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online Video and audio Programing Douglas Ferguson college of Charleston Paper presented to the Southern States Communication Association april a, 2002 Lexington, 1 online video and audio, also knows 28 multimedia, sonetines referred to as interactive media, officially arrived in the early part of this century. For a while, the prospect of 2 monumental new communication medium had the NASDAQ tock index making record-breaking increases, The comle strip Doonesbury parodied how easy it was to perlay an idea into an empize with no worry of showing a profit. Former cable MO Medisone (now owned by ATET Broadband) coined the phrase “This is brosdband. This is the way" (which batfled most people who read the slogan on bilitoards). And now the new online media are the subject of a conference piper! With the official debut of Brondband culture, sone observers wore reluctant to foresee any merger hetween the Evo worlds, broadcast and computer, because of the inherent differences between vatching 1 passive) and using = computer (active), On the other hand, one bold prognosticator (Richard Baskin of Intertainer] predicted in 2000, “Five to 10 years out, there won't be @ difference between a television and a Pc, You'll have intelligence, network and display, and it will be all over your house, and you’12 wateh some things on the TV, some on the finivions ‘what is broadband? Broadband is the high-speed delivery of digital information: video, music, text, data, ete. over wires, cables, and through the air. In many vaya, digital information has changed the media world. for example, global online advertising is projected to overtake globa: TV advertising spending by 2005, when U.S. online spending alone 1s expected to reach $32.5 billion.? multimedia is a word comonly used for digital forns of media. The world of Live and recorded information snd entertainsent is influenced by newer forms of multinedis tke e-mail, video games, instant messaging (a live form of e-mail), and group discussions (chat) Streaming is the digital distribution of audio and/or video in near real-time,’ Also known a@ webeasting, streaming differs from broadcasting because the connection is one-to-one, rather than one-to- any, even though anyone with a computer and a connection co the web (World Wide Web, oF www) can receive pictures and sound. Many websites provide streaned content, live or recorded, using Real Player, Quicktime, or Windows Media standards.‘ ‘the streaming technique Je based on a time-delay called buffering, which prevents slight delays fro interrupting the flow of the program. buffering ie less than perfect, sonetines resulting in Jittery video in fa very spall frame on the cosputer screen. But, however imperfect, it'e ‘video on demand: what you want, when you want it, almost in real-tine in addition to vebeaste, broadcast networks have developed synchronized interactive Links between its evening news broedeast and websites. very eporte event has an enhanced viewing online feature and fa logo in the corner of the screen to remind viewers that they can access gane statistics or enter conteste. Even syndicated gane shows play-at-hone online enhancements.” Flagh anination 1e low-frane rate technique friendly to slow connection speeds and conprsssed video.* Notwithstanding the growth of broadband, made for online video hae needed co capitalize on low trans rate, ae with flash animation. one of the reasons South Park episodes were a0 easy to download off the Internet in the late 19908 was because the animation was so crude (not co mention the writing!), The ccrestivity of online prograns that emlate the South Park etlye of edsy hnunor is inportant to building an audience base while the web waits for unbuffered real-time streaning ‘Conceptual. Pranework ‘men an innovation comes along that fundamentally changes the vay wo view the world, the term discontinuous change is weed. At Eire lance, the use of online technology to distribute radio and television programming appeare merely an extension of broadcasting, ancther way to receive the content, ag with cable and gatellite, The key difference, however, 4s the interactivity between the user and che programmer, The seeningly infinite mmber of choices ie ancther Important difference: by 2001, there were over 169 million internet hosts (comparable to ccharnets) | Wich the *a la carte” nature of program offerings on the Internet, inany of the progeanmer's tasks go out the window: inetead of schedules of Limited choices, the online audience has an abundant menu of near~ Limitless choices.” Every Listener and every viewer constructs his or her om media landscape. Even those audience members not online (or too @istracted to schedule theix ovn options) are able to use personal video recorders (PVRa) as progrim-sesking robots, where automatically-recorded shows can be played back in any order, at any time (including vhile they're being recorded!) In this content-on-denand world, nobody spends the sane Eine enjoying the sane program as anybody else. Although it is safe to define online programming as media content available through a compurer screen or speaker that displaces or substantially supplenents the use of noncomputer media content, it is easier to say what online programming is not, Tt is not a web page that promotes programming delivered over conventional channels, nor i¢ it ‘those archived sound biter and video clips found on journaliom sites Tt is not Limited to live and taped shows, described above a9 streaming content, but can represent virtual events like chat rooms and event simulations. I 42 not repurposed content that has already been seen, although it may be simuteast material that is shown Live on another ‘conceptually, online prograaning compares to other programing a8 shown in Tabie 1. the 1ist of differences is nonexhaustive but helpful in fxoming the relative position of online distribution. while these @ietinetions may mm peripheral to how programing is strategically “scheduled, these conceptuil aifferences are crucial for progranners’ understanding of why new nedia are fundamentally unlike the old famitiar media. Table 1 Strengths and weaknesses of media delivery systens Rear REVERIG GERSEE | HSNGWIGEN | THESEREETVIEY Binived by Broaden Geography —| Taveras ST oaeway Cable/SatelIiee [Channel (27 Five High Mostly ne way capacity __| subscriptions Cae Bandwldeh—] (3) Flee Ta Ray erchandiee ordinary over-the-air radio and television are Linited by geography. Networks were developed to link together stations to create a national service. multichannel media (cable end satellite) becane collections of networks, Limited by shelf space to abot $00 digitally compressed channels, Online is free of geography and channel capacity, ‘but Limited by the omall pipe (bandwidth) through which programming mrt flow. Bundled fiber cables are graduatly replacing old-style coaxial cable (and telephone lines). Cable and DSL (high-speed Digital Subscriber Loop phone Lines) pushed delivery speeds beyond 300 kilobite er second by 2000 and DBS satellite offered 400 kilobite per second by 200% (although velevision-quabity distribution requires several wegabite per second to achieve true brosdband). Faster speeds produce better ‘video and audio quality (see Table 2). table 2 Bit rate versus quality Cally Frans per second | Transiion meiod | Bis por second "Televison w Tselite, copper cab | TSmemabis igh bandit internet (CAN) cy 7m Saat, oppor cable] T Sagan high bandwidth items, (AN) Tigh eal ieiet 5 ‘medium-high bandwidh | SETOBIS (CAN); DSL: eable "eda quali eae ¥ tox baa iat | aS connection (phone ine) Taw gual mie z ‘modem (phone ine) | ERR ‘The very essence of programming strategy 1s linked to how revenue ‘flows from consumer to program producer, with the programmer nniddienan. The Key distinction between broadcasting and multichannel Gistribution has been the nusber of revenue streams: over-the-air radio and TY stations rely simost entirely on advertising while cable/satellite services have dusl incone from advertising and merchandising that allove point-and-click purchasing of items related to ‘the media content, including the products and services that once solely occupied the commercial breaks within the shows ALL three foras of wedia programming in Table 1 have offsetting benefits and drawbacks. Although {t only has one revenue stream, the “free” clonent of broadcasting allows nearly compete audience penetration: 98 percent of U.S, hones receive broadcast radio and TV stations. Thus broadcast advertising is so much more efficient than advertising on cable or the Internet, which means broadcasters can ‘charge wore for their comercials. Cable/satellite programming attracts ore revenue than all of broadcasting, but the splintered channels and lower heusehold peneteation (about $9 percent) make multichannel wedia ese Likely to compete for advertising. Or 20 it was at the onset of roadbard programming Finally, online progeammers are Limited by low bandwidth in the quality of programs: streaming audio and video weve Initially restrained by tiny video windows and audio reception hiccups caused by slow connect, speeds. Furthermore, the ability to attract subscribers (except for content not readily available elsewhere, 1ike pornegraphy-on-denand) 12 Limited by the "free" nature of the Internet. Users expect to get web everything free on the Internet, even copyrighted waterial providers who charge must compete with those who are totally advertiser- supported (and with the pirate services that share their content with everyone for free). Finally, the