In The digital convergence scenario all the players are coming at the point. Telephone carrier, broadcasters, content providers, internet players are trying to set the best strategy to engage users/viewers. What is clear is that internet will be the arena.
Those player who understood that social networking is the key are gaining advanteges.
Broadcasters and content providers are beginnign to understand that the protection of copyrights is not the winning strategy.
The digital rights management problem and the attempts the mainstream media are doing to protect their position are revealing the best constraint to a new winning strategy.

The IPTV case is exemplar.

In order to face digital convergence challenges the two greatest market actors: the broadcasters and the telephony carriers are facing on the IPTV technologies. The first, generally owns the contents and the
distribution channels the second have an advantage on the digitalization side and the IP/internet access technology. From the air to the cable the contents are delivered by the IP protocol on
telecommunication networks. So, the same programs you can find on the Television platforms (Analogical, DTT or Satellite) are made accessible through data networks with computers or set top boxes
devices, generally bundled with data and voice services.

But a new way to delivers the same content/services it is not a stunning
innovation.

From a customer perspective what is new in IPTV is:

  • high
    costs to access services and limited contents. If I like reality
    shows and soccer matches I can find them shared among competitors.
    The cost to have the whole supply available is quite high.
  • switching
    costs
  • information/content
    retrieval problems and costs
  • limited
    geographical coverage (IPTV services are delivered only in the
    larger cities)

Some
of this weakness points became points of strength in the Internet TV
scenario so we have:

  • lower
    and decreasing costs to access services and contents.
  • new
    and original contents produced by internet users
  • no
    switching costs, just click away from the website
  • more efficient information/contents retrieval through advanced search
    engines, larger web TV directories, folksnomies and social tagging,
    new clients and contents aggregator (see in the next paragraph)
  • wider geographic coverage with the diffusion of the broadband services
    (ADSL technology supports the user generated contents).
    IPTV contents requires HDSL of optical fibers connectivity not always available and more expensive)
  • growing quality of video compression algorithms
  • sharing and publishing functionalities that makes the user experience more and more personal and tight to users own needs.

The point is that the big players in the digital convergence struggle are fighting for contents believing that the “the content is the king”.
They are missing the point.

In a digital networked environment the connections, the relationships, the point – to – point communication, the users, are the king.
The content is a corner of the realm.

“What the argument that content is not king does say is that people are willing to pay far more for point-to-point communication than for the famed content. That is likely to be reflected in what kinds of networks are built, and which companies succeed. It inverts the usual ordering of priorities, making point-to-point communication central, and content secondary. The fights over control of movie distribution
may be a distraction from the main business of communication. As a simple example of what this may mean in practical terms, most broadband access links, such as cable modem and DSL ones, are
designed to be asymmetrical, with higher capacity on the link to the home than to the network. The expectation is that these connections will be used primarily to pull content to the consumer. However, if
the consumer places much higher value on personal communication than on content, the case for symmetrical connections becomes stronger. ”

(A. Odlyzko, Content is not the King, http://www.firstmonday.org/issues/issue6_2/odlyzko/)

The broadcaster missed another point relevant to their accountings:

“The value of a broadcast network is usually regarded as proportional to the number of users in it. On the other hand, a point-to-point communication network is often said, by Metcalfe’s Law, to have value
proportional to the square of the number of member. This then leads to the conclusion that eventually, once a single network like the Internet reaches a large enough size, point-to-point communications will provide much higher value than broadcast. There are some problems with this argument. (See [Odlyzko3] for detailed arguments.) In particular, Metcalfe’s Law does not reflect properly several other important factors that go into determining the value of a network. However, the general thrust of the argument and the conclusion is valid. Certainly all the historical evidence cited throughout this work supports the conclusion that connectivity (or point-to-point communication) is what matters the most. “

Odlyzko arguments relays on the following definition of contents

“generally content is used to denote material prepared by professionals to be used by large numbers of people, material such as books, newspapers, movies, or sports events. That is the sense in which it is used in this work. In general, content is distributed by “mass” or “broadcast” communications systems.”

