We’re Crawling Not Leaping into the 3rd Dimension

By Lloyd Mason – March 2011

Few innovations in TVs history have caused as much divisiveness as 3D. Currently the darling of consumer electronics, manufacturers and retailers far and wide are actively demonstrating this revolutionary new form of TV. However consumers don’t seem to be buying it; either the idea or the technology itself.

So what explains the public’s apparent lack of affection for 3D?  According to What Hi-Fi? magazine, 135,000 3D screens were sold in 2010, the first year the technology has really been available to British consumers. This seems respectable until you consider that nearly 10m TVs were sold in total and set sales were bumper last year due to the boost of the football World Cup in South Africa, always a driving point for sales of new sets. 3D sets totalled 1.35% of sales.

Now it is possible to give the third-dimension a break; it is a new premium (read ‘costly’) technology and therefore will only really demand the attentions of so-called early adopters. This determined group are also the section of the population most likely put up with shortcomings in technology and missing functionality. In comparison, Joe Public wants good value for money and a tangible upgrade before handing over the Mastercard.

The problems 3D must tackle in order to achieve mass consumer take-up are threefold.

Firstly, there is a distinct lack of content. For 3DTV at home there are three main routes to content – Blu-ray, on-demand and broadcast. 3D Blu-ray films have been slow to surface, about 40 were available at the end of 2010. On-demand 3D is available on Virgin and BT Vision’s TV services on a pay-per-view rental basis but have only 5 and 3 feature films available respectively. This explains why Sky has over half of the 3D population in the UK on its books. Offering Europe’s first 3D broadcast channel from October 2010 has meant that the satellite broadcaster can boast the richest bouquet of 3D content on offer; movies, sports, music and documentaries are all available each day and moreover, are recordable on Sky+ boxes. However, the 70,000 subscribers it has racked up on the Sky 3D channel are also paying subscription to Sky’s top-tier package at £62 a month.

This brings us to the second hindrance, cost. We have alluded to the topic twice already but it is probably the largest turn off for consumers that show any initial interest in getting 3D TV. Not only do you have to purchases a 3D ready screen, often with £80 glasses needed for each viewer, a 3D specific source is needed too such as Sky 3D or 3D Blu-ray player plus film.  This premium is mirrored in the cinema too where a 3D movie at Odeon Leicester Square will cost £18.60; rather than £15.60 for it’s 2D sibling.

Thirdly a lack of consumer education will also restrict sales, and though this like the other two problems will eventually be alleviated, is likely to be a more stubborn stain on 3D’s reputation. With a lack of industry standards in hardware (proprietary glasses, HDMI connections etc.) the process of purchasing can be complicated. Add to this reports of sickness and headaches (Wired report less than 20% actually experience discomfort) and consumers have an increasing amount of reasons to steer clear. This same problem was seen when high-definition TV first emerged and many consumers assumed buying a ‘HD-Ready’ television set rewarded them with HD TV content. The industry relied on retailers to educate consumers on the subject but felt they were slow to get their act together. If consumers are to understand and feel comfortable with 3D at home, they need to understand it rather than feel alienated by it.

Once 3D TV shakes off these issues consumers may begin to come around to the idea of having 3D in the home. However, if this takes too long it will have already been overlooked as a passing fad – it’s probably got a couple of years of consumer patience to play with.

However, even then it is likely to a remain a rather niche product. Event based broadcast such as sports and movies lend themselves well to 3D – they only last a couple of hours and can generally make the most of interesting camera angles and eye-popping situations; Eastenders in 3D doesn’t seem to make sense.

Consumers want to love 3D, and have done ever since it was first trialled over 50 years ago. It needs to address its many problems if it is to make any headway in 2011, until then it will remain a gimmick dipped into for sporadic events; there’s been no revolution yet.

Filed under: Future Content, Uncategorized, 3D, 3DTV, Future TV, TV

A Great Idea For A TV ‘App’!

Samsung announced this morning that it’s launching a contest in the U.S. to find innovative new apps for its connected TVs and Blu-ray players. Samsung will give away $500,000 to developers who come up with the best new TV apps.

Now, I think that I have this one in the bag!  I have come up with the perfect TV ‘app’ – called a ‘cluster’.  It is based on a video file that automatically starts when the previous one is finished.  This type of video file could allow the TV industry to create ‘clusters’ of video files that play out continuously, in a line for people who don’t like having to press stop and start all the time.

I can’t be arsed to go choosing which ones to play, so we could get some clever people who know about content to decide which ones to play, and in which order.  Different ‘clusters’ of video file could focus on different kinds of video content – for instance there could be a sport cluster or a history cluster or even a wider cluster of content that appeals to a more general audience. Each ‘cluster’ of content like this could even have its own brand. Sometimes this might be a simple numbering system (eg Cluster1, Cluster 2 from a single provider) or if it is a really cool cluster of content, we could give it a brand with a bit of personality – like ‘Bert’.