online household penetration is only about 5¢ pereent, although the long-term trend is sway from televieion viewing. According to Veronie, Subler & Associates, the average adult devoted 3,448 hours to consumption of consumer media in 1999, increasing by 22 hours from 1998. Sone 44 fever hours were spent watching broadcast television in 1999 compared with 1998. Tine online increased 31 hours. audience shifts were responsible for a slowing in the groxth of conventional television advertising, and an annual 40 percent growl rave for online commercials. Still, there are some monunencal positive features of being an ooline program supplier. There is no license required, as with broadcasting, nor any FCC regulation, to one ows the Internet, 60 being online erases location a well as time and space, There are no networks and no eyndicators; everything 1e local (but received worldwide). Moreover, the distinction between distribution and content 4s tenvous, becau there are very few distributors: content is really king. There are no bricks and mortar. The staff size Le much enaller: Most crveial to Ehis book, the job of progranner Decoses the job of Librarian. There is not mich “scheduling” because everything is avatlable all the tine. whether listeners and viewers prefer co create ehetz own media landscapes remains to be seen, but the online world Le not a particularly friendly place to middlenen (Like distributors, packagers, and programers) because, by its nature and design, it has no middle. Unlike media companies, there's not much to prevent immediate consumption following the creation step.' Progranmere online are better ynow as content providers. Aesthetically, online programming is dissimilar from the nature of what ie imitates. Untii radio, mage media (magazines and newspapers) bad only aight to rely upon. After aight snd sound, cinens and televielon elevated the experience to aight, sound, and notion-the most Gynamic medium the world had seen. For fifty yeara, televieion (both broadcast and multichannel) reigned supreme, even though it lacked ‘analog broadcast is both expensive and difficult co manipulate aline audio and video is much less expensive and easier to integrate with other forme of media. The hourly cost of online usage fell to 41 ‘cents in 1999 from $2.27 in 1998, going from one of the most expensive ‘media Co one of the least expensive in just six years, For the user, getting connected to online media Se eee expensive than eubscription television, sonetines even free from advertising-supported web portals: world, for better or for worse (see Table 3). Sone who have examined che online world have chosen to think golely in terms of interactivity. Xe would be useful £0 look at one of these frameworks.’ By 2003, Forrester Research anticipates that over $60 billion will be generated by interactive applications, organized below by the frat, second, and chird revenue streams we introduced on our conceptual model +11 pitlion in annual advertising revenue +42 bition from subscriptions, plus $3 billion in voo + 67 biltion in e-commerce maple 2 ‘The Dark Side of interactivity How can anything nened cookie be @ threst to privacy? Online access is interactive, thus two-way, But it’s two-way on both ends, eaning that you're being watched by the content providers. How? Pirst, your unique addvess ia traceable. Forget about the anonymity of watching TV or listening to the radio. Second, sost web browsers let the eites you visit leave a "cookie" behind on your computer hard drive ‘This cookie tracks your online behavior and can be accessed by gant marketing databases (much Like the way your purchases, grocery by that Little plastic card they encourage you to use) . Sone people are not concerned that marketers gather auch information. After all, it is aggregated into ispersonal data sets that don’t care who you are (or what you do) as long as trends can be spotted. But data collection could becone pernicious if it’s used against you. If you're worried, learn how to get rid of those cookie files, It’a ae easy ae finding a file named “cookie or “cookies.txt” fon your hard drive, and deleting {t. (Don’t be surprised Lf you have to repeat thie procedure on a regular basis.) (end of box] ‘The interactivity model has five categories: : internet-on-T¥ : personal TV (PvRe like Tivo and Replay7v) . Interactive program guides or navigators . ceohanced TV interactive advertising (t-comerce) . video on demand (VoD) men it became obvious to mainstream sedia that Interactive technologies were here to stay, most of them got busy diversifying their Aisteibution. Consultants advised then to look at the creation process ar a one-tine affair and the exhibition proces as following mitiple Who Je behind all of this media convergence? Mlcrosote, for one BE11 Gates sees a big future in video and was eager to invest $5 billion in ATET Broadband to further hie WebTV service. The WebTV $299 boxes being designed for DISH-TY (Echostar) for 2001 were configured with 6.8- gigabyte hard drives to allow video dowloads. Ia 2000, Microsoft also launched @ new Interactive satellite-rV service with DirectY called bltimaterv, again featuring a $489 set-top Box with dual-tunere capable of recording 30 hours of video while watching another channel. The ‘second tuner also let the user downloed other kinds of coeputer data (e.g, e-mail, stock prices) while watching 1. AOL entered inte an agreement to make PVR-naker Tivo its programming service. The §200 milion agreement set the stage for a 5249 aet-top box similar to the Microsoft device. The hope is to drive new revenue streane, using a renote control and 2 keyboard. AOL is be well-positioned to provide web content, having Bought Time-Warner ia Aol is a portal, alse acm a walled garden, vhere content is kept somewhat parste from the rest of the Internet (which brings solace to parents of young children), Yahoo is the other major portal with most media, there Le room for at least three “giants,” so it is reasonable to expect more portals in the coming years. rrenically, the najor television networks (e-g-, ABC, NC) that tried to become major portals were unsuccessful and many withdrew from the playing field by ‘me Major Players Tf the online world wae already a mature medium, there would be Liteie need to explore the growth of tiny companies vying to become major players. For radio and television, and even cable and satetlite, ‘the major players are already known, with occasional reconfiguration from mergers and buyout But a clear picture of who would be the major online players had not quite emerged by 2002 What about streaming media? At the NATPE convention in 2000, the major players were Microcast, Sandpiper, akami (which later bought interve), and iBean. A sunmary of major players in interactive television (see Table 4) came from a June 2000 article in Cablevision rnagazine, but ia Likely to evolve considerably in the next few years, reble 4 interactive 1V players walled Gardens and cont: We Providers acrv regional interactive-TV sports programming nets america Online Malled garden and content provider Broadcom www.broadcom.con "Generation Y¥ content focus with extreme cablesoft Develop eystens in conjunction with Notoraia set-top cable boxe! mxcitostions Largest cable modem service in U.S. Excite Chelle is largest in the world. ruvure TV Web access, home banking and T-comerce Features, plus snart-card and debit-eard applications rev wu, Biatribution intertainer Match interactive TV with video-on- Gonand. ‘The interactivity #ide of this ledger includes T-comerce, (nteractive/personalized ade and facts to find as you pursue on-denang viewing Liberty Digital woe. Liberty has @ deal with Atat Broadband for aistribution of up to 12 iTV channels Meta TV Develop interactive applications for cable operators, conceatrating on hone shopping, other T-conmerce services and seversising Motabyte Networks Best of to worlds--interactive Gectronie prograt guide and personalized video instrument § 1a TiVo or Replay PV. The wore cable sube use this interactive guide service, the tore personalized it geto for then, a= “thumbprint software enbedded in the format automatically directs users co their favorite content xs Subgcribere play director of the games they View. Other content forays include hone benking, multi-player games and Interactive ade Net Por ALL Latino interactive-TV marketplace Multilingual (BngLieh/spanien/Portuguese) service has plenty of Features, including Web access, e-mail, news/stock ticker, play-along games and e-mail NIN Communications Interactive games via restaurants and sports bare nationige, looking to break into cable. Peach Networks Owned by Mixcosoft Source Media/Interactive Channel wiv. interactive program guide and local/national information wervices. Source also has Virtusltoden, a patented product that dalivers high-speed Web and multimedia content to MWe without a noden oF #C, all from digital cable hardware eibune Media Services Interactive program guide via zepait AV Guide Interactive mw. Leader in interactive progran-guide field. {TWN Entertainment omy, Video-on-denand, e-commerce, healthcare, games, education snd investuent-service applications. ‘vin Entertainment ve, twinentertasnment .com Games service Worldoate Communications Internet TV service, Compicte with channel hyperlinking capabilities, hac 20,000 subs Sos deptoying 12 in the U.S. 2epiedia woe. Hopeful mainstream provider, in Teague with former cable operator Gannett eight operating Systens and Middleware canal Plus U.S. Technologies smu, set- Cop bores bundling Wink Communications’ e-comerce tech with