“The big flashy ranches that populate the NATPE floor
are a little like the first class cabins on the Titanic.”

– Jason Calicanas, Editor, Silicon Valley News, January 2000

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The Internet is not a technology, or a community, or a media space based on the technical convergence of a computer with a TV set. The Internet, in the early 21st century, is all about Content Convergence.

Note, for instance, the not-so-subtle change that took place at this year’s NATPE convention.

You’ll recall that NATPE is an acronym meaning National Association of Television Programming Executives. In prior years conference-goers were inundated with posters, banners, books, brochures, billboards, even television commercials beamed via closed circuit directly to their hotel rooms, with this logo and its message.

However, this was the year that NATPE became a common noun – no more acronyms. The posters, banners and such now read:

NATPE: The Alliance of Media Content Professionals

This was a paradigm shift of Richter proportions. It signaled acknowledgement within the organization’s executive committee of the change that had taken place. Perhaps more than just tacit acceptance that ‘content’ was king after all.

While the Internet continues to ‘evolve’ on almost a daily basis, television is going through its own revolution. It’s those changes in TV that are having the greatest impact on the content world at large.

Technically, completely separate from any online influences, TV is moving from a linear ‘hard copy’ world where it’s been since its inception, to a non-linear binary-based one. Compression of signals for both production and delivery, myriad videotape formats for content storage and transfer, component miniaturization, embedded screens, plasma screens, CCD pick-ups, 16:9 versus 4:3 ratios, HDTV… it all comes down to one word: Digital. Digital compression of TV signals alone is increasing both the demand for acquisition of content, and the desire to repurpose that content over many receptors.

How many of you can name the ‘Original Six’ NHL hockey teams? Even if you’re a fan it’s probably difficult. Well, you’ve seen the words ‘Big Three’ networks here several times. In a few years it may be just as difficult to name them.

By the end of last year there were over 300 cable networks in the United States alone. In less than two years it’s conceivable that there will be a thousand or more. That’s digital. That’s television. It’s the force that is driving the move from narrowband to broadband.

As Randall Rothenberg, Editor of Advertising Age magazine, put it so eloquently in the January 17, 2000 issue:

“…if you define convergence as the rendering of all datatypes into a consistent digital form, such that they can be delivered agnostically anywhere at any time, then you can see the phenomenon is occurring almost as a force of nature.”

Statistically, it’s also interesting. Even though research and advisory firm, Forrester Research (Jupiter Communications, too for what it’s worth) tells us that only 20% of American home Internet users will have broadband access by the year 2002, 30 to 40% of usage in streaming media is already above 56k TODAY!

Furthermore, an encoding rate of 300k (a standard broadband rate) is now considered MIDband, not broadband. Sites that encode at 700k, even a megabit, are increasing.

INTERACTIVE TV TO EMERGE AS HYBRID OF WEB AND TV MODELS

So says Jupiter Communications. It projects that interactive television will reach 30 million U.S. households and generate $10 billion in revenue by 2004. They continue:

“The revenue model for television is very focused on advertising, and players entering the Internet space must shift their focus to compete in the Web’s commerce-centric environment. (Interactive TV) will force yet another change in strategy, as the revenue mix is more balanced between commerce and advertising. In addition, (Interactive TV) will also force players to relearn programming. Online entertainment is all about involving the audience.

…if an entertainment company has $50 to spend on the Internet, it should spend $40 of it on promotion and audience relationships, and use only the remaining $10 on inventing online entertainment content.”

The non-too-subtle increase in the vertical integration of media companies has augmented the already heated discussions regarding the blending of television and the Internet.

Here are two very interesting quotes regarding that subject from Mark Snowden, Senior Media Analyst of the Gartner Group, particularly as it relates to the AOL/Time-Warner merger, as you might expect:

“The deal with Time-Warner underscores the importance that they (AOL) place on TV as the platform of the future. If AOL thought it was all going to be over the computer, they never would have made this big a deal.

…the proposed marriage of new and old media through AOL Time-Warner crystallizes the concept of ‘television that can do more tricks.’ “

Randy Selman, president of Visual Data Corporation, wants to offer Internet marketing tools through TV. He says:

“I don’t think consumers realize the potential. Advocates (of Interactive TV) are thinking along these lines: We know what they’ll eventually want. They just don’t know it yet.”

Both of these statements can be seen as inflammatory considering the vociferous nature of the (sometimes) opposing camps of television and Internet. That last statement particularly rankles. Or does it…?

If traditional broadcast television is based on revenue from advertiser support which in turn is based on audience ‘stickiness,’ then what it really comes down to is creating TV shows (or events, experiences, etc.) almost on an experimental level. By definition, the TV audience doesn’t know what it wants until it sees it; the audience isn’t in charge of programming. The irony, however, is that they are in charge of deciding the future success of any given TV show.

