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.
Friday, 25 July 2008
Video on demand
First I feel it necessary to define what I mean by Video on Demand (VoD). I mean in the broadest sense of on demand. Walking into your local DVD rental emporium is VoD. The time lag between making a decision and the fulfilment is a function of the operation and technology. So what isn’t VoD? Buying a DVD or taking a DVD out of your personal library isn’t VoD – something in-between. At the opposite end from VoD is broadcast where programmes are scheduled to play at a time determined by station that also decides what content to aggregate into its schedule.
So in my definition of VoD I would include the walled gardens of IPTV services like BT Vision even though they exhibit the broadcasters’ trait of decided what content to aggregate onto their platform. Internet TV services such as Joost and the BBC’s iPlayer are VoD as is a download or stream.
VoD is still an emerging service with early adopters still dominating the consumer base. This is unlikely to change for sometime for a number of factors.
These are 1. Uncertainty 2.Complexity and 3. Confusion caused by: -
• Proprietary technologies and applications that require multiple installations on your PC.
• Multiple set top boxes, sling box, IPTV box, Multimedia centres
• HDTV on the horizon which technology or device will give the best experience or will new boxes and technology require me to ditch my new but obsolete investment.
And others.
Even if these are all resolved and a “Blue-ray” standard emerges there is still a big benefit that broadcast has over VoD though few seem to recognise it or be developing it as a strategy. It is “Discovery”.
What is discovery? Well, most viewers know where there favourite TV Soaps are they switch channels to watch their Soap. How do they now? Well they look in the news paper, TV guide or know it’s always on. What about a new Soap? Here the marketing is done by the broadcast TV channel (or Network) Posters, newspaper but also trailers that are placed around other programmes.
Other channels don’t need to do this as much as their brand value broadly describes the content they aggregate for the viewers’ entertainment. Examples of my interpretations of these TV Brand are; Disney is a family channel, I could place an 8-year old in front of it in complete confidence that they would not hear a profanity. MTV once a music channel is now a 16 – 30 year old life style content. National Geographical, The Discovery Channel etc all have consumer understood values that set the viewing expectations.
BT Vision on the other hand and Joost may promote themselves and the extent of their content libraries but I have yet to see much more. This is because, to date, their content has previously been shown on TV or in Cinemas and therefore someone else has done the marketing and created the awareness. Users of these services are primarily looking for something they missed or want to see again. They may see something that they watch on speculation, but not the primary motivation.
Will VoD services see the day when there is content made primarily for VoD and secondly for broadcast? Will VoD commission exclusive content? Could they bid for 24, Lost or Heroes, so these programmes appeared exclusively or initially on their platforms? To succeed they will have to spend more and get smarter at marketing and enabling their target market to discover the delights, benefits and freedom of VoD.
So in my definition of VoD I would include the walled gardens of IPTV services like BT Vision even though they exhibit the broadcasters’ trait of decided what content to aggregate onto their platform. Internet TV services such as Joost and the BBC’s iPlayer are VoD as is a download or stream.
VoD is still an emerging service with early adopters still dominating the consumer base. This is unlikely to change for sometime for a number of factors.
These are 1. Uncertainty 2.Complexity and 3. Confusion caused by: -
• Proprietary technologies and applications that require multiple installations on your PC.
• Multiple set top boxes, sling box, IPTV box, Multimedia centres
• HDTV on the horizon which technology or device will give the best experience or will new boxes and technology require me to ditch my new but obsolete investment.
And others.
Even if these are all resolved and a “Blue-ray” standard emerges there is still a big benefit that broadcast has over VoD though few seem to recognise it or be developing it as a strategy. It is “Discovery”.
What is discovery? Well, most viewers know where there favourite TV Soaps are they switch channels to watch their Soap. How do they now? Well they look in the news paper, TV guide or know it’s always on. What about a new Soap? Here the marketing is done by the broadcast TV channel (or Network) Posters, newspaper but also trailers that are placed around other programmes.
Other channels don’t need to do this as much as their brand value broadly describes the content they aggregate for the viewers’ entertainment. Examples of my interpretations of these TV Brand are; Disney is a family channel, I could place an 8-year old in front of it in complete confidence that they would not hear a profanity. MTV once a music channel is now a 16 – 30 year old life style content. National Geographical, The Discovery Channel etc all have consumer understood values that set the viewing expectations.
