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The $100 cable bill is dead. The cable industry just doesn’t know it yet. What killed it was not just a combination of ad-supported online video sites and cheap subscription video services, but a fundamental inability on the part of TV programmers and cable companies to reach the next generation of consumers.

It’s still heady days for the cable industry. Cable, satellite and IPTV companies have continued to draw in new consumers to their pay TV services, and have even been successful in convincing existing subscribers to pay more for premium video content. But one needs only to look at audience demographics to see that big cable’s ability to draw in new viewers is waning, and that spells trouble for the TV industry as a whole.

CNET reports that the average age for broadcast TV viewers has risen dramatically over the past two decades. Marguerite Reardon writes:

Twenty years ago, the median age for ABC viewers was 37; today it’s 51. Fox’s median age has also jumped, from 29 to 44. And NBC and CBS, which have always had older viewers, are also seeing the median age of their viewers rise.

Even the NY Times, which took on the cord-cutting phenomenon with the headline “Plenty to Watch Online, but Viewers Prefer to Pay for Cable,” couldn’t ignore the obvious. Despite the fact that 677,000 new subscribers signed up for pay TV services in the first quarter, the number of young people that are willing to pay for cable continues to decline. According to a Times/CBS News survey “found that people under the age of 45 were about four times as likely as those 45 and over to say Internet video services could effectively replace cable.”

In other words, cable companies and broadcasters aren’t bringing in new customers. They’re just selling more stuff to existing customers.

Some companies have tried to remedy the model, with new services that are meant to appeal to the on-demand everywhere demands of the next generation. Comcast, Time Warner and others are pushing hard to make their cable programming available on-demand through broadband TV Everywhere services so that their subscribers can watch shows online at their leisure.

But so-called TV Everywhere services miss the point: the existing audience paying $100 a month for TV doesn’t care about watching True Blood on a laptop. And the people watching True Blood on a laptop aren’t going to shell out $100 for a cable subscription.

Consumer behavior is fundamentally changing, and it starts with the young people who don’t see the need for cable.

Today, there’s an entire generation of consumers that has grown used to turning to Netflix and Hulu for their video entertainment. You think you’re going to sell them a $100 a month cable subscription, when they’ve been doing fine just paying for broadband? The TV industry is going to need to find a way to reach those consumers — because there’s only so long you can cater to an increasingly aging audience.

Lets say you are a wineblogger producing high quality content. Or you are a production house creating a 15 episode show for TV. Would it be nice to get access to different medias by someone else working for you without fee. Thou taking a cut from your advertising sales. Cooperation on the distribution benefits the whole ecosystem.

Here is a link to the Beet.TV article about it.

Here is a link to Pupulandia lifestyle-blogger, where you can see the service in action. http://pupulandia.indiedays.com/2010/06/22/pikavisiitti-my-o-my-putiikkiin/

Production is a commodity and expensive; hence why both companies are trying to inject more science into the art to drive down the price of production. A low cost approach can maintain a high enough quality with text content, but with videos it’s more challenging. Moreover, a totally freelanced production team can also have some iota of consistency across text content, but with videos, nothing looks alike and marketers don’t feel any confidence in running ads. Quality content requires consistency. If a media planner agrees to spend $1M on a website running ads next to certain content, it assumes that the content the publisher produces tomorrow will be as good (and similar) to what it sees on the site today. A freelance model does not guarantee consistency and a UGC platform guarantees that it won’t be, especially with video.

Publishing (i.e., building a destination) is a challenge. Demand Media doesn’t have a destination but has a lot of eyeballs through its many sites; AOL meanwhile still has oodles of traffic and in addition to the AOL.com portal has many smaller niche sites with the potential to drive traffic too. Here, we see a divergence between Demand Media and AOL. On the one hand, AOL really does not need to focus purely on search traffic because it has traffic from its sites. Demand Media, however, has a more byzantine traffic pattern on its many sites, so I can understand the focus (and need) to focus on search traffic. However, search traffic is “in and out” and not the kind of engagement that branded marketers look for.

Distribution is increasingly fragmented, to the extent that even AOL is migrating from the one size fits all portal to the multiple web properties, and Tim Armstrong citing “fragmentation is our friend”.

Read more: http://techcrunch.com/2010/04/10/aol-demand-media-content-farm/#ixzz0mqXnuM7L

This poses some interesting points. Online video is really the fastest growing sector in online advertising and has some real meaning for paying customers. Still, despite the rapid rise, the medium faces challenges in technology and content quality.

According to my own knowledge, I have learned that the challenges are:
- How to produce quality content
- How to distribute the content to generate good enough reach
- How to develop more intuitive technology
- How to target your target group better

Two latter ones are on acceptable level by know. Currently media are wondering how to solve the two first points. Well, we are developing a service this, check it out: Videoflow

There is always pain
To struggle for freedom
If we don’t get it easy
It would not feel good

If we success we probably
Sue each others in the end
Still, that is cool
Just feel the vibe

What I am looking for
Is the beauty
To feel the moment
And finish the journey

That is freedom for me