I am also conscious that a lot of the video files that I might like to play will be time sensitive or have a very short ‘shelf-life’.  Therefore, the different clusters of video files could go out under some kind of  time framework, so that at any part of the day I could click on the cluster of my choice and it would start playing the relevant video wherever it was in the time loop.   (I would quite like to wind backwards in the video loop, or see a list of the video files that had played out previously if possible – but that might have to wait till version 2.0).

We could then allow anyone who makes media devices to develop an interface ‘app’ that presented all the content clusters in a particular order that makes sense to me as a customer.  This would probably just have the clusters  listed out with the most familiar / most used on page 1. With this system we could also offer consumers the ability to see which video files would be in any particular cluster later in the day, and give a bit of information about each of the video files that were being played out.  A slightly more advanced system may have a system which allows us to pre-arrange for a video file on one of our favourite ‘clusters’ to be downloaded to some local storage.

Given that someone is going to have to fund this we will have to work out how the apps get paid for.  My suggestion would be to use the gaps between the video files, to insert paid for video apps.  I am sure that there are companies who would pay to insert a message between the video files?  No, that would be pushing it……

Filed under: Future Content, Programme Formats, Uncategorized, Future Content, Programme Formats

What The Hell Is Google TV?

By Nigel Walley – Augst 2010

So Google and Sony have jointly announced the launch of Google TV – a range of set top boxes running a version of Google’s Android software. Google have also announced a range of other box launches in the US before Xmas.  You may have seen the press notices about this, and we would like to offer an explanation and opinion on its importance.

First thing is to understand the background landscape.  Broadly, there are three types of competitor in the TV market at the moment: the pay operators (like Sky and Virgin) who make their own boxes and software; the set top box manufacturers who are making Freeview and Freesat boxes with all sorts of fun stuff added over-the- top of broadcast  (sometimes called the ‘over the top’  or OTT  boxes); and the device manufacturers, like Sony,  who are desperately trying to grab ownership of the TV experience in the home with a device centric strategy.  Google TV has relevance for both the OTT and device manufacturers.

At the moment, the OTT phenomenon is being driven by some box manufacturers (like Humax and NetGem) and by service providers like Fetch (who  use a NetGem box).  None of them has a great heritage in making great software or interfaces, so Google TV represents a potential new bit of software to use in the next generation of their boxes.  This must be attractive given that is it free to use, and is supported by the weight of Google’s R&D team.   The fact that it gives Google software a route onto TV is important, but secondary.  The only problem, in the UK of course, is that this puts Google TV in direct competition with the other group developing a free-to-use bit of set top box software – Canvas.    Google vs the BBC’s Canvas would be a great head to head bit of competition were it not for the fact that they are both so desperately late to market.

For the device manufacturers like Sony, on the other hand, Google TV could offer them a way out of a problem of their own making.  The device manufacturers are connecting all their devices to the web and trying to create interfaces and on-demand packages that are available without subscription.  However, right now their offerings are very clunky and have no intelligence because the device manufacturers have no experience of putting together ‘services’. The current crop of connected devices (screens and BluRay players) are a shambles of incompatible consumer interfaces and remote controls.   The way to view Google TV’s deals with companies like Sony, therefore,  is not necessarily as a ‘web-on-TV’ initiative, but as a Sony initiative to make their connected TV devices more intelligent.

But Google may not even be able to mop up all the device manufacturers.  Samsung have just announced a deal to work with Tivo to launch DTT PVRs.

However, the key element to recognize with Google TV is that this is another ‘future TV’  initiative which fails to integrate broadcast into the emerging consumer experience. Yes, it will supercharge the search function on any TV system using it.  It will add functionality to EPGs (eg search) and the on-demand environment but will do very little for the core experience that most people have of TV – watching a live channel.   The consumer  outcome on one of these emerging ‘device-led’ systems is very fragmented – and will continue to be, even with Google’s input.   On these devices, it is impossible to move seamlessly from a broadcast show into the related catch-up shows (because there is no connection between broadcast metadata and on-demand data) or even onto the EPG and back.   This is what the BBC Vision Multi-Platform team call ‘flowing audiences’ between content.  It is a compelling vision of how broadcast, catch-up and red button content can be fused into a cohesive whole in this new IPTV fuelled TV world.   However these new device based systems, which will use Google, view each content type as separate and distinct, requiring the consumer to launch a different app each time they want to move from one to another.  It is not clear that they even recognise the idea of interactive content within broadcast.   It is a PC experience writ large, not a TV experience.  It is most certainly not consistent with the type of TV future that the interactive teams in the UK have been trying to achieve over the last few years.

