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The genie is out of the bottle

March 4th, 2006

It may seem hard to believe now, but in the no-so-distant
past, when people want to watch moving pictures, they
had to get in the car, or on a trolley, and go to a movie

That was the only game in town…

When television was introduced commercially in
the late 1940s, it took an immediate and painful
bite out of the movie theater business – and then
things got worse.

Today, the average person spends only one-sixth –
that’s 16% – as much time in movie theaters as
his pre-televlsion ancestors did.

You can still see signs of the sudden wreckage of the movie
theater industry in small towns and inner cities all over

Here’s what interests me about this story… 

I can virtually guarantee that as late as 1945 no one in
their wildest imagination would ever have predicted
what actually happened. 

— Cable TV: The Many-Headed Hydra – Part One

The Hydra is mythological creature famous for
growing new heads.  Just when the hero thinks
he’s dealt with one head, twenty new ones spring
up in its place.

This is exactly what’s happening to people who
are heavily invested in the old media model and
there are at least three hydras that merit attention.

Reading Steve Dworman’s excellent book about
the infomercial business
, I came across a number
that shocked me into a realization of how radically
television itself has changed in recent years.   

He states that in 1989, the average household in the
US had only eight to nine television channel choices.

Can that be true? Can we have come so far, so fast?

And what impact has this had on the television industry? 

A significant one.

Last week, CBS Corp announced that it’s reducing the stated
value of its radio and television assets (a "write-down") by
$9.5 billion, for a total write-down of $27 billion in just
two years.

One analyst, Fred Moran, commented to the New York Times:

"This officially recognizes what the market has already
stated.  Traditional broadcasting assets are worth less
than they were a few years ago."


— Download mania: The Many-Headed Hydra – Part Two

The same week that CBS announced its write-down, Apple
announced that its iTunes Music Store had sold its one billionth


How much is media-on-demand (MOD) carving into
media-when-we-say-you-can-have-it  (MWWSYCHI)?

There might be a study out there.

Has anyone seen one?

If not, the reason there isn’t may be that it’s not in the interests
of old world media companies to sponsor one.  They only
publish studies to convince advertisers to spend more and
more often.  The data on that front can’t be good.

Companies like Apple don’t really need to know
the impact they’re having on old media. In fact,
crowing about it too loudly could throw cold water
on alliances they’re trying to foster with the old

So it’s possible, theoretically at least, that media-on-demand
is causing old school TV and radio to hemorrhage customers
as badly as TV did to the movie theater operators.

We just haven’t heard the news – yet. 

— Social media: The Many-Headed Hydra – Part Three

Something big is definitely up at Yahoo.

One of the hottest hit makers from the broadcast world,
Lloyd Braun, now head of Yahoo Media, is staring to sound
like an Internet guy.

Braun is the former chairman of ABC entertainment and helped
bring mega-blockbusters like "Lost" and "Desperate Housewives"
onto the small screen.

Rare among people who’ve been wildly successful in one
field, Braun "gets" that video on the Internet is a radically different
game than the way he played it – and won – when he was at

Understandably, when Braun first came to Yahoo Media, he was
prepared to apply the model he knew best – hit TV program
development – to the Internet.

Here’s what he’s saying now (as quoted in the New York Times

"I didn’t fully appreciate what success in this medium is really
going to look like. This is not about creating one-off hits like
my old business. That is not the way to create a sustainable
competitive advantage."

"Embracing things like blogs and sharing of content
between individuals… is at least as important as…
coming up with the next mega-online event."

"I now get excited about user-generated content the way
I used to get excited about thinking about what television
shows would work."

"Original content is the salt and pepper on the meal. It’s
certainly not the engine driving this."

"The Internet is such a niche content environment
that the broadcast model does not really work."

—  "The broadcast model does not really work…"

Less than twenty years ago, broadcast was the
only game in town.

Sixty years ago, movie theaters were the only
game in town.

Television did not kill the movie industry. It just
diluted its power.

The Internet is not likely to eradicate television –
cable or broadcast – either, but just like TV did to the
movie theater business, it’s going to chomp away
at its influence, probably significantly. 

Here’s the path we’ve been on as screen watching

From a limited number of moving picture options outside
the home available according to a set schedule
(movie theaters)…

To a limited number of moving pictures inside the home
according to a set schedule (television)…

To a virtually limitless selection of choices, when, where
and how we want it (Internet video)…

The genie is out of the bottle.

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  1. March 4th, 2006 at 10:48 | #1

    It is great to know that I am not alone in my thinking and beliefs. These comments validate my thinking and in addition confirm what we are suggesting to our parnters and the strategy of our digital Cape Town based studio. I also like the recogniotion of ‘personal content’ I think that personal content is going to take up a lot of bandwidth and viewing time in the new media

  2. March 4th, 2006 at 11:18 | #2

    With tools like Sony Vegas and Virtual communicator around, i think video on web sites will be a standard.

  3. March 4th, 2006 at 11:44 | #3

    I am sticking with your newsletter and The System as the guide on this. I know in my business, it’s like your saying, the broadcast media is giving way, and in some cases tranforming to niche content developed by experienced real world people enabled by technology.

  4. Graphic
    March 4th, 2006 at 11:45 | #4

    Me personally I can’t wait for the next innovation of video online. The whole picture, idea and possibilities excites me beyond anything I can remember of late.
    My only reservation is that it should not follow down the road of TV but create it’s own unique individual argument and niche in entertainment and informing, in similar yet possibly far more beneficial ways than the tiring, money enforced political agenda’s.
    Let the genie roam free, to explore, uncover
    and expose what needs to be changed.

