How Time Flys

htf-e-sAs the Kindle/iPhone platform builds out, the possibility of pulling free content back from the abyss has sent tremors of hope through the media business community. Boxee’s continued struggle with Hulu suggests the content cartel has decided to double down on the hardball approach while they still can make it work.

On the other side of the river, the technology companies are busy shoring up their runways. On this week’s Gillmor Gang, FriendFeed co-founder Paul Buchheit confirms his startup has enough money for the next couple of years. FriendFeed’s work in recent weeks has been on the back end, invisible to the user but proactive in forestalling the scaling failures so damaging to other social media platforms.

Next on the priority list (or at least high on it) is realtime search, aka Track. While FriendFeed has a complex UI and API underneath, Buchheit promises investments in simplification as Twitter users hit the power user wall and Facebook struggles to redefine its private architecture as a public stream. With Twitter growing rapidly and Facebook jumping in to compete in the micromedia space before it’s too late, FriendFeed remains the best source for deep investment in realtime information.

Once FriendFeed delivers a Track capability, third party developers will find fertile ground for realtime services in the enterprise. TweetDeck’s success stems primarily from a grouping function that allows monitoring of reduced flow in multiple tracks. Track goes an important step further, enabling customized filtering of the firehose and integration of those results with a social graphed stream.

As valuable as groups appear, they represent only a one-way view of the flow. Being able to respond in realtime transforms the new network from reactive to proactive, and from consumption to value creation. This is the moment the micropayment crowd has been waiting for.

The Hulu/Boxee tango illustrates the end game for the ascension of content as the power broker. No matter how hard the studios try to control the means of access to their content, all they are ultimately doing is defining the price at which they loosen the handcuffs. Take Comcast, for example. Its key value proposition is not immediately visible, but essentially resides in its ability to establish a two-way conversation with its customers.

Like a TweetDeck or a Twhirl, its initial value proposition is as an aggregator of multiple pay channels, voice, broadband, HD, and on demand. But as you explore the system, you discover that on demand becomes the real differentiator, as a kind of FriendFeed router for the rest of the services. Your time is the real delimiter, with HD’s data size turning the DVR into a caching mechanism you have to clear every other day to keep up.

That’s when you discover the on-demand archives of not just movies but premium shows, essentially sharing in a kind of peer-to-peer network the content you formerly “followed” and then watched or discarded. Catching up on shows becomes more of a magazine experience, for leisurely Saturday afternoons or late nights after the kids are in bed. And the money spent on video rentals begins to migrate into this new paradigm, even as some films are made available on-demand the same day they ship on DVD.

Viewed from this context, Boxee, Hulu, and the like become competitive only for those programs that aren’t bundled as on-demand: most of the ABC shows, the NBC shows that cost a dollar, and some Fox shows like House that are backbone of that network. Those, you record, watch, and release. The economics suggest more and more bundling will even out these early wrinkles.

That’s why the micropayments are finally coming to the net, based as with Comcast not on the walled garden of the studios but the time availability of the viewer. Given a flexible on-demand bundle, the user can create an optimal experience by time shifting. In return, this new form of bundling allows the marketplace of micropayments to be aggregated and subsidized by relationship marketing.

To remain in control of pricing, the studios now have to deal not just with the broadcasters but also the more specialized two way relationships common to the enterprise, where microcommunities can establish viable economics that can be leveraged through peer-to-peer sharing of on-demand shelf space. This equilibrium between creatives and suppliers is only now beginning to emerge, and will keep pressure on the studios and broadband cartels to maintain parity with the Web experience or risk being overturned by it. In the end there will be no difference.