Open Television Network lauched to serve the fat middle of the long tail
February 27, 2008
The Open Television Network (OTN) was launched last month with the goal of providing a distribution network for the “fat middle” of the Long Tail, helping to build a “middle class” of media publishers. It’s a framework that allows small media producers to sell video through iTunes using RSS feeds. And that’s the clever twist behind their approach.
So far, Apple has only made video from the major studios available through the iTunes music store, experiments with independent media makers notwithstanding (e.g. The Tribe). And while Apple may still have something up their sleeve, and you can imagine they do, they are not talking. I would think they want to do for video what they did for music. But right now, unlike independent labels who can get their music into the iTunes music store, there is no way for independent media makers to get their content into the iTunes music store if they want to charge a fee. Yes, people can subscribe to your video blog through iTunes, but you have no way to charge for it. What if you want to charge something for your content? Why should the big studios be the only ones who can charge for content on iTunes? Thus enter OTN.
OTN lets viewers subscribe to an RSS feed so they can see the titles of new videos in iTunes. When the viewer clicks on a particular item to download it, their OTN account is debited the price of that video. This is done through a technology called KlickTab. Media makers can add buttons on their site that when users click on them it add their RSS feed to iTunes. Before viewers can buy content they will have to obtain an account with OTN (OTN starts new users off with a $5.00 credit as an incentive to try it) and then whenever they click on content in iTunes from an OTN publisher, their account is debited the price of the video. Like PayPal in the early days, people are going to be hesitant to give their credit card number to an unknown entity, but I think that if OTN can collect a critical mass of interesting content, viewers will start to see the value of being part of the network. What OTN needs is a killer hit that everyone will want to download, or some free content that requires opening an account, so viewers can see what’s in it for them.
There are many things I like about the OTN model. They provide small publishers a way to get paid for their media, they are putting it into iTunes, which offers a seamless user experience for getting media to iPods, iPhones, and AppleTV that most people can manage. There are no content gatekeepers (except for clearly inappropriate content like pornography). No DRM. OTN charges a reasonable 15% fee from the money they collect, unlike other services based on old media that want to take much higher percentages. Last time I checked internet transactions were super efficient, so the percentage distributors take should drop precipitously, not stay the same.
Some media makers may be concerned about no DRM, but OTM is perusing a positive model and counting on the goodwill of most viewers out there that want to support media makers doing good stuff. Rather than worry about protecting your media, small publishers should worry about getting their media out there and sold. User convencience should be the priority. Long tail publishing actual benefits from some sharing among viewers, for that spreads the word of mouth. And as Philip Hodgetts of OTN said at last week’s Final Cut Pro Users Group Meeting in Boston, it’s about making it, “easier than piracy and almost as cheap.”
The music industry made a big mistake when they introduced CDs at a price higher that LPs rather than lowering the price. That was the beginning of the end. The video industry was much smarter in the transition from VHS to DVD by lowering the wholesale price of DVDs, and the home video industry took off. Now Apple’s iTunes music store is selling videos for too much money, are they repeating the mistake of the music industry? I think the price of a video should be low enough as to constitute an impulse purchase. Only a small segment of the population is going to pay $1.99 for a TV show. There’s an untapped market out there. The long-tail content publishers that OTN is building their system for will have an open marketplace to sell their goods. Right now they have none. The democratization of production and post production is not enough. You need the democratization of distribution. OTN is trying to take care of that. So far advertising has not earned much for media makers distributing their video online, however, for specialized an niche content, OTN might help media makers make a decent living making videos for specific audiences who are not served by the major studios.