  5. March 4th, 2006 at 12:04 | #5

    The impact of media on the internet will change the way people live and learn. Both hardware and software are being combined with focus into one direction. Video online is part of that focus.

  6. March 4th, 2006 at 12:18 | #6

    The importance of online video is beyond doubt for me. So the question becomes not ‘Why’ to vblog, but ‘What’ to vblog. Just how does one decide how to ‘monetise’ the video. As a lead generation tool it could be huge; it’s perhaps too obvious as a sales mechanism. How to brainstorm for video…now there’s an idea. Anyone got a clue?

  7. March 4th, 2006 at 12:36 | #7

    You continue to act as a great catalyst for masterminding around Video on The Net.
    Ian Pritchard asked a super question, “WHAT to vblog?”
    My suggestion is to produce content that people WANT to see. Make it useful, timely and insightful.
    Ask your customers, clients and prospects what they want and GIVE it to them. – Nothing new. Still ignored!
    Regardless of the MEDIUM that your content goes to and through, make it WORTHY of being viewed, heard or read.
    Wishing you much success,
    Martin Wales

  8. March 4th, 2006 at 12:47 | #8

    Since subscribing to this site, I’ve been overwhelmed at the insight and bold thinking that all members have to offer to my learning curve. The comments are just stimulating to say the least. Keep em’ posting. Thanks

  9. March 4th, 2006 at 13:39 | #9

    Hey Ken–
    Imagining what is possible with content through e-video in my business–helping people create great relationships–is so exciting in its implications I can hardly stand it. I am just getting together the resources to vlog and deliver many of my products through video. Thanks for your able guidance and vision to the future!

  10. March 4th, 2006 at 13:45 | #10

    In the words of Artie Johnson ” V-e-r-y Interesting” and yes the truth of the matter is that we are in a society that wants what we want when we want it .. and the Internet has provided us with just that. The appearance ( no pun intended ) of Video all over the Net today is just another ingredient for the viewer ( consumer ) to have things their way ..what to Vlog ? I agree with Martin and all the Niche Marketers online in taking the approach of – never mind Vloging what you think people might want. Ask them what they want to watch and then provide exactly that!!
    Happy viewing and I just want to say how much I enjoy your systemvideoblog
    Thank you
    Harry Crowder

  11. Ken McCarthy
    March 4th, 2006 at 16:20 | #11

    Thanks for the kind comments.
    Some more evidence of the impact the Internet is having on television…
    The New York Times (3/2/06) reported on Procter & Gamble’s attempt to recapture its declining Soap Opera audiences.
    (P&G owns several major soap operas through Procter & Gamble Productions. It originally created them to sell soap and laundy detergent to housewives.)
    “As the World Turns” is down from 5.48 million viewers (1994-95) to 3.26 million today. “Guiding Light” is down from 4.97 million to 2.8 million today.
    Where is P& G looking to recapture lost viewers? The Internet.
    Taking a page from 1950s when P&G was originally trying to build audiences for their shows, they’re bribing viewers with cash prizes for watching. You can see what they’re up to at DaytimeDollars.com.
    (Seems like a weak approach to me, but mayeb people can be lured into watching shows they’ve apparently decided not to watch by the chance of winning prizes.)
    Anway, this sums up what I think is going to be the story of the next several years… big advertisers scrambling to recover the viewers they’ve lost, and are continuing to lose, to the Internet.
    Declan Dunn who has worked the Internet from many different angles (info marketing, affiliate marketing, creating advertising networks) has made the shifting balance of media power a focus of his latest work and will be talking about how to cash in on it at System 2006 in Chicago.
    If you’d like to learn more about the System and System 2006, you can go here: http://thesystemseminar.com/teleseminars/

  12. March 4th, 2006 at 16:31 | #12

    Internet video will definitely play a huge role in one of my niches (cooking). I see the passive “cooking show” giving way to an interactive medium where the viewer can choose which recipes to view and when, stop the video to see something again, and even post live questions in the middle of making tonight’s dinner. And of course, the whole thing will be on a iPod so cooks can stir and watch at the same time. It’s going to be fun!

  13. March 4th, 2006 at 18:47 | #13

    Dan Bricklin, in an interview on IT Conversations, mentioned that user generated content over wireless medium drawfs commercially generated content.
    How? Users spend more time calling each other on mobile phones than listening to the radio. He argues that people need to remain socially in touch with other people. In this sense, MMS phone videos will out-do any commercially generated content.
    Sites that are taking advantage of these are the new social networking startups. There’s one which recognizes facial features… which will make automatic social linkages interesting.
    Virginia’s mention about cooking is most interesting. When my brother moved out a few years ago, he spent most of his dinner hour calling up mum for cooking instructions. Home cooking and home recipes are the most potent candidate for personal user-generated content.
    Although I’m not impressed with quality from phone videos, the quality from digital cameras are good enough for internet broadcast, and is so much easier to download to the PC. There might be something in there.

  14. March 5th, 2006 at 00:57 | #14

    I am over the moon about what is happening with video online. For forty years I’ve been associated with home movies as my ex-husband was a fanatic and what he could do with 8 mm movies was amazing, but a time-consuming. I’ve experimented with DV-cam, and have been following Ken McCarthy and others such as Mike Stewart and Jim Edwards. I can’t wait to get video on my website, and to tap into more of this new world of Internet broadcast. Joan Small, http://www.joansmall.com

  15. March 5th, 2006 at 21:59 | #15

    I think Ken is right on. I’ve uploaded viral video assets across numerous directories and am averaging 50,000+ views per week of my video content. My business is an online music education model and I am only uploading watermarked teaser content. These viral assets are boosting unique visits to my web site and boosting subscriptions. We’re branding the launch of our product through viral video.

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