AfterThought: Why digital video will never be the hit people hope.

14 Comments

This is all why, try as they might, pushing video to your phone, shoes, and sunglasses isn’t ever going to see the success that mobile audio has. Sure, the idea of people paying you to watch your newest show anytime they have a couple extra few minutes sounds fantastic from a revenue generation point of view. The problem is, getting people to pay to watch your video on their 100″ plasma is hard enough. Trying to get them to pay you to watch it on their 3″ phone screen (in the best of cases) is just a failed idea from the get go.

As a video content creator myself, I understand the attraction of the business model, but it just doesn’t fit the way people use video. It is one of those famous ‘solutions looking for a problem.’ It is the video content industry looking at success of the Internet and mobile phones, and saying “how can we get in on that?” Thing is, there is no guarantee you can get in on it. Just because something is big and popular, doesn’t mean that every other business can get a piece of it, as many supermarket chains found out when they tried to open their web grocery stores. Some products are just better suited to some environments.

None of this is to say that there is no room at all for mobile, downloadable, digital video on portable devices, but it is always going to be an extra feature; something that people might do once and a while during lunch because they decided they didn’t have time to do more than have Cup-O-Soup at their desk. It is never going to see even the kind of success digital audio has, which in itself is still only a small portion of the music world.

You aren’t going to see a multi-billion dollar Video Ringtone market spring up. Everyone at the gym isn’t going to be carrying around their own TV they watch shows on while they work out. People aren’t going to be driving down the street watching sitcoms on their way to the office. At best mobile video might hope to be a viable alternative to other niche forms of portable entertainment like audio books, but I doubt it will ever be as big a hit as portable audio or or even handheld gaming, no matter how much phone manufacturers and network providers try to hype it.

The sooner video content producers understand that they can’t just make a carbon copy of the boom in digital audio, the sooner they will start setting realistic expectations, and getting a real feel for where the market lies. Phone network providers are starting to understand this, and services like Digital Multimedia Broadcasting, Seg1 and MediaFLO provide an infrastructure to try and find new ways to experiment with mobile video that might better fit its niche, but none of that matters until the phone manufacturers and content providers understand that it isn’t just an issue of putting a bigger screen on the phone, and giving users a place to buy content. You can’t just sell it like it was music, and expect it to be as successful.

If anyone ever wants mobile video to be anything more than “oh, and it plays video too” in a sales pitch, it is going to require an entire strategy for how to make the feature appeal to users in a way that adds actual value. Unlike audio features, you can’t just tack on the feature and expect it to move a few more phones.

It will be interesting to see how it develops, but it is going to require something more sophisticated than just sticking software on the phone that can play a video file.

  • squished18

    Hi L.M.Lloyd,

    Another thought-provoking post!

    Regarding the paragraph starting with
    “You aren’t going to see a multi-billion dollar Video Ringtone market spring up.”

    I agree that you likely won’t see a multi-billion dollar video ringtone industry. But I also thing the ringtone industry will be in serious decline within the next few years. With the Pearl, you can now easily use MP3s are your ringtone. (and probably with WM devices and Palm devices and the iPhone) Why bother buying a ringtone any more? I think the main point there is not that video ringtones won’t take off because of the limitations of video. I think the main point there is that buying ANY ringtone really isn’t necessary any more.

    “Everyone at the gym isn’t going to be carrying around their own TV they watch shows on while they work out. People aren’t going to be driving down the street watching sitcoms on their way to the office.”

    I seriously beg to differ. Since the introduction of the Pearl, I’ve done this many times myself. I’ve had video of old episodes of comedies and car shows playing in the background while I do other work. I can carry this with me wherever I am in the house. I’ll have it playing while I’m folding laundry, washing dishes, cooking… I find it takes the monotony out of the task I’m working on. Yes, this isn’t going to work for the World Cup, but watching a Scrubs re-run for the twentieth time while folding underwear is something at least one person does on a regular basis. Finally, witnessing the growth of back-seat DVD players, I think even this “niche” is hardly insignificant.

