How to Deliver Online Content That Delivers Viewers

Marshall Herskowitz’ view is not so sanguine. He comes to the internet from the world of television, where six media conglomerates control both production and distribution. Even though the internet is theoretically an infinite space and can’t be consolidated to the extent television has been, Herskowitz is concerned about consolidation resulting from rising costs for promotion and advertising on the internet. "Google, Yahoo!, and others are working very, very hard to grab as much real estate as they can," says Herskowitz. "And the more real estate they grab, the more difficult it will be for newcomers to be found. The only good news is that it’s too big to be totally consolidated."

The economics have yet to shake out, and online video ad dollars are still relatively insignificant, but if a brand can be established, even at the cost of a few years of deficit, the payoff can be substantial. (Many hit television shows—not to mention Amazon, Yahoo!, and Google—took time to build audiences.) Herskowitz had enough faith in the changing landscape to put Quarterlife on the internet even before the NBC pickup. "The advertising industry is in the middle of a shift," says Herskowitz. "They’re going to start putting more and more dollars into the internet, and pretty soon there won’t be that much difference in revenues [between the internet and television]."

The shift in ad spending from television to the internet is just one element of convergence. Another is the way users ultimately choose to integrate the consumption of content into their lives. "On television, people are much more willing to seek out a program that they like and think about it in terms of their schedule, their week," notes Herskowitz. "On the internet, people just live in a sort of extended present." TiVo has already presaged the evolution of content-consumption habits, and "appointment TV" is on its last legs. After all, as STBs and HD displays become ubiquitous, how much difference will there be between TiVo-ing a show and downloading the same show? "It’s not whether it’s delivered by satellite or broadband," says Herskowitz. "It has to do with whether the gestalt of the internet is going to be the thing that takes over television, or the gestalt of television takes over the internet." Streaming through its social network site while broadcasting on network television, Quarterlife is hoping to succeed in either case.

For now, the internet gestalt-based Rocketboom model clearly works. The true market value for Rocketboom is difficult to establish, but Wallstrip (a similar, much-less-frequented site, the stated mission of which was "to do Rocketboom for stocks") recently sold to CBS for $5 million. And if 100,000 users would send Baron their $3 each month, then Rocketboom’s model would work even better. But even though Baron sees a bright future for the Rocketbooms of tomorrow, he’s not blind to the possibility that consolidation will constrict the avenues of exposure for online upstarts. "The beauty of it now is that something compelling can rise up into the system without anybody’s control," says Baron. "I just hope that it will stay like that."