MARKET MONITOR COLUMN
INTERNATIONAL CONSULTANTS GUIDE
The broadband content fallacy
The enthusiastic belief in parts of the entertainment and media community is that the internet is radical. REALLY radical. It has certainly proved to be radical in its narrowband form - changing the way we access information, improving communication and transactions between companies and enabling new business models. But will the internet be radical enough to change the very nature of the entertainment we consume ?
Today, the biggest categories of entertainment include music, films, and TV. We don't yet know how the internet will change these, because Internet entertainment only comes into its own with broadband connections, which are just beginning to take off. Some entrepreneurs in digital Hollywood are betting that the internet will create entirely new forms of entertainment, and the race is on to discover these forms among creators of web animations, short films and interactive games.
Durlacher is yet to be convinced that entirely new forms of entertainment will become mainstream. In fact we believe that while the internet will change the way that music, films and TV programmes are consumed, it will have relatively little impact on the content itself. It is true that some forms of entertainment are entirely enabled by interactivity, including multi-player games, betting, and auctions - but these are unlikely to become bigger than traditional entertainment. We would be skeptical about new forms of entertainment that depend entirely on a new distribution channel (such as broadband internet) to succeed. This is because the new content creators would have to start from scratch and build a market presence from nowhere.
Historically, television created a new form of broadcast entertainment by adding pictures to the radio. The internet now adds interactivity, but this time we do not think it is revolutionary enough to create a new content form. What we do see working is interactivity complementing existing content (for example 'The Simpsons' have an internet site with interactive features, but it is the TV show format that is the mainstream revenue earner) and interactivity adding functionality to traditional content (for example, allowing viewers to select camera angles from multiple streams of sport footage). And clearly while the content itself may not change, the distribution mechanisms certainly will (for example, it is likely that you will consume TV and radio style content via the internet, with interactivity adding the element of choice).
This means that rather than new content creators and aggregators (such as Icebox, DEN, iFilm and Atom Films) becoming content powerhouses, it will probably be established media giants that benefit most from the internet and broadband. LivePlanet, founded (not just fronted) by Hollywood actors Ben Affleck and Matt Damon, is an interesting hybrid. It aims to create new content that utilises interactivity but also works in traditional formats through established channels. Creativity is king !