ite wares Company also partnera with Concurrent Computer to add YOO functionality. Beperor Systems Software Linux as set-top operating system, Liberate Technologies wwre.Liberate the Microsoft OS alternative, and ha Operators, including Coscast and Cox n Liberate positions itself as Westaente from seversl ceble Microsoft woe Set-top operating ayetem along the Lines of Kindows. pent translate Openty's global succes! Shto domestic deals. power TY sors. Set-top boxes spyaiaes sre, Partner with Opent¥ Sun Wicrosyetens Java language in cable set-tops infrastructure and Toole accelerate 77 moeu_aeceleratety.con Be-all interactive-delivery chaco syatens Hquipment maker, wannabe content prowder extend Media Distributing interactive TV across a variety of platforms, including wirele: Advanced mulei-format publishing systens. devices, by using Inteliccity USA Content development, developer tools and infrastructure desisa. Mixed Signale Technologies wenr.mixedaignals.con Hardware and software reused to cxeate and encode complex interactive TV, such ag enhanced Yersiona of Jeopardy and wheel of Fortune. Telecruz Technologies Provide platfors baiversal Hlectronics Work wireless keyboards, remotes and Palr-type devices into every eable operator interactive-TV rollout video Propulsion Digital video products are this newco-cable fimn'e specialty, goed for enabling e-mail, shopping nd Web browsing on the tube: Wink Communications B-comerse/into delivery service is available £0 200,000 cable subs in 20 marketa: Source: Cablevision fone problem with discussing start-up companies in the same breath ‘a5 eotablishes companies ix knowing that many of these companies will be acquired by others or go bankrupt before the ink is dry on this page. Neverthelese, it is useful to sea what companies vere up to in the wild and wooly early days of online media. shakeout: ‘The major wedia corporations, especially NSC, had been quick to Jjunp on the interactive bandwagon, even before che turn of the century. But Wall Street reality set in early in 2000, and the big shakeout began. NBC Internet ( hed its other Brands (, and Videosecker]. Sone saw the downturn being caused by television’s inability to drive business to the web, and some players’ focus on the consuner sector, rather than the more luerative busines to-business sector ‘A good case study is what happened to wobcaster DEN, which raised $62 million in venture capital in six months and burned $5 million a month. Their content was truly extrene, which led to very strong appeal. One conpared it to the golden age of sitcoms. But the downéall ‘steamed from sone well-known advice: good-fast-chesp, you can only have two, RN Eried to do all three and becane an overnight failure Another path to failure Le overconfidence, ASC had a disastrous experience with ite website that attempted to become a portal, Despite the network's trenendous promotional resources, the online experinent lost out to Yahoo and AOb, which specialized in the online world, where ABC only dabbled. STRATEGIC CONSIDERATIONS Selection strategy Tf program strategists are middlemen, and the Internet has no middle, then vhat is the role of program strategy? Selecting ontine programs scene totally different from the old media environyent, There are, however, enough sinilarities to discuss how programere can make che transition from a Eime-bound broadcast world to the a-la-carte Daypart Compatibility. Thie strategic theme wae considerably: Weakened vith the advent of thene cable channels in the 19802 and 18908 (e.9., Cane Show Channel, Cartoon Network). But the true goal of dayparting is to target groups of people; the use of a time segnent ix only 2 meang to an end. Online programmers who select prograns for = given website can match their content to a compatible audience 1m the earliest days of streaming video, the distribution of neterials was © novelty, go targeting was minimal. Streaming was done because it was possible, not because there was any market desand. Mainstream formats fron television, for example, could not be expected to warrant the users’ effort to download because it wae o: ‘The typical early online weer was a young male. Programmers needed veagy" content that met the sensibilities of pleasure-seeking youth. The rnost successfel prograns became iconoclastic cartoons Like the God and evil show, which was reminiscent of South Park husor. Of course, the most extvene form of early program content for online programing wae pornography, which has been = driver of early adoption of all kinds of new media innovations, from old wooden stersopticone, right through the ana film and Polaroids, up to the first VoRe and CD-ROMs In August 2000, che majority of online users officially flipped from male to female. Nowadays, the typical online user no different than che typical television viewer. Thus the strategy used by the cable thene channela will find a new hone online, with the key difference being the user’s ability to select from a list of options (online menu) ‘The programer, ae alvays, mist construct an online menu that Le compatible with the desired visitor to the website ation. Freed fron tine constrains, the Web can show anything, anytime. Programmers mist count on first-time visitors being 4 with the online content that they will Bookmark (J sddvess of) the website, Present studies of website repertoire already 0 impre ve the note that users have a limited munber of favorite sites (so mich so that the idea of "web ourfing has become outdated). Major eites (portale) ike Yahoo and AOL function ae networks, in the broadcast sense of che word, Different categories (called Links) of content are presented on mnain screen menu, sorted by interest area: news, sports, weather, travel, shopping, ete. Many users go first co these sites as a jumping: off location for finding what they need to know. One strategy for programmers ie to align themselves with a portal. Or, in the case of ‘Mine-Warner and AOL, allow one’s empire to be bought by a portal another strategy for content providers Le to be an independent website, not uniike the old independent televieion stations, Here the ‘programmer mst rely on the second kind of sajor site, the search engine, ouch ag AltaVista and Infoseek. Even those users who fire visit a portal will often txy a search engine, too. Programmers must decide whether to offer thele content vis major sites or te go it alone, hoping to be found by the search engines. The job of habit formation falls to caking a {ist favorable iapression, such as being the best weather radar site or the best online auction site: Audience Flo. When it cones to the notion of audience flow, most ontine sites, once again, follow the cable television model for specialized theme channela, The main strategy is to invite audience flow sn and out. fn the other hand, online programmers can cro! prosote content by including new offerings on the same page as the established content. if surfing (the online world’s anawer to grazing) is really less common nowadays than in the beginning, new services will need s programming strategy, beyond promotional aupport, co attract an audience. The spinoff approach and the tie-in approach used by broadcasters should work welt for online content providers. Sone examples of thes! approaches are discussed tonard the end of this paper. conservation of broadcast and cable Program Resources. Just programers recycle material to optinize its value, online programners put as mich material onte their online menus as possible. Unlike ‘schedule-bound projranmers, the online content providers are not forced to rotate or rerun offerings because everything is continously available ne unusual consideration may influence sone providers to Limit the availability of thete material: many programmers believe that perceived scarcity wakes content appear more valuable to the public. ror example, Disney carefully limite accessibility to its old classic filme on videocascotte to make them seen more special when they briefly become available in stores. If online content becomes too common oF too readily available, the perceived worth of the products (a8 compared to premium materials) may be diminished. One argunent why cable viewers spend eo mich of their time watching HB0 is becaus hey pay extra for Se, and the extra use justifies the cost. The lesson for website program services seeking cubscription fees is to Keep the content “special” and th of Appeal. online content ig not inmune to being categorized es broadcasting or narroveasting, even though the term webcasting does no: differentiate. So far, the size of the online audience for brosdsand entertainment and information Je not large. Thus the strategy has been to narrowcast unique content (avant-garde ine land edgy cartoons) and to broadcast mainstream content (sports, weather, news, comerce) ‘the nunber of web users who would be willing to stream video 4a presently limited connection speeds. Until the rate of transfer probler Ae Hinally resolved, programers must enphasize short-length materials Given the ever-deereasing attention span of adults, the online environment. ie vell-suited for delivering brief programs. ven eo, the speeds are getting faster and the competition between cable modens and DSL, Like the competition between cable and satellite, hae driven dow the cost of broadband connections." ‘Those who toll in the programming business should take heart that regardless of the zechnology and distribution, content ie etl? king Programs have to hive broad (or narrow) appeal to meet the consuners’ needs and wants. ven Sf the audience starts paying