THE BLOG
05/17/2010 05:12 am ET Updated May 25, 2011

Web TV: The New World Order... Is Not Without Challenges

Independent TV programming created exclusively for online audiences, commonly referred to as Web TV, has exploded. Record numbers of entertainment consumers are canceling their costly cable subscriptions in exchange for free, and very personal, Web TV. Accordingly, the question is raised: "What challenges does the industry face and what will it take to "legitimize" the space?" Here's my take.

Money. The internet has become the central gathering place for the global population, and everyone knows that it is also the new hub for serving television. Why then hasn't the money followed, in amounts which can truly support what is, perhaps, nothing short of a paradigm shift in how television is delivered?

Traditional television entertainment, most commonly delivered to homes via a cable provider, is generally financed one of two ways - by paid advertising, with respect to traditional "free" TV, and by additional subscription fees, for premium and mature-themed programming. This isn't likely to change in the new world order of Web TV. It all comes down to commercial advertising, or pay-as-you-go programming, to finance filmmakers already producing great new shows for your entertainment pleasure.

Here's the rub. Current CPM rates, the cost per one thousand sets of eyeballs, which advertisers pay for the right to access those eyeballs, rarely pay enough to cover a single line item in a filmmaker's production budget. Brand advertisers aren't willing to pay ad rates that can sustain a growth industry, rendering Money THE number one CHALLENGE.

Old-School Thinking. Just because "things" have been done one way for so long, doesn't mean it's the only way, or even the right way, to do them today. Agents, managers, publicists, and other service providers who have played in the old game must fully understand and respect the fundamental dynamics, and economics, of the new world order of content creation for Web TV. Many don't, and this represents an enormous challenge. Everybody needs to be in-sync with reality.

Quality Programming. Just because the tools of the trade have become affordable, doesn't mean that all those who use them can tell a story in an engaging and entertaining way. Great story-telling is a bona fide art form, and it typically takes a large team of talented people to turn out great work. This particular challenge brings us back to THE number one CHALLENGE - Money. Truly creative people in the industry can, do, and have, produced fabulous shows on a shoestring budget, thanks to New-School thinking, but with real money, they can eclipse what we currently see on traditional television.

Mainstream Media Coverage. An easy one to call out. The rapid growth of content and Web TV audience barely receives the attention of mainstream media. Just how eager do you think traditional television and the print media are to introduce you to the next generation of television? They already know how many entertainment choices you have, so they're not inclined to introduce you to a new one.

Volume. No, not the audio. The sheer volume of content being created makes it that much more difficult for the cream to rise to the top, rendering "volume" a significant challenge. As the volume increases, and it will, the cost of achieving "discoverability" and "relevancy" rises. In an industry with so little financial support, the volume is already deafening.

Internet Freedom. The same folks who laid the highway, with your money, set the speed limit, want to control your right to drive the highway, how frequently you drive it, and what you see while driving. And they run the toll booth. You do the math.

Despite these and other challenges, Web TV has already been legitimized. The facts are reflected in the numbers - as the numbers continue to rise, so will the level of legitimization and relevance. What, then, are some of the next steps which will allow this young industry to mature further?

Advertiser education. With respect to the commercials themselves, advertisers must understand what viewers will appreciate and enjoy, and they must respect industry economics in order to earn the right to access, and benefit from, this massive audience. Otherwise, the industry will quickly morph into something akin to subscription cable.

Service provider education. To build a vibrant industry, everyone must fully understand Web TV economics, and earn their money the same way - by first investing in it.

Elevation of the Craft. Content creators must continue to elevate their craft. Reduce the volume and focus on quality.

Accepting full responsibility. Reliance on current mainstream media to tell a story about the competition is never going to happen. The Web TV industry must aggressively beat its own drums in order to build a larger and more heavily-engaged audience.

Freeing the Technology: Treat the highway like a utility and regulate it. It's that important.

Every new industry has its challenges. One would expect the same for Web TV, especially because there was no previous foundation on which to build, other than the internet itself. The challenges I have laid out represent the reality of the space at this moment. Some will be difficult to overcome in the near term, but they can be overcome. Others, such as freedom of the internet, otherwise known as "net neutrality," may ultimately need to be legislated. And new challenges are an absolute certainty. They rise by day. It's simply the nature of the beast.