    I think the number one roadblock to massive adoption of portable video is the file format conversion headaches. There are at least 20 different audio codecs (and variations) commonly used and sometimes that is already a hassle making sure you can listen to the files you want to. When it comes to video, the complexity increases by an order of magnitude. If you want to ever get a sense of this, check out the help file of the mplayer program! Once somebody creates a program that allows my mom to drag-and-drop any video from a hard drive or DVD to her portable video player in 5 minutes or less, I think you’ll see this take off.

    “…but I doubt it will ever be as big a hit as portable audio or or even handheld gaming, no matter how much phone manufacturers and network providers try to hype it.”

    It won’t be successfully marketed by phone manufacturers or network providers because their business models aren’t setup to address the market demand where this technology really has value. Phone manufacturers and network providers are interested in selling you streaming mobile video. Again, I agree that there isn’t much of a market for that. But I think the real market is in downloadable mobile video. I believe this can be marketed successfully by the Apples, Samsungs, and Sonys of the world.

    squished18

  • squished18

    Hi L.M.Lloyd,

    Another thought-provoking post!

    Regarding the paragraph starting with
    “You aren’t going to see a multi-billion dollar Video Ringtone market spring up.”

    I agree that you likely won’t see a multi-billion dollar video ringtone industry. But I also thing the ringtone industry will be in serious decline within the next few years. With the Pearl, you can now easily use MP3s are your ringtone. (and probably with WM devices and Palm devices and the iPhone) Why bother buying a ringtone any more? I think the main point there is not that video ringtones won’t take off because of the limitations of video. I think the main point there is that buying ANY ringtone really isn’t necessary any more.

    “Everyone at the gym isn’t going to be carrying around their own TV they watch shows on while they work out. People aren’t going to be driving down the street watching sitcoms on their way to the office.”

    I seriously beg to differ. Since the introduction of the Pearl, I’ve done this many times myself. I’ve had video of old episodes of comedies and car shows playing in the background while I do other work. I can carry this with me wherever I am in the house. I’ll have it playing while I’m folding laundry, washing dishes, cooking… I find it takes the monotony out of the task I’m working on. Yes, this isn’t going to work for the World Cup, but watching a Scrubs re-run for the twentieth time while folding underwear is something at least one person does on a regular basis. Finally, witnessing the growth of back-seat DVD players, I think even this “niche” is hardly insignificant.

    I think the number one roadblock to massive adoption of portable video is the file format conversion headaches. There are at least 20 different audio codecs (and variations) commonly used and sometimes that is already a hassle making sure you can listen to the files you want to. When it comes to video, the complexity increases by an order of magnitude. If you want to ever get a sense of this, check out the help file of the mplayer program! Once somebody creates a program that allows my mom to drag-and-drop any video from a hard drive or DVD to her portable video player in 5 minutes or less, I think you’ll see this take off.

    “…but I doubt it will ever be as big a hit as portable audio or or even handheld gaming, no matter how much phone manufacturers and network providers try to hype it.”

    It won’t be successfully marketed by phone manufacturers or network providers because their business models aren’t setup to address the market demand where this technology really has value. Phone manufacturers and network providers are interested in selling you streaming mobile video. Again, I agree that there isn’t much of a market for that. But I think the real market is in downloadable mobile video. I believe this can be marketed successfully by the Apples, Samsungs, and Sonys of the world.

    squished18

  • Rob

    Why would I WANT to pay for video and have it on a portable device? The main reason is that a lot of popular shows are series oriented.

    It is difficult to jump in part way through. Being able to buy episodes means that I don’t have to worry about missing an episode.

    Being able to have it on my iPod means I can watch on the subway train, the bus, the train to Montreal, the hotel in Montreal, the flight back from Montreal, the TV in the living room, the TV in the bedroom, the TV in the rec room downstairs, or even while I’m eating lunch in the staff room.

    If the price of each episode in digital, portable format is the same as buying and ripping the DVD versions the I’d rather buy it digitally. Unfortunately in Canada we are getting the shaft on the iTunes site and can not get TV shows yet. Regardless, the work involved in ripping the DVD’s to iPod are worth the freedom to watch when and where I feel like it.