more for entertainment and less cones fron advertising, the nature of the product will remain the sane: Comedy, drana, and human interest will prove enduring appeats. As for specific online progranaing strategies, we know as Little about wnat Works aad doesn’t work in thie new medium ae televieion aid during ite inceptian. Or radio in ite early days-many honestly thought st would be weed for education! It’ probably too early to pass along say tried-and-true methods, John Gaffney at Revolution magazine interviewed sone key players sm the online world about whether the veb vould grow up to be like Tv." Several good strategic pointe were made about medium in which a victoria's Secret webeast drew tvo million users and in which a onal webcast (AtomPilns) was making deals at the Cannes film festival: + short te good Ae mentioned above, programmer should eveate online content that will download quickly, Perhaps content providers can benefit from ‘the ever-shortening attention span of the audience, + Generation ¥ 4a the unknown, otherwise the potential is small ‘Thus, the near term 1g not threatening, much én the way cable TV was not a big bother to broadcast during the early yeara. As for ‘ceneration ¥, which is» huge audience for this textbook, old strategies will need to give way to new wtratuyius, MulLiptentoy Le the ability for people to attend to several media activities at once. Young people have it and their parents often do not. + speed mist improve ‘thie may seem too obvious. The trick is to ramp up the quality wherever possible, Online video Ja fighting to catch up with NTSC video, standardized way back in 1941. Drawing even with the nexer Ansc digital video standards mist seem ispoesible without greater bandwidth (Larger pipes! and faster opeods + tmnovations take time Progress is incremental and innovation happens on its own schedule, For programmers, the lesson is do not overpromise, The public is searter than you think, as ABC learned with and MBC discovered with its website + Ganes have the best groweh potential ontine ganes, contesta, gambling, and competition are probably the snext big thing’ in terms of interactive progran content. This area has been previously unexploited by the media, simply because tthe media were not yet interactive, Furthermore, the unregulated online world can more readily run lotteries than other media can. Scheduling strateaies [As discussed above, dayparting i# @ minor consideration fer online channel because, a2 with the case of cable and satellite channels, the choices are plentiful, Radio and colevision stations have one channel, ‘so it wakes sense to taeget the one denagraphic group most Likely to be atoning at a particular time of the day or day of rhe week-by age, gender, or lifestyle. Interactive shows exist in nearly-linitiess yberepace, uhere shelf space i endieas. Likewise, flow is not very important for online programming, either. Digital media can be ordered without regard to time or space. Even old media can be rescheduled to meet the tastes of the viewers, when £4ltered through a personal video ‘Mering is one scheduling strategy that cuccessfully makes the transition from the analog to digital world. I: 1s likely that consuners will purchase more of their programming as done with premius multichannel programming. Indeed, much of the promium multichannel programing (e.g., EO, Showtime, Encore) has already moved to a randon- access schedule with the advent of digital set-top boxes and PRE MEASUREMENT Nietaen//MetRatings and Media Metrix measure the size of the online audience, using txo different methods: online panels and server- ‘side audite, Both methods report sostly cunes. Measuring total reach ie ‘2 good tactic when a “channel” hag not yet attracted a substantial audience, when convergence of the media takes place in the next dozen years, ratings and shares will prove useful tools for online prograsming that garners a larger core of users: Until that Eine arrives, here are sone realities regarding the choices wade by audience manbexe in how they spend their tine with media, eopectally the cable and broadcast channela in a new online media environnent. While the auaber of TV/eable channels available to the average U.S. houaehold has increased from ¢1 channels in 1995 to 62 in 1999 (an increase of 48%), the number of TV/cable channels viewed has only increased from Table 4 in 1995 te 13.1 in 1999 (an increase of ast). Thus, over # four year period, the number of channels has increased nearly twice as fast as the aunber of channele actually viewed or used by viewers (channel repertoire), This trend suggest that ‘viewers’ usage of growing channel variety {e not even coming close to keeping pace with the vapidly increasing nunber of available channels. ‘The inpLicstion for TV programmers i clear: attracting and keeping an audience for a specific channel or the programs on that channel has become increasingly difficult, Like diners in thely favorite restaurants io generally order the sane few items, vievers tend to stick with previous choices that have proved rewarding and adequate to meet their needs Just as the increase in available channels brought about by cable had a mijor impact on the existing broadcast channele, the internet is ow having an even greater impact on how viewers use their cable/satellite/broadcast channels. Again, there is a parallel trend to bbe found in people's choices of vebeites used versus the nusber of availabie websites. Data indicate that as the nunber of websites hu shown exornous growth, the nunber actually used by Internet customers hhau increased only marginally. Neb users have begun to reach a comfort level where they usually access the Line. an occasional new site 1¢ added or even accessed regularly, but the core number hag rensined rather small and consistent. whatever lure that “surfing* held in the first few years of the World Wide Web, the most recent research indicates that habit formation is at work. ‘The average Internet user in 2090 was on the net 19 tines per wook for an average of 30 minutes per seseion, visiting an average of only 11 ine sites each tine they go on- lunique sites; time spent per site was about 52 minutes and tine spent on ‘the net was about 9.5 hours per week. The total number of web sites in 42001 totaled 2 billion, continuing to grow daily. Again, each user has ‘quickly becone very selective in relying on a very snall number of sites for normal use. An ineffective eite (one which presents user obstacles) TV viewers who, remote in hand, are ready to change channel when the progran fails to maintain thelr interest. How web use affects viewing and Listening to traditional media is not entirely clear. arly audience surveys of web users showed that to accommoiate web use, they cut back on some of the tine ordinarily spend watching television. Later research has shova that heavy web u: ‘spend even nore tine with traditional media than Light web users.” These studies also found that many heavy web users are using other traditional media at the sane time as the web. Overall household use of bboth television and radio continue to increase, despite the competitive presence of the Internet. While the nunber of web users had topped 65 million at the end of 1999, average daily household TV viewing had increased to an all-tine high of 7 hours and 24 minutes. Average tine spent Listening to the radio had risen to 21.5 hours per week among those 12 years of age and older.” Although the overall time spent with traditional media way not have been affected by the presence and us use traditional sedia in fact has changed. Network television audiences continue to shrink as a percentage of the total audience watching television in ail day parts, most notably in prime tine where the aunber of total TY viewers is highest, and for news and information programing click away from disappearing trom the screen, similar to of the Internet, how people turn of the century. Among the many findings, several are important for our attention to audience research. They are summarized on the first page of the Pew report: ‘Traditional neve outiete are feeling the impact of two distinct and powerful trends. Internet news has not only arrived, it ie attracting key segnents of the nationsl audience. At the sane tine, growing aunbers of American are losing the news habit Fever people say they enjoy following the news, and fully half pay attention to national news only when something important is happening. And more Anericans than ever aay they wateh the news with a remote control in hand, ready to dispatch uninteresting stories. To some extent, these trends are affecting all taditional media, but broadcast news outlete - both national and docs? - have been the most adversely affected.” Beyond news and information content, the Internet has changed the face of television and how sudiences use television and how they chink shout what television represents as a communications medium. Nielsen's one Technology Report hes described how and why some of these changes Ihave occurred and continue to occur.” ‘The report observes that fundamental changes have taken place in cerns of (a) the content itself; (b) the content delivery means (e.9-, cable modems, satellite wireless networks); and (6) the content receiving tools (¢.g., 1V sets, hand-held wireless devices, sonitors) Content receivers include the 1V set now being used to deliver Internet content, PCs being used to deliver TV programming, and special purpos Gevices for specific Internet applications. Like the national/iocai ratings tor broadcast, cable, and radio, Internet audience