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Broadcast in a multi-platform world

Last week I attended the Mediatel Media Playground 2011 – the first session of which was Broadcast in a multi-platform world. Below are my notes.

Notes for the other sessions will follow later in the week. However, I found this seminar the most enjoyable and thought-provoking due to the sector being highly competitive with players who would traditionally be in separate markets, and the willingness of the speakers to engage in debate on this.

Details

According to the website, the themes of the debate were:

Platforms, content owners, broadcasters, manufacturers and the confused consumer too – the new broadcast world.

  • How are consumer viewing and listening habits changing?
  • What is Connected TV? How will it best be sold to the consumer?
  • How will broadcasters and programme makers stand out in a world of TV clutter?
  • How should VOD be sold to agencies and advertisers?
  • The role of the EPG
  • Who needs who most? Are these uneasy alliances going to come crashing down?
  • Is YouView just too late now or the catalyst to Connected TV taking off?

The session was chaired by Torin Douglas, Media Correspondent for the BBC and the panel consisted of:

  • Dara Nasr, Head – YouTube & Display at Google
  • Oli Newton, Head of Emerging Platforms at Starcom Mediavest
  • Dan Saunders, Head of Content Services at Samsung
  • Jeff Siegel, Head of Advertising at Rovi
  • Nigel Walley, CEO of Decipher
Notes

My notes are chronological, so will broadly follow the themes above. All “quotes” were hastily scribbled down, and so are subject to error and misinterpretation.

Introduction

Nigel Walley opened by saying that in many ways new media isn’t that different to old. “Broadcast is the original recommendation engine” albeit editorially driven rather than through algorithms.

He also said that we are now in a “post VOD world” where new media is a support to broadcast and not an alternative. This is actually a boon to live TV as those time-shifting need to actively avoid mobile and laptop to keep away from spoilers.

Oli Newton said that consumers don’t realise what technology they already have and what it can do – he used games consoles as an example of this. He sees the children being the main educators in spreading these forms of behaviour.

Dan Saunders talked about the rise of connected TVs (Smart TVs, in Samsung parlance). Samsung sell 1 in 4 TVs in the UK, and 