I have been meaning to write about this topic for a long time. The linchpin has been discovering this presentation via Mark Cuban’s blog, who knows a thing or two about online video himself given he is the chairman of HDNet and sold Broadcast.com for a bajillion dollars.

This slide deck is from Netflix. Its very honest and insightful into where this company is going, the opportunities, the threats and the future of entertainment. Check it.

My own personal thoughts

What’s really pissing me off at the moment is my data limit on my ISP and the random wi-fi disconnections. It happens when someone in my family yells out:

“hey we’re reaching our limit! We’re X% over, stop watching online video!”

Clearly, we do not have the infrastructure or the networks yet that can cope with high usage, fast internet speed. Nor am I on the correct data plan. YET. I do hear there’s this thing called the NBN being built and WiMax.

I love watching movies and tv shows. I love watching stuff on Youtube, tvshack, from blogs, friend’s videos on facebook, Hulu, etc… I smashed “How To Make It In America” in like 3 days (8 episodes makes it easy). I’ve just watched Book of Eli, A-Team, Hot Tub Time Machine, Zombieland, Invention of Lying, one episodes of Gruen Transfer in the past 2-3 weeks.

On average I watch several videos a week. I’ll also throw in some UFC action, NBA (in season), worldcup, Masterchef, Underbelly, etc… The majority of these I watch from my computer or from my tv.

I’m telling you – the future is going to be streaming. If I miss an episode of Masterchef or Underbelly on tv, I watch it streamed online. It gets posted up by the Network the following day. It’s just so much easier watching it online when I want to.

The alternatives in Australia suck

I can’t say that I’ve watched many movies online. Because the better services like Netflix, Hulu, Amazon are not available in Australia. There are ways around it, but I can’t be bothered. Its too much effort. The ones that I can access for streaming do not have great quality. Plus my wifi connection will drop out at some point and I do not want to stream it again from the start or lose my point in the video.

Theoretically speaking, downloading means that I can’t watch it immediately. I would have to wait til when the download finishes (which could be the next day). But sometimes, you have a hankering for a certain movie or tv show. You don’t want to wait. So you have to settle for an alternative. We, well me specifically, are dreaming of a world where this stuff is on demand and affordable.

Currently, Netflix has a leading position in the consumer market in the US. It charges $8.95/month for unlimited streaming of its catalogue. It is focusing on the long tail – not the new releases. This is partly because the studios do not want Netflix to be showing new releases before it is in DVD rental / sales, as it could cannibalise those sales and they probably have existing arrangements that Blockbusters, etc… would have first release.

In Australia, we also have Telstra which has a online streaming consumption model and also iTunes. But these are either too expensive, alacarte and not subscription based.

Parrallels with music

With my music, I do not have a collection on my laptop anymore. I have some music on my phone. Now, I just stream music online. One of my favourite sites is 22tracks, where the music is available to be streamed and has been curated into the newest tracks and by genre.

I occasionally do download music such as free mixtapes or free albums which the artists or music blogs give out. I haven’t purchased music in a long time. The last time was in the States when I bought some mixtapes from Amoeba in Sunset Boulevard, Los Angeles 3 years ago. Before that, it would be several years again when I was working down the road from Dirt Cheap CD’s. I’d wander into there and pick up a few hip hop CD’s during lunch.

For me, music has become a commodity. I still love my music. But I no longer want to purchase it or have the need to. I don’t even really download it anymore. I can stream it on demand. I can usually hop onto Youtube and find the songs that I like. There are lots of paid music services out there like Spotify, LaLa, etc… but I think its EXTREMELY difficult to get people to pay for music now, even if its unlimited streaming and storage in the cloud. As consumers are simply used to free. And many of them are not prepared to pay. The horse has bolted.

Back To The Future

I feel that movies and tv shows are also going down this path. We have so many movies available via P2p networks. People have more movies than they can watch. Because they have so many movies, it also devalues them, turning them into commodities.

The future is streaming movies. A mix of tv, cable and online streaming. The question is whether people are prepared to pay for this on demand access. Or will we simply shove better ads into them to entice purchase of goods/services.

I’m out like Australia in the world cup,

Matt Ho.

This is the local version, Sydney State of Mind which my friend Cheryl sent to me recently. I actually heard them mixing / playing it in the Nova station. Check it!

