My expertise (such that it is) is primarily around the logistics of moving video content around the “broadcast” industry. My expertise extends into the business models and the consumer technologies, habits and demographics as a way of understanding the drivers of the B2B market that my company sells services into. However like Joe Public I have an opinion on what was and is wrong with the broadcasting from a consumer perspective too.
So my opinion about this press release from 20th Century Fox is from my consumer perspective. Having closely followed the music industry’s consistent miss handeling of digital, the internet, MP3, consumers, artists to the extent that EMI now stands for Every Mistake Imaginable. I have observed TV trying to apply lessons learned from music to their own industry. Some of these lessons don’t apply, more in later blogs maybe. However taking the Fox press release at face value it would appear that they have learnt the lesson of bending to meet what consumers want rather than opposing it. In this case consumers (at least some) want simple and easy. I’ve paid for the content and I want to make a copy or watch on some other entertainment device then I’d like to be able to do that as simply and easily as possible. Make it difficult as record industry did with DRM and you through down a gauntlet to the “would be” hackers and you piss off some consumers most of the time and most consumers some of the time.
Make it easy, as Fox appear to be, and even if there are limitations the effort an complexity of bypassing it, is not worth the gain.
Have you ever seen that sequence in Indian Jones where someone waves a sword around skilfully and trying to threaten Jones. Jones simply shoots him. Well the one of the mistakes the record industry did was to skilfully wave DRM (Digital Rights Management) around their CD’s but with some electrical insulation tape or a dense (water soluble) black marker pen you could negate its presence on the disc. Highly skilled programmers, expensive development complicated algorithms, just so a reasonably dextrous seven year old could bypass it in seconds.
Friday 29 August 2008
Friday 22 August 2008
Seperating Production from Broadcasting
An analyst in the US has apparently looked at Disney and determined that one strategy is for Disney to sell its 10 ABC channels and exit the broadcast distribution of video content. NBC has been selling stations piecemeal since 2006. News Corp’s Fox has been selling smaller stations to concentrate on the ones in the largest markets.
I seem to remember a recent quote from ITV (and I may be mistaken but I thought it was Michael Grade) that their vision was to be “a content producer that just happens to be a broadcaster” rather than a broadcaster, that also produces content.
Two reasons behind this: -
1. Money - They are making less money out of broadcast and see no way of significantly changing that. Coupled with the need for investment in Digital and HDTV capabilities and with a slow or no return on that investment.
And the second reason is
2. Money - Producing exclusive content for a single technology and with a single primary route to market is risky in the rate and speed of return on the production costs.
Not surprising then that money is the reason as large corporate organisations are run by accountants and not entrepreneurs or creative artisans and ultimately the stock market’s demands for growth and dividend take their toll. Some stations are delisting in the USA as they are bought by private equity. These private equity owners may allow more creative freedom but that won’t solve the inefficiencies in the stations’ operation.
Smaller TV station groups and single stations may be able to run more efficiently. (Buying advertising spots would become more complicated for brands and agencies so some spot aggregator would be needed.) However, the real problem is that many of the people in the day to day running of broadcasting have worked their way up over 20, 30 or 40 years from cheap student labour they have moved from one company to another in a very incestuous industry. Rocking the boat is not the way to get on so received wisdom pervades. The industry needs some outsiders (not accountants or CEO’s or CTO’s) that know how to organise and run efficient repeatable processes. Not just cutting head count and making those behind work harder. People are needed that can remove the operational cost and time to get content on air. People that can cut through the fiefdoms often found in broadcasters, drive out the operational synergies between stovepipe divisions of transmission, network, home entertainment, news media, spot sales and content sales. Release people and money to buy and create compelling content.
On the second reason, making content that has multiple routes to market reduces risk. Take a programme forecast to bring in 8million viewers. The ad space is sold and only 4m turn up suddenly advertisers are complaining and the decision to stick with it or pull it has to be made. The investment in time, effort and money is lost if its pulled but there is no point spend good money after bad. Action is required, so the programme is pulled so the production resources can get the next project out the door to fill the slot.
As an agnostic producer if the programme is pulled. The third option is open, to switch/sell it to another channel where 4m would be a good size audience or via an IPTV, ISP or mobile route to market.
The point is that as a content producer you are not tied to an outlet that drives a creative idea to be dropped rather than developed. So in the UK you could see BSkyB bidding for the rights to Coronation Street. In the USA “24” on ABC or High School Musical on Fox.
I seem to remember a recent quote from ITV (and I may be mistaken but I thought it was Michael Grade) that their vision was to be “a content producer that just happens to be a broadcaster” rather than a broadcaster, that also produces content.
Two reasons behind this: -
1. Money - They are making less money out of broadcast and see no way of significantly changing that. Coupled with the need for investment in Digital and HDTV capabilities and with a slow or no return on that investment.
And the second reason is
2. Money - Producing exclusive content for a single technology and with a single primary route to market is risky in the rate and speed of return on the production costs.
Not surprising then that money is the reason as large corporate organisations are run by accountants and not entrepreneurs or creative artisans and ultimately the stock market’s demands for growth and dividend take their toll. Some stations are delisting in the USA as they are bought by private equity. These private equity owners may allow more creative freedom but that won’t solve the inefficiencies in the stations’ operation.
Smaller TV station groups and single stations may be able to run more efficiently. (Buying advertising spots would become more complicated for brands and agencies so some spot aggregator would be needed.) However, the real problem is that many of the people in the day to day running of broadcasting have worked their way up over 20, 30 or 40 years from cheap student labour they have moved from one company to another in a very incestuous industry. Rocking the boat is not the way to get on so received wisdom pervades. The industry needs some outsiders (not accountants or CEO’s or CTO’s) that know how to organise and run efficient repeatable processes. Not just cutting head count and making those behind work harder. People are needed that can remove the operational cost and time to get content on air. People that can cut through the fiefdoms often found in broadcasters, drive out the operational synergies between stovepipe divisions of transmission, network, home entertainment, news media, spot sales and content sales. Release people and money to buy and create compelling content.