This has to be viewed in the wider context of a battle for the soul of TV between technology and broadcasters.    There are groups of technology people around the world who are working on a vision of TV that largely ignores the primary role of broadcast.  They tend to be people from an internet engineering background who have been put in charge of TV projects.   These people are creating a vision of an ‘on-demand’ and ‘device’ centric TV experience, which is an outcome based on thier personal preferences not research into the mass audience.

In this world, the programme brand takes over from the channel brand as the primary organizing device, and the web as the primary distribution context.  A seemingly un-connected announcement this week from the BBC, about the iPlayer now connecting with Facebook, makes this point.  The BBC on-demand team have not yet successfully connected their catch up TV with Sky, Virgin or BT Vision, (through which 15M homes watch their broadcast channels) but FM&T have achieved a ‘breakthrough’ with a social media site.  These people are building what they personally want, and are not creating a TV future that has relevance to the mass of the current TV audience.  (The astonishing thing is that senior TV management in broadcasters like the BBC, are letting them do it).

In the UK, where innovation has historically been led by the platforms,  we have an opportunity to create a completely different approach, in direct competition to the Google TV / Sony vision of the future.  This is dependent on the TV platforms (Sky, Virgin and the Canvas group of companies) launching the next generation systems in which broadcast is central to the experience.    This experience should recognizes that the channel is the primary navigational device that consumers understand, and would include features that lock broadcast into the future, such as ‘next generation red button’,   ‘jump to VOD from broadcast‘, and  ‘play-over from the EPG’ in creating  a new interactive consumer experience.  In this light, Project Canvas has an opportunity be the pre-eminent example of a broadcast centric platform – designed to show what the future looks like from a channel controller’s point of view.  But they need to deliver against this promise, not get sucked into a ‘me-too’ apps-centric strategy like Sony, or Samsung.

We have to ask is could Google TV be good for UK broadcasters?  The answer is probably not, but in the same way that Hulu and Joost weren’t good for broadcasters – and they were seen off.   So it will be possible to minimize the impact of even Google in this world, if the broadcasters act in a co-ordinated way.  However, this is where it gets tricky.

Five have broken ranks already,  launching a Demand Five app on Sony TV,  and Channel 4 have broken ranks with the YouTube deal.  So, we are fast approaching a situation where UK broadcasters are unable to act in concert to achieve a broadcast friendly outcome.    Decipher believe that broadcast channels in the UK need to decide which camp they want to play in, because it will be impossible to support both platforms and devices in a single country. (It is important to note that in countries like Germany, with very weak platforms broadcasters may have to work with the device-led OD offerings to achieve significant roll-out of their catch-up content).

It is Decipher’s contention that the most commercially viable future for a commercial broadcaster is in the type of integrated future provided by the existing TV platforms.  However, the platforms have to deliver the required functionality to do this, and they need to do it in a consistent, integrated way between them.   This will require them to talk to each other about functionality that is used by broadcasters across all platforms.  In the past they have failed to do this, as anyone working in red button will tell you.  If the platforms want to fight off the Google TVs of this newly emerging world, they need to learn how to co-ordinate on the development of broadcast-centric functionality and do it very quickly.

Filed under: Future Content, Interfaces & Functionality, IPTV

Is Netflix Coming Our Way?

By Alex Street

The nature of competition in pay TV markets could be about to change. Internet-enabled TVs and connected devices represent a fundamental change to the way content is distributed and markted to the viewer. I’d like to address these issues by looking at one company’s attempt to build a hybrid distribution strategy that capitalizes on the growth of internet-enabled devices connected to the TV set.

Historically, a single TV platform has been in control of the viewer experience in the home. If I was a Sky customer, Sky controls everything interesting to do with TV in my home. In fact I pay them to do so. The arrival of video on demand products on Blu Ray, games consoles and internet TVs challenges this control. For example, quite soon, in my home, when it comes to watching movies or catch up, I’ll have a choice of platform at the point of decision. In other words, instead of picking up the Sky remote, I’ll have several remotes all competing to deliver me the same thing and or similar things. I will no longer be limited to the TV platform I subscribe to. This puts device manufacturers in direct competition with pay platforms and this isn’t a challenge one American company seems to fear.

Netflix started out as a simple movie rental company that delivered your DVD rental by post. However, as the company name suggests, they never saw themselves as being simply pigeon holed into just offering a postal service. Netflix has an advanced hybrid distribution strategy taht uses the open web to deliver movies to the viewer. Netflix is now available on games consoles (Xbox 360, PS3 and Wii), BD-Live Blu Ray players (Samsung, LG and Insignia) and internet TVs from LG, Sony and Vizio. Netflix is also now available on the iPad. This strategy puts them in direct competition with US cable and satellite operators. Netflix claims that by offering streaming cross-platform streaming options it can drive premium subscriptions and tap into the $66b US home entertainment market. At the end of the first quarter, April 2010, Netflix reported it had 13.9m subscribers, representing 35% YOY growth. This is expected to hit 16.6m by the end of 2010, a 400% increase in subscribers since 2005. Graph 1 shows this rapid increase in Netflix subscribers, in the context of the number of US DVD households and movie goers. As graph 2 illustrates, this expansion has been partly driven by a more competitive subscription rate, with average fees falling from $17 to $12 a month.

