Skip to content

Break Out the Buggy Whips. Is Now the Tipping Point for Streaming Video?

Buggy Whip Business buggy whip business in technology Who’s in the buggy whip business in technology these days? By that, I mean, what companies are about to become obsolete thanks to major shifts in media delivery and consumption caused by the rise, the serious rise, of streaming? More than a dozen years after the launch of the Streaming Media conference, which is now filled with dozens of content-management systems and practically no CDNs (content distribution networks), the show is creeping back to success showing its best growth numbers in years. Meanwhile, the CDN business is still a rug-dealer’s market, facing a death spiral toward $0 bandwidth, with individual suppliers providing widely varying price, quality and value. “We’ve seen this all before,” observes Steve Lerner, RampRate’s Media Technology Specialist, “by 2003 there were over 25 dead CDNs all who followed the same pattern of selling ‘cheaper’ rather than selling ‘better’. It is hard to make a living marking up bandwidth that has a continuously collapsing marginal cost.” Thankfully, there’s still a market, as my firm, RampRate, mediates deals in this space). Somehow, the CDNs continue to develop new tech to stay in business, but I have to think they’ll eventually bow to Google and Microsoft, the only firms with enough scale to survive in the long term. That said, there’s more happening in streaming than in a long time, with more mainstream content and more kinds of devices that can access it. My partner David Bloom has just published a piece in, listing some of his top candidates for Industries Soon To Be No Longer Needed. He writes: “What’s it all mean? To start, I’d sell off that optical-disc duping factory if I were you. And you may want to get out of the hard-drive and home networked-storage businesses, too. They’re on the way to buggy-whip status and fast.” Just to top it off, he throws in the makers of shelving for all the DVDs, CDs, books and more that we soon won’t be collecting to show visitors how cool our tastes are. Now we’ll have to do that by sharing our culture preferences online with friends through programs such as GetGlue and Apple’s Ping (well, maybe). Why are all these industries suddenly endangered? David rightly says it’ll be a while before things completely shake out, of course, but a series of recent announcements and developments are accelerating the long-bubbling transition to streaming for much of content that we consume. “The resulting shifts likely will change the kinds of entertainment we consume (it will be a while before that shakes out, I think), but those shifts definitely are already beginning to change the way we consume them. “ Big companies such as Apple, Google and consumer electronics makers have made a series of recent announcements that will make it easier than ever to get brand-name content for a cheap price, stream it smoothly and at high quality on all kinds of devices and platforms, and not worry about keeping it on hand on some vast hard drive forever after. Mark Suster of GRP Ventures smartly asserts Hulu is the OPEC of the Online Industry (though I wonder if they soon become yesterday’s fish wrapper as Skype becomes en vogue as their founders return to shake it up). Reversal of Fortune?

Buggy Whip Business – There are some caveats:

For instance, at least some people will need local hard drives and optical drives for the stuff they already have, like the CDs and DVDs they already own and the personal stuff they’re now creating by the boatloads. Will big content creators actually free up their good programming enough to avoid what I’ll call Chronic Consumer Frustration, a condition that drives tech-savvy audiences back to the latest illegal tools to access all that locked-away content. As an example: Look at the broadcast networks’ ban of their content from the much-ballyhooed Google TV service. That uniform opposition means Google TV users will only see some basic cable networks among the online offerings of the service. It doesn’t mean users won’t get that programming somewhere else (and Google TV’s Internet access and search capabilities may make it easy to find). Over at iTunes, only Disney/ABC and Fox are selling their TV shows at 99 cents a pop. That doesn’t mean people aren’t watching shows from NBC, et al. They’re just going to get it in other ways. But I digress. For tech companies, the string of recent announcements and developments show that cloud computing is rapidly becoming mainstream, undergirding the business plans and major new offerings of some of the biggest companies in media and entertainment. As David says, “It’s kinda already here:” “…we’re seeing significant changes in distribution through mainstream devices, for mainstream audiences, involving low-cost content that people won’t own, and won’t store on their own machines, but can access nearly anywhere, on a wide variety of devices, from cell phones to TVs to computers. “ The only question for you to consider is whether you’re suddenly in the buggy whip business, or transforming your company to leverage the opportunities that are quickly presenting themselves. So, are you moving forward, or looking back?

Any questions? Don't hesitate to ask us.

Leave a Reply

Your email address will not be published. Required fields are marked *

Like this article?

Share on Facebook
Share on Twitter
Share on Linkdin
Share with Someone