measurement has proven to be a very difficult and complex process. Companies aze refining the process and constantly testing ko find new and better ways to measure web audiences, che cask is daunting. Mielsen's Home Technology Report describes sone major ‘complications that make accurate measurezent very aieficule. Ao an ‘example, because of increasing interactions happening vith users on their PCs, dnformation collected at the web site level is lege and less clear about how content ig actuaily being consumed. In this case, 2c users my acces a weboite and perform other operations while Keeping the website on-line. Such uses may be widespread and varied but would be considerably different from the user who went toa site, used it, and chen closed ie ‘the on audience Mo are the users of website content? Who watches (or léstens to) online content? Is it just 2 bunch of cotlege kids with high-speed connections? The U.S. had 78 million web surfera in Apeil 2000, with ‘equal numbers of nen and women. The Internet, once the toy of young people, had become dominated by adulte in their 402, only 21 percent fof homes with incones under $15,000 vere on the web, but 78 percent of ‘those with combined faniiy incomes of over $75,000 had internet acces Only about 9 percent had connection speeds higher than dial-up sekpe. Broadband connections in 65 million homes (31 percent) were anticipated by the end of 2003 ‘Arother clue to the activities of the audience for web progranming is clear from overall online usage. The 1999 statistics in Table § show 44 substential percentage increase in Internet activity and spending Table 5 ‘CONSUMER MEDIA USAGE, 1998-199 1998 1998 (Betinated) (actual) change ‘rota 1 1.879 1573 404 Broadcast TV eo eee 5.08 Neework-affitiated stations 60 7086.88 Independent stations 180 1762.38 subecription/video services ns ore Premium channels aor 1070.08 Radio 1,037 1050 -2.28 Recorded music 28 ae nat Datly newepapers ase ise 2,38 Consumer magazines a e212 Consumer books 96 os tae Hove video(s) 37 ss sa.08 Movies in theaters 4B 130.08 Videogames « a ner internet ” mae ‘total media 3/488 3,426 40.68 Spending per person timated] (Actua) Change: otal TY pies s60.78sa.7e Broadcast 2 7 ~ ] Network-attiliated stations : - - Independent stations . - = subscription/video services ¢188.55 $268.78 sa.78 Basie networee na na na Radio . . . Recorded muste $63.07 seis 62.58 Daily newepazers $51.39 40.98 Consumer magszines gas.s1 §38.300 3.8 Consumer boots 00.77 606.95 45.28 Home videot*l 997.51 692.24 +.88 Movies in theaters 218 sas vVigeoganes grior | s18.4s 09.98 internet $39.89 $30.78 29.68 ‘rotal media se22.21 $576.90 47.98 1na + not available; * playback of prerecorded tapes only. Not all colunns add up to totale, due to rounding Ie appears that che audience for online programming is not such aietezent than the audience for other types of programming. Having high-speed connection favors young wales in 2001, so that explains most provocative contest on streaming eites. Sut not everything is experimental or crude. As nore people come online, and as wore get faster connections, the web looks mare Like a mainatream wedium, Internet Behavior [A study by Fergugon and Perae found that web surting was act exactly a eubstitute for television viewing (although it vas seen as being just as diversionary), primarily because online activity is les relaxing. ABC's executive vice-president of Internet media Dick 9 the difference ae the lean-back experience of TV versus the lean-forward experience of online media.” Ae early a6 1997, Nielsen Media Research (in a study commissioned by AOL) found that hones connected to online services watch an average 22 percent lees television per day than non-Internet hones. Although prime-time viewing was only lover by 6 percent, the loss during the 4:30 £0 6:00 pm tine period was 17 percent. Later in thie paper, we will see that the Dig televieion networks fare cresting online content to complenent their prime-tine and sports schedule, What makes the networke think that computer users vill be wetching televieion while they're online? It Le because 44 mi2iton web users, according £0 8 2000 Gartner survey, report using their online browser at the same time they watch TV. The mumber vas projected to grow to $2 million by 2001. [A February 2000 report fron statistical Research, inc. (SRt), suggested that, when it cones to Web activity, the average Internet user Ae not always an explorer, It reported that 244 of yesterday visitors to fan average Web site return to the site every day, and that 624 of those visitors have the eite bockaarked in thelr browser. In addition, 65 percent of yesterday Web users reported visiting just one or two sites during 2 typical S-hour daypart (website repertoire), But the SRI report also reflected Internet sere’ adventurous aide, vith surfers reporting searching the Internet (578) and looking for product information (46¥) nore often than any other activity except email Oust ae demographics have evolved, go will Behavior. In the 19508 ween colevision was nex, people would watch anything. Later they becane nove aophicated and predictable, The challenge for online programmers 12 to stay current with ene desires of their audience, While this is true for other media, it is expecially important for media in their infancy: Impact on the Mainstream Media For someone operating from with the established media, staying informed about trends in online progranming 12 important to maintaining audience share. More inportant, mainstream wedia can spot new opportunities by following the new developments in the osiine world. ‘the flipside of opportunity 18 threat, so it also pays to know what loons over the horizon. This gection recounts some of the threats (and opportunities within) che status quo Network Telev: lon. The major networks all developed websites to promote prime-time programs and provide archived clips, but it wasn’t luseil near the turn of the century for them to get really creative and 0 made-fer-online programming." ‘Testing new primetime shows online also cane into vogue about the sane tive, For example, in late 1999, Fox Bntertainnent commissioned new TV eexies that would spend months on the eite before moving to the Fox broadcast network. The creator and producer for the show previously did the movie Mt The Blair witch Project. 4m dune 2000, Karner Brothers announced the online debut of 2 new animated conedy series The ablongs to debut che following year on its network The WB, Potential viewers of thie “edgy comedy could tune in 25 original 20-second animated sketch produced separately for & ‘ website. In another example, The Anteye Network, at vne.anteye.coa, Bet $690,000 that the Web {e a geod tegting ground for pilots. After a contest where web surfers voted on content, ix winners were awarded production deals worth up to §100,000 each, to create pilots that Anteye would help shop to TV studios. but the first real signal that prime time wes being influenced by online progeamming was NBC's aniaated series God, The Devil, and Bob, which briefly aired in March 2000, The program was based on a popular online aninated series called The God & Devil Show at the website. Apparently, the baxdy content of the website made the online series nore appealing than the toned-down ‘version that was given an ill-fated txy-cut on NBC. Tt became obvious that youth-audience success online did not necessarily translate to the ase audience of prine-tine television. Enhancing existing series is ancther vay for broadcasters to use online content. Por example, Fox decided in March 2000 to stream ten imte webcasts a half-hour before the last six episodes of That ‘708 Show of the prine-tine season. Such tie-ins are a way to promote shows that have been on the air awhile. The arrival in primetime of hit game shows like Who Wants £0 he a Millionaire and reality shows like Survivor atso gave networks a chance to hold the audience attention even after each episode had ended. In the case of the second week of the Survivor series in June 2000, for exanple, saw an increase of 44 percent of thely unique (cune} audience, with 600,000 visitors as coapared to 417,000 visitore the previous week, according to a Wieisen//iletratings online press release. Sports content lent itself to the idea of expanding the reach of live NFL football telecasts in 1989 to Austria, The Netherlands, and Singapore. The events were gold to broadband ueers, as part a PPY package. In the United States, vieere were receiving "Enhanced TV" on ‘ec Monday Night Football. in 1989, Between $0,000 and 90,000 viewers were logging on co each games online simulcast. In terms of stickiness, fa measure of time apent with s website, the viewers were averaging 40 lainutes of connect time, motivated by access to live statistics, crivia polls, end an online gare that let them win pointe by predicting che next play. Surprisingly, only 2 percent of the users were young males 60 percent were age 26 to 45 ‘the National Basketball Asseelation also got on the convergence bandwagon, bringing computers together with television. The NBA showed multiple webcam coverage of the All-Star Game on, where ‘viewers could chooge canera angles. wlelsen//tetratings revealed in June 2000 that a WiP “King of the Ring’ promotion boosted visits co its websites by 64 percent in one week Political coverage of the summer 2000 conventions was scaled back for the traditional network news operations and vastly expanded on thelr ontine counterparts, Nearly 100 websites covered and webcast parts of the proceedings. AOL had a skybox cam 24 hours a day, ont of many