In order to tap further into the lucrative home entertainment market, Netflix has to drive online streaming and attract more pay TV subscribers. Firstly, Netflix is already driving more users to stream online. More than half – 55% of subscribers – now stream movies and TV shows from Netflix over the internet. Graph 3 details the average number of movies streamed compared to the average number of DVDs shipped to each subscriber, each month. In terms of the total volume shipped and streamed, Netflix believes that streaming will surpass postage as the primary delivery format for movie rentals within 2 years. Conceivably, much of this will be driven by an expansion in the base of the devices that can be streamed from. Secondly, in order to grow its subscriber base Netflix is offering TV shows in order to attach cable subscribers. This puts Netflix in direct competition with US cable and satellite operators who have combined subscriber based of around 105m. Increasingly these operators are also offering VOD products on multiple screens in the home. However, the domestic market isn’t the only way Netflix is looking to grow. Netflix will launch in a foreign market later this year. Moreover, a readily available distribution base exists in the games consoles and BD-Live players, by virtue of their international manufacturing standards and global brand presence. This is not an option open to domestic cable and satellite providers who have sunk costs.

All in all, the online streaming market is there to be colonised. Netflix is one of the first companies to develop a hybrid distribution strategy on this scale. We’re going to have to get used to the competition at the TV screen and develop ways to deal with it. Essentially, there’s a functionality rush occurring on the TV set and it’s not simply a question of the best, most commercially viable and economic way to distribute content, it’s who can offer the most compelling user experience.

Download the original article from NMA, here.

Filed under: Commercial Models, Distribution & Devices, Future Content

“Who Gave The IT Department A F*#king Brand To Play With?”

By Nigel Walley

We have been looking at the role of PC VOD in the TV industry recently and reflecting on how, in attempting to capture the potential of this new medium, the industry seems to be making many of the same mistakes of the  first dot.com boom. The  way that the PC VOD teams appear to operate as separate fiefdoms in all the main broadcasters seems troubling, and strangely familiar.

People appear to have forgotten that, when the internet came crashing into corporate life in the mid nineties, confusion and conflict quickly blew up in many big companies.    The battle lines were particularly drawn between IT and marketing over the vexed question of ‘who owned the web site’.  The IT departments thought that, as they were the only people who understood the  new technology, they should be in charge of the web site.  Like the TV industry, the creative departments in most companies were slow to react.  Suddenly, IT departments started recruiting web designers and content people to run the company web sites, and conflicts with the marketing teams broke out.

There were some bizarre outcomes.  One UK bank (whose company colours are clearly red, white and black) had an olive green web site for a while because the IT department liked it.  Inconsistency in marketing messages were everywhere.  In retail companies, this problem was further complicated as the IT departments, not content with taking on the marketing teams, tried to set up rival retail operations. One major retailer faced a revolution amongst store managers who refused to stock the promo disks, or even mention their fledgling e-commerce service in the stores, because of the antics of the new department.

Part of this chaos came about because of the insistence of the development teams that they needed their own brand for the new service.  Retailers in particular, fighting off competition from Boo.com and Amazon.com, were insistent that they needed a unique brand to play with in the dot.com space.  This only served to confuse customers and make cross-marketing difficult, let alone doubling-up marketing teams and budgets. Some of the worst offenders were the publishing industry, who set up competitive digital divisions with separate editorial and sales teams in competition to their main magazine properties.

The blame for the chaos sat clearly with senior managers.  Most were so befuddled by the arrival of the web that they weren’t able to fully appraise its strategic implications, and they therefore let their IT departments have their head.  Eventually sanity re-appeared, the absurd brands were shut down and the web operations were broken up and integrated into each of the relevant departments.  My favourite memory of this, came from an experienced older department store boss, who woke up to what was happening and exclaimed ‘who gave the IT department a fucking brand to play with?  They should be making sure my photocopier works!’ There is nothing new in this.  R&D teams always want to watch their babies grow.  In every industry, there comes a point where these initiatives have to stop being R&D, and be integrated into the mainstream, and sometimes you have to prise control from the fingers of the boffins.  Coming out of th dot.com chaos we learned a few basic rules of dealing with technology change:

