Current TV, a small and premium-only cable TV company, was founded by Al Gore and Joel Hyatt as a channel that would highlight user created content. Nowadays with the phenomenal success of YouTube, that doesn't seem to be such as stretch, but Current TV was founded over a year ago and was instantly lambasted, first by politicos who saw it as a touchy-feely left-leaning network. Then, when it became clear that the channel was completely apolitical, the financial press took over and dumped on its business model and size and potential for making money.
Having lead the charge it appears Al isn't the only one getting in on the act.
Who's been building digital TV?
Niklas Zennstrøm and Janus Friis (The guys who brough us Skype) have been talking about the idea behind Joost for a long time. In early 2006, they started gathering the world's best engineers, web gurus and media visionaries to start building it, under the code name of The Venice Project. More than a year of very hard work later, their vision is ready for public viewing.
In that time, Joost has grown from a handful of people in a small office outside Amsterdam to more than 100 people spread right across Europe and North America. Joost is already a global venture, bringing TV to a global, highly networked community. And according to Joost they're " already...setting new standards for 21st-century entertainment."
So what are the business models they have in place? Where will the proportion of their revenue come from? And in the long run who will benefit?
I asked Amanda Zweerink, Director of Online Community at Current UK.
"Though I’m not at liberty to discuss the details of our financial arrangements, I can tell you that we do have a fairly substantial advertising model in the US, where we have been on air since August 2005. We even have sponsors who allow our viewers to create their advertising, and then air it on the network (and beyond). As we get settled in the UK & Ireland, we’ll be offering similar programs to sponsors and advertisers here."
It is apparent that Current has had a certain amount of success in the states (Recently industry analyst, Derek Baine, with Kagan Research stated that Current TV was already making a small profit and Hyatt has stated publicly that the company is doing much better than expected financially.) while Joost is still finding it's feet in Europe.
The premise behind Current TV is that users create small video – 3 to 7 minutes – upload them and then visitors to the website vote on what videos should make it on to TV. The significance is that this method takes content creation, production and even editorial decisions and puts them in the hands of viewers. And it clearly is a success. Current TV is available to 30 million cable and satellite subscribers and is large enough now to start attracting real advertising revenue.
At the same time, other TV content companies like YouTube are pioneering the creation of content by users although the delivery mechanism is streaming over the Internet and their isn't a clear revenue model yet. Despite that, YouTube has achieved astonishing growth and huge interest from broadcast networks.
But there is also a huge revolution going on in delivery and distribution and in features and functionality. It is already clear that whatever TV and video distribution method wins out, it will involve distribution of IP-based information and traffic. Whether that is streamed, on-demand, over a closed circuit (also called 'walled garden'), wireless, via fiber optic or whatever, it will be packetized.
At every stage, the TV and video industries are undergoing huge transformation. Cable, satellite, telcos, cellular and even media companies are all joining battle to establish the standard delivery platforms. Cable, TV, media, internet and even telco companies are joining battle to establish standard distribution models. If anything, right now there is divergence in these areas rather than convergence.
Consumers and industry participants can expect to see a gradual move toward standardization of the delivery platform and even to some extent the distribution model. But don't expect to see the content and editorial sides of the equation settle down any time soon – rather, Current TV is the simplest and most obvious of the solutions that will be coming to our screens.
More to follow…
Coming up shortly: Revenue Models for Digital TV & Who Benefits?
Nice!
