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Weekly Column

Saving the Cheerleader: Hiro has a plan to bring TV commercials to the Internet and save the world.

Status: [CLOSED] comments (103)
By Robert X. Cringely

As much as some readers of this column like to bitch and moan about how they hate commercial television, most of them still watch it. True, there's the odd reader who claims to survive purely on BitTorrent copies of shows with commercials surgically removed so as to not taint the entertainment experience. And there are a fair number of New Media types who claim to do most of their viewing of user-generated video on YouTube or YouTube-equivalents. But the former content wouldn't exist if it weren't paid for originally by ads and the latter IS paid for by web ads if you haven't noticed. So until large numbers of people are willing to pay their own money for television, I'd say commercial-supported free TV is going to survive. And thanks to an Israeli start-up called Hiro Media, commercial TV appears to be coming to the Internet, too.

The great challenge of video on the web is how to make it fair for everyone. Viewers want content that is cheap or free yet retains high production values (costs a lot of money to make). Producers, networks and movie studios want to be rewarded for ALL viewings of their works, not just the first one. The ways we have attempted to resolve these disparate desires haven't been very successful. Viewers sometime copy illegally or share video content. Producers, networks and movie studios do all they can to make such sharing and copying technically difficult and legally perilous. The result is that less television is watched, fewer people are entertained and neither side is completely satisfied.

Can't there be a simpler way?

Hiro Media thinks we simply ought to add commercials to Internet TV shows and movies, thereby changing both the associated business model AND the balance of power. If shows come with ads attached in such a way that they can't be easily removed or skipped, why would their creators be opposed to copying and sharing? In fact, copying and sharing should be ENCOURAGED, because they lower the overall cost of distribution, increasing market share.

"When we started work on this a couple years ago we met with a woman from AOL who was in charge of anti-piracy," recalled Hiro co-founder Ronny Golan. "She was angry with us. She asked us why we were encouraging piracy. We said we weren't, we were encouraging DISTRIBUTION. But she didn't get it and almost threw us out of the room. A lot of people didn't get it at first."

"It," in this case, is the idea that how you receive a TV program shouldn't matter as long as the ads can be viewed and accounted for. "We don't care if you copy the show to a disk and give it to your friend or throw it up on BitTorrent or eMule," said Golan. "Any of those solutions costs the producer almost nothing. They are far cheaper and far more scalable than streaming, which looks like a good business model to us."

Internet users in many countries can already watch TV episodes on the web, often with commercials. But that is different from what Hiro is doing. If you watch 30 Rock at, for example, the episodes are cut into sections and commercials are added between the sections. If you want to start watching a new section of the show you first have to watch a pre-roll commercial. There are no true interstitial spots like you find on television. And these NBC shows generally play the same commercial over and over and the commercial doesn't seem to be tied to any information about the viewer.

In Hiro's case the commercials are not only difficult to remove, they are difficult even to skip or fast-forward through, unlike systems like TiVo, for example. You can fast-forward the show in the Hiro system, but NOT the commercials. And those commercials change every time the show is played, even if what is being played is a copy of a copy. If an Internet connection is available the ads can even be coordinated with a database and targeted at the presumed interests of the viewer. This is true not just for the initial downloader, but also for every copy of that show distributed in almost any fashion.

There is a similar capability designed into Neokast, another TV-to-the-web technology I wrote about recently, but Neokast is streaming video and the trick there is that you can't fast-forward in a stream so you must view the ads. Hiro, in contrast, is aimed specifically at DOWNLOADED content popular on networks like BitTorrent. Streaming and downloading each have their place. However, for the moment most Internet connections won't stream HD, but they'll easily download it.

What makes Hiro most interesting is that it is being taken very seriously by TV networks, with trials shortly to begin in both the U.S. and Australia. The first U.S. trial begins this week, in fact, with one of the big four commercial broadcast networks. Another U.S. trial should begin next month with a major basic cable network. And Hiro is already being used by one commercial customer in Israel.

"Our solution has a valid business model," explained Hiro co-founder Ariel Napchi. "This helps a lot when you can go into a meeting and explain that they'll be making money the same way they are used to, leveraging their existing sales force."

But like any Internet distribution service, Hiro ought to be just as attractive to producers who want to disintermediate TV networks or get coverage where the broadcast and cable networks may have shown no interest. It would be perfect for the Aaron Spelling Network, for example, based on 10,000 hours of bad 1980s TV -- that is if the Spelling network had an ad sales force or could find an ad sales partner like a Yahoo or Google, or perhaps even Hiro, itself, since the company will already be logging ads and taking a split of ad revenue.

The idea behind this service probably isn't unique to Hiro, but it is definitely the first such service to reach beta stage. As if to validate Hiro's effort, Adobe Systems this week announced its Adobe Media Player, which will eventually include a mysterious and generally unexplained capability to include commercials that can't be bypassed. Well Hiro can do that today. Perhaps Adobe (or Google) should take a look.

For the moment, Hiro is a Windows-only service, but Mac support is scheduled for the third quarter of this year and Linux support is scheduled for the fourth quarter.

Many readers of this column will hate the whole idea of interstitial video ads. They want to watch TV on the Internet, but see no reason why they should have to watch commercials to support that habit. But without a clear business model, commercial-free Internet TV will fail in the long run.

As the Internet turns into just the Net -- an IP-based network for all kinds of data including voice data, music data, and video data -- many people mistakenly assume that because the technology is changing the underlying business models must be changing, too. That's usually not the case. Though we from time to time do a good job of convincing ourselves that business models are changing and that having a zillion users has to mean business is good and profits will follow, sometimes they don't, mainly because we forgot to include them in the plan.

The fact is that successful businesses bring in more money than they pay out, and if we are expecting the $20 billion broadcast TV industry and the $20 billion cable TV industry to migrate to the web with their production values intact but their traditional revenue streams left behind, well that's just crazy. And it is no way to save the world.

Comments from the Tribe

Status: [CLOSED] read all comments (103)

Essentially, what the content producers want is a trade: they provide entertainment, and we watch commercials so they can make money. There is no reason that this commercial watching must interrupt the show every few minutes. That's just how things are done now.

Why can't a person watch all the commercials first to earn credit? They could make the commercials interactive to prove that a human is paying attention. Perhaps there would be other ways to earn credit, such as filling out a survey or spending three minutes browsing a company's website. Or, a person who doesn't want to do that could simply buy credits.

Interrupting the show frequently is one of the worst possible ideas, speaking as someone who enjoys watching shows with no breaks.

Bruce | Apr 27, 2007 | 6:27PM

would consumers be willing to pay a flat monthly fee that gets divided up based on the time spent watching or listening to different media? obviously, it would need to be optional. the entity that collected and distributed the money would need to be transparent and non-profit. and how many people would need to participate and how much a month would they need to pay to make it interesting to the creators? any interest in this?

William Maggos | Apr 28, 2007 | 11:56AM

Do you really think that people will not be able to Rip/edit/torrent media delivered under this model?

Pace | May 01, 2007 | 10:38AM