Revision3's Louderback Talks Technology, Traffic, and Takeovers
"The history of TV is the history of overcoming limitations," said Jim Louderback, chief executive of Revision3, during his keynote at Streaming Media East in New York this morning. "We started with one black-and-white television per household, and every city had to have its own local networks since the over-the-air signals would only travel so far. So we built around these physical constraints, including frequency or spectrum limitations, and we've been living with that for years."
"Suddenly, when cable emerged, we weren't constrained by the 6Mhz spectrum transmission bottleneck," said Louderback, "so we were able to double or triple the channels available to consumers, and today we're at hundreds of channels."
Louderback's comments on the technology of television segues nicely in to the fact that the acquisition of Revision3 by Discovery Communications is just a few weeks away. His keynote, though, avoided discussions around the takeover and focused instead on the technology trends behind the significant growth the company has seen since it was founded in 2005 by well-known online pundits Kevin Rose and David Prager, with assistance from Jay Adelson.
"In 2011 we saw significant growth in ad revenues, viewership and channel subscription," said Louderback, referring to numbers that were released on the Revision3 blog that show the company's revenue growth in 2011 stands at 53% year-over-year compared to 2010. The blog post also notes taht otal views across the Revision3 content increased to close to 800 million worldwide views for the year, with a four times increase in YouTube viewership, with almost 4.5 million YouTube subscribers across all Revision3 shows, including Film Riot and Scam School.
Louderback spent a great deal of time talking about how technologies are trending toward free, or at least very low costs, starting with processing and storage.
"Storage is trending to free," said Louderback, adding that an SSD he just purchased for a new home computer had a very compelling price point. "The storage equivalent of Moore's Law is that storage densities would increase by a factor of 100 every ten years, but now we're seeing storage densities doubling every year."
"Knightsbridge has the ability to aggregate 50 Ivybridge processors on a single board," added Louderback, referring to a new Intel technology set to be released later this year. "Companies such as Dreamworks Animation seeing this as a revolutionary, exponential leap in their technology capabilities, but it's also good for the average consumer who wants to move in to high-end content creation."
Louderback then linked the trend of lower-priced processing and storage to the logarithmic scale when it comes to bandwidth availability.
"One derivative of Moore's law, when it comes to bandwidth, is projected by Jacob Nielsen," said Louderback, "which says that high-end bandwidth to the end user doubles every 21 months. I don't live in a FiOS neighborhood, so I look forward to seeing Nielsen's Law taking effect."
"In essence we should have no problem sending 1080p HD video—and even 3D HD video—to consumers within the next year," he added. "Pay attention to Google Fiber, a test being carried out in Kansas City, because it's the trojan horse that will be coming to a neighborhood near you soon."
"Bandwidth today is good enough, for the most part, for good experiences," said Loudberback. "Hulu and YouTube are testaments to business models that can be built on 'good enough' and it's just going to get better. One reason is that every screen we have access to these days can give us access to significant content. Even that dumbest screen in the house—the non smartTVs—is getting smarter and getting connected."
"I remember bringing on of the first TiVOs in to the cable television executives, and showing pause functionality," said Louderback. "That was revolutionary when it happened twelve years ago, and we're now at a DVR penetration of over 50%."
"I predict to you that the iPad—which is not just a big iPhone—will revolutionize television," said Louderback. "What you do with a phone is very different than what you do with a tablet like the iPad. Communicating on the go is the primary use for a phone, even though you can watch video on it, but a tablet is much bigger and more attuned as the first personal TV. We read, take notes, read web pages and watch video."
Louderback then laid out the difference between tentpole and personal video consumption programming.
"Tentpole shows we tend to watch on the big screen, such as Game of Thrones or Modern Family," said Louderback. "The Oscars or reality television shows such as Survivor are the kinds of shows that you may want to watch live, but that trend is changing thanks to the DVR."
"The newer trend is where personal consumption drives personal content choices," said Louderback, referencing a new bestselling e-book that may not have been as popular if readers had to carry around a physical book with a provocative cover. "The same is true when it comes to video consumption: no one has to know that you're watching 27 episodes of Parks & Recreation in a single setting. The reason is that the tablet is a screen you curl up with, put your headphones in and you're watching content privately."
"Over time we'll find much more content on the internet that look less like a traditional show that's geared to a wide audience," predicted Louderback, "but we'll see emerging classes of online video that is geared toward smaller audiences, just like a blog is geared toward an audience that's different from a newspaper website."
"For some content I want to help pick the ending to the story, but for other content I just want to sit back and be told a good story," he added. "I can't tell you what it's going to look like in a few years, but that's the opportunity we're building around."
According to an earlier StreamingMedia.com news story the existing Revision3 leadership will stay in place following the acquisition, which should take place around June 1, 2012. The 2012 Streaming Media East show continues today at the Hilton New York.
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