Pulling the plug on business as usual

This post from MoneyTalksNews made me think seriously about nixing my own cable television service, and wonder how long the cable industry will survive in its present form. The post included plenty of interesting insights about the industry, but it was basically a how-too guide for finding free video entertainment.

One key point: You no longer need cable access to get prime-time shows in high definition, thanks to rules that went into effect last summer. So viewers now have incentive to go back to advertising-supported television, except that off-the-shelf digital recorders can skip the ads for them. The post also gives pointers on the other hardware for catching and viewing HD signals.

Enjoy it while it lasts, folks. Studios won’t keep producing indefinitely for no payback — not on television and not on the Web. They’ll eventually restrict their programs to paying subscribers. Some are already doing so: Witness the advent of Hulu Plus, a $10/month version of the Hulu free television site, earlier this month. Expressing disappointment with Hulu’s ad sales, the media conglomerates that co-own it have been pushing it for a subscription version for a year or more. This looks like a validation of FargoTube and any other subscription-based models.

In contrast, television producers and cable networks that keep offering free online content will almost certainly find that the decision comes back to haunt them.

Need nobody to tell me now that we’re in Tennessee

F3’s sales team is back in Nashville for the third time in six weeks. I could’ve guessed that after a glance at their list of appointments: an agency that manages country musicians, a public-relations firm, a couple of country musicians who have a reality television show, and two meetings with a large music-licensing firm.

The reality-show stars may be the biggest coup for our FargoTube entertainment service if they come through because they’re a household name among country-music fans. It’s a logical fit: FargoTube would let them sell music videos and other video content that isn’t already claimed by the network that airs their reality show.

Moreover, FargoTube would do that in a social setting that the network can’t match. FargoTube is fundamentally a social networking platform, with each network — or “tube” — centered on a content owner and his/hers/their/its videos. Viewers can e-mail each other and post comments while watching. They can create personalized networks of online friends with similar entertainment interests. They can subscribe to one or more tubes or pay a one-time fee for a single video, depending on how tube owners want to integrate FargoTube with the rest of their online presence. The direct contact with fans allows tube owners to better understand fans’ buying habits.

For me, the most interesting part of our team’s trip has been hearing about their meetings with the licensing agency, one of the three largest music-licensing agencies in the United States. Licensing agencies are basically sleuths that track down unlicensed use of songs and then politely ask the radio station or website to pay and play … or cease and desist. Radio stations are relatively easy: The licensing agency just records what’s on 1,600 radio stations, runs it through a software program similar to Shazam, and checks the resulting list against its own list of which stations have bought which rights. (“Wait,” you’re probably saying, “you call that ‘easy’?!?!?”)

Well, from what I understand, there’s no way to automate that kind of search when it comes to internet-based music outlets, and there are theoretically an infinite number of those outlets. So licensing agencies have to rely on those outlets’ cooperation. We’re eager to cooperate because FargoTube’s entire mission is to help musicans and other artists to regain control of their work and the profit it brings. And we believe that a partnership with this licensing agency will give us enormous credibility with musicians and record labels.

Speaking of street cred, a reliable source tells me that American Idol is kicking off its next round of auditions in Nashville Saturday morning. I think our COO and business-development manager, Paul and Stephanie, have already established their credibility, but I’m going to watch the first few episodes of Season 10 in the fall to see if they stayed in town with their guitars for an extra day.