I think an example of what you think Disney should have done would nicely illustrate your point.
 

Hi Anon,

I think you should read my presentations - it's a question I've answered numerous times in painful detail.

Thx for the comment.
 

Finally, a business perspective that makes sense. Of course the bloggers love the move, precisely because Disney is giving away free stuff to them. But what does Disney get out of this besides some happy PR? If their strategy is "we'll see how this goes then adjust" then they're opening the coffers for the sake of buzz... not a good move. It's time to put down the kool-aid and plan how to monetize through this new distribution channel without mindlessly cannabilizing their old, profitable ones.
 

Good stuff, as usual, Umair. Note, too, that ABC wants to get involved in the fan site phenomenon, "bring them closer to our brand" was the explanation. Read: control them.

BTW, why is your RSS feed now titleless?
 

The presentation link is dead. I agree with the comment above that a sharp, well thought-out example of what disney should do would speak volumes more than plasticity and rebundling....
 

If I may be so bold, the problem Disney is creating is now their stuff immediately flies out to the edge, without them capturing any of that value.

The point of the edge, for the major media players, is to leverage it-- not to give their value to other players. What Disney could have done instead is launch a new video service which would feature this content and the ability for fans to mix it up, add metadata (you can imagine how powerful that would be with a show like LOST, for example), etc.

Instead, now other players will get to capture that value.
 

How about in-movie product placements? Since this media runs on computers and other communications devices, there is also a potential of product endorsements through the stars.

Advertisements are overrated in terms of finding the right audience. Could movie downloads be combined with direct response marketing? Short 5-second ads that say "Want a credit card? Click on link and we'll contact you. Will not interrupt movie-watching"

By the way, the link to the Media Economics Presentation is broken.
 

Funny that so many are so quick to be critical of whatever the mainstream media do. Not that I'm a proponent of the networks, but I think that trying this out for 2 months with an ad-supported model deserves some kudos.

ABC is clearly trying to lead the the mainstream effort to deliver media via alternate platforms, including iPods, cell phones, and now over the internet. In Italy, you can get Lost on your Vodafone, for example.

Is this the ultimate solution? Of course not. Does this represent "the rethinking of media orthodoxy?" I have no idea. Are they experimenting and trying to find a solution? Seems like it.

BTW, this post would win a buzzword bingo competition.

http://bingo.adactio.com/

~G~
 

Umair. For me this is the first blog ost that I have read of yours (came via Fred Wilson's link). I third the request to spell out what you think the right strategy for Disney would be. For you to say "read my presentation" is a cop-out, especially when that presentation is 107 pages filled with economics diagrams. Sorry, my attention is scarce.
 

A basic skim of the powerpoint would answer some of the questions posed here. It's free and really not all that hard, econ graphs included.

A quick point I picked up after re-reading it just now: media 1.0 strategy is focused on different platforms and pricepoints. All Disney is doing is adding another platform. Just because it happens to be the platform bloggers prefer does not mean they are utilizing it effectively. The internet can do so much more then just show TV shows.
 

1. Do we have any detail regarding the build and the openness of the suggested fan-sites? They could be an attempt at re-bundling and smart aggregation, a first for a major content+platform owner. (Of course, they could also be classic walled gardens.)

2. It appears to me that Disney has started to embrace the beta practice of the modern Valley. That is quite something for a mainstream company, with content that has audiences much much wider than the usual web 2.0 actual visitors! Not waiting for the final final biz model, not fighting legally without offering alternatives; it seems to me that Disney has learned from the music industry's errors.

3. Trying out audience options for either passive or interactive advertising formats is a huge user-generated leap in Hollywood! This comes out of a mainstream many-to-one, not a start-up many-to-many operator!
 

I'm not a WSJ subscriber, so I never read the original article, but as I understand it, when you boil it all down, this is what Disney is doing:

1. Putting popular TV shows online for on-demand streaming
2. Putting ads in them
3. Somehow incorporating fan sites

To me, that doesn't sound like much of an innovation in business strategy. They're taking the model that works via TV and pasting it onto the Computer monitor with only a few minor changes (you can watch the shows on-demand).

BUT

That's exactly what I want. Perfectly, exactly, almost to every detail, that's what I want.

I don't watch TV - I never have, I just never got into the habit. I *did* get into the habit of spending ridiculous amounts of time in front of my computer.

I've posted to my own blog about how I think TV doesn't mesh with my "on demand generation," and how I want TV shows to be available online, ad-supported, for free, anytime I want. Adult Swim already does it (for the most part), and I think it's great.