    In the future I may decide to switch devices to get a slightly larger screen but for now, my iPod and the video’s on it constitute the majority of my video watching.

  • Rob

    Why would I WANT to pay for video and have it on a portable device? The main reason is that a lot of popular shows are series oriented.

    It is difficult to jump in part way through. Being able to buy episodes means that I don’t have to worry about missing an episode.

    Being able to have it on my iPod means I can watch on the subway train, the bus, the train to Montreal, the hotel in Montreal, the flight back from Montreal, the TV in the living room, the TV in the bedroom, the TV in the rec room downstairs, or even while I’m eating lunch in the staff room.

    If the price of each episode in digital, portable format is the same as buying and ripping the DVD versions the I’d rather buy it digitally. Unfortunately in Canada we are getting the shaft on the iTunes site and can not get TV shows yet. Regardless, the work involved in ripping the DVD’s to iPod are worth the freedom to watch when and where I feel like it.

    In the future I may decide to switch devices to get a slightly larger screen but for now, my iPod and the video’s on it constitute the majority of my video watching.

  • Thought

    I think that digital video itself, as in video delivered in digital download, will be huge, just as in audio. I do see a day when the CD/DVD/optical disk itself is very obsolete and infrequently used as the main means of purchasing prerecorded content. Surely in my own home I’d rather download a movie to watch on my big screen TV rather than go out and buy a DVD.

    However, digital video on a portable device…well, I agree that this is a rather harder market to satisfy than portable audio. However, I do believe it has its place and will ultimately be a very large market. As long as people can easily take some video with them, why not? There are many times when casual video watching on a small screen can be practical. Not only that, but if I can take my video with me on a portable device, I can also visit someone and play that video on another large TV set.

    So I do think that portable video is a harder nut to crack than portable audio, I do think it has its place and will only grow to a very large and lucrative market, esp. when the future generations who grew up on digital content rule the marketplace.

  • Thought

    I think that digital video itself, as in video delivered in digital download, will be huge, just as in audio. I do see a day when the CD/DVD/optical disk itself is very obsolete and infrequently used as the main means of purchasing prerecorded content. Surely in my own home I’d rather download a movie to watch on my big screen TV rather than go out and buy a DVD.

    However, digital video on a portable device…well, I agree that this is a rather harder market to satisfy than portable audio. However, I do believe it has its place and will ultimately be a very large market. As long as people can easily take some video with them, why not? There are many times when casual video watching on a small screen can be practical. Not only that, but if I can take my video with me on a portable device, I can also visit someone and play that video on another large TV set.

    So I do think that portable video is a harder nut to crack than portable audio, I do think it has its place and will only grow to a very large and lucrative market, esp. when the future generations who grew up on digital content rule the marketplace.

  • L. M. Lloyd

    squished18

    I appreciate that for some people this is a highly coveted and useful feature, but that really is a small group. If you look at the Nielsen Media Research figures on portable video usage, you will see that a very small fraction of people who have a portable device capable of playing video really use the feature. It doesn’t matter if it is an iPod, PSP, or phone, people (in America at least) just aren’t biting. Verizon has had some limited success (better than anyone else), but even that is pretty small relative to the portable audio market. Even people who have very video-centric devices like an Archos or PSP still don’t use it very often for video, using it far more often audio or games respectively.

    You are certainly correct that all the various encoding, aspect ratio, and resolution issues only make it more difficult, but I really think the main issue isn’t the nuts and bolts, but the fact that there aren’t that many people looking to watch their favorite show on a postage-stamp screen.

  • L. M. Lloyd

    squished18

    I appreciate that for some people this is a highly coveted and useful feature, but that really is a small group. If you look at the Nielsen Media Research figures on portable video usage, you will see that a very small fraction of people who have a portable device capable of playing video really use the feature. It doesn’t matter if it is an iPod, PSP, or phone, people (in America at least) just aren’t biting. Verizon has had some limited success (better than anyone else), but even that is pretty small relative to the portable audio market. Even people who have very video-centric devices like an Archos or PSP still don’t use it very often for video, using it far more often audio or games respectively.