On the second reason, making content that has multiple routes to market reduces risk. Take a programme forecast to bring in 8million viewers. The ad space is sold and only 4m turn up suddenly advertisers are complaining and the decision to stick with it or pull it has to be made. The investment in time, effort and money is lost if its pulled but there is no point spend good money after bad. Action is required, so the programme is pulled so the production resources can get the next project out the door to fill the slot.
As an agnostic producer if the programme is pulled. The third option is open, to switch/sell it to another channel where 4m would be a good size audience or via an IPTV, ISP or mobile route to market.
The point is that as a content producer you are not tied to an outlet that drives a creative idea to be dropped rather than developed. So in the UK you could see BSkyB bidding for the rights to Coronation Street. In the USA “24” on ABC or High School Musical on Fox.
Thursday 21 August 2008
Olympic Audiance
This story goes to validate (to some extent) my posting “Young eyeballs v Old money”
With 2 to 11 year old audiences the same for 2008 as they were for the 2004 Olympics – and I suspect that until you get to about 7 or 8 year olds this age group a watching because their parents are or it happens to be on in the room they are playing in. So this is a “No shit Sherlock!” statistic.
Teenage (which seems to start at 12 rather than 13) audiences are down 4% despite greater access via internet and sports like BMX added to the line up. Not a lot!
However when you go back to the 1992 Olympics 2 – 11 year old viewing is down 45% and teenagers are down 50%
As with football, the Olympics’ aging audience (if unchecked) will eventually be unable to command the ability to attract the right audiences that the advertisers (and therefore the broadcasters) want to get to.
With 2 to 11 year old audiences the same for 2008 as they were for the 2004 Olympics – and I suspect that until you get to about 7 or 8 year olds this age group a watching because their parents are or it happens to be on in the room they are playing in. So this is a “No shit Sherlock!” statistic.
Teenage (which seems to start at 12 rather than 13) audiences are down 4% despite greater access via internet and sports like BMX added to the line up. Not a lot!
However when you go back to the 1992 Olympics 2 – 11 year old viewing is down 45% and teenagers are down 50%
As with football, the Olympics’ aging audience (if unchecked) will eventually be unable to command the ability to attract the right audiences that the advertisers (and therefore the broadcasters) want to get to.
Friday 15 August 2008
Subscrptions more than advertising revenue
The latest Ofcom report for 2008 amongst other things shows that TV revenues for subscriptions is more than 50% or revenues for the industry. Given that before Satellite and Cable (not that long ago) all the revenue would have been advertising this is a significant fact.
The UK TV consumer is now use to paying for TV in a way that German consumers (amongst others) are not.
So what are the FTA channels in the UK doing about taping into this growing market?
Well they seem to be focusing on online – sure they’ve got to be there, but the market business models and technology are all on the more still, making far more uncertain and risky than subscription TV.
Park that thought for a minute. Now look at the content lifecycle. People often think that this starts (in TV) at broadcast where the content has a premium value to attract eyeballs, that the broadcaster then sells the access to the advertiser. Repeats generally attracting lower audience over time = the long tail. But an episode of Coronation Street is in the “can” a day or two early + we know that people want to see things first (hence DVD pirates – not the only reason but a part). Therefore show the 7:30 Thursday edition on a Pay-Per-View bases on Sky/Virgin and BT Vision for £3 get 1m viewers and your £3m richer then you would otherwise have been (I now its not that simple but the principal is there). Create enough content that has a pre-Broadcast value and you’ve got a subscription channel.
OK so it maybe the elite with disposable income and the majority may wait 24 or 48 (or whatever) to see if for “free” but then you’ve segmented the audience and now can provide targeted advertising on your subscription channel. Sure they’ve paid a subscription so may object to adverts interrupt the programme but pre roll and post roll ads?
Cut the ads and you’ve got several more minutes to fill! What about a directors version an extra seen or two that wont be in the broadcast version? Now it’s not just a subscription to see it early but to see something the others never will.
The UK TV consumer is now use to paying for TV in a way that German consumers (amongst others) are not.
So what are the FTA channels in the UK doing about taping into this growing market?
Well they seem to be focusing on online – sure they’ve got to be there, but the market business models and technology are all on the more still, making far more uncertain and risky than subscription TV.
Park that thought for a minute. Now look at the content lifecycle. People often think that this starts (in TV) at broadcast where the content has a premium value to attract eyeballs, that the broadcaster then sells the access to the advertiser. Repeats generally attracting lower audience over time = the long tail. But an episode of Coronation Street is in the “can” a day or two early + we know that people want to see things first (hence DVD pirates – not the only reason but a part). Therefore show the 7:30 Thursday edition on a Pay-Per-View bases on Sky/Virgin and BT Vision for £3 get 1m viewers and your £3m richer then you would otherwise have been (I now its not that simple but the principal is there). Create enough content that has a pre-Broadcast value and you’ve got a subscription channel.
OK so it maybe the elite with disposable income and the majority may wait 24 or 48 (or whatever) to see if for “free” but then you’ve segmented the audience and now can provide targeted advertising on your subscription channel. Sure they’ve paid a subscription so may object to adverts interrupt the programme but pre roll and post roll ads?
Cut the ads and you’ve got several more minutes to fill! What about a directors version an extra seen or two that wont be in the broadcast version? Now it’s not just a subscription to see it early but to see something the others never will.
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