The Evolution of Content Distribution in the Broadband Age

PATRICK SEAMAN
I nternet B roadcasting & M edia P ioneer
THE EVOLUTION OF
CONTENT DISTRIBUTION
IN THE
BROADBAND AGE

2Copyright © Patrick Seaman, All Rights Reserved
 Pre-moveable type
 Push Distribution
 Big Media
 Desktop Publishing
 Talk Radio
 Decline of Newspapers
 Pull Distribution & the Internet
 Distribution Evolution
 TV Everywhere
 Content Piracy
 VOD & OTT Growth
 Cord Cutting
 Periscope & Personal
webcasting
OVERVIEW
This White Paper discusses the evolution of media distribution, from its
origins in the days before moveable type, through the 20th Century Radio
and TV eras, to the Internet and the emergence of Digital Media, Video
On Demand (VOD) and Over The Top (OTT) delivery of media over the
Internet. Discussion includes:

 Throughout the cycle of history, as new Civilizations have risen, they
re-invented science and technology.
 Then as now, knowledge was power, but secrets were often tightly
held and protected. Only select few were entrusted with knowledge.
 When those civilizations
eventually failed (or great
libraries or castles burned), the
secret knowledge was lost.
 It was difficult and slow for
knowledge to propagate.
BEFORE MOVEABLE TYPE

 Moveable type resulted in vastly
cheaper books -- and a steady rise in
the number of titles.
 Regular newspapers become possible
and inexpensive.
 The choice of which books or
newspapers to be printed was tightly
controlled.
 A small number of people or
institutions were in control of the
“Push” distribution.
1ST INFORMATION AGE

 Content is designed and created
by a small group of people with
specialized skills and technical
infrastructure.
 Publishing editorial control held
by few.
 Distributed to an audience that
has little to no input into what is
being published – or how it will be
consumed.
PUSH DISTRIBUTION

 Print, Radio & TV are difficult to
produce, requiring expensive
infrastructure and specialized
professionals and technicians.
 Distribution requires expensive
infrastructure.
 Advances in technology drive
gradually lowers production costs.
 Consumers increasingly restless
with available choices.
AGE OF BIG MEDIA

 Advances in personal
computer technology
create “desktop
publishing.”
 Production costs
dramatically fall.
 Faxed and mailed
newsletters, created by
individuals and “interest
groups,” expand the
availability of media.
DESKTOP PUBLISHING

 The public increasingly
demands a voice. In the last
20-30 years, “Talk Radio” has
set the stage for the idea of a
community “voice.”
 Success is Darwinian, driven
by what the public wants to
listen-to.
 Viewed as an alternative to
traditional broadcasters
where consumers have little
voice in what is produced.
TALK RADIO

NEWSPAPER’S DECLINE
1995-1999
iPhone
Initial
Broadband
Availability
Growth
Consumers find new
ways to discover and
consume content

 Even before the Internet,
newspapers were failing.
 The Internet accelerated the
fall.
 Circulation down dramatically.
 Many experiment with
paywalls, with mixed results.
 Many of the most financially
vulnerable have failed,
leading to consolidation.
INTERNET KILLS MANY NEWSPAPERS

Traditionally, content distribution was managed by entire industries
devoted to the complex process of distributing to the content
consumers. The distributors kept the lions share of the profit.
OLD DISTRIBUTION MODEL
Content
Created
Content Creators
(often paid by
distributors)
Complex Distribution
Model: Lions share of
profit
“Shotgun” delivered to
broad audience

 Traditionally, content distribution was managed by entire industries
devoted to the complex process of distributing to the content
consumers. The distributors kept the lions share of the profit.
OLD DISTRIBUTION MODEL
Content
Created
Content Creators
(often paid by
distributors)
Complex Distribution
Model: Lions share of
profit

"It used to be that a handful of editors could
decide what was news-and what was not.
They acted as sort of demigods. If they ran a
story, it became news. If they ignored an
event, it never happened. Today editors are
losing this power. The Internet, for example,
provides access to thousands of new sources
that cover things an editor might ignore. And
if you aren't satisfied with that, you can
start up your own blog and cover and
comment on the news yourself."
DEMIGODS
Rupert Murdoch
News Corp,
MySpace.com, The Wall
Street Journal
-- Boyer Lecture, November, 2008

“The media is too concentrated, too
few people own too much. There's
really five companies that control 90
percent of what we read, see and
hear. It's not healthy.”
MEDIA “TOO CONCENTRATED”
Ted Turner
CNN
TNT, TCM,
ATLANTA BRAVES, ETC.
-- Speech to the Commonwealth Club in San Francisco, April, 2003

Technology is "allowing the little guy
to do what once required a huge
corporation… Matt Drudge has
succeeded in challenging all the
leading media companies of our day -
- including mine."
INFLECTION POINT
Rupert Murdoch
News Corp,
Street Journal

 Traditional “Broadcast TV,” also called “Linear TV” is now
available Over The Air (OTA), on Cable, Satellite and Over The
Top (OTA – Over the Internet).
 Much of Linear TV now broken up into individual programs and
available as Video On Demand (VOD).
 Netflix, Yahoo, Amazon, HBO, Showtime, etc., now distribute
original content created exclusively for VOD
LINEAR, VOD, DIGITAL MEDIA

 1.6 billion people worldwide actively watch online video on a
variety of connected devices, representing just over a fifth of
the planet's population.
 900 million people worldwide access TV programming and
movies online today.
 Over 70% in order to access specific titles.
 Over one-third subscribe in order to access original content.
(RELEVANT) CONTENT MATTERS
Source: Parks Associates OTT Playbook, 2015