• Don’t be bamboozled.  If management don’t ‘get-it’ then the  boffins aren’t doing a good enough job of explaining. Send them back to write a business model  (its funny how the only bit of software that the boffins don’t appear to be able to use is a spreadsheet!)
• Don’t throw the baby out with the bathwater.  Unless you are one of the unlucky few, your core business will stay your core business – don’t lose sight of it. (OK, that speech might not have gone down well in the typewriter industry when the PC arrived).
• Don’t let new technologies set themselves up in competition to the main business.  Almost invariably the new systems should be positioned as supportive and complementary to the main business.
• Don’t let the boffins have a brand to play with (they are bound to create something in olive green or fluorescent pink!)
• Don’t let boffins speak directly to customers or make content decisions!  (These people have no friends or family and play Dungeons and Dragons for fun. They shouldn’t be put near your customers!)
• Let the boffins run developments while the emphasis is technical, but put in place a plan to integrate back into the main business once an initiative gains momentum – then fire the techies!  (They’ll only go round annoying people by grumbling that it was all their idea in the first place).
• Don’t let key people in your existing business abdicate their responsibility to understand and  adopt the new capability. (

All of this seems logical with hindsight, but when we look at the rise of the PC VOD branded players, it feels as though senior management in the TV industry failed to learn any of the lessons of the first dot.com revolution.  In every major broadcaster, senior management  set up separate VOD R&D teams, in separate buildings, with separate objectives from the broadcast teams. These teams have effectively been set up as competitors to their parents.  In some broadcasters it appears that the VOD teams KPIs are actually in conflict with the main broadcast business.  The outcome has been cannibalistic, not complementary to broadcast audiences, and these needs to be reset.  Nobody appears to have asked the question, ‘how can we build a VOD service that is supportive and complementary to our core broadcast business?’

If we had started with that question, we might not have ended up with broadcasters repeating the dot.com mistake of creating separate brands.  In the case of the BBC and ITV the player brands that have been created are not even built out of the established brand architecture that the channels have paid a lot of money to develop.  Once again, the outcome is confusing marketing messages and confusion in cross-marketing and branding.  That is what happens when ‘you give the IT department a brand to play with!’

Creating separate entities made sense from an R&D point of view, particularly given that there was a need to drive a significant change of consumer behaviour into the market.   iPlayer in particular has been a dramatic success on that front.  However, we cannot ignore the organisational friction and chaos that all this is causing within the broadcasters.  More importantly, this separation is putting unnecessary pressure on channel brands.  Consumer research has been clear on this.   Consumers still value and use channel brands as key editorial and navigational supports.  More importantly, they view catch-up as part of a channel experience, not as a separate experience.  With the current organisational structures around PC VOD, the opportunity to exploit these consumer perceptions of channel brands have been limited.  More dangerously, when most commentators are realising that we need to bring catch-up much closer to broadcast, VOD teams are beginning to make syndication decisions for VOD based on their own needs and interests, rather than than synchronising with the interests of the main broadcast channels they are meant to support.

There is a very strong argument to say that iPlayer, and the other PC VOD teams now need to be broken up and the R&D teams focussed onto their next technological challenge.  As Tom Peters once said, ‘If it ain’t broke, break it!’. Now is the time for that philosphy in the TV world.  However, it appears the opposite is happening.  In every broadcaster these R&D teams have morphing into their own permanent divisions. (In the BBC, they are moving towards letting the R&D team commission content.) In every case there appears to have been little integration planning for how to bring this new functionality into the main business.  More worrying is that there appears to have been a hope among traditional channel managers that, having ‘solved VOD’ by setting up these separate teams, then the core business can get on with running the core business without changing anything.  This means that  management in the TV industry seem unprepared to take on responsibility for running VOD within the broader TV mix

Filed under: Distribution & Devices, Future Content, Uncategorized

Is The VOD Industy Lying To Us Or To Themselves

By Nigel Walley

Martin Johnson, the England rugby coach stood in front of the cameras after the England Scotland game at the weekend and said that he saw improvement in the England team.  Like most of the English sporting audience, who had just watched a dire display of turgid rugby, I gulped in shock  and stared at the screen feeling very uncomfortable.

My discomfort came from the fact that Martin Johnson should be able to do no wrong in my eyes.  He is someone I revere, and for whom I desire success in a very difficult job.  But he was talking rubbish.  What I couldn’t work out was whether he knew he was but was fronting up, or whether he actually believed the stuff he was saying.  It is discomforting when people I like, and want to succeed, spout stuff that is not believable. Particularly if I am not sure that they believe it either.  I am beginning to feel this way about a whole host of new media initiatives that are currently underway.

