What your customers want and what they’ll actually use. Perception is everything.
Ask anyone 5 years ago what the next holy grail would be in technology, and many of them would have said ‘Video on demand’. The rapid proliferation of bandwidth and processing power turned the internet into a virtual New York City - a place where you could get just about anything you want whenever you want. It only made sense that someone would find a way to offer every movie ever whenever you get the urge.
The startups came and went. The ROI of further expanding what people do with their PCs came into question. Cell phones and music players however were sure things. The so called burst bubble pretty much marked the end of any large-scale attempt to develop new content delivery technologies. In a move very uncharacteristic to the industry, it seemed like everyone had given up.
There are a few logistical problems with such a challenge. Storage is cheap, but its not that cheap, and there are a lot of movies out there and only a small percentage of them are currently in digital format. Bandwidth is still a problem. Even though many people now have DSL in their homes, bandwidth requirements for the provider would be huge. And of course there is the notorious question of copyright protection.
Any good problem solver will tell you that if your requirements have painted you into a corner, your only way out is to reexamine and refine those requirements. So let’s review the requirements that we have problems with:
It would be too costly to store a consummate repository of television and film
It would be too costly to procure enough bandwidth to stream high definition audio and video to millions of subscribers
It would be too costly to purchase the rights to distribute every TV show and film ever made.
These problems can be addressed by asking the following questions
Who already stores this media?
Who already has the distribution rights to this media?
Is there already a high-bandwidth mechanism in place to all our potential subscribers?
Where is the greatest benefit in ‘on-demand’ video?
The folks at TiVo asked these questions, and this is what they came up with. Existing cable and satellite networks can provide hundreds of channels of high definition video at once, over a distribution network that is already in place. These networks already subscribe to the networks who own and have rights to the content people want. What people like and dislike in entertainment is for the most part predictable, otherwise networks like The Sci-Fi Channel, Comedy Central and MTV wouldn’t be such a success. If someone likes Star Trek, they probably like Stargate; If they like The Apprentice, they probably like The Restaurant. TiVo learns what you like to watch, and records things it thinks you’ll like to watch based on what other people with common interests watch. With a properly trained TiVo you’ll never again be frustrated that you have 400 channels with nothing on.
What about movies? Is it really that hard to drive a 1/2 mile to Blockbuster to rent it? And if Blockbuster doesn’t have what you want or you’re just sick of their rediculous late fees you can always try NetFlix.
TiVo is a great example of how to innovate in this industry. Their success did not come from building faster and more powerful hardware, nor is it limited to people with T1 internet connections in their homes. They solved the elusive video-on-demand problem in a much smarter manner: by changing the requirements from what the industry had prescribed to what the customers would actually use.