 Video now consumed on phones, tablets, PC’s, and Smart
TV’s, in addition to traditional Over The Air, Cable and
Satellite.
TV EVERYWHERE

“You know what is
AMAZING about VOD (video
on demand) ? It gives you
thousands of choices and
its already connected to
your TV. It just works.”
VOD (VIDEO ON DEMAND) &
CONSUMER CHOICE
Mark Cuban
broadcast.com
Dallas Mavericks

In 1995, we launched AudioNet (later broadcast.com). It
seemed to grow geometrically, and eventually became the
largest aggregator and distributor of audio and video in the
world, prior to the acquisition by Yahoo at the end of 1999 for
over $5billion.
One reason it grew so fast and huge was that people couldn’t
get the content anywhere else. People even accepted the then
poor streaming experience the late 1990’s bandwidth allowed.
People wanted to PULL what they wanted – not channel surf a
sea of content they would otherwise “settle for.”
DISCOVERING “PULL”

 Mainstream Content continues to be
published by “a few” with large
budgets
 Smaller producers now leveraging
cheap technology to create NICHE
vertical interest content.
 Mainstream or Niche, consumers
choose how, when, and where it will
be consumed.
 Consumers now funding actual
production – not just after-the-fact
subscription payments.
TODAY’S PULL
Kickstarter funded “Veronica Mars” movie

Today’s content creators are creating direct relationships with
enthusiast audience members, often while continuing traditional
distribution in parallel. There is much friction.
EVOLVING DISTRIBUTION MODEL
Content
Created
Content Creators
Traditional
Distribution

 Content distributors struggle to
maintain control over distribution –
Applying the old models to the new.
 Consumers rebel – whether it is
music, video or games, and Pirate-
Pull what they want anyway.
Publishers prosecute their
customers…
 Successful publishers often go
direct to consumers, trying to
establish direct relationships.
 Piracy often shown to be result of
content not easily available to
consumers.
CONTENT PIRACY

PIRACY AS MARKET RESEARCH
“What's certain is that [piracy] has
created a public that is accustomed to
viewing content online. We will offer
an alternative that is much simpler
and immediate than looking for a
torrent.”
Reed Hastings,
CEO Netflix
-- June, 2015

INTERACTIVE GROWTH
7.48
8.13
9.19 9.45 9.11 8.93 9.25 9.63 9.95
10.65 10.48 10.14
11.07 10.9
10.37
5.5
6
6.9 7 7.3
6.9
7.3
9.5
11.7
10.1
17.1
16.7
15.2 15.4 15.4
0
2
4
6
8
10
12
14
16
18
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
INBILLIONSUSD
US MOVIE SALES -VS- VIDEOGAME SALES
US Movie Sales
US Videogame Sales
Video games are an ultimate consumer “pull” content type.
Source: Statista & The-Numbers.com

VOD GROWTH
By 2013, Netflix and others seriously challenged traditional cable TV

OTT GROWTH
OTT video delivery (“Over The Top”) refers to the delivery of video over
the Intenet to connected devices, like smart phones, PC’s, laptops,
tablets, or game consoles using free or subscription service
applications (“apps”).
 Juniper Research forecasts that subscriptions from OTT TV providers,
such as Netflix, will generate $31.6 billion by 2019, up from just under
$8 billion in 2014.
 Streamingmedia.com reports that from May 2014 to May 2015, OTT has
grown to $9-12 billion in global Revenues.
 Streamingmedia.com also reports that $1.9b of those revenues came
from emerging markets.
 Advanced-Television.com reports OTT should see 26% revenue growth in
2015, and 24% CAGR through 2019.

OTT CORD CUTTING
Streaming Media Magazine reported in 2013 that OTT subscribers
were:
Cutting back on channel packages with pay-TV
subscriptions and supplementing with OTT.
51%
Canceling traditional pay-TV subscriptions in favor of pure
OTT.
23%
Maintaining their full traditional pay-TV subscriptions and
supplementing with OTT.
19%

LINEAR TV GROWTH
Linear TV growth is flat or declining, VOD like Netflix continues to grow.

PERISCOPE & PERSONAL WEBCASTING
The democratization of “Pull”
can perhaps be symbolized by
Twitter’s mobile personal
webcasting app “Periscope.”
Individuals have been able to
easily use apps like Skype and
Facetime as well as Google
Hangouts, etc. for various
purposes, but Periscope raises
the live-streaming bar, for
ease-of-use and its ability to
deliver to a broad audience
from ubiquitous smartphones.

FINAL THOUGHT
To quote Rupert Murdoch one more time:
“Stop whining about
the challenge of new
technology and “get
out in front of it”".
Rupert Murdoch
News Corp,
Street Journal

http://www.linkedin.com/in/patrickseaman
http://www.slideshare.net/patrickseaman
http://patrickseaman.com
https://twitter.com/ PatrickSeaman
PATRICK SEAMAN (misc. roles)
 Yahoo! Broadcast.com Director of Technology
 Board Member: Broadcast.com Japan
 Timberwolf Press, CEO
 Deer Channel, CTO
 WhichBox Media, COO, CTO
 Ole’ Media, SVP Strategic Technology
CONTACT / LINKS
PATRICK SEAMAN
Internet Broadcasting & Media Pioneer

The Evolution of Content Distribution in the Broadband Age

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