We are in the midst of a significant wave of big consumer technology and service punts at the moment. If you look at the level of commercial activity around PC VOD, TV VOD, HD TV and even 3D TV, the volume of launches planned for 2010 and 2011 feels like the height of the dot.com boom, apart from the small inconvenient backdrop of a global recession.  As part of this frenetic activity, all sorts of people who I really like, and want to succeed, are quoting numbers at me which make me feel uncomfortable.  The numbers in the business cases being expounded, were they to come true, represent significant changes in consumer behaviour, mass adoption of a host of new things, and general consumer enthusiasm for things which, if truth be told, there has been little indication of demand.  And once again, I can’t work out if the people involved believe the numbers either.

Consumer demand is a tricky thing to understand.    There are times when we, we are told, that we ignore the consumer at our peril. The customer is king. But almost by definition, our industry has always worked on the principle of ‘if we build it they will come’.  None of the great things that the internet has spawned were based on meeting an explicit demand, so why should I worry now.

Also, at the heart of many of these launches are good old competitive fights for market supremacy.  PC VOD is a case in point.  It is quite clear that there won’t be sufficient consumer demand for all the new PC VOD players to succeed, but the consumer will benefit from the competition.  As consumers, do we now care what happened to Netscape, or AltaVista?

For new media, these existential issues are nothing new.  But for the TV market, this is probably the craziest phase we have ever seen.  This week we have seen the announcements that some of the major electronics brands are ready to launch the new generation of Flatscreen TVs.  These things have 3D capability, IPTV capability, DLNA home networking capability and, almost as an afterthought, the new HD chips in their Freeview receivers.  Everyone seems to want to get into the market before the World Cup and the launch of Sky’s 3D channel.

Ignoring the cyclical problems caused by the recession, which will naturally dampen consumer demand, this explosion in TV technology is predicated on a level of consumer willingness to spend over the next two years, which would be hopeful in the good years.

The new media industry has always accepted this craziness as a cost of doing business.  But lets not forget that, alongside all the success stories, there have been a long series of high profile, venture capital sapping, failures along the way.  I liked the people at Boo all those years ago, but didn’t believe their numbers.

This blog is the original, unexpurgated version of an article that appeared in New Media Age in April 2010.

Nigel Walley

Filed under: Commercial Models, Distribution & Devices, Future Content, IPTV, 3D, DLNA, Future Programming, On-Demand, PC VOD, VOD

Why do I still watch broadcast TV?

Adrian Stroud – June 2009

I recently challenged myself to work-out why I still watch so much ‘live’ TV. I don’t mean news or sport because I can rationalise those genres quite easily. I mean bread and butter programming.
The challenge came about because I was debating just how much more damage all the VOD services and PVRs will do to live TV viewing figures in the long-run. This is important because it is those live viewing figures that contribute the vast bulk of advertising impacts. VOD currently delivers far, fewer impacts per hour of viewing than live TV, so the ‘end game’ for advertising funded TV programming is defined by this question. My guess was that live TV won’t drop more than perhaps 25%, no matter how many VOD and time shifting gadgets like Sky+ launch, but I could not say why. I suspect I’m making the mistake of confusing the technology with the benefits.
VOD and the PVR are the rational way to consume all but the livest of live TV events. So, when VOD has all the content you want and it is available on every screen in the house, why would you want to watch ordinary old broadcast TV at all?
Live TV has one strong thing going for it – ‘missability’. When you turn your TV on, the rational thing to do is to check a few favourite channels to see if something is sneaking past you that you might like. If I find something valuable in this initial foray into live TV I’ll add it to my Sky+ planner. But here is an odd thing, having committed to recording a newly discovered programme and all subsequent episodes; I’ll probably continue browsing likely sources of live entertainment. When I’m in this mode I’m not actually looking to make a commitment to something I really enjoy. I’m probably expecting to be interrupted or be forced to change channel to meet someone else’s taste. The stuff I really like is salted away for some future, quiet, uninterrupted hour that never comes. So missability is a factor for me at the moment but what if just about every TV programme you could think of was available on demand? How can you miss something then?
Misability is not always what drives me to the broadcast channels first. The conditions under which it seems appropriate to commit to a piece of VOD material are quite specific. The kids must be in bed (a deadline that slips further and further into the evening) and a joint decision must be made with Mrs Stroud as to the duration available for shared viewing and of course there is then a debate about exactly what to watch.
By habitually recording things I like and then delaying their consumption to some future ideal moment that never arrives, I could easily end-up watching less programming that I really enjoy than I did when I had to strike while the iron was hot.
Here is another odd thing. Watching one of my ‘favourite’ programmes sometimes just does not appeal as much as watching short bursts of fairly random content. When left alone with the remote control and hour to waste, I’m likely to channel hop. I might leave a programme in a dull bit and give it another chance a few minutes later knowing that it will have moved-on.
The use of Sky+ to time-shift seems to have levelled off at about 15%. This is an average drawn from a very wide spectrum of behaviour so don’t worry if you are not typical. It is not an average like the average shoe size for men is 10, it is more like the average score for a blindfolded darts player will be 10.
Maybe 15% has always been the average amount of consciously planned TV viewing, and VOD and PVRs have simply revealed this underlying truth? Maybe 85% of viewing was always low-commitment and ‘a bit random’ and we were unconsciously quite happy with this. Let’s face it, how could TV have become such a world-wide hit, occupying many hours a day for most people in most countries if ‘fairly random, low commitment viewing’ was not fun?
So the reason I watch live TV is rational but it is not about being live, it is about serendipity and the way it can be randomly sampled – it is a about browsability. When I channel-hop into a programme half way through, I know that is what I have done and that is exactly what I wanted to do. I don’t want to navigate a hierarchical menu system, highlight a title, see the channel indents, pre roll and then sample ten minutes of scene-setting before a drama gets going. I want a random few seconds somewhere in the middle. I don’t even want a ‘sampler’ of best bits edited together. If I go back to the same programme five minutes later I want it to have moved-on by five minutes. If I’m channel hopping while the children are still around I want to know that I’m not going to stumble across something violent, rude or frightening. Of course, when they are safely in bed these become positive selection criteria.
I have yet to see a VOD system that has the browsability of live TV and that encourages the same happy-go-lucky lack of commitment to viewing a whole programme. But surely a VOD system could mimic these attractive features of broadcast TV and offer added benefits? I suspect that the current generation of VOD systems are assuming that our TV consumption is more planned and sensible than it really is.
Rather than thinking about what the end-game is for live broadcast versus on demand, the real question might be how much TV viewing will remain low-commitment, fairly random sampling? It would be surprising if on-demand systems did not eventually meet the need for browsability better than the current broadcast channels. But if they do, will they be able to deliver about fifteen, spots an hour like live TV does? If you have some cash for research I’d love to see what can be done.

