My interview with Albert Cheng: The Father of Online TV

November 10, 2008

To call Albert Cheng a TV industry insider is a supreme understatement. As the Executive Vice President over Digital Media at Disney’s ABC Television Group, Albert not only has a front row seat inside the industry, many would say he occupies the driver’s seat. Yeah, I’m mixing metaphors there, but you get what you get.

In fact, in my writings and in the speeches I give, I typically refer to Albert Cheng as the Father of Online TV. And though you can practically hear him blush when I say it to him over the phone for the first time, all hyperbole aside, it’s an accurate description of Cheng’s role in the dramatic changes sweeping over the television industry today.

It all started in April of 2006. It’s hard to believe it has only been that recently that ABC, in what seemed like an out-of-nowhere move, announced it would test streaming of two of it’s hottest shows, Lost, and Desperate Housewives, online, for free. Yes, free. The rest, as they say, is history. Today, ABC.com streams well over 50 million videos a month and is likely to cross the 100 million threshhold sometime next year. 

After Albert and I participated in the same conference on online video recently, I took the opportunity to interview him in more depth about his own experience with TV and his expectations of the future of the medium. The full-length interview I’m keeping to myself for a future project that shall remain nameless for now, but I’ll share three important things I learned from and about Albert Cheng here:

 

1. Cheng learned about TV technology from the VCR

One of my favorite images of Cheng’s childhood is of him watching the CBS soap opera As the World Turns alongside his mother each day. It became such an integral part of their lives that he admitted to following the show right up through high school. Unlike the soap opera itself, his relationship with it finally ended. “I lost track of it once I went to college.”

Buried in all of this soap opera goodness, however, were the seeds of the future. “In those days my mom’s schedule got busier. She couldn’t watch her soap operas during the day anymore. So she recorded them on the VCR, every day.” It was an early form of time-shifting, one that was rare elsewhere. But thanks to the Cheng household’s commitment to As the World Turns, the VCR was used as aggressively as most people use a DVR today. “My mom watched her daytime soap operas in primetime,” concluded Cheng.

This was a secret Cheng learned about new TV technology: it can make people watch more than they otherwise would. “Our media consumption started to go up, for sure.” 

2. How you watch depends on what you want to watch

Cheng lives a life of TV superabundance that he lives every day. “I have three televisions,” he begins, then with a pause, admits, “for a two-person household.” The largest television (65- or 70-inch, he can’t exactly recall) sits in the family room and is the center of their viewing life. There are two others in the home for specialized viewing – one in the home gym and one in the master bedroom. True to the lessons he learned at his mother’s side, he explains, “Our typical watching is predominantly time-shifted. It’s a combination of DVR and online.”

As I’m seeing more and more, where he watches depends on the show he wants to watch. “I choose shows for live viewing, then others that I record but prefer to watch on the TV.” He performs a kind of triage on potential shows. At the top are shows he has to watch on the big screen. “Even though Lost is available online [on his own network’s site, no less], I choose to watch it on TV.” For shows he wants to keep up with but doesn’t have to experience fully, he turns to the Web. “Online is a great way to keep up with shows I don’t have time to follow, but when I find a spare minute I can quickly catch up with.”

3. There’s a lot more to come in the future

In the long run Cheng proves he’s got what it takes to dream big. “I’m just going to put a flyer out there, this might be insane, but right now we see more and more 3D content for theaters and the TV.” I nod, thinking that I know where he’s heading with this. It’s the age-old maxim that in the end, all future predictions, when taken far enough, end up at the same place: Star Trek. With pervasive computers, matter replication, and clothing that doesn’t fit very well. I often end up there myself. In this case, I sense Cheng’s line of reasoning is headed straight to the holodeck made popular in the Star Trek: The Next Generation series.

“I’ll take it one step further and say there will be people who watch content in laser holographic 3D environments.” Bingo. “That would be the next theater level of entertainment, it eventually goes to the home, where you take virtual worlds and combine that with filmed entertainment. Then you get to 3D feel in a 3D world.”

I like that Cheng can think this big. I also like that someone with such unorthodox predilections is an insider with the power to lead us forward. Expect to see the mark of Albert Cheng on many a future video innovation.


    What I’m watching

    October 17, 2008

    I’m totally predictable. First, some background, I give speeches and talk to clients and the press about TV all the time, and I find it’s helpful to provide examples of what I’m talking about. So I toss in TV shows I’m familiar with.

    Which is where my aforementioned problem arises: I’m totally predictable. Gee, tech geek, grew up on Star Trek, what do you think I’m watching? Yep, it’s the obvious.

