[credit provider=”Wikipedia/Forbes” url=”http://en.wikipedia.org/wiki/File:Brian_Bedol_at_Fortune_Brainstorm_TECH_2011.jpg”]
Brian Bedol has had an fantastic career as both a startup founder and TV executive.In 1995, he launched Classic Sports Network and sold it to ESPN for $175 million. He later founded College Sports Television and sold it to CBS for $325 million.
Now he has another media startup, Bedrocket, but this time he’s not going to rely on the traditional distribution of cable to build his company.
Bedrocket raised $15 million from NEA to become the next generation generation TV company. Think of it like a Viacom that’s web-first, but not web-exclusive. Bedol launched Bedrocket with Huffington Post cofounder, Ken Lerer.
Bedol has been heads down on his startup. We recently visited him and learned what he’s building at Bedrocket.
The television industry has never really been disrupted.
So far, television and the cable industries haven’t been disrupted much by technology or the Internet. There’s YouTube and Hulu, but there really is nothing that has threatened long-standing cable contracts.
For example, you can read a New York Times article online, you can listen to a licensed song on Spotify, but you can’t post a 30-second clip from the Olympics.
Why? Because NBC paid $1.2 billion for the rights, and TV is still controlled by a few gatekeepers.
“You’ve got this very well-defined cable TV business. It’s controlled by a handful of big companies on both the programming and distribution side who have really big contracts,” Bedol explains. “In a world with gatekeepers it’s a highest bidder mentality…it’s bad for consumers but really good for participants.
“With the Internet, consumers are in charge. Our view in building this company is ultimately, consumers win.”
The Internet makes it cheap(er) to launch a cable-like network.
Bedol is trying to create a much cheaper Internet-based cable network that keeps quality high while minimising costs. He says Bedrocket can produce shows for a few thousand dollars that would cost a traditional network a few hundred thousand dollars to make.
“Before, if you wanted to create a cable business you’d have to spend $50-100 million before you even knew if you had a business,” he explains. “Creating programming over the Internet is much more scalable. Anyone can effectively launch a channel over the Internet and build an audience.”
Part of the reason traditional networks are so expensive is their approach. Internet-based cable companies like Bedrocket can stream video on demand. Traditional TV networks can not. They have to prepare content 24 hours a day, 365 days a year, stick to a strict schedule and be there if/when a viewer decides to turn on the TV.
Bedol says the average viewer only watches a few hours of TV per week, so most of networks’ content (and production costs) are wasted.
“If [an Internet-based cable company] had four hours of fresh content every week, it would effectively delivers the same experience,” he says.
In addition to creating less content, Bedol’s team is finding creative ways to cut production costs. For example, while shooting an aerial view for a skateboarding video, his team used a remote control helicopter and strapped a camera to it. Most traditional networks would have spent a few grand renting a real helicopter to capture the same angle.
Traditional cable networks are also limited in the social, data and distribution departments. Traditional TV networks still rely on Nielsen ratings, whereas Bedol’s team can perfectly measure how frequently shows are watched, how shows are discovered, and how they are shared. Bedrocket can also push content to places easily, like Facebook, Hulu and iPads. They can show “most viewed” or “most popular” content, but those social discovery features aren’t available in current cable menus.
In a few years, cable networks and Internet networks will be indistinguishable.
Bedrocket has been buffing up its shows and staff over the past year. It currently has four channels: soccer, action sports, comedy and fashion. It has 35 people and it recently hired Josh Dern, who developed the HBOGo app, as SVP and Chief Product Officer.
“In a way we’re just stocking the shelves,” says Bedol. “The bet we’re making is, in next couple of years, you’ll see some really interesting business models emerge.”
But how long will it be before Internet cable networks rival traditional networks?
It’s still early. Only a small per cent of people even have computers hooked up to TVs. But Bedol says 90% of new TVs sold are going to be ethernet enabled and connecting to the Internet will become easier and easier.
Instead of cable and broadcast networks having the power, Bedol thinks the hardware companies like Samsung and Apple will start controlling what people watch. And the way we discover what to watch could be much more like the App Store experience than current cable menus.
“As devices do a better job of surfacing good programming, it will begin to (I think) force a convergence of Internet and cable,” says Bedol. Eventually Bedol thinks the two will be indistinguishable, the way broadcast networks and cable networks are today.
Here’s one of BedRocket’s networks, Network A.
[credit provider=”Network A/Bedrocket” url=”http://www.youtube.com/networkA”]