Filed under: Ad Formats & Cases, Commercial Models, Distribution & Devices, Future Advertising, Interfaces & Functionality, IPTV, PVR / DTR / DVR, 4OD, BBC, BT Vision, CH4, CH5, ch5 on demand, demand five, iPlayer, IPTV, ITV, ITVplayer, Joost, Sky, Sky Anytime, SkyPlayer, Tiscali, topupTV, VOD

Whose Shares Wins? ITV vs Google

See Decipher discuss the Susan Boyle case on Channel 4 news here

Much was made in the press about ITV not earning any revenue from all the people watching the clip of Susan Boyle on Britain’s Got Talent on YouTube.  This has been described by various commentators as a missed revenue opportunity, and a commercial failure for ITV.  This completely misses the point.  Over 50 million people tuned into watch the Susan Boyle clip on YouTube.  It was the best two minute ad for a TV programme that has ever been distributed and ITV didn’t pay a penny for the privilege.  You have to ask how many posters a TV company would have to buy to get an equivalent, media impact.  The only statistic of interest should have been the uplift in audience, from the episode before to the episode after the YouTube explosion of Miss Boyles version of Les Miserables. There was a 2 million uplift.

There has been a bizarre implication in all the media coverage over the last two weeks, that because of this example, YouTube is somehow a 21st century business and that ITV is an old fashioned business that doesn’t get it.  ITV maybe sitting in the middle of firestorm of reduced ad spend, but at least advertisers are spending with it.  They are barely spending with YouTube, which costs Google the best part of a billion dollars a year to run, but makes it only 200 million dollars in return.  It is one of the last of the dot.com absurdities – a great functionality in search of a business model. 

The press commentators declared that ITV’s shareholders were funding content that YouTube were exploiting to build a business and that they should be up in arms about it.  But this perspective was not based on a sensible analysis of commercial outcomes.  If you look at the issue from a revenue gained point of view, the only shareholders who should be up in arms are Google’s.  Their expensive acquisition, YouTube,  distributed an amazing two minute advert for Britain’s Got Talent from ITV for free on their platform.  For Google or YouTube to get the equivalent value out of ITV you would have to pay them millions pounds.

YouTube is the best thing that has happened to the TV industry in the last 20 years.  The idea that people are tuning into the UGC site, rather than watching TV is preposterous.  There is just no evidence that it is happening.  Consumers get the idea of relative value between them. YouTube is a clip sampling destination, not a TV destination. 

More importantly brands understand the relative value. T-Mobile the brand behind another recent YouTube hit  – the Liverpool Street Station dance scene -  quite clearly understand the comparative value exchange at work here.  When they wanted to launch their follow on campaign to the dance scene, they chose not to launch on YouTube, but paid serious money to good old ITV to put their ad into the centre break of…….you guessed it…Britain’s Got Talent. You can bet that the perceived price and value of the spots they used had increased dramatically because of YouTube’s free support and the extra 2 million pairs of eyeballs it delivered.   If I were a TV exec I would be gagging to get promo footage of my shows onto YouTube.