BT Vision on the other hand and Joost may promote themselves and the extent of their content libraries but I have yet to see much more. This is because, to date, their content has previously been shown on TV or in Cinemas and therefore someone else has done the marketing and created the awareness. Users of these services are primarily looking for something they missed or want to see again. They may see something that they watch on speculation, but not the primary motivation.
Will VoD services see the day when there is content made primarily for VoD and secondly for broadcast? Will VoD commission exclusive content? Could they bid for 24, Lost or Heroes, so these programmes appeared exclusively or initially on their platforms? To succeed they will have to spend more and get smarter at marketing and enabling their target market to discover the delights, benefits and freedom of VoD.
Tuesday, 22 July 2008
Young eyeballs v Old money
The audiences for sport are gradually getting older. That is to say that there are fewer young people interested in passively watch sport on TV or at the ground. Why is this happening? Well cost is a factor, ticket prices increase and subscription costs for pay TV are barriers to access. Alternatives, video games, internet, DVD etc alternative entertainment options.
Yet audience levels remain high especially at the grounds of the top teams/events. Therefore the accountants are happy as they collect the aging audiences’ money. Yet as they take the baby boomer’s money in the short term they are building up a long term trend that could have a profound affect on sport. With less spectators, one outcome might be a concentration on the larger teams and events (a trend that some might see already) at the expense of the lesser teams etc.
I was at a conference recently and one speaker said that for the 2008 Olympics in Beijing it will be the pinnacle as far as global TV audiences, with forecast audiences for every subsequent event progressively falling. TV has the same aging audience problem.
In the case of commercial TV there is a dichotomy, on the one hand the advertisers want to get to the 16-35 age group while it is the 55+ age group that watches most TV.
So what is TV doing about it? I’m not sure it is doing anything. They seem to be doing “more or the same”, at best. At worst budget cuts from falling revenue impact production quality and the fear of failure makes the industry risk adverse. Then to top it the financial institutes and investors that hold the leash encourage repeating what worked last time again… and again… and again until ultimately it fails.
Advertisers are attracted to the 16 – 35 year olds, because the perceived wisdom is, if they capture the consumers early, they are likely to retain them. Example, if a collage or university student joins a bank now, even if they have no money now, the chances are will still be with them when they have money at 40+. The same applies to a whole range of white, brown good and MFCG’s in terms of brand loyalty. Whether this is really brand loyalty or apathy and whether it will hold true as the children of the digital age grow older is a different discussion.
Yet the 16-35 have less disposable income, lower paid jobs, highly active social lives, mortgages, young families etc all drain their disposable income. The other day I heard the term NEET’s (Not in Employment, Education or Training – or something like that) a 16 to 25 age that may have a part time job but effectively live off of their parents income, for at least their housing and food needs.
The 40 or 45+ have money and can, and do, pay for simplicity comfort, ease and quality. Part of this desire maybe why they tolerate the NEET’s (its easy). Despite this the ad industry (and their clients, the brands) and consequently the pure ad funded TV channels, are obsessed with this “sub prime” market. A market that prefers speed, interaction, change/new and cheap. A market that has and exercises choice with self in mind. A market with limited or no money.
And the point is, like sport, broadcast TV needs to look at the long term and ensure that it creates a habit and a loyalty that will hold viewers for a life time, not just until the end of the series/season.
Yet audience levels remain high especially at the grounds of the top teams/events. Therefore the accountants are happy as they collect the aging audiences’ money. Yet as they take the baby boomer’s money in the short term they are building up a long term trend that could have a profound affect on sport. With less spectators, one outcome might be a concentration on the larger teams and events (a trend that some might see already) at the expense of the lesser teams etc.
I was at a conference recently and one speaker said that for the 2008 Olympics in Beijing it will be the pinnacle as far as global TV audiences, with forecast audiences for every subsequent event progressively falling. TV has the same aging audience problem.
In the case of commercial TV there is a dichotomy, on the one hand the advertisers want to get to the 16-35 age group while it is the 55+ age group that watches most TV.
