----Mark Cuban's plan for (ITEK) Business model???
We're on the cusp of becoming our own entertainment programmers
By JOHN HAYES
Pittsburgh Post-Gazette
26-JAN-06
Since the first time we saw Dick Tracy fiddle with that special watch, we knew it was coming _ that magical day in the programmable future when we could watch any episode of any TV show that we want the instant we want it, see any movie on a whim, or hear our favorite songs whenever and wherever we want.
Move over, Dick Tracy. The future is here.
Sort of.
The technology that enables us to program our own audio and video choices is in place. But we're only halfway into the future. Despite the overall music-industry slump _ down another 8 percent last year _ and the exponential jump in music downloading, more than 95 percent of all music sold continues to be in the CD format, according to Nielsen SoundScan. Broadcast television overwhelmingly dwarfs cable TV in numbers of daily TV viewers, and traditional cable still dwarfs digital cable downloading.
And while barely 20 percent of movie revenues are now earned at the cinema, downloading first-run premieres is still a Dick Tracy daydream.
Think of it like this: Downloading audio and video in 2005 was where television was in 1950, where the compact disc was in 1983, where the Internet was in 1990. The technology is available, and there's no question it's going to be huge. But mainstream Americans have yet to make it a part of their daily lives.
While 2005 was not the year we programmed our own individual entertainment universe, it's likely 2005 will be remembered as a turning point _ the year when the mainstream show-biz industry finally reduced its dependence on long-standing methods of targeting audiences and set up shop to embrace iPods, TiVos, Xbox 360s and other programmable devices. In what's being called by the trade magazines a "bold experiment" for Hollywood, director Steven Soderbergh's new film, "Bubble," will be released this week concurrently at the theater, on DVD and on high-definition cable channel HDNet. Pittsburgh dot-com billionaire Mark Cuban, one of the film's producers, says he's excited about the new business model. But is programmable the wave of the future?
"Yes and no," he said. "There's so much contention for our time, we have so many things going on, it's about time somebody made it easy for us instead of dictating to us. ... (But) the concept of consumers as programmers _ people looking at iTunes and downloads _ I don't think any of the portable devices or anything on the laptop replaces television or going to the movies. If anything, we use those now as a distraction or a keep-up mechanism, so if you miss an episode of 'Lost,' it's a great way to catch up.
"But (download devices) are the world's best sales tool for television. It should actively increase how much television and how many movies we watch."
The easiest way for mainstream couch potatoes to get in on the coming download revolution is to click on digital cable. In the Pittsburgh market and elsewhere, Comcast OnDemand offers movies, select TV and lifestyle shows and even karaoke and guitar lessons, available on one's TV with the click of the remote. Hundreds of options are free with a digital cable subscription; hundreds more are ready when you are, for a few extra bucks. The added charges show up on your monthly bill.
For more than a year, Comcast has been slowly rolling out a new digital video recording service, a sort of TiVo-style box that allows one to download and watch or record two shows at once. VCRs never let us tape what we wanted whenever we wanted it. We still had to wait for it to be on TV.
"We think this is going to change the way our customers watch television," said Comcast spokesman Thomas Meinert. "Comcast began offering DVR service in Pittsburgh in late 2004. We don't keep track of what percentage of subscribers are using it, but I can tell you that among nationwide Comcast customers there are more than 2.3 million (DVR) setup boxes today. To put that in perspective: In February 2004, there were 1 million boxes."
On the near horizon, Starz Entertainment Group, a premier channel on many cable systems, is launching a movie download service that will allow consumers to view full-length studio films, concerts and TV shows on portable devices that run on Microsoft software. Starz, the search engine Yahoo and satellite DirecTV are among the media companies getting in the business of bringing Hollywood movies, TV shows and even home videos to multiple programming devices.
Hip-hop artists OutKast and Nick Cannon are cashing in on download requests for their songs. But the guy who helped to set that up for them, manager Michael "Blue" Williams, concedes that even among rap stars, CD is still king.
"I think what's happening is the music industry and the film industry lean heavily toward younger audiences," he said. "The key demographic is 12- to 26-year-olds. The younger kids coming up, they're learning on this new technology and they'll try out an artist by downloading some of his songs. But after two or three cuts, if they like it, it convinces them to go out and buy the album."
That could explain why CDs still so overwhelmingly outsell MP3 downloads.
"(Songs from) the last OutKast albums (were leaked to) the Internet a few weeks before the album hit the stores," said Williams. "The artist was bothered, but I never was mad. It was free advertising. It worked. My numbers were still huge the first week. The last OutKast album debuted at No. 1."
Despite music-industry travails, the digital-download folks had a blockbuster holiday season. With Napster-era theft of intellectual property on the decline, legal U.S. download sales spiked during the week after Christmas. Nielsen SoundScan reports a new digital-download record of 19.9 million tracks sold during the final week of 2005, more than double the number of tracks sold during the same period in the previous year _ a 108 percent increase over the previous week's sales.
Hip-hop group D4L's "Laffy Taffy" had a holly-jolly Christmas season, setting a record for one-week download sales, moving 175,000 tracks. The previous record was a mere 80,500 tracks sold by Kanye West one week in September.
In all, some 352 million digital tracks were downloaded last year, a 147 percent increase over the previous year.
As if you hadn't guessed, driving those week-after-Christmas downloads was a mammoth spike in digital hardware.
Programmable music, programmable movies, programmable TV _ how about programmable books?
Technology is taking a radical leap beyond the Gutenberg with programmable electronic book readers. Slim and compact, they can store hundreds of books in their memory, and the newest ones promise you'll be able to read "War and Peace" without recharging the battery. Text size can be adjusted to preference, and personal documents can be loaded as well as high art.
While the search engine Google makes public-domain texts available online and is battling the publishing industry for access to published books, Sony is poised to challenge dot-com giant Amazon with its own downloadable book service.
All of which means the library of the future will be in your pocket.
Right alongside your TV, movie theater and stereo.
(Distributed by Scripps Howard News Service, www.shns.com.)
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