And that’s what Broadcaster and carriers have in mind.

Broadening the definition it changes the logic and the conclusions.

If we means for contents all those generated by the users the “volume” of contents and the “value” generated by the networks match again.

Just a single example will explain that point.

Google is the most successful internet company. It is built on users generated content delivering. Research keywords are users generated contents as well as all the links the search engines answer back to the users queries.

The users generated content is the King.

Concluding this overview we can say that video sharing communities success demonstrate once again the power of network effects. The value of a network is approximately calculated from the minimum measured with the Metcalf Law: it increases with the square of the number of users to a maximum that results from the Reed law: the utility of a social network grows exponentially with the growth of the users (2^N-N-1).

Collecting, packaging and seeding user generated contents it is the strategy to leverage networks effects. Community managers have not to be worried if all the contents are available through the API’s and are
released under creative commons license. That’s their power: the power of redundancy and ubiquitous availability. What a video sharing platform has to do is to create a “comfortable” environment to
provide a unique user experience and to guarantee the visibility of the platform and of the brand on the net.

You Tube is the success history everyone know. What is interesting ing the You Tube case is also the behaviour of some broadcaster that seemed to learn the lesson.
Online word-of-mouth has been primarily responsible for You Tube’s growth since its inception, and gave the site its first surge of publicity when it hosted the popular Saturday Night Live short Lazy Sunday.
However, You Tube’s official policy prohibits submission of copyrighted material, and NBC Universal, owners of SNL, soon decided to take action.

In February 2006, NBC asked for the removal of some of its copyrighted content from You Tube, including Lazy Sunday and 2006 Olympics clips.

The following month, in an attempt to strengthen its policy against copyright infringement, You Tube set a 10-minute maximum limit on video length (except for content submitted via its Director Program,
which specifically hosts original material by amateur filmmakers).
However, the real cutoff is 10:58. This restriction is often circumvented by uploaders, who instead split their original video into smaller segments, each shorter than the 10-minute limit.

Though You Tube had done its part to comply with NBC’s demands, the incident made the news, giving You Tube its most prominent publicity yet. As the site continued to grow, NBC began to realize the possibilities,
and in June 2006 made an unusual move. The network had reconsidered its actions and was announcing a strategic partnership with You Tube.
Under the terms of the partnership, an official NBC channel will be set up on You Tube, showcasing promotional clips for the series The Office. You Tube will also promote NBC’s videos throughout its site.

CBS, which had previously also asked You Tube to remove several of its clips, followed suit in July 2006. In a statement indicative of how the traditional media industry’s perception of You Tube (and similar
sites) has changed, Sean
McManus,
president of CBS News and Sports noted:

“Our inclination now is, the more exposure we get from clips like that, the better it is for CBS News and the CBS television network, so in retrospect we probably should have embraced the exposure, and embraced the attention it was bringing CBS, instead of being parochial and saying ‘let’s pull it down.’

This is another example of how the problem of copyrighted contents is becoming less important.

In August of 2006, You Tube announced that, within 18 months, it hopes to offer every music video ever created, while still remaining free of charge. Warner Music Group and EMI have confirmed that they are
among the companies in talks to implement this plan.

In September Warner Music and You Tube signed a deal, in which You Tube will be allowed to host every music video Warner produced while sharing a portion of the advertisement income. Additionally,
user-created videos on You Tube will be allowed to use Warner songs in their soundtracks.

On October 9, CBS, along with Universal Music Group and Sony BMG Music Entertainment, also agreed to provide content to You Tube.

This is another new trend of web 2.0 revolution. Substantially all social network applications and dynamics are not new. They all were ready in the ’90s. BBS, newsgroups, FidoNet and all the first social networks made the success of internt. the WWW broadened the audience but at the same time changed the communication model. it gave a great importance to the one way communication paradigm, with few content provider and many users. The web 2.0 it is balancing the internet aging taking it back to the feauture. Now social networks are wider then the beginning and the copyright protection army is changing its stratetegy. Sooner or later this will boost againg the internet growth. What we will see it is probabily a growth of users running parrallel with a comparable growth of the content.

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