    You are certainly correct that all the various encoding, aspect ratio, and resolution issues only make it more difficult, but I really think the main issue isn’t the nuts and bolts, but the fact that there aren’t that many people looking to watch their favorite show on a postage-stamp screen.

  • L. M. Lloyd

    Thought

    Sure, downloadable home video has a market, especially when we are talking about devices like the 360 and PS3 that will probably be in over a hundred million houses over the next few years. I mean, one could argue that it is already huge in the form of the digital cable/DVR combo.

    However, in this instance I was talking specifically in the context of mobile devices.

    I will say of home video though that I think even there the Media Center/Network Extender model is probably not ever going to catch on as big as people hope. I see the real future there being IPTV and video streamed/downloaded directly to a device that is already connected to the TV. I don’t really think the Vongo/Amazon/iTunes/CinemaNow model is really going to be the winner. By its very nature it adds delays and complications that most people seem to be unwilling to deal with when they just want to watch a show. I think that the real hero of digital digital video (both home and mobile) are going to be integrated services that add real value beyond downloading it to your computer and then sending it off to some other box that then displays it to your TV.

    Sure, geeks like me see all sorts of cool potential for a Media Center type box, but I think the last thing your average consumer wants is another piece of expensive hardware taking up another input on their TV.

  • L. M. Lloyd

    Thought

    Sure, downloadable home video has a market, especially when we are talking about devices like the 360 and PS3 that will probably be in over a hundred million houses over the next few years. I mean, one could argue that it is already huge in the form of the digital cable/DVR combo.

    However, in this instance I was talking specifically in the context of mobile devices.

    I will say of home video though that I think even there the Media Center/Network Extender model is probably not ever going to catch on as big as people hope. I see the real future there being IPTV and video streamed/downloaded directly to a device that is already connected to the TV. I don’t really think the Vongo/Amazon/iTunes/CinemaNow model is really going to be the winner. By its very nature it adds delays and complications that most people seem to be unwilling to deal with when they just want to watch a show. I think that the real hero of digital digital video (both home and mobile) are going to be integrated services that add real value beyond downloading it to your computer and then sending it off to some other box that then displays it to your TV.

    Sure, geeks like me see all sorts of cool potential for a Media Center type box, but I think the last thing your average consumer wants is another piece of expensive hardware taking up another input on their TV.

  • Thought

    Lloyd: regarding home video, I will agree with you that the simplest solution will win out.

    Basically, I think with video what everyone ultimately wants is what they have with audio: the ability to play whatever they want whenever they want, with content acquisition being trivially easy. It’s getting there…and you are right, some would say pretty much there with the DVR/cable/movies on demand/ services.

    I think these PC media center type solutions will have their place, although I do agree with you that for many it seems too complicated. However, the ease of use will only get better over time, and who knows, eventually this type of functionality may be incorporated into the TV itself. Plus, again, the younger generations of today are growing up being far more technically savvy, and so when they become the dominant consumers, they will be far more willing and capable of navigating through a more complex set of options.

  • Thought

    Lloyd: regarding home video, I will agree with you that the simplest solution will win out.

    Basically, I think with video what everyone ultimately wants is what they have with audio: the ability to play whatever they want whenever they want, with content acquisition being trivially easy. It’s getting there…and you are right, some would say pretty much there with the DVR/cable/movies on demand/ services.

    I think these PC media center type solutions will have their place, although I do agree with you that for many it seems too complicated. However, the ease of use will only get better over time, and who knows, eventually this type of functionality may be incorporated into the TV itself. Plus, again, the younger generations of today are growing up being far more technically savvy, and so when they become the dominant consumers, they will be far more willing and capable of navigating through a more complex set of options.

  • L. M. Lloyd

    Actually, in a weird way, I think that video has to work a LOT easier and better than the current audio distribution system before it will be a hit. The current audio market is actually pretty crude and complicated compared to turning on a TV and flipping through the channels, but it seems so much less of a hassle than going to the store and browsing CDs, that people go ahead and use it.