The only cause for complaint among ITV shareholders must be that Google let YouTube provide ITV with a global promotional base for BGT, but ITV don’t own the global rights to exploit the programme asset. But that is a different moan.

See Decipher discussing the media coverage on Channel 4 News here.

Filed under: Commercial Models, Future Content, Future Programming, Future TV, ITV, Nigel Walley, On-Demand, YouTube

The BBC Is A Pay TV Operation

Nigel Walley – February 2009

I opened my bank statement the other day to see how much I paid Sky.  What I found interesting wasn’t the Sky number, but the line underneath. By some quirk, the direct debit that I pay to TV licencing was listed underneath. I pay just over £11 a month to the BBC for TV and radio.  Now, as a middle class middle Englander, I understand how much value I squeeze out of the BBC for that money.  I probably use way over the average amount of BBC output, and don’t begrudge it.  What I find odd is that the industry still lumps the BBC together with ITV, C4 and Five in our discussions about free to air television.

The BBC is quite clearly not a free to air broadcaster.  I pay a subscription every month to access the content and it is quite clearly a Pay-TV operator in terms of the way it is financed.  The only differences between the BBC and the other Pay-TV operators are that it is a compulsory subscription and that they have a variety of public service obligations in return. 

While this may seem like semantics, the question of whether they are a Pay-TV operator or not becomes quite pertinent when you consider a different question:  ‘does free-to-air have a future?’  This normally would have been an absurd question to ask but if you look at the revenues this year so far for ITV, C4 and Five it is clear that it may no longer be quite so stupid.  The cash crisis affecting the PSBs operating in the FTA sector (apologies  – couldn’t resist the acronym clash) mean that we may be seeing the beginnings of a vicious circle where programming budgets on the non-BBC channels decline to the point where their content is demonstratably of inferior to the BBCs, so they lose share to the BBC, they then earn less from advertising and therefore have less to spend on programming. Whether a circle is vicious or virtuous often depends on the direction from which you are looking.

Filed under: Future Content, BBC, FreeToAir, Nigel Walley, PayTV, Sky

Could Free TV be the new Pay TV?

The other night I went to bed with Paxman. His typical wit and insight on the global credit crunch got me thinking about where the belt can be tightened in my own household. As the Sky EPG finally bid me farewell after I had convinced myself that there was nothing on worth watching live and everything on my Sky+ box demanded more than the 12 minutes or so I was prepared to give it, my mind focussed what I pay for TV. A rather interesting picture started to form.

I, like Parkinson and Felicity Kendal, am a Sky+ fan. It’s easy and works for me. Point, shoot, job done. I would estimate that 75% of my watching is ‘off line’, so to speak. However, a review of what is currently sitting on my hard drive is rather revealing – Heroes, Madman, Jonathan Ross and at least 2 movies for the wife, QI, the cricket, Have I Got News for You and Panorama for me. Mmm..mostly provided by free to air channels. OK, so why am I not on FreeView? They have Sky+ like recorders, so why the reluctance? Well sorry for being picky but the picture just doesn’t do it for me. All this ‘digital TV means quality’, ‘like the step up from LP to CD’ is rubbish. I’d put it on the TV in the kitchen at a push, but on my beautiful new HD Ready 40” work of art you have got to be joking. The truth is multi-channel broadcast TV needs lots of bandwidth. An awful lot of it, in fact, and digital terrestrial (that’s Freeview from that old aerial still sitting on the roof) does not enjoy an over abundance of it.

So Freesat. There’s an idea. HD too and in a few month’s time with a rather neat PVR. So, all I need to do is convince the wife that Film4 does provide all she really needs and we are laughing. Mmm, not sure that’s going to do it.

I see that iTunes launched their video service in the UK last month. This is online video retailing at its most impressive. I could also use this as an excuse to buy that exquisite Apple TV device. Plug one end into the TV, the other into the phone line and I get more video content than the wife can ever want. It will talk wirelessly to my computer and my iPod Touch to share the content around my house. Very neat. It’s HD as well.

So let me work this out. Multichannel TV, PVR, movies on demand that we pay for only when we watch them and much of all of this in HD. Compared to the £55 per month I currently pay Sky for my fully loaded Sky+ HD service I would be able to watch pretty much everything I currently want to watch, watch it when I want to watch it, have my wife rent 2 movies per week from a choice currently over 1,000 (£2.50 to £3.50 a go) for less than £25.

But where’s my sport? Well I can always take the £30 I save and meet my friends down the pub and watch it there. Although I still have to find the additional £200 to buy the hardware. Now, where’s my calculator….

 

Filed under: Commercial Models, Add new tag, freesat, Freeview, HD, multichannel, PVR, Sky