     

    [clearspring_widget title=”Heroes – Powerless” wid=”4727a250e66f9723″ pid=”48f72c9938420486″ width=”384″ height=”283″ domain=”widgets.nbc.com”]

    I was a huge fan of Heroes from season 1, episode 1. However, this season has me concerned. I’ll stick it through to the end, but if we don’t provide some actual character development soon (instead of rushed plot points), I’m going to give up. I’ve learned from the complex J.J. Abrams dramas of the past that once a show starts to spin out of plot control, it doesn’t come back to redeem itself. I watch this one on DVR almost exclusively.

    My 2nd favorite show this season is Fringe. Yes, I have fallen for a third J.J. Abrams drama, despite my warning above. This one has yet to really grab me, but I’m giving it a chance. Anna Torv‘s character is practically anonymous, that’s how little background we have on her, while the mad scientist has a deep history already. There are hints about her past; I hope we’ll get to plumb those depths soon. I watch this show entirely online, as it fits in my schedule better that way (don’t have to compete with the kids for the DVR).

    Like I said, there’s no mystery about me here. And, yes, I’ll be watching Battlestar Galactica and Lost again in early 2009 when those shows start up again.

    But enough about me. What are you watching? Are you following any new shows this season? I know you’re watching something, and based on how many odd looks I get at conferences, it’s not what I’m watching…so chime in.


    DVRs add 42% more key viewers in some cases

    October 16, 2008

    The New York Times did a piece this week on Nielsen’s release of adjusting ratings that take into account DVR viewing. I love this last paragraph paraphrasing Alan Wurtzel, president of research at NBC:

    [Alan] called the DVR the “ultimate frenemy” (friend and enemy) because it increases overall viewing and demonstrates that viewers are engaged enough with shows to plan ahead and record them, but “the enemy part is that there is still a lot of commercial avoidance.”

    So true, so true. What’s interesting is that he’s now open to the friend part of the Frankenword “frenemy.” Remember, just two years ago, people like Alan thought DVR was the ultimate evil. We still have former clients of Forrester who refuse to engage with us because we had the audacity to (correctly) forecast that DVR use would be near 30% by now. Gee, we’re sorry we hit that nail on the head. We’ll try to be wrong next time. [yeah, you know who you are]

    The ratings numbers from Nielsen revealed that hot, upscale shows like House, Fringe, and Heroes, all added an additional chunk of viewers via DVR.

    House, for example, added 3.7 million additional viewers. Among 18-49 year olds, Heroes went up 42 percent. That means nearly a third of its viewers in that target age range were watching via DVR.

    And let’s not forget the viewing that’s happening online. Remember that? It’s even easier to do than watchingvia  DVR. And in a recession, online viewing seems a lot cheaper than paying for a DVR. For shows like Fringe or Heroes, I could imagine that 50% of all viewing is now happening on-demand, whether via DVR or Internet. Here’s a prediction for you:

    • Online viewing will account for more views than DVR viewing by year-end.

    Two factors will drive this. First, more people can and do watch TV shows online than have a DVR. Second, it is less of a hassle — there’s nothing to program, no disk to keep uncluttered with episodes of Suite Life of Zach and Cody (sorry, went on a personal tangent there).


    30 Rock debuts new season on Web

    October 16, 2008

     This was noted earlier this week in Mediapost. It appears that flush with the success of all-things-Tina-Fey, NBC is hoping to finally get some attention for brilliant comedy 30 Rock by premiering the new season on NBC.com and Hulu.com a week before it airs live on October 30th.

    First, it’s an amazing show and Fey has taken her career to all sorts of new heights with her I’m-normal-but-everyone-else-is-nuts persona. But it’s a show that doesn’t get the ratings it deserves, largely because its popular lead-in, The Office, doesn’t either since a boatload of its viewers watch in via DVR, so there’s no lead-in audience for 30 Rock

    Premiering a series online isn’t that new, either. It was common this season and will be the norm in the coming seasons. But it does emphasize how dependent networks are becoming on the Web to cultivate and keep an audience. As long as ratings stay relatively stable, that’s fine, but once people start abandoning linear programming in droves, there will be some network execs who have gone along with it who will shriek.


    Dow down 18% in one week — what does this mean for video?

    October 10, 2008

    I’m busy working on a piece for Forrester about what a down economy does for video. I’ll be finished next week and can share more then, but in the process of speaking to people in the industry, I came across a bright spot, at least as Simon Fleming-Wood, VP of Marketing for Pure Digital, the maker of the phenomenal rags-to-riches Flip digital video cameras. In a recent conversation, I broached the topic of a down economy and mentioned that while many were optimisitc about the future of free services like online video (for obvious reasons), some are nervous about the prospects for devices this holiday buying season. But Simon isn’t seeing it:

    We are cautiously optimistic.  Our retail partners have increased their forecasts for sales of our products over the last 3 weeks. The President of the United States went on television in an unprecedent event to tell the nation that we were in an economic crisis. Yet our sales went up that week.

