Categories
The Industry

You Can’t Force Innovation

The new video service Quibi failed after only 7 months of operation and after having received $2 billion in backing from big industry players. The concept was to offer short 5 to 7-minute video serials that would get viewers engaged in a story from day-to-day and week-to-week. The failure seems to be due to nobody being interested in the format. Younger viewers aren’t interested in scripted Hollywood content and instead watch content created by their peers. Older people have now been trained to binge-watch. It turns out there no audience for the concept of short cliff-hanger videos.

The Quibi failure reminded me that you can’t force innovations onto the public. We live in a society where everything new is hyped beyond belief. New technologies and innovations are not just seen as good, but in the hype-world are seen as game changers that will transform society.  A few innovations live up to the hype, such as the smartphone. But many other highly-hyped innovations have been a bust.

Consider bitcoin. This was a new form of currency that was going to replace government-backed currency. But the public never bought into the concept for one big fundamental reason – there is nothing broken about our current form of money. We deposit our money in banks, and it sits there safely until we’re ready to use it. For all of the endless hype about how bitcoin would change the world, I never heard a good argument about why bitcoin is better than our current banking system – except maybe for criminals and dictators that want to hide wealth.

Another big bust was Google Glass. People were not ready to engage with somebody in public who could film them and replay a casual conversation later or post it on social media. People were even more creeped out by the stalker aspect of men using facial recognition to identify and stalk women. To give credit to Google, the folks there never envisioned this as a technology for everybody, but the Internet hype machine played up the idea beyond belief. The public reaction to the technology was a resounding no.

Google was involved in another project that hit a brick wall. Sidewalk Lab, a division of Alphabet envisioned a new smart city being created on the lakefront in Toronto. To tech folks, this sounded great. The city would be completely green and self-contained. Robots would take care of everything like emptying trashcans when they are full, to setting up picnics in the park and cleaning up afterwards. Traffic was all underground and an army of robots and drones would deliver everything people wanted to their doorstep. But before this even got off the drawing board, the people of Toronto rejected the idea as too big-brotherish. The same computer systems that catered to resident demands would also watch people at all times and record and categorize everything they do. In the end, privacy won out over technology.

Some technologies are hyped but never materialize. Self-driving cars have been touted as a transformational technology for over a decade. But in the last few years, the engineers working on the technology acknowledge that a fully self-sufficient self-driving car is still many years away. But this doesn’t stop the hype and there are still articles about the promise of self-driving cars in the press every month.

Nothing has been hyped more in my lifetime than 5G. In the course of recently watching a single football game, I must have seen almost a dozen 5G commercials. Now that 5G phones are hitting the market, the new technology is likely going to soon be perceived by the public as a bust. The technology is being painted as something amazing and new, but recent tests show that 5G is no faster than 4G in 21 of 23 cities. 5G will eventually be faster and better, but will today’s hype make it hard for the cell companies to explain when 5G is actually here?

I could continue to list examples. For example, if I had believed the hype, I’d now live in a fully-automated home where I could talk to my home and have it cater to my every whim. I’d have unlimited power from a cheap neighborhood fusion power plant that produces unlimited and clean power fueled by water. I’d be able to avoid a commute by using my flying car. There is much to like in the hype-world, but sadly it’s not coming any time soon.

Categories
What Customers Want

The Onslaught of New Content

As if cord cutting isn’t bad enough, online OTT programming is exploding with numerous new options. One has to think that these many options will lure a lot more homes to ditch traditional cable TV.

Disney+. This service is hitting the streets with huge fanfare. It’s priced at $6.99 per month or $5.83 per month with an annual subscription. Disney+ will contain the content provided by Disney, Marvel, Lucasfilm, Pixar, and National Geographic. Disney owns the Star Wars franchise and is planning a lot of new Star Wars content. There will be new content created only for the Disney+ service like a series produced by the Jim Henson Company. Disney also owns most of Hulu and will be offering a bundled package of Disney+, Hulu, and ESPN+ for $12.99 per month.

Apple TV+. The service launched November 1 with a monthly fee of $4.99. It’s being offered for free to customers that buy an expensive Apple product like an iPhone, iPad, Mac, or Apple TV.  The company has set a goal of having 100 million customers within 3-4 years and will launch in over 100 countries. Apple is also offering new content created just for the service. They have announced partnerships for content from Oprah Winfrey, from Reese Witherspoon’s Hello Sunshine production company, and from Steven Spielberg’s Amblin TV. While not yet announced, Wall Street expects Apple to accumulate a library of older content. For now, the service doesn’t work on Amazon Fire and Roku devices, but should in the future.

HBO Max.  This is being offered by AT&T and slated for launch sometime in the spring of 2020. The company is offering this at $14.99 per month, the same price as HBO Now – which is the current online HBO offering that only carries the library of HBO content. Customers subscribing to HBO on a cable system might get the new service for free. The company will likely migrate HBO Plus customers to the new service. HBO Max brings in the vast library of content owned by Warner Media. There will be a curated revolving list of classic movies. They’ve also bought the rights to shows like Friends. The company hopes to have 50 million paying customers by 2025. This is the only online service that doesn’t care if customers buy their prime HBO content online or from a cable company.

Peacock. This is owned by Comcast and is scheduled to launch in April 2020. The service is named for the NBC peacock logo. The service will provide new content including shows from Alec Baldwin and Demi Moore. It will carry the vast library of NBC’s programming. The new offering will also tie into Olympic coverage. For now, Comcast is thinking of giving this free to every Comcast customer and may make it free to everybody.

Quibi. This is a new service created by Jeffery Katzenberg of DreamWorks. It will launch in early 2020 and contains a lot of new content. The unique thing about the service is that it will consist of short-duration content and will only be available on smartphones. The company is working with over 30 partners to create content that is aimed at younger views. The typical content will be 7-10 minutes in length. It’s attracted big names like Steven Spielberg, Kevin Hart, Tyra Banks, and Jennifer Lopez. There are plans for vignettes from traditional series like Punk’d, Varsity Blues, Vikings, and How to Lose a Guy in 10 Days.

Bloomberg. Just to show that all new content isn’t entertainment related, Bloomberg is also planning a new online offering. It will be subscription-based and will offer all of Bloomberg’s current business content plus new content. For example, there are plans for a series, Moon Shot that looks at major scientific breakthroughs. Accelerate will look at test-driving cars of the future. Prognosis will look at cutting edge medicine.

The question faced by customers of traditional cable TV is if they want to continue to pay the big monthly bills for traditional TV and also subscribe to some of this new content. There are a lot of households that are going to want to watch the Disney catalog of programming or see the new content on Apple TV+ or HBO Max. It seems likely that this flood of new content is going to convince more homes to cut the cord.