Economics of Video on Demand

You may use this content, but please cite my ideas as (c) 2005, Dr. Bruce Klopfenstein.

Sometimes I wish my students would tape record my lectures so I could demonstrate what I'm about to say which is something I've been preaching to my students especially since the advent of the Web. You know if you've been following my blog that the U.S. model of delivering content to audiences is advertiser subsidy. I remember when, for example, USA Today came on the web as a subscription service (you can look it up!). As a consumer myself, I had given up on the CNN and ESPN web sites for the most part because I was put off by their "premium" content available only by subscription.

When following a link from a student project today, I noticed that CNN's video is tagged "now free." Congratulations! This is the way of the world for media in the U.S. Without researching this decision by CNN, I can guess that they didn't get enough subscribers to make it worthwhile, they realized they were losing out as a brand to to other video news services such as Reuters that offer free content, and that they stand to reach a much larger audience on the web now. Oh, and surprise, surprise, you get to see an advertisement before you see the CNN video news source.

There's another good reason for CNN to be doing this (actually, there are many, in my opinion): CNN can recycle valuable content. I used to work in radio news and we, of course, would present the same "major" stories each half hour or hour. A common practice was to get an interview that lasted several minutes or more and then refresh the story each newscast with a different sound bite from that interview. CNN already lured me in with a story on the ineffectiveness of antibiotics on bronchitis. I'll leave the growth of health news to another day. (Hint: as we baby boomers age and start to get sick more often, we will want information on ailments immediately. Consider the case of a person just diagnosed with a form of cancer. Suddenly that content's value rises exponentially to that person.)

So, call this another staw on the camel's back as far as the slippery "pay as you go" model of VOD in the United States. (I confess to being a bit provincial here in limiting my comments to the U.S. market.)


Video Killed the Television Star: First Experience With Live PC Video-on-Demand

You may use this content, but please cite my ideas as (c) 2005, Dr. Bruce Klopfenstein.

My Cleveland Indians have won 8 games in a row and I was preparing today to listen to the game on XM satellite radio (I have an XM boombox). I checked mlb.com to see if this non-New York team was catching any headlines there. Seeing that I could get 2 weeks of live baseball free for also getting a trial subscription to Sports Illustrated (please, help me remember to cancel that!), I decided to risk a credit card number to see if the Indians can win 9 in a row today (I was in the old stadium when they won 8 in a row back in 1986 which stretched to 10 before they floated back to earth). I also suspended my satellite TV subscription (and landline telephone) to save a little money. Oh, I live near Atlanta so I need the help catching up on the Indians, although WTAM 1100-AM Cleveland often comes in quite well at night down here)

As I write this, it's 3-2 Indians going into the bottom of the 8th. Why am I posting this to my iTV blog? Well, this experience is my first with an "on the edge of my seat" live broadcast on my PC as well as a video-on-demand experience online.

Here are my observations today:

  • I didn't know what the feed would be, it turns out to be Fox Sports Network (Ohio) with the local cable sports broadcasters

  • The feed includes all the commercials that are airing (I'm a veteran viewer of these cablecasts)

  • The inclusion of commercials is significant because I'm not convinced that this service will continue on a subscription model, and it would be easy enough for mlb.com to insert its own commercials if it saw fit

  • I'm multitasking, checking email and fighting off invaders to my PC (wow, these uninvited guests are getting to be as big or bigger a problem as is spam)

  • I am on an Adelphia broadband service using a Wireless G connection to my PC (this is not Adelphia's high end broadband--I dropped back to the less expensive service because I could see no difference between the two); there have been no hiccups whatsoever during the entire broadcast

  • the audio is perfect to my ears (high fi as far as I can tell, but I can't detect any stereo)

  • the video is running on Windows Media Player 9 (Realplayer was the only other option offered) at a screen size of xxx by xxx

  • fullscreen is available but probably only useful if I were to use the monitor as a TV set at a distance

  • OK, I have to stop with 2 outs in the top of the ninth, no one on....I've turned on XM radio and the broadcast is 10-15 seconds ahead of the PC video buffer. OH! Tears in my eyes as Bob Wickman strikes out 2 in the ninth and the Indians win, 3-2 for 9 in a row!

  • Whew. OK, I do love the Indians radio broadcasts (Tom Hamilton is much more dramatic than the local Fox broadcasters)

  • mlb.com cut off the feed during a commercial break so I won't get to see the obligatory post game interview and that ticks me off, bad experience

  • The remainder of the season would be $49.95 for all games except blackouts (almost certainly to stop competition with national TV broadcasts and ESPN Sunday Night Baseball cablecasts). Baseball is my favorite sport, but it is the Indians I care about and I'm not sure how much it would cost me to resubscribe to MLB on satelite television

  • I'm turning on the Minnesota Twins game because they are ahead of the Indians (and the White Sox are being ridiculous)...I think I like the idea of grabbing a video feed of other games but is this as good or better than a TV subscription?)

  • XM radio is allowing the Indians' post game show (this is a change from earlier in the season, but we Indians fans are everywhere and XM may have heard from a lot of us...maybe I should call them and ask)

So how can I sum up my experience? Well, it's unusual for any sports team to have won 9 in a row and that has very much to do with why I did the trial subscription. The game was a pitcher's battle with few controversial plays, so I could have been out in the yard listening to my XM radio boombox. I was also highly involved in the broadcast, also a very relevant point. So it's the context, stupid. (c) 2005 by Dr. Bruce C. Klopfenstein.