So what is TV doing about it? I’m not sure it is doing anything. They seem to be doing “more or the same”, at best. At worst budget cuts from falling revenue impact production quality and the fear of failure makes the industry risk adverse. Then to top it the financial institutes and investors that hold the leash encourage repeating what worked last time again… and again… and again until ultimately it fails.
Advertisers are attracted to the 16 – 35 year olds, because the perceived wisdom is, if they capture the consumers early, they are likely to retain them. Example, if a collage or university student joins a bank now, even if they have no money now, the chances are will still be with them when they have money at 40+. The same applies to a whole range of white, brown good and MFCG’s in terms of brand loyalty. Whether this is really brand loyalty or apathy and whether it will hold true as the children of the digital age grow older is a different discussion.
Yet the 16-35 have less disposable income, lower paid jobs, highly active social lives, mortgages, young families etc all drain their disposable income. The other day I heard the term NEET’s (Not in Employment, Education or Training – or something like that) a 16 to 25 age that may have a part time job but effectively live off of their parents income, for at least their housing and food needs.
The 40 or 45+ have money and can, and do, pay for simplicity comfort, ease and quality. Part of this desire maybe why they tolerate the NEET’s (its easy). Despite this the ad industry (and their clients, the brands) and consequently the pure ad funded TV channels, are obsessed with this “sub prime” market. A market that prefers speed, interaction, change/new and cheap. A market that has and exercises choice with self in mind. A market with limited or no money.
And the point is, like sport, broadcast TV needs to look at the long term and ensure that it creates a habit and a loyalty that will hold viewers for a life time, not just until the end of the series/season.
Tuesday, 15 July 2008
Mobile TV - update
I’ve just read an article in Broadcast Engineering (July 08) title “Get mobile”. The article, better written than my meanderings, is not out of tilt with what I said in an earlier blog. However, one thing it highlights is simultaneously broadcasting on DVB-H (the mobile standard) as DVB-T (the television standard). This seems a waste of radio frequency spectrum.
If you can buy a simple USB dongle to put digital television on your PC why not use the same technology to put it on your mobile.
The article also highlights the different screen formats on different mobile devices that each would need their own format. Although ignored in the article the implication is that there would potentially be multiple DVB-H versions to cover each format. Again, a waste of valuable spectrum.
Why not use DVB-T on mobile devices and make the device reformat for the screen it has. This would be an efficient use of the spectrum – will make obsolete the older mobile devices, so playing to the mobile phone manufacturers’ obsolescence strategy.
Some may say that this loses the opportunity to personalise the content and adverts. However, there is no reason why interactivity and personalised ads and content could not be delivered via cellular network. This network could down load the ad of content to the mobile device and insert it into the broadcast ad break at the appropriate time.
DVB-T is being deployed across Europe and will probably have a better coverage than any DVB-H network will for some time.
The only problem is if you are on a train (for example) and watching a programme and moved out of one transmitter area into another how would you maintain the TV experience during the transmission. Cellular network already does this if you are on a call. A simple reference table that said you are in this cell’s coverage and the best DVB-T signal is “A transmitter” as you moved into the next cell site this could trigger the DVB-T tuner to move to the “B transmitter” if that gave a better signal.
If you can buy a simple USB dongle to put digital television on your PC why not use the same technology to put it on your mobile.
The article also highlights the different screen formats on different mobile devices that each would need their own format. Although ignored in the article the implication is that there would potentially be multiple DVB-H versions to cover each format. Again, a waste of valuable spectrum.
Why not use DVB-T on mobile devices and make the device reformat for the screen it has. This would be an efficient use of the spectrum – will make obsolete the older mobile devices, so playing to the mobile phone manufacturers’ obsolescence strategy.
Some may say that this loses the opportunity to personalise the content and adverts. However, there is no reason why interactivity and personalised ads and content could not be delivered via cellular network. This network could down load the ad of content to the mobile device and insert it into the broadcast ad break at the appropriate time.
DVB-T is being deployed across Europe and will probably have a better coverage than any DVB-H network will for some time.
The only problem is if you are on a train (for example) and watching a programme and moved out of one transmitter area into another how would you maintain the TV experience during the transmission. Cellular network already does this if you are on a call. A simple reference table that said you are in this cell’s coverage and the best DVB-T signal is “A transmitter” as you moved into the next cell site this could trigger the DVB-T tuner to move to the “B transmitter” if that gave a better signal.
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