A Pandora's Box

With the explosion of content platforms in the last few years, cable operators and programmers obviously face unprecedented challenges as they try to navigate this minefield. It won’t get any easier. Still, the opportunities to test new business models and try new ways of delivering content to viewers have never been more abundant. It’s reminiscent of the late 1990s when we all thought we’d become billionaires by delivering pet supplies over the Internet. Only this time, it’s not about making a quick buck. It’s about giving consumers what they truly want when it comes to video content—and that’s primarily an a-la-carte-ish experience while preserving the all-you-can-eat business model that keeps the entire content industry fed and happy.

 

It can’t be one or the other. The industry needs to find a happy medium that gives the people what they want while preserving the fragile ecosystem that somehow justifies spending $3 million on an episode of a TV drama. The long tail—a wonderful device for indies and startups to reach niche audiences—will never produce $3 million shows. Some would say that’s a good thing. After all, $3 million shows waste a bunch of money on bloated crews and overpriced catering, right? Perhaps, but most viewers would miss the quality. Even if they don’t like to admit it.

 

So what to do? Authentication offers much promise, but it seems to take the VOD paradigm and simply retrofit it into the online environment. Shows are categorized into little baskets within other baskets associated with specific networks. But what if the industry offered a navigation experience that was completely different? What if it treated our tastes in video content similar to the way we all listen to music? Think about it: We don’t listen to record labels or even TV shows like “American Idol.” We listen to artists and, more specifically, individual songs. And our love of one artist or song begets our love of another artist or song with a similar vibe. Through the magic of collaborative filtering, we can discover new music that we would have never run across on our own—simply because a group of people who share our musical tastes also liked something else. This is the tech used by Amazon and Netflix to hook us up with movies we might enjoy based on our ratings, past purchases/rentals and the patterns of other similar customers. Why not apply this to the world of video content?

 

You need look no further than the success of Pandora to understand the power of this sort of navigation. This music service, which grew out of the geeky Music Genome Project, offers a free way to create your own radio station based on a favorite artist. If you love Liz Phair, you can create Liz Phair Radio to hear her songs as well as numerous other artists who are similar or in some way seem to consistently please other Liz Phair fans. It’s not an exact science. But it’s pretty darned accurate. And it works in any genre, and with any artist you choose (as long as Pandora has the artist on file). The company just reported its first profit in Q4 2009, and it’s creeping up on 60 million registered users. Billboard reports that Pandora is running some 500 simultaneous targeted advertising campaigns, with 45 of the nation’s top 50 advertisers taking out ads.

 

Is it feasible to offer a Pandora-like service through cable authentication? Could operators let customers set up their own Mad Men Channel, White Collar Channel, South Park Channel, Dog Whisperer Channel, etc? Would people really watch TV this way?

 

To be sure, this sort of idea is fraught with pitfalls, challenges and perhaps even insurmountable hurdles. First of all, cable operators would have to spend the money to set up recommendation engines and other back-end systems to make this possible. Then, they would have to get the major programmers to sign off on the idea that their shows could be mixed together with rival shows and presented to consumers on one customized “channel.” Can you imagine the fights over the algorithms to decide which shows pop up on the channel and when? And what network wants to risk losing brand ownership of a hit show because it was mixed in with a bunch of shows from other nets?

 

The advertising angle is even more troublesome. The entire industry would need to devise a new inventory system that would allow ads to float between shows or even be administered by the operator rather than each individual programmer. Good luck getting that to fly anywhere. Plus, there’s the whole issue of how consumers would want to pick and choose based on recommendations. These aren’t 3-minute songs, after all. You couldn’t just play shows back-to-back and expect viewers to sit there and watch them. The system would need to allow people to sample new shows through a menu, and that would require shows to set up trailers, previews and other media—all of which would need to work seamlessly through this Pandora-like system. And then assuming any of this worked online, operators would want to eventually migrate it to the VOD world on the TV screen itself. That would likely involve even more complicated back-end wizardry.

 

The bottom line is that nothing like this is in the cards any time soon. It may never happen. But the industry should think about this and other new ways of presenting content to consumers. It’s never a bad idea to think outside the Pandora’s Box.

 

(Michael Grebb is executive editor of CableFAX).