    The difference with video is that we already have the option of watching it on Pay-Per-View, or going to the store and getting the DVD, or getting it with OnDemand or putting it in your NetFlix queue, or waiting for it to come on cable, or waiting for it to come on broadcast. That is a lot of consumer choice, most of which requires no more effort than flipping a remote. It is actually quite a bit more sophisticated (from a consumer choice point of view) than the state of the music market back when digital audio hit, where your only real options were to go buy it on CD, or wait for it to pop up practically at random on whatever radio station you were listening to.

    Digital video, unlike digital audio, is trying to find a place for itself in an ecosystem where consumers already have an abundance of choice. It is largely a solution looking for a problem. Sure, it has some advantages over some of the other ways to acquire video, but nothing like the advantages digital audio had when it really started taking off. I don’t think it is just an issue of the solution having to be simple enough for people to understand. I think it also has to be simple enough to be worth the trouble, which is really hard, when you already have a box that can record any content off of 500 channels automatically, and can order movies right from your couch before they are even available on DVD. THis is one of the reasons I really thing the game consoles have a strong chance of being the real contenders. Plenty of people who would never bother to get a special piece of hardware just to watch digital video, will still go get a game console to play games. Once it is there, already hooked up to their system, and able to download video as easily as it plays a game, then it becomes an option, because it doesn’t really require any extra effort.

    Where the things like Media Centers, Network Extenders, the AppleTV, and the like really have problems, is that first the person has to see enough need to watch digital video to go out and buy the thing, then hook it up, then start buying the content. It doesn’t really matter how hard (or easy) it is to use, if they never buy it and hook it up.

    I will be especially interested in seeing where Microsoft is going with this whole IPTV 360 concept, because one box that could be DVD/HD-DVD player, game console, media extender, DVR, and cable set-top box would be really hard to beat. It would make the difference between downloaded content, OnDemand content, cable content, and DVR content completely transparent, which is when it will really start to take off in a big way.

  • L. M. Lloyd

    Actually, in a weird way, I think that video has to work a LOT easier and better than the current audio distribution system before it will be a hit. The current audio market is actually pretty crude and complicated compared to turning on a TV and flipping through the channels, but it seems so much less of a hassle than going to the store and browsing CDs, that people go ahead and use it.

    The difference with video is that we already have the option of watching it on Pay-Per-View, or going to the store and getting the DVD, or getting it with OnDemand or putting it in your NetFlix queue, or waiting for it to come on cable, or waiting for it to come on broadcast. That is a lot of consumer choice, most of which requires no more effort than flipping a remote. It is actually quite a bit more sophisticated (from a consumer choice point of view) than the state of the music market back when digital audio hit, where your only real options were to go buy it on CD, or wait for it to pop up practically at random on whatever radio station you were listening to.

    Digital video, unlike digital audio, is trying to find a place for itself in an ecosystem where consumers already have an abundance of choice. It is largely a solution looking for a problem. Sure, it has some advantages over some of the other ways to acquire video, but nothing like the advantages digital audio had when it really started taking off. I don’t think it is just an issue of the solution having to be simple enough for people to understand. I think it also has to be simple enough to be worth the trouble, which is really hard, when you already have a box that can record any content off of 500 channels automatically, and can order movies right from your couch before they are even available on DVD. THis is one of the reasons I really thing the game consoles have a strong chance of being the real contenders. Plenty of people who would never bother to get a special piece of hardware just to watch digital video, will still go get a game console to play games. Once it is there, already hooked up to their system, and able to download video as easily as it plays a game, then it becomes an option, because it doesn’t really require any extra effort.

    Where the things like Media Centers, Network Extenders, the AppleTV, and the like really have problems, is that first the person has to see enough need to watch digital video to go out and buy the thing, then hook it up, then start buying the content. It doesn’t really matter how hard (or easy) it is to use, if they never buy it and hook it up.

    I will be especially interested in seeing where Microsoft is going with this whole IPTV 360 concept, because one box that could be DVD/HD-DVD player, game console, media extender, DVR, and cable set-top box would be really hard to beat. It would make the difference between downloaded content, OnDemand content, cable content, and DVR content completely transparent, which is when it will really start to take off in a big way.