such setups. The viewer hag the capaniiity of communicating aivectiy with floor cerrespondents of the dozens of e-journalism websites network imitators, Some of the streaming media eites that emulate the offerings of @ broadcast network are: BYada, Laugh, Clicktiovie (featuring dozens of classic TY shows), and Entertaindon (best known for the aninated God & Devil Show). The anination sites seen to attract larger audiences. Pu Jn animation continues to be 2 favorite method for these animation sites because it looks good but does not require mich bandwidth, Net animation houses as Spunky, Mondo Media and are not based in Hollywood, but they aspire to be big ‘studios. Even usere with elow-modem connections can enjoy these sites, any of which are provocative (see Table 6). south Park creators Trey Parker and Matt Stone vere lured to produce flash snimation for Shockwave. (Most web cartoon sites rely on Macromedia's shockwave Flash.) Mainstream producers alao took note. The Carsey-Merner production firm (Roseanne, 3rd Rock From the Sun), for exanple, opened fan animition division, ‘Table 6 Online Animation websites swe ondomed. com sews, sw, ven. bde38. com vent. doodie. com sone Level sow shockwave coe. vow. spunkyprodct ions. com sore, £4, com Aside from pure animation sites, there were other webcast sites in June 2000. Here ie a List of sites not show in Table 6. ov dreadnought .com sore sew, sew ‘Tose sites generally feature short file made by avant-garde Filmakers Will put 14, public-domain LIne and TY shows just for che sake of having content. just getting started. Occasionally sit zt on. With regard to webcasting, individual stations got into the act with repackaged and simulcast local news content by such programers as Zateo, Brosdcastanerica (, and (see Table 7), to ane 4 few. The real potential for local stations is for t-comerce, which markets online producte via over-the-air TV commercial Links: Similar to e-commerce, which exists solely online, t-conmerce is in the survival plans of many television broadcasters Table 7 there in the world is Tuvalu? Most people have never even heard of the small Pacific island Tuvalu, but they can appreciate the significance of its two-letter countey code. TV. Every nation has an Internet code that routes incoming connection Like .br for Brazil and ie for Italy, An enterprising california start-up company called dotTY and its parent Idsalab agreed to pay the ‘Tuvalu government §50 million over 10 years for the rights te the .tv domain name. So instead of going to wv.nicrocast.con, you can visit woe microcast.ty instead. Bach company that adopts the donain nare pays 1000 a year for a creative address Like FrasierCrane.7V or up to $100,000 for nanes Like or sex.ty Local brosde tere are locking for ways to use thelr epectrum to create new revenue streans, beyond advertising. one idea is to send information fron the relevision to the personal computer (see Table ©) A different idea is for companies Like Broadcast Digital Cooperative, ABlast, and Geocas: to help local stations provide content to personal computers via over-the-air broadcasting, using part of the éigital apectrum get aside for HDTV. The bandvidch of a broadcast signal is mich wider than brosdbaad or DSL, #0 the opportunity to have real-tine streaming 49 exciting Bither method enhanced local atation’s ability to got started with e-commerce, Rather than have only one revenue stream (advertising), Jocal stations could well subscriptions for a second stream, and facilitate the sale of merchandise for a third stream Digitalconvergence.con, for example, is s company who sot = goat in the year 2000 to sell local Broadcasters, advertivers, retailers and others @ chance to deliver enhanced content fron the television to the Pc, rather than the other way around. Unlike Wink and ACTY who offered offering programing and commercial exhancenents via digital set-top available to enyone with ‘2 television and computer within 20 feat of exch other. The company's boxes, Digitalcomvergence.con’s rechnolosy proprietary technclogy--:CRQ, a phonetic acronym for “see Our Cue! ‘based on an audio cue encoded into the vertical blanking interval of the broadcast signal. This allowed the system to work with video delivered over the air, cable or satellite, even recorded video. ‘the audio cues sent the user directly to the particular Keb page ‘that cofneided with the TV message, or could be stored for later. because the audio cue vas in-band and could not be stripped out, the aysten worked with other enhanced eervices. Tt used technology that near-1008 penetration: basic free television, according to the company executives. No opecial cards or set-top boxes vere required. The only Limitation was the munber of hones with Internet connections, then about. half of the United stax had also developed a print application-- NCAT (keyatroke automation echnology)--based on the same concept as {ck0. A acanning device, built to look Like a cat and to eplit off the cable running inte the Pc’s sou portal, read s code on a printed page and delivered Internet addresses to the compucer, once instaiiea, ene [cat read codes from practically anything--from printed news to UPC codes on packaged goods. Two enhanced spote per half-hour is the Limit set by Digitalconvergence.con, but stations had unlimited use of cues tor content and promotion. Another Limitation imposed waa that only two stations within any local market could License the technotesy. Cable/Satellite. Cable operstors have a two-pronged approach to online programing. Pirst, they sell high-speed connection via cable roden through services Like BxclvesHcee and RoadRunner. A List (see Table 9) of cable modes servicer show the musher of subscribers in early 2000. Second, they (and DTH companies) provide programming content that coupetes with (or complements) online viewing, DOH satellite se offering high-speed Internet access (with 4 celephone Line return loop because OTH is one-way! Table 8 Cable Modem Subscribers CABLE MODEM SERVICES ApeILIATES SUBSCRIBERS charter Pipeline B.A, Na. (4/001 NA $818 (4/00) xciteations « 1,800,000 (4/00) SA 80 16,099 (2/00) nnternet Vestur a 1,700 (2/001 18P Chennel ° 10,048. (4/00) optimum online 2 31,474 (4/00) Power Line 30 37,000 (3/00) Road Runner “ 730,000 (4/00) source: onygen always wanted to be an established cable channel, but had ite first incarnation as @ web channel because streaning media presents an opportunity for wannabe cable networks to audition thelr content MeTV was the opposite situation: a web-page first and then a PPV service (streamed navies for $$ with 2 $200 set-top linked to Pc) MEO introduced fane of ite Oz drama program to new webisodes at ite site in advance of the telecasts on HBO in the 2000 fail season. And Showtime borrowed page from the broadcast networks in 1999 when it simulcast a high-draw telecast, the Tyson-Norris boxing natch, vith interactive camera angle selection ty the subscriber (at an extra fee above usual Showtime subscription) After 20 years, CM started to eee ite ratings decline in 2000, partly because so many people were getting their information ontine. If you can't beat ‘em, join ‘em (they gay), so Turner Broadcasting invested $1.2 billion over five years to develop handheld-wireless online access to CaM. Their goal wae to maintain the dominant position as a news provider anytine, and now, anywhere: video on denand (VOD) became a reality for eable operators who did online interactive trials using set-top boxes from Motorola and Seientitic-atianta, Sone of the platforms conputer operating systems) included Liberate, WicrosoftTY, OpenTV, and PowerlV. The actual program services came from these conpanies: Intertainer, Diva, ICTV, Wink, and ‘the pay movie services are cautious about internet PPV, wanting to bbe sure that the rights they buy include internet rights. on the other hand, Playboy Television was one of the first cable premium channels to push online PPV, back in 1998, in @ deal with Mindspring ncore got creative in ts multibilion-dollar 1999 Licensing deal with the Disney studios, when it unvelled a service called sv09. Subecristion VoD uses @ video file server to store and deliver pay novies whenever a subscriber wante them, with full VOR functionality. ‘the primary advantage of internet VoD over conventional ePY is former can be completely automated. Subscribers get their content and it's played ae if they put a dollar into a jukebox. But for ‘a movie to dovntoad in five minutes or so, even at the high compression rates used in most software, the end-user mist be equipped with access Lines sspporting throughput of about 3 megabits per second, Someone with a typical digital eubecriber line or cable-nodem Line running at feu hundred Kops (see Table 2) would require the better part of an hour to dow:oad 2 feature-length fils, Real-time streaming is faster, but auch cechnologies were new and untested in 2001, Hollywood wae Likely to wait until they weve ready. In the meantine, there would be a place in the vindow, probably after filme are shown on free broadcast TY, because then they have been fully exploited, Progras Guides. TY Guide and other companies have online guides to broadcast, but by 2003 only two companies (Yack and Channel seek) offered comprehensive internet program guides. acquired Channelseek in a multimillion dollar stock deal in cone 2000 Chennelscek had published che first printed guide to streaming media, which wis stuffed into mailers sent by broadband and st providers rateractive television lends itself to better methods of searching for content, eapecially 4f the viewer Je