    Bully for Pure Digital. It helps that the Flip cameras are positioned as low-cost digital video cameras, of course. I don’t imagine Sony and Canon are as sanguine about their prospects this quarter. But it goes to show that even in a down economy, the right product targeted at the right market with the right features can succeed.

    What do you think? Are you afraid for any particular products or services? Will premium cable channels suffer? Will that 2nd DVR get postponed to next year? Will Hulu.com take over the world with its free content?

    Tell me what you think will happen or what you are doing personally. For example, I’m cutting back on premium movie channels (that I don’t watch enough anyway). What about you?


    SlingCatcher – the first true cable-killer

    October 9, 2008

    If you follow the video space, you have been waiting for Sling Media’s SlingCatcher for more than a year now. First announced at CES of 2007, it was hard to tell whether the SlingCatcher was going to be more Apple TV or more SlingBox. It was reannounced at CES of 2008, and now it has finally arrived.

    My verdict: This baby was worth the wait.

    Sling CEO Blake Krikorian came by the office to demo the box a few weeks back. I was surprised he made the trip out to Boston just to demo the unit. Until I saw the demo. That’s when I realized why: in this case, seeing really is believing.

    The SlingCatcher looks like the rest of the Sling family

    No, it’s not the Darth Vaderesque unit itself that impresses. It’s the fact that this is the first over-the-top (OTT) set top box that can compete directly with cable. As I’ve recently written, the whole OTT set top category is very challenged. If you have a DVR and a DVD player, you have the killer combination that gives you access to and control over most of what you want to watch. Why get a box like this?

    The SlingCatcher answers that question. As I wrote in my OTT ranking report, the number one thing that these boxes need to do to stand a chance is call CBS.com, ABC.com, and Hulu.com and set up deals for content distribution (sorry, CW, I, uh, didn’t have room to include you). With those deals in place, any OTT box would jump light years ahead of the pack and provide the first serious threat to cable at a time when people are already starting to consider cutting the cable cord.

    The SlingCatcher does one better: If you have a computer in your home, you can use the SlingProjector software to sling anything from your computer to your TV without Sling having to cut a deal. And as you know, you can find just about everything you like, ad-supported, on your computer these days — prime time shows, classic episodes, even more and more movies (see recent Netflix-Starz deal). For everything else — by which I mean HBO — there’s iTunes, which, guess what, you can also sling to the TV.

    For the increasing number of people who watch video on their laptops at home, this is a content boon that is not only rich, but elegant. The SlingProjector software can automatically identify the video image on your screen, so you don’t have to worry about PC menus or the taskbar showing up on your TV. Want to zoom in on just a portion of the screen? Go ahead. Want to play an online game on the big screen? You’re not limited to slinging just video.

    Yeah, it’s that innovative. and yeah, this is going to change the game. At $299 (look for it on Amazon), the Catcher is not for everyone, even though it’s cheaper than putting an extra PC in the living room. But the real point is that this SlingCatcher system is ripe to be plucked from the box and embedded in TVs, DVD players, and even game consoles (Wii, anyone?). I expect the phone to be ringing at Sling once Samsung, Philips, and LG figure that out.


    Do you pay attention to DVR ads?

    October 8, 2008

    In my house, we don’t watch anything live if we can help it — it’s all DVR. (Okay, I lied, we do watch So You Think You Can Dance live, let the embarrassing facts be known – btw, I called Josh as the winner way before you did). In this process of going 98% DVR, I have been caught by surprise on one issue: My kids love to scan the commercials as we skip them to find ones they like. They then call out, “oh, go back, go back, that’s hilarious.” I can’t tell you how many times we’ve gone back to watch the “Don’t throw away those minutes” AT&T wireless commercial and its equally witty follow-up, “Milky minutes” spot with the ultra-funny ending.

    I have been amazed that my teenagers — in this generation that some feared wouldn’t pay attention to commercials ever again — keep a keen eye out for movie trailers they want to see, funny commercials they want to joke about with friends, and even products they want to buy.

    Now there’s research to prove that people are still paying attention, even in fast forward mode. Great research by Innerscope Research, by the way, employing biometrics to see how people respond physiologically to the ads they are skipping on the DVR. My kind of stuff. I almost did my dissertation on using brain waves to predict whether people will like a movie or not. Well, that was one of six topics I proposed…

    What about you: do you pay attention to DVR ads as you skip through shows? Am I a sucker for doing so? How does this change the model for advertising besides the obvious of keeping logos up longer?