Yeah, Im out a Blacktown, now Im in Maroubra,
Right next to the Seals, Im Sydney forever,
Used to live in Newtown, couldnt dig the people there,
With the crazy coloured hair and you can always see their underwear,

So I hit up Carringbah, did my time at bizzos,
Saw some good bands and did some talking with my fists though
Started work at Panthers, uniforms an insult,
Still remembered as the Tiger Woods of Aqua Golf

I’m out like Empire State of Mind remixes,

Matt Ho.

Youtube concert

At approximately 2.30pm on Monday AEST, U2 staged the first live streaming Youtube concert online. And I witnessed it!!

U2 is easily one of the world’s best known bands. It’s probably not the first band to stream a concernt online, but the first of the major bands to do so and to such a large audience. I’m by no means a huge fan of U2, but I wanted to be part of this historic and momentous event. Plus I got to watch a concert for free!

I tuned in for about 2 hours and watched it in between doing work. I had it streaming in the background and witnessed an awesome concert unfold. They played a lot of songs that I was familiar with but didn’t know the names of and got me reacquainted with a lot of their music.

There was a bit of lag at times (about 3 or 4), but overall the streaming was smooth and there were heaps of different camera angles. Considering that there were in excess of 1.3 Million channel views, that was a pretty impressive job by Youtube. Their cloud servers must have been running at max capacity!

Monetisation Streams

As I was watching it, I was talking to my friend @dacheah about the monetisation possibilities. I feel that this was a public demonstration of Youtube’s streaming capabilities. This was a free concert, but imagine how much advertising, publicity, and album sales were made in the lead up, during the concert and post concert.

On the right side of the streaming video, you could purchase a download of the album off iTunes. Or donate to Bono’s Red charity or find out new information about their new album. These are just the direct actions you can take. By using iTunes it allows people to make an immediate purchase and receive the album on demand, an even cheaper distribution method.

But what happened indirectly?

They were able to bring in people like myself who aren’t big U2 fans into their music. Created new fans and advocates of the brand.

Given all that is happening in the music industry with the profileration of free downloads and pirating, there needs to be alternative money stream. Stream the concerts for free and entice people to purchase singles, albums and merchandise.

However, I think the biggest play would be to charge people access to live streaming concerts. This could be Youtube’s monetization model, have people pay $5  -10 to watch a world class concert. You could potentially have a subscription service as well, whereby people pay a yearly fee and get access to number of online streaming concerts. I’d also pay for this.

The ability to use streaming online video is now quite easy. We used it for our basketball game via Livestream (formerly Mogulus).

Back of the Envelope numbers

Using some general online stats that only 10% of people would pay for an online service, lets assume that 130,000 of the 1.3m viewers would have tuned in @ $5 a pop (lower end of the scale).

$5 per viewer x 130,000 number of viewers = $650,000  Revenue

Video Costs

1. Streaming costs

Youtube offers branded channel but their not cheap. If you advertise more than $80k with adwords, you can get it for free. They also have free accounts as well at the public level. But I feel that its going to be bundled together with streaming, storage space  similar to how Livestream and Ustream do it. Let’s do a yearly calc based on Livestream current costs:

1 Channel with 25GB streaming, HD up to 1.7 MPS: $350 a month

20 premium channels with 200GBs streaming, HD up to 1.7 MPS : $1,250 a month

I assume that there will be an option in the future for premium users for 1 Channel with 200 GBs available for larger concerts. It could possible use Google App Engine or Amazon EC2 which will bring the cost down. However, lets go with $1,250 since this is a publicly available cost. Give that 130,000 viewers watching video could potentially smash the server, lets multiply the cost of streaming by 5 fold to be ensure there is enough capacity to handle the extra traffic.

I’ve chosen a yearly fee because the band will want to maintain it and possibly do a number of concerts.

$1,250 per month x 5  x 12 months = $75,000

Note that this is a variable cost because it can be cancelled or use more/less bandwidth. But you will probably want to retain it and the more concerts you do, the more the cost will be spread.

2.  Camera crew for 2 hour concert

Camera crew will be needed for full day to prepare, stream and record,  dismantle stuff. This staff is in addition to existing sound crew. I don’t want the regular sound crew worrying about online streaming in addition to the concert as well.