The only features I haven't heard Disney announce are deep tagging and blog-reposting. I think you should be able to grab a 15-20 second clip (deep tag) it and share that on your blog, with a quick ad.

If the content providers provide that functionality, and monetize it, then everyone wins.

I imagine that when LOST episodes show up online, I'll finally start watching the show. I've heard from a million people a million times that it's an excellent show...but I don't want to shell out the money for the DVDs and I don't have a TV.

So I think we're looking at Disney's move in totally the wrong way - it's not a business model innovation. Granted I'm no economist (or, for that matter, media insider), but it still sounds like Disney's making a good move to me.
 

Disney has wonderful content and now they have a new medium of distribution, what Disney does not have is attention of users for their new medium. Putting up Video content for isolated downloads perhaps is not the best use of the attention they may get to their new distribution mechanism. The relationship Disney creates with the user is very one on one, the user comes on to the portal gets the content they want and leaves. Now lets compare this to Myspace
The content on myspace is provided by users and users help captivate attention of others users. Its feeding the interaction between the users that powers the whole value chain. Myspace created a sticky affinity consumer space around music, they fueled the user interest and interaction by connecting them around Bands, Myspace parties etc. Allowing users to interact with the bands, around the bands and bringing attention of their peers to the content and Myspace. Now that they have enabled the myspace community to create its own switching costs through the relationships they have built around the myspace brand they are monetizing it in ways that is useful to the users. Adding mobility (Cingular deal), providing ads that do not disrupt their interaction or media experience.
A possible approach for Disney could have been to create interest focus communities that aligns well with their content. Use content as a fuel to generate water cooler chats around their brand, get consumers to build relationships around their brand.
Inspired by Umairs work, ConnectedMix is developing a platform that does just that. While Myspace�s and , Youtubes of the world have been very successful in capturing the attention of the 14-24 age segment, the other varied demographics and user interest are a nascent and untapped market. We enable brands to create interconnected, consumer interest based communities with consolidated backbends. It enables users to build affinity based relationships around the brand and bring attention of their peers to the brand. Further more we provide peer enabled personalized highly relevant information to users from trusted sources, accessible any way any where any time.
 

Umair,
I think you're expecting too much at once. I agree that strategically, this isn't the real move... in fact, it devalues the network, for every program producer will soon want to have this direct relationship with their audiences without the middlemen and when tehre is sufficient ad revenue.

BUT this is, in my already blogged view, an extremely important moment because it is a network telling its affiliates, cable MSOs, and retail outlets to go jump in a lake because the fire is coming.
 

�in fact, it devalues the network, for every program producer will soon want to have this direct relationship with their audiences without the middlemen and when there is sufficient ad revenue.�

Jeff I couldn�t agree more. However companies like Myspace have proven that it is possible to enable producers to have a direct relationship with the consumer (Bands and fans) while creating value for their brand.

I agree that in the current paradigm networks will loose their value if program producers were able to create a direct one on one relationship with their viewer. However Networks can create significant value by being facilitators of connected consumption. In my ideal world program producers will produce content and networks will create an eco system that enables peer promoted allocation of attention to the content, interaction with and around the content.

So in effect the value shifts from ownership of relationship with individual consumers to enabling an ecosystem of connected consumption. Simple analogy would be a large shopping mall compared to a individual shop. Shopping malls attract a higher customer flow as opposed to an individual shop.
 

"Certainly, unbundling TV from distribution is a good first step." Uhm, certainly, there's no such thing as unbundling TV.
TV is just the most prominent way to distribute video content. If you unbundle TV, you're back to square one: either nothing (ooops, did you see my network?), or a bland catalog of content.

Right now, the question would be: do you watch TV, DVD, HBO, The Sopranos, or this New Jersey Mafia show? The content stays the same, it's either bundled or unbundled. But is it a branding scenario (HBO, Sopranos), or just usage driven (TV, DVD)? And how many shows do become brand names by itself?

Monetizing those shows in different distributions is never a wrong move.

But, yes: rebundling (or any bundling) is, where values in multiples are creatable. As content production is not a very scalable business.
 

Hubert,

For the last 50 years, the only way to consume the content distributed on TV has been to watch TV.

Content is being unbundled from distribution - unbundling TV.

Distributing content across different channels can often be a very bad move - it hurts brand equity, it dilutes market power, vaporizes switching costs, etc.