crulaing along the ved. Sone observers predict that vanart TV" receivers will use artificial intelligence to anticipate audience desires, based on past viewing habits, In Me Future of Broadcast Televison, this author predicted back in 1997 the need for # ‘aosething else" button on remote controls that would allow Viewers to change Broadcast and web channels without ever going back to a previous choice (during a single sitting)" A few years Liter, such a forecast should be revised tos “give ne what 1 Like" batton that would be the viewes’s last xesort after giving up on finding anything good without the eet-top box's help audio Radio. Streaming audio content a commonplace on the web nowadays, survey research by Cyber Dialogue Inc. shows that 42 percent of all Internet users have nade use of ose misic-related contest, with 37 percent visiting sites operated by radio stations and 28 percent downtoating music.” several web aites offered thelr viestore an opportunity to be their om disk jockey by modifying music playlists for thenselves and and, to mane a few. Mow offers an assortment of simulcast and internet-only raato stations (Table 10). i¢ ancther source for connecting te online radio, While the simileasts extend the reach of stations co interested listeners in other sarkets, the local stations in those markets get come unvanted competition for listeners. Arbitron does not yet measure euch fstening, however ‘Table 10 MSW Onine Radio alipaNzradio Swing Internet only) Andtiow heb Radio -- Jaz2 & Blues. (Internet Only) -- Jazz X/ theDial (Internet Only) Rreaguides ‘net —- Soul Ritehen/ theDial [Zaternet Only) Jazz (Internet Only) Blueesoyitieic.con {Internet only! (Internet only! Snooth Jazz (Thternet Only) ChoieeRadio. com Jazz (Internet Only) Jazz (64k etreas) (internet only) Choicekadio.con Snocth Jazz (Internet only) crossover 205.1 FM (Philippines) Gyberradio2000,com Ratpack Plus (Internet only) Blues Trip (Internet Only) Night Grooves 1 (Internet Only) Eyoerradion20d com Night Grooves 2 (3ak stream) (Internet Only) ( Sol Patrol (Internet only) Swing Dream (Internet only) Zydeco ave (Internet only) -- BluesLine (Internet osly) DiseJockey com -- Guitar Naze (internet Only! Disedockey .com -- Modern Swing (Internet only! -- Progressive Jazz (Internet Only) Disedockey com -- Snooth Jazz (Internet Only) mn.con (22k stream) (United xingdon) -- daze X/ theDial (Internet Only) Homesteed-com -- Soul Kitchen/ theDial (internet Only) ‘Saez FN 202.2 PM (United Kingdon] ange Radio 106,8 FM (Poland) (Internet Onty) GeaiMantusic com (Enternet Only) ‘-wAVE 61,3. FM (Japan) aon 103.1 FH (Bunice, LA) Hurt 95.7 BH K High (Denver, CO) ROAZ 97.5 FN The Oasis (Tucson, AZ) APU 66.5 FN Pacific Lutheran University (Tacoma, Wh) so 88.2 FM gazz03 (San Diege, CA) RUWR 68.7 PN (Reno, NV) ied 105.2 PH The Oasis (Wichita, KS) RESP 95.3 FM Love 95.3 (South Padre Island, TK) -- Blues (Internet Only) ediamazing.con -- Jaz2 (Internet Only! -- Café Jazz (Internet Only) Divas (Internet only) Jazz fock (Internet 0 Lounge (Internet only) Quiet storm (Internet Only} Snooth Jazz (Internet only! Acid Jazz (Internet Only) Onennet + Jaze X/ theDial (Internet Only) One net =~ Soul Kitchen/ theDial (Internet Only) Phosaix Radio Network -- Phx Jazz (Internet Only! Radio Free Virgin Absolutely Live (Internet only) Radio Free Virgin Absolutely Live (Ssk) (internet only) Radio Pree Virgin Absolutely Live (96k) (Internet only! Radio Free virgin Jez (Internet only) Radio Free Virgin Jazz (Sék) (Internet Only) Radio Free Virgin Jaz= (964) (Internet Only) Red #4 66.2. FM (Mexico! Relax 92.4 FM (Gomany) Rhythmkadio Blues (znternet only) -- Jaze X/ theDial (Internet only? -- Soul Kitchen/ cheDial (Internet Only) Shibuya FM (Japan) Sottwave (Russia) Softwave (64k stream) (Russia) Sporting News =~ dazz X/ theDial (Internet Oniy) Sporting News -- Soul Kitehen/ theDiel (internet only) The Basement (Australia) ‘TMubemusic Jazz & Blues (35k stream) (Korea) ‘Tunelavow Jazz (Internet only) WeLE 91.9 EM Clark University (atlanta, Al WORR 90.6 FM Drean 98.5 (Gan Carlos Park, FL) Weed 97.9 IM Smooth Jazz 97-9 (Jacksonville, FL) wiredRingdom Radic (32x stream) (Cenada) uve 92:9 FM Love 94 (Msami, FL) rve 93. 9M (New York, 37) =~ daz X/ theDial (Internet only! =~ Soul Kitehen/ thepial (Internet nly) ov Radio 980 AN lOtieville, NY) waz 98.9 FM (Charleston, SC) =~ Avant Garde (internet Only) Blues funternet Only) blues fock (Eaternet Only! op (Znternet Only British Blues (Internet ony) Claseie Blues (Internet Only) Classic Jazz (Internet only) (com = Crossover Jazz (Internet Only) (com -- Fusion (Internet Gniy) > - ara Bop (Internet ony) S gaze (Internet only) * Modern Blues (Internet only) o Modern Jazz (Internet only) © post Bop (Internet Gnly) © Snooth Jazz (Internet Only? (com Instru Pop (Iaternet Only! ‘ww com Jazz Cafe (Internet Only) ore com Lounge Lizard (Internet Oniy) ‘ Pop Jazz (Internet only) Hilllll Aside from misic, sports radio got sone competition trom NFL auaiocaste in the 2000-2001 season. NFL teams agreed to create # NFL Internet Network to provide free audio for every game not covered by = local radio contract. Major League Basebsl1 also announced a similar plan to audiocast its ganes: music Recording Industry. Their nanes axe Gnutella, Scour-com, and apster, but Napster got all the attention in 2000, when a controversy arose of 4 progran (written by a 19-year-old) enabled owners of digital- quality €D music to *share" their musie vith like-minded youth lor old people). Unlike neighhor-to-neighbor sharing, however, these copyrighted files were being traded across Internationa? borders instead of picket fences, Some universities blocked access to Napster because 50 many undergrads (and grads) were tying up the campus digital backhone with pirated music filer typically § megabytes per song. Steven Levy said it best: “Napster allows you to search for almost any song you ean think of, finds the song on a fellow enthusiast’s hard rive and then permite you to get the song for yourself, right now. For the unbeatable cost of free, nada, gratie, bupkes, zero.*” He algo noted that this controversy follows a long history of similar concerns \VeR and audio cassettes that were supposed to kill intellectual property, but did not. Maybe this tine the difference will be the ease with which i21feit copying can be done ontine. Lawauite threatened to shut down Napster eventually.” But with some never systens, the searching ir done in a distributed manner, 60 it cannot be stopped. Unlike Napster, Gnutella was used to exchange not just msie files but any files. Freenet is ancther, more radical approach because it randomly igtributes encrypted, copyrighted aterial. le ach of the major Hollywood studios has its oxn dot-com, exploring the etreaming video world, not sure where it Se leading then. They fear, with sone justification from the Napster inbroglio, that a Little application program written by a 19-year-old in a dorm room will steal their irtellectuat property and eliminate copyright royalties. Even encryption echenes may fai2, if someone is clever encugh co renave the Gigital fingerprint from s purchased copy. vrdaunted, no Le: ‘than Steven Spielberg (Dreamsorks SKS) and Ron Noward HImagine Entertainsent) have teaned with thelr respective partners to create a elte that will feature short pieces of fitemaking. Initial capitalization wae set at $50 million. other start-ups are shown in Table 11, but a coherent list of major players has not yet nerged table 1: Hollywood dot-cons company ‘content foment destinations Dreamworke/Thagine shore £L1ne/videos/aames Distanteorners ex-Disney film chief horror/science fiction Thethreshold Threshold Entertainment sganes/ comedy Wirebreak Gntertaindon _Narner Brothers Station Sony Movies online Leo Filme eo Diney Aeonfilns short £i1ms/aninations ils (ows /£! ontine/Fox site for budding ELlmaners Sighesoind musie/tiie Belin Bijoucate Neaiuee ‘The bitecreen forun for filmmakers Reelplay forum for filmeker Nedéeceip Rheaysit 1g not just hort Cites, either. In January 2000, Mom became tthe first Hollywood studio co get serious about online pay-per-view when Az made a multiyear deal with Blockbuster Video. The arrangement Ancluded streaming of movie trailers, old MGM televieion series 1ske Flipper and Green Acres, and feature-length filme on a trial basis. By april of the sane year, Miramax set a sinilar deal with Sightsound. com to present 12 feature-length PPY movies online. Viewers would pay about $2.95 per tite Blockbuster sees new technologies as a threat to its video rental business. Another strategic alliance in Janvary 2000 (te position to develop a voo service for Tivo subscribers, Also, TiVo would allow Blockbuster itself egainat possible change in the future) wi custonere to reserve movies through their special emote control. In return, Blockbuster would promote the Tivo PUR (personal video recorder) ir ite (000 stores nationwide In many ways, the online video inroads affect the studios and the networks equally. Ae distribution of materiale moves online and to subscription services, the penetration of hones may grow to the point that over-the-air broadcasting becomes a novelty, 1A good strategy for the film studios, and the other impacted “old media, is to adapt to the new environment. The adaptive strategy is viewed from the standpoint of the established media and their "ola" business codele. For example, how does local television adapt to increased online competition? How do the program distributors (networia] adapt to new forma of delivery? By gradually changing over ‘to the new methods hen TV replaced prime-tine radio, radio didn’t die, Tt changed 1f personal viewing technologies wrest the control avay from rogramers, they too will have to change. Even so, the old way of ‘packaging shows in arranged schedules von’t vanish completely, right away. Meet revolutions tend to be hyped evolutions Many businesses adapt by changing thelr business model or product men the telephone industry eaturated ite growth potential by the 1980s, it iooked to other information entities, Like eable. when Kodsk saw the impending doon of their film business in the 1980s, it got into the Aigival photography business. ‘Ar article in Blectronic Media tried to answer some important questiors about streaming video, following the carly denise of a few cospanies in that business." The important question was: Do consuners really vant to watch stresming video? If 60, when will full-motion, full-screen video streaming be a reality? The answer was yes, with on asterisk. As of 2001, St 42 only truly acceseible and watchable in closed, controlled, corporate environments. it will be st le © unt 2005 belore enough people have fast coanections to online materials: ta anewer to the question, Can entertainment streaming video sites actually make money?