This could be you streamed online....

Lets say 5 are needed – one in the booth to check video, three camera people to give different shots (upclose, in the crowd, pan wide), maybe an extra sound guy. That’s 5. I use 8hrs for a full day required for a 2hr concert.

$80 p/h  x 8hrs x 5 staff =  $3,200

3. A couple of IT and social media guys

On standby to monitor streaming, computer/servers crashing, social media feedback, commenting, drive traffic – 3 staff. I’ve chosen the figure $120 an hour to get more quality staff with experience.

$120 an hour x 8 hrs x 3 staff = $2,400

Total costs

$75,000 streaming + $3,200 camera crew + $2,400 IT staff = $80,600

$650,000 Total Revenue – $80,600 Total Cost = $569,400

That’s approximately $570,000 profit.

I haven’t included advertising costs, but this could be done in conjunction with their concert promos i.e. a URL at the bottom of the concert poster, twitter updates / facebook updates, email, radio. The cost of this should not significantly increase current advertising spend.

Of course not all bands are going to have this kind of fan base like U2. Smaller bands can cut costs by hiring less staff, opt for a smaller online account, but I dont see how they couldn’t take advantage of this.

Plus you also need to add in the profit from ticket gate receipts, album sales, tshirt sales, iTunes downloads, etc….

Final Thoughts

Online streaming simply provides an additional revenue stream for music bands via concert. I’m sure some bands and event planners are concerned that people might not turn up to a concert if shown online for $5 instead of a concert ticket price of $130. But nothing beats seeing something live.

However, there is going to be a significant number of fans that can’t afford the ticket price, cannot make it due to work / commitments or are simply living overseas. Surely this can be monetized! Your providing them with the chance to also participate in the concert, be a part of the crowd, and sing along.

Side note: Youtube has also introduced paid search for video,  and the videos shows up as a sponsored link. There is also Google Music Search, which produces results for all the different music services.

I’m out like Mogulus,

Matthew Ho.

I’m out like Imagine,

Matt

After telling the door staff we registered via the web, we pointed to our names. Much darker than upstairs, we wandered in as the sounds of old school 90′s rnb tunes wafted through the doors. To my surprise, the place was 3/4 full. I wandered around looking for my friends and found them in the “pit”, this dancefloor area sunken into the ground, with raised bar around it. There was still nothing on stage, so we went to get some food on Pitt St.

On our eventual return to the Civic, the place was packed. Couldn’t even move around. As I brushed past the bodies, I made by way back to the pit. There definently was some buzz in the evening. Most people had RSVP’d via the facebook group or on Charmaine’s website. I suspect the majority of the crowd were friends or friends of friends. I came because my friend Neha (@twittledeeps) was a backup singer.

Charmaine Bingwa rocking the Civic Underground

Charmaine came out the blocks with a Beyonce cover. Full of energy, she had that vibe goin’ on! She did a couple more tracks  including her own stuff and pulled out her red guitar. Sang and strummed the guitar at the same time. I always like it when a singer plays an instrument – she’s legit.

Oh yeah, and did I mention she had some crazy sneakers on – blingin sparkling aqua sneakers from General Pants.

It was a pretty good night. She definently has some potential, though not sure about the strength of her voice. I don’t think her tracks show off her range. It’s mostly “funk,rock, snap, crackle and pop” as she describes on her website. She’s been gigging for a year now and has an EP out. Something about her – she’s got the buzz. 

After she did her final song and walked out. I told G that she’d be back, he looked at me and said “nah, she’s done”. To which I responded, “if she’s worth her salt, she’ll come back out”. After a few minutes, some chanting, particularly from the groupie girls next to me, and a sneak peek through the curtain, they came back out. Charmaine did two more songs and called it a night. I’ll let her have the final word on the night:

Charmaine Bingwa on twitter

She then came out and hugged some of the people, and I think some of the guys I was with were disappointed they didn’t get a hug too =p

I heard on the grapevine that she’s actually Zimbawean (G did a google search before he came).

$64 million dollar question – who does Charmaine Bingwa look like? 

She’s a dead ringer for Brandy – in fact some other people told me independently. Its the dreads and the chocolate coloured skin. In case your wondering – she is hot.