The rather arcane practice of quantifying ratings through statistical analysis – the Nielsen method that everyone is familiar with – is far too weighty a topic to tackle here, it’s best left for another day. Understand, however, that although TV ratings are based on a ‘statistical sampling’ of TV viewers to reach the rating ‘points’ and ‘shares’ that TV series live or die upon, Internet ratings can be based on direct individual response to page views, or unique viewers. Can you imagine the firestorm of protest and genuflecting that will occur at the advertising agency level when the Internet becomes the gauge for eyeballs for a TV show?!

If someone had said six months ago that game shows would make a comeback in prime time they would have been laughed at. ABC isn’t laughing. Who Wants To Be A Millionaire? has propelled them to the top of the ratings (and therefore an advertising revenue windfall) in only a few short months. Other networks, eager to capitalize on this ‘formula’, have followed suit and have either invented or resurrected other shows such as Greed, 21 and Winning Lines. Greed continues to wane in the ratings battle, even though they offer a top prize of TWO million dollars; 21 is almost gone; and Winning Lines, a Dick Clark production, was cancelled after only three weeks. On that subject the audience has spoken.

So, maybe Randy Selman is correct. But does that translate to the web…?

If television is having an impact on the web, it’s interesting to see the various influences that are flowing the other way.

I mentioned Who Wants To Be A Millionaire? and Winning Lines… Both the Regis Philbin and Dick Clark versions of these game shows are based on UK formats and were purchased directly from the original producers. Big American networks ‘purchasing’ format rights to international successes isn’t new. All In The Family and Sanford and Son, extremely popular sitcoms during the early 1970s, were based on British sitcoms – Till Death Do Us Part and Steptoe and Son, respectively.

But although foreign television formats have been ripe for picking for many years, what makes format distribution on the game shows so interesting today is the potential for interactivity. Both ‘Millionaire’ and ‘Lines’ had a web component built into them in their original foreign forms. This summer we’ll see big budget examples of this interactivity from two new American programs also produced from foreign formats, both of which had (and will have in the U.S. versions) significant Internet aspects.

From Holland we have Big Brother. The show is now formatted for a German audience as well. Italian and Spanish versions are soon to follow.

A dozen or so twenty-somethings are sent to live coed in a house without any communication to the outside world: no phone, no mail, no television and, ironically, no Internet access. The kicker? Although they can’t contact the outside world, the outside world is privy to each and every word and deed – everything, yes, even the bedrooms and the bathrooms! Did I mention that this was coed? The building is wired for picture and sound with dozens of small video cameras and microphones placed throughout.

The audience, watching on TV and voting on the Internet, decides which of the so-called contestants they are bored with or simply don’t like. Each week another contestant is removed from the house until only one is left. He or she is the winner and receives prizes galore.

How popular was this show in Europe…? The German version alone continues to dominate and the associated Internet site gets 3.5 million page views a day! This makes it the most visited website in all of Europe and one of the most visited websites in the world.

As you can imagine, an American version will be far tamer than its European counterparts, but based solely on the voyeuristic aspects it’s sure to be a hit once it launches on CBS. But that’s not all. From Japan comes the format for Survivor, also on CBS.

From their website:

“Imagine that you and fifteen other strangers are marooned on a deserted tropical island in the South China Sea. White sand beaches, lush rain forest, crystal clear waters. This is your new home for seven weeks. The only other inhabitants are long tailed Macaque monkeys, monitor lizards, and deadly coral snakes. It seems romantic, but you are now part of a bold challenge where only one of you will win the ultimate prize of one million dollars!”

The plan is much the same as Big Brother.

Each week one of the ‘inhabitants’ is voted off the island by the ‘tribal council’ until only one is left standing. He or she wins the million bucks.

Think ‘Lord of the Flies’ hosted by Alex Trebek!

So, where does this leave us…?

The link between Content and Audience is Context. Context is the fabric the entire entertainment and information experience is wrapped in. In other words the programming and packaging of the content for the audience is paramount – that’s where the true magic lies. Fail at this juncture and it won’t matter what content you have or how good it is. Succeed, on the other hand, and your ability to generate revenue from distributing the content is sealed. Convergence, to the extent that it will happen at all, will only increase those abilities.

This, and only this, is what drives the media machines in the opening moments of the 21st century. Television may be a closed fraternity, but the Internet is still the ‘Wild West’ – relatively open and agnostic. Those of us involved in the pursuit of creative ideas, the means of expressing them, and the desire to make a living from them, should memorize this credo…

Content, Context and Convergence combined with the ability to Purchase Online
results in Real Revenue derived from Digital Distribution

Here’s an easy way to remember it:

C3PO equals R2D2

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Content: The Once and Future King
Intro  |  Part 1  |  Part 2  |  Part 3  |  Part 4  |  Part 5  |  Part 6  |  Epilogue