computer age.  They have converted their bedrooms into their own personal living rooms.  No self respecting parent would ever try to send their kids to their rooms as a form of punishment.  This was a common form of discipline in the last century but it is useless today when our children have decked out their bedrooms with every digital device available.  Why would they want to connect their computer to the television set in the living room when their computer is already their television set?  What this means for the future of media consumption is obvious.  Television has already been redefined by the computer age.  Television is what you watch when you watch it anywhere you have a device that can present long form video content to you in a manner acceptable to you.  Want to watch TV in your living room?  First tell us why you don’t want to watch it in your bedroom, or on your Gameboyä, or your PSP®. The future of digital media is already here.  It is time to adapt our production and distribution strategies to the realities of consumer behavior that are already well established.

Traditional video, television and film production professionals will learn a lot about creating content for online delivery but the means to deliver video content and monetize it are already here.  The audience is already online waiting for the content to come to them.  The limiting factor lies in the creation of broadband television channels designed to cater to niche markets that have huge appetites just waiting to be fed.  Together, the interactive world and the video/film world will build the future of digital media together.  The greatest challenges have already been overcome.  The next steps will focus on the joy of creative storytelling.