2012 could be the year for online content to take shape
“There’s something happening here. What it is ain’t exactly clear.” — Buffalo SpringfieldAdopting a ’60s protest song lyric might sound like an overreach — especially with actual protests around Wall Street and across the U.S. — but something revolutionary does appear to be brewing at the perplexing nexus of Hollywood and Silicon Valley. After years of fits and (false) starts, of Chicken Littles forced to later eat crow, is 2012 the year when the future for online content will take shape — or at least, begin to coalesce? Amid an almost daily deluge of new deals and initiatives, it feels like we’re getting closer — approaching some kind of threshold, one that could launch video content toward a next level but might also claim high-profile casualties in the process. Of course, we might not recognize that the earth has moved until after the ground shifts, and as always failures and setbacks may be as important in defining what’s to come as successes — starting with the aborted attempt to migrate the ABC soaps “One Life to Live” and “All My Children” online. By validating skepticism about such a business model, the withdrawal of those plans illustrated how rhetoric in this discussion can easily race ahead of reality. Nevertheless, the stampede of video content to the web appears to have moved past the “hedging our bets” stage to the “maybe there’s really a business here” phase. So keep an eye on Netflix, and its growing pains; Comcast, and its rebuffed plans to advance in-home windows for movies; Google, Sony and Amazon, with their distribution ambitions; Apple, and its much-discussed flirtation with a next-generation TV; and Hulu, and whether the partners who opted not to sell wind up regretting that decision or benefiting from it. Pay attention, too, to how CW shows fare under recently announced deals with Netflix and Hulu. And while there’s clearly logic in a younger-skewing network making its programs available to a tech-savvy audience via alternative platforms, one wonders whether online viewing will cannibalize tune-in to the TV stations providing the netlet’s swaying backbone. Finally, when the smoke clears from the original programming announced with great fanfare by these online distributors, let’s see whether they have the fortitude to spend more on new production once they’ve gotten their noses bloodied by an expensive flop or two. Speaking of flops, nothing provides a more sobering wakeup call about the perilous nature of the current media than Netflix, a company that went overnight from widely admired to the gang that couldn’t market straight. Even the company’s hasty retreat from a scheme to split its service didn’t address how they misread the playing field so badly. On that score, Netflix is hardly alone. Take Logitech’s Revue set-up box featuring Google TV, whose sales were so dismal Logitech subsequently called them a “big mistake.” (Editor‘s note: Logitech — which produced set-top boxes featuring Google TV — called them “a big mistake.” The statement was incorrectly attributed to Google in a version of this story posted earlier.) Google’s YouTube, meanwhile, has unveiled a $100-million commitment to expand its presence in original content, enlisting such celebrities as Ashton Kutcher and Amy Poehler to participate. A similar strategy is being employed by a number of online ventures — namely, testing whether programs and personalities with established followings can transfer a lucrative portion of their fans into another dimension, as former Fox News Channel host Glenn Beck has sought to do by luring his acolytes to a premium site. For talent like Beck, especially, such deals represent a notable tradeoff: At the right price and cost structure, subscription models and even an ad-supported formula can be viable. The sacrifice comes in the size of the audience reached — and whether one’s voice is heard beyond a tiny echo chamber. Just ask Howard Stern, who made a similar bet several years ago in his jump from terrestrial to satellite radio. As has been true in the past, those eager to declare winners and losers in this rapidly changing game tend to get ahead of themselves. Moreover, many announcements sound suspiciously like reruns from the turn-of-the-century boom, amid high hopes surrounding services like Icebox and DEN before the dot-com bubble burst. Even so, something is happening. The question, yet again, is whether the media world has evolved to the stage where online content’s would-be prophets can prove they’re not just blowing smoke — starting by actually turning a profit. And if not now, see you in 2013.
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