-the anwar was *not a the near future.” Even then, revenue will need to flow in many streams: advertising, sponsorships, exansactione and commerce. obviously, the pay-per-view model works well, bit it's hard to get people to pay for things that othere are giving avay. As for advertiving, St may work best when it is personalized-sonething called one-to-one marketing, where share of customer ig nore inportant than share of market. Privacy is an issue, and a sufficient base of potential consumers must exist to make the fextza marketing effort worthwhile: bandwidth considerations make streaming video look different than regular video, To accomodate the computer, programs limit movement to a minima and motion effects are discouraged. The audience tor online programing is semevhat willing co be patient with the glitches of a new rnedium, not unlike the eituation with early film audio and early television color, but eventually streaning video and audio will have to at leagt match VHS quality of home video. Faced with the announcement of big changes in store for old media in @ new media world, some people wonder aloud "Do people really want to interact with their Va?" One should consider that the same question wag asked about the conputer, which vas originally deeigned for doing work: spreadsheets, word-processing, databases. The answer was YES. Wi12 people be just as enamored with interactivity from their 1 ae from their computer? rte Likely, given the right tools and applications o people want to waten video ever the web on their computers? No, not 4 St duplicates enterssinnent video already avaliable on broadcast of cable, and certainly not if i¢ looks vorse than the picture on the TV set out in the garage. But people will want to watch international videos, ike ¢ virtual tour at a real estate site, conventences that make their Live more simple acy Lieberman, analyst for Morgan Stanley Dean Witter, had observations about the future of online. among his predictions are the following: + once the tools and applications are in place, che revenue potential Se huge + watching QvC £¢ you have @ *buy* button on your remote is hard to + Set-top boxes will not succeed unless they cost $300 or less + obsolescence will be a the eame problem for set-top boxes that it 48 for computers + thin applications will be more successful than fat ones + Ys are Like power windova on your car: Once you have them, you fan never go back + the first step will be video-on-demand + the “ki2ler application" wial be a surprise, Likely dreamed up in 3 dorm room + interactive TV will land in the middle of the Pc and 7V experience: You won't Iean back as much as you once did, but you won't lean forvard as much as you do with your computer + Brand nanes wi11 continue to be important + compatibility is a must According to Paul Kagan Associates, internet PPY will be a $5 billion @ year business in 2005, up fron $460 million in 2000 Here's one final forecast, this tine from Strategy Analytice: By 2005, 91 percent of U.S. hones will be online. about 90 percent of them Weill use a PC, but 72 percent will also Rave interactive TV or other Net device. Sales of interactive TV appliances, such as online digits! "V set-top boxes and advanced gamee consoles, will reach $2.4 billion in 2000, an increase af 1078. Sales will peak at $4.8 billion in 2003 but wilt decline to $4.2 billion in 2005. shipments, however, will reach 7.4 million unite in 2000, and rise at an average growth rate of 44 per cent fa year, reaching 26.4 million unite a year by 2005 Tf 91 percent of america is online by 2005, then the ubiquity of the prosdeast world will no longer be so wonderful. It's hard to smagine ‘that we might download our favorite shows while ve channel surf through thousands of channels, or Iet @ PVR robot download programs for us while we've away, but such change seems Likely in the coming years. Whoever designs the kind of renote control we use will have @ tough Job. will a trackball replace the mouse? Will votce-recognition do away with the lap keyboard no one will want to use? These questions will Gemané careful thought and planning. can the public afford to pay individually for each show? i121 product placenent within sitcoms and drasas be enough to pay the stars aries? If the economics are wrong, ve may have to cling to the old nage audience ways. But if the new media denassify the audience, there nay be no turning back. You will Live in interesting tines. Yen Kerechbauner, “interactive Television: Fulfilling the Promise,” Broadcasting # cable, 20 July 2000, pp. 22°30. usa Today, Mazch 28, 2000, p. 1B. ° the Reaithannels site at shows a vide assortment of stzeaning channels for one che dominant multinedia players Pune fleet regularly scheduled, 1V-quality internet newscast vas ereaned on seprenber 27, 1999. The show ‘Zire daily at 12.30 BT and viewers can participate. Prograns are archived in case you mise one Online progeannirg ie readily available to anyone to produce. anyone can start a radio station online for under $5,000, compared to the usual $100,000 startup cost for the smallest station. ScreenGenie is a portable television davice that allows a programer to create streamed Content with all the video production capabilities of a TV studio. In the sunmer of 2000 if retailed for $16,999, compared to the mitimillion Geart-up cost of aa over-the-air television station (the streaming fottware and hardware wae just a small part of that cost) «me first regular Live comedy webcast debuted on June 25, 1997, on the uicrosoft Network. The show, This Te Not a Test, was the brainchild of the producers of stturday Might Live. The fixet original episodic comedy Nebcast cane slong in 1999 with a fail debut of 26 ten-minute episodes Of scotland on the website Tye times, Literally ‘out the window": Tivo, maker of PVRS that allow viewers to control their ova viewing schedules, featured a television Commercial in the sumer of 2000 that showed a television program executive being through out of & window. "paul Sweeting, "Hon’t Fight the Wrong Battles,* Revolution: Business land Marketing in the Digital Reonomy, July 2000, p. 44. Wfathy Maley, *Pinding Your vay to Interactivity: Two-Way TV," Broadcasting & Cable, 6 Septenber 1999, p. 28 MiQ'group of designers at Agilent Technologies have developed a palm sized device capable of speeds of 10 gigabite or 20 billion bits @ Second. Called & transceiver, it uses new souped-up version of the old Bthernet format, delivering transfer rates at 10 tines those available fn high-speed connections in 2001. The cost of one-gigabit transceivers fe expected to fall below §5 by 2004, following the same declining cost. carve that drove the gemiconductor industry % John Gaffney, ‘BALL the Web Grow Up to Be Like TV?" Revolution: Business and Marketing in che Digital Economy, July 2000, p. 92-53. » pepitron, 1999 » Gunzerath, 2000) Pew Research Center, 2000 % Wielaen’a Home Technology Report. 2000 Douglas A. Ferguson and Elizabeth Perse, “The World Wide Web as a Punctional Aiternstive to Television," Journal of Broadcasting «© Electronic Media, 4(2), Summer 2000, pp. 155-274. Svpichard Tedesco, "Back to the Future: Internet TV," Broadcasting & cable, 31 vanuary 2000. W David Lieberman, "Ltsa TY in On-Line Homes,* USA Today, 20 July 1997, pe Bt. Brahe tire simultaneous complenentary TY broadcast and online webcast of a prine-tine taped sitcom aired on November 17, 1999. Of the 17.6 Siition viewers watching The Drew Cerey Shov, nearly 2 million visited Che show's Web eite and €50,000 live wedia atreana were cent out. * steve Sullivan, "Media Matchmaker," Sroadeasting & Cable, 10 July 2000, p. 44-46. 5 pougias Ferguson, “The Future of Broadcast Television,’ in The Broadcast Television industry by Janes Walker and Douglas Ferguson, * Don Clark, “With Web Radio, Anyone Can be a OJ, But Special Software Confuses Users,” Wall Street Journal, 25 Kovenber 1598, p. 38. ©" Geeven Levy, “The Noisy Nar Over Napster,” Newsweek, June 2000. qn August 2000, two people who had an early involvement with Napster created Applesoup, a new service that sllowed payments to content providers * paiay whitney, “Six Burning questions, Electronic Med/a Online, wor entonLine. com/resourceGuide/, guly 2000. S ken Kerschbaumer, ‘For Lieberman, Tt’ ALL About Perspective," aroadcasting & cable, 10 duly 2000, p. 52-56

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