Reference no: EM131804325

Problem: Ten years ago, the Internet began a revolution that has forever changed the way consumers shop for goods, send and receive mail, find and read news, and acquire and listen to music. A relatively new electronic distribution channel, the Web enables billions of near-instantaneous commercial, consumer, and information exchanges each day. And with the widespread dispersion of increasingly powerful and portable digital technologies, marketers are witnessing a new phenomenon- consumers devoting considerable time to archiving and sharing the personal events of their lives. Tech-savvy members of Generations X and Y are photographing, recording, cataloging, uploading, blogging, hyperlinking, downloading, and sharing peer-to-peer files at an accelerating pace. Moreover, the independent Web sites where those opinions, files, and reports are located are becoming an increasingly valid means of staying connected with the world. Quite simply, this phenomenon is turning traditional media channels on their collective ear. Few companies really comprehend that the digital technologies driving homemade reporting and entertainment productions are simultaneously increasing demand for them. One company that understands, and even anticipated, this trend is start-up cable channel Current TV.

Cofounded, chaired, and shaped by the vision of former vice president Al Gore, Current predicted the relevance of do-it-yourself (DIY) media some time ago. Gore's objective, as stated on Current TV's Web site, is to democratize the production, distribution, and consumption of television. Years ago Gore recognized that the proliferation of affordable digital technology would make it possible to create "a powerful new brand of television that doesn't treat audiences as merely viewers, but as collaborators." And those collaborations, fueled by viewer-created content (VCC), are powering the DIY media boom. Shari Anne Brill, vice president and director of programming at the Carat Group, an independent media agency, predicts that "Current will appeal to a much younger-skewing and very unique audience. It opens up tremendous avenues between Internet and television, and it's a very interesting way to reach out to viewers who want to participate in the viewing experience." Current TV's Web site already hosts a menu of more than 50 "pods" containing program lists chosen for their appeal to independent spirits who have grown disenchanted with the staid format of mainstream television.

Recent feature programs on Current TV have included a piece on a man who spends his free time jumping from cliffs and bridges, a first-person perspective on the rescue efforts in the aftermath of Hurricane Katrina, and an in-depth report on a San Francisco rock band produced by a local college student. Most programs relate to current affairs, but other topics routinely covered include lifestyle themes such as art, fashion, culture, the environment, music, language, relationships, careers, travel, movies, and more. Regardless of subject, all Current TV programming has an intimate and unpretentious feel. Ever mindful of past pitfalls, Current is adamant that it will not devolve into a twenty-first century version of the public access fiascoes that gave VCC a bad name many years ago. To protect program quality, only one-third of Current's programming is viewer created, but the company doesn't think that will dissuade viewers as long as its professionally produced work has credibility, relevance, and appeal. The viewer-submitted content that is aired is also paid for, though it is repeated quite a bit, and watchers have the ability to vote for shows at Current TV's Web site. What would enable Current to run more VCC? The answer, in a word, is access.

At this time, Current distributes its programming to only 20 million residences in select metropolitan areas via Comcast, DirecTV, and Time Warner. It lacks support from the major cable and satellite companies that, together, feed popular stations to around 80 million homes. Current needs access to viewers in order to appeal to their creative alter egos and fuel the DIY cycle. In an age when countless business models have seen explosive growth followed by a dramatic collapse, Current's approach and situation look promising. Its concept has recently been validated by MTV's purchase of independent, Web-based VCC site iFilm.com. MTV Networks Music Group president, Brian Graden, says that VCC "is obviously the next wave, and the purchase by Viacom of iFilm is probably the strongest statement that we're very much on to that. The more control you put of everything into the viewers' hands in this sort of multiplatform, on-demand age, that's the only way you're going to win."

Questions: 1. Explain Current TV's channel strategy. What factors influence it the most? Why?

2. Describe Current TV's channel arrangement. What role do the intermediaries play? What potential conflicts would you predict for Current?

3. Who are Current's channel partners? What do you think will be needed to sustain those relationships?