You can check her out on Myspace, twitter and her official website. 

I’m out like the Civic underground,

Inspiredworlds aka Matt.

He’s a black dude that can sing Chinese! Fuses that Joe / Boyz 2 Men style with Jay Chou style!

It’s pretty cool! He can speak much better Chinese (that I would ever hope). 

[youtube=http://www.youtube.com/watch?v=y19vv0ZEMPU]

Apparently, from what I can gather from the Youtube comments his name is “Haoge” and he is from Liberia. 

How funny are these youtube comments (spelling left unchanged for authenticity)

“is that jason richardson from the golden state warriors singing in chinese??”

“Probably noy ethnically Chinese, so kudos to his Chinese. Pretty good.”

“african people can sing everything and make it sounds good:)”

“the wrong!! the iam balck!! and black people dont sing chines!! bcz in the ghetto !! you have just 1 chance!! baby!! and G-CODE !! song will show alot of thing just write g code and press the first song!!!!NE HAO”

I’m out like black guys singing chinese music!

Matthew Ho

It’s called “First Asian Boy”, and I’m digging his style:

[youtube=http://www.youtube.com/watch?v=b3ZQty7I1aw]

This guy has got 1.2 million views on youtube so its doing very well!

Second video I found whilst surfing the web called “Daft Bodies”. It’s Daft Punk’s “Harder, Better, Faster, Stronger”. It’s genuis!

[youtube=http://www.youtube.com/watch?v=bl6RJyZdBSU]

It listed in the Daft Punk Youtube Channel, but I don’t think its an official Daft Punk vid as I’ve seen the cartoon one (also very good). It’s more of a fan vid. Very simple, yet highly effective and creative!

If you are into Daft Punk, I would highly recommend this idaft. It has a console with different words. You tap the buttons on the console with your keyboard and recreate the song’s chorus. Very cool! 

I’m out like being an Asian Boy,

Matthew Ho.

One mashup that has been sweeping the internet is Jaydiohead, a mashup of Jay Z & Radiohead by DJ Minty Fresh Beats. It’s growing on me. I probably like it because it’s a Jay-Z mashup, and I’m a huge Jay-Z fan.

Jay Z v Radiohead

Mashups have become really popular in the last couple of years. Dangermouse’s Grey Album, a mix of Jay Z’s “Black” album and the Beatles “white” album is one of the more famous & controversial ones.  Mashups have become so viral because of the internet – they spread so fast now as they can be downloaded and shared on peer to peer networks. DJ Minty Fresh Beats and his website has gotten publicity on Digg, Delicious (where I originally found it), MTV, and the Carson Daly Show (see below).

But don’t just listen to Carson & me hyping it up, check it out here and download the torrent for free!

Mashups -  The law and opportunities

Mashups are changing the way we consume music. We are hearing sounds which the original artists and the record companies did not even fatom. Their are legal issues as well, because the DJ’s are using music belonging to other artists, which the music labels would probably never clear. But, the music labels and the artists – they should be embracing it as the music is being introduced to new fans and markets. For example, I don’t even listen to Radiohead, but I might get their albums now.

Record labels and artists should be encouraging mashups, and letting them be downloaded for free. It is innovative, creative and the public love it.

[youtube=http://au.youtube.com/watch?v=nBpgik8BkPE]

Change of the music industry business model

The music industry itself has been turned upside down with the internet. It’s totally changed their business model.  I watched a video on the American Express forums where the Editor for Wired stated that “we are growing up in a generation of free”. We are able to download what we want for free. Some artists are embracing it, while some music companies take their official videos down from youtube.

I found it a bit strange that a rap artist I saw on the weekend, MURS, actually had his album available for as a free download. That’s awesome. He gave his album out for free before he signed with a major record label, to encourage and spread his music. The effect is so that he could draw more people to his concerts and it allows his fans to connect with him in a deeper way as they have access to more of his music. It will be interesting to see how the music industry and the artists also respond to Apple iTunes giving up the DRM (digital rights management). These are topics for another post.

I’m out like Jay-Z v Radiohead,

Matthew Ho

p.s. Check out this track by Jay-Z & Santos Gold “Brooklyn We Go Hard” from the Notorious B.I.G soundtrack. I’m feelin it