April 13, 2010

Part 5.0: Dave Smith Sees "Over-The-Top."



Click on photo #1 to see the filibuster scene and photo #2 for its dramatic end.

Forward by Wendy McHale

Jimmy Stewart's filibustering-performance as Mr. Smith in the 1930's-era film, "Mr. Smith Goes to Washington" has one thing in common with the 2008-era striking TV Writers' non-performance. They're both going head to head with big, powerful media companies. Yet if Frank Capra was here today to write and direct a film about the on-going fight, he wouldn't be able to produce it if he was in their union!

Jefferson Smith caught the attention of the United States Senate and an ever-increasing national radio-listening audience with each hour he stood to talk. On the other hand, the TV Writers union (WGA) stands to lose more of their ever-decreasing audience on Oscar night with every hour they refuse to sit down to talk.

Jefferson Smith's Senate floor speech was simply "over the top." It changed everything. And that's something neither the TV writers of today nor the big media companies of today really understand. In part 5 of our series, as they continue to fight over nickels and dimes, Dave Smith covers why OOT TV is going to change everything.

It seems to all boil down to the simple things. Stewart's character had no idea when he decided to write a bill, and then introduced it on to the Senate floor, that it would create a sensation. In the same regard, when Dave wrote a media list, and then posted it on Mediasmith's office kitchen wall, we expect he had no idea it would create a sensation either.

Jeff Smith did it with the help of his partner, Clarissa Saunders. Dave Smith's done it with the help of his partner, Karen McFee. Perhaps they are two important reasons why so many people admire these Mr. Smith's!!


Tim: Let's talk about OTT. Tell us what it stands for.

Dave: OTT stands for "Over The Top." It starts with all the new flat panels. Everyone is going to have to get a new TV in the next 18 months or so because of the United States Congressional dictum that everybody is going to have to go digital. This is going to disenfranchise the people who can least afford to be disenfranchised relative to their right to have TV unless they pop for a new converter. This is such a serious problem that the feds have announced that they will be buying converters for some households.

Tim: Right.

Dave: All the new flat panels have an Ethernet connection in the back. So you have an Ethernet connection, you can run that to your computer. If your computer has Vista, is a MAC or it has Microsoft Media Center on it, you can program a flat panel from there.

Tim: Got it.

Dave: This will enable you to program that panel and decide what you want as the default screen. At the Consumer Electronics show recently, companies such as Philips Sony and LG, among others were talking about OTT and some of its applications in their back rooms. Each of them is developing what is being called their own "GUI widget" that would be a combination guide and search service. According to Shelly Palmer's Media 3.0 blog, "everyone" was showing their version of OTT IP-video-enabled TVs. There are a lot of different ecosystems and no standards yet, but this will settle out in time.

Tim: A TV guide and search service.


Dave: It will have other functionality too. The result could be that Sony, LG and Philips will be selling advertising on them. You'll be able program them to be your main interface. You could also choose YouTube or your cable company or whatever your want as your default screen.

Tim: That's the ultimate convergence, right?

Dave: It is convergence. OTT will bring web video, "Over The Top" of your cable or satellite provider to the "first screen," or otherwise known as your TV.

Tim: Wow.

Dave: Now there are a lot of implications. One is convergence. Another is that it will be like you're taking the dial tone away from the cable companies. When you turn on your TV it will no longer be CNN or another cable network that you watched last night. It could be the GUI widget if you make that your default screen. Therefore it's going to take away a lot of audience.

Tim: Because the user programmed it that way.

Dave: There will be 3rd party "GUI Widgets". There may be a company like the next Google who come in with a 3rd party gooey widget which will be a guide for "all" of your video. Like for example, what's on TV, what's on your DVR, what's in your DVD collection and what's on the web. It could be a guide for all those things. Who wouldn't want a customized guide like that? Just because you might have been watching something last night on one of those media platforms, who is to say that you would want to continue being on that channel!

Tim: Of course!

Dave: It will be a smart interface which could be the preference of many. I don't know how much viewing is done on TV by people who turn on the TV and watch whatever is on it at that moment. But I'll bet it's no small amount.

Tim: At least for the first several minutes.

Dave: Right. All of that will be eliminated under the world of OTT. We very well may be writing checks to Phillips, Sony, LG and Panasonic if they are running the advertising instead of NBC! For better or worse, they don't seem to have figured out how to monetize this year though.

Tim: Let me play it back to you so that I am clear. I have an HDTV, I have Vista. I have Comcast as my cable and internet connection. And now I'll have another channel from the TV manufacturer itself if I choose their interface as my default screen.


Dave: Sort of. Once you hook it up to your computer, your flat-screen is just another monitor. You'll be able to choose many sources e.g., if you want the TiVo interface to come up or CNN to come up or a GUI widget to come up or YouTube. You'll obviously be able to access all of them but whatever you choose to be your default screen, it will be an ideal position for any advertiser. This will be easier if you have a dedicated box like an Apple TV or many other boxes that are coming out.

Tim: So we have HD/Flat-panels to thank for this convergence.

Dave: Right. This is a consequence of the law proposed which will impact people in a good way relative to the rule congress put out there. In essence it will deconstruct the broadcast industry.

Tim: Which is a major paradigm change for our business.

Dave: Yes. But there are many other ramifications as well. For example, like whether we'll have what you might call "tower of Babel-like" audience fragmentation. This may very well put the heat on budgets for high-level TV spot productions. The fear is that some of the great production values we get from the networks from HBO or the networks will no longer exist because there will no longer be big audiences to fund their production if there aren't enough eyeballs around.

Tim: Which is kind of ironic since HD technology offers viewers a more robust content experience than ever before.

Dave: I don't think seeing two singers lip-cinching Back Street Boys songs from China country is ultimately what the technology was made to distribute, even though there was actually a hit video that did that.

Tim: Agreed.

Dave: So while widgets and social networks are getting lots of coverage now, OTT is looking a little bit into the future, but it's not very far. If you saw the applications like these at this past year's CES, think about what's going on in Vegas next year. And in fact if you think about it, Apple TV, TiVo and Sling Box are all single-function OTT applications. That leaves the door open for a multi-function box that combines all of these things into one.


Tim: Sling is really just a cut and paste video tool isn't it?

Dave: Yes.

Tim: Which I think BTW is a brilliant tool.

Dave: Sling wants to be a tool that goes into a bigger box. We have too many boxes.

Tim: It's not just the boxes, it's the wires!!

Dave: The world wants an OTT box that combines all the boxes you've got now. It will include your cable box and flat panel and it will be wireless. So we'll have to buy one less piece of furniture which is the one that houses all of these boxes. In the meantime, CES this year also featured Wireless HD where you could put the boxes in a closet!

Tim: So Ethan Allen's also going to take a hit?

Dave: Let's save our talk about the home furnishing business for another time.

Tim: LOL! Thanks, Dave. This was great!

Dave: It was my pleasure, Tim


David L. Smith is CEO and Founder of Mediasmith, Inc. -- a full service advertising media agency, specializing in digital media with an increasing emphasis on emerging technologies. Mediasmith is headquartered in San Francisco, California. For more information about Mediasmith, please contact Dave Smith directly by email at smith@mediasmith.com.

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