So… what have we learned so far? First, that the world is an ever-changing place. Things that work one decade don’t necessarily work the next. Second, that the home video business is one of those things that has changed, and those changes have made it highly unlikely that a new Christian video series could be successfully launched using the same strategy that launched VeggieTales way back in 1993. The home video business today is driven almost entirely by feature films and TV series compilations. The business of half-hour kids videos is, with a few notable exceptions, dead.
That was the bad news. So what is the good news? Simple: The same trends and dynamics that close old doors almost always open new ones. And that is exactly what is happening here. The direct-to-video business is nearly gone, at least as far as independent producers should be concerned. But new opportunities for independent producers to find an audience through other means are popping up like daffodils in May. (Or is it April? When do daffodils pop up again? Oh, you get my point.)
What’s creating the opportunities? Technology, of course. Think about it – thirty years ago there were three broadcast networks and six or seven major movie studios. Very little content found an audience without going through one of those nine entities. The buyers at just nine companies by and large determined which stories American families would – and wouldn’t – hear. Twenty years ago we had 10-12 film studios and, with the first wave of cable, perhaps 60 television networks. Suddenly a whole lot more content could find its way to an audience.
And where are we today? Well, the movie situation is roughly the same, but on the TV side, due to advances in compression technology and increased bandwith through satellites and cable systems, there are more than 200 networks broadcasting everything from big budget network shows and HBO specials to micro-budget reality shows like Monster Garage and Trading Spaces. More independent producers are getting their programming in front of an audience than ever before. Whereas thirty years ago there were just three or four points of entry to the screens in American living rooms (labeled NBC, CBS, ABC and PBS), today there are hundreds. But even that is changing, as a new pipeline into the living room will soon trump all others. I’m talking, of course, about the internet. Whether a home is connected to the internet over phone lines, coaxial cable or fiber optic cable, the increases in bandwidth and, just as importantly, compression technology, are combining to challenge the stranglehold broadcast networks and cable systems have enjoyed on the living room television. If you happen to live in one of a few key neighborhoods in Texas or New Jersey you know what I’m talking about. The first tests of IPTV (Internet Protocal Television), are happening right now, conducted primarily by Verizon and AT&T. These tests use extremely high-speed connections to the internet and special hardware and software to deliver all your television content without a cable or satellite subscription. (You do, however, need a subscription to the IPTV provider to cover the costs of service.)
What’s the significance of IPTV? Simple – no channel capacity limitation. With traditional cable, every channel offered must be present in the home at all times, so no more channels can be offered than will fit through the pipe into your living room. Since most cable systems are currently operating at full capacity, adding a new channel now requires withdrawing an old one. As a result, none of the major cable systems are particularly interested in adding any new channels. With IPTV, however, a channel is sent to your home set-top box only when you request it. One channel comes down the pipe at a time. It could be a linear channel (like Nick or CNN) that transmits 24 hours a day, or an individual show or movie that you have requested (like cable’s pay-per-view and video-on-demand content). But nothing comes down the pipe until you request it, and, once requested, anything can come down the pipe. Meaning, the channel capacity of an IPTV system is infinite. Want to program a network just for lovers of Bulgarian movies from the 1930s? Your local cable system would say, “Uh… you want us to dump Fox News for that?” An IPTV system will say “Okay.” (Assuming, of course, you can prove there are at least a few people interested in watching Bulgarian movies from the 1930s.)
Just as cable technology allowed the creation of TV networks focusing solely on kids, women, sports fanatics, history buffs, and 100 or so other discernable audiences, the combination of television and the internet will allow programming services to be created for even narrower groups – European history buffs, women’s sports fanatics, Christian kids, Mormon bow hunters, etc.
You’ll notice I said “programming services,” not networks. Since new digital technology allows programs to be delivered, Tivo-like, whenever, wherever and in whatever order you want them, the notion of a traditional, linear television network may itself become a passing trend. Do you really want to watch the Fox Network? Or do you just want to watch American Idol? I’m sorry – what was the Fox Network, again? I think my parents used to watch that.
Of course, cable and satellite TV providers aren’t sitting idly by as the big telephone companies roll-out IPTV services. Instead, they are deploying better compression technology and looking forward to using their bandwidth currently occupied by analog channels (for those of us who haven’t switched to digital cable yet) to greatly expand their offerings to near-IPTV levels.What’s it all mean to you, the independent producer? For those of you with entrepreneurial streaks, it may represent an opportunity to conceive a baby network of your own. If you really just want to focus on producing one great show, it means a whole lot more buyers looking for content – looking for the one great show that just might be yours.
Not ready to produce at the level needed for a slot on even a baby network? You can still find an audience for your content, through YouTube, Revver, Joost, Yahoo, AOL or any one of a million other video distribution websites that the digital revolution will launch. The walls around the American living room have become wildly porous. Almost any good idea can find an audience.
“So, um… how do I make money at this?” That is a more challenging question. As programming services and video distribution sites proliferate, audience fragmentation accelerates. In other words, the more channels available, the fewer people watching any one channel. The days of a “mass audience” are pretty much over. Beyond Pixar films, Pirates of the Carribean, American Idol and the Super Bowl, the notion of all of America focused on one piece of amazing content is pretty much dead. When Walt Disney used his Sunday night TV show to feature the grand-opening of his new theme park, Disneyland, in 1955, half of America watched the two-hour live broadcast. Literally. Half of America. Today, the Super Bowl is lucky to get half that audience. Most network hits are thrilled with a fifth the audience of Walt’s big Disneyland infomercial. And those are just the hits. We’re dealing with micro-audiences now. And micro-audiences mean micro-budgets.
So what does this mean for us intrepid creatives? Think low-budget, and very clever. A clever idea executed inexpensively will have a very high likelihood of gaining distribution in an internet-dominated world. A clever idea with a big budget needs one of the media giants behind it to bring it to market, making it a very difficult undertaking. In fact, a smaller and smaller group of people has the capability of producing big budget entertainment. (And his name is Jerry Bruckheimer. Ha ha. Okay, there are a few more than just Jerry… but not many.) If you dream of crafting the next Star Wars or Lord of the Rings trilogy, good luck. But if your tastes run more to Napoleon Dynamite, Borat (in concept, if not in, um, taste), Homestar Runner or MythBusters, the next decade looks very inviting.
So think small. And very clever. Humor is vital, because it isn’t inherently big budget. Cheap and silly trumps moderately-priced and earnest any day. Think funny. Think clever. Think inexpensive. And keep track of the developments in IPTV, VOD, SVOD and every other acronym that pops up in Variety or Broadcasting & Cable magazine, because those acronyms hold the keys to bringing your brilliant-yet-inexpensive idea into homes all across America.
If you’ve got a great idea, the future looks bright. Cheap, but bright. Ready to get started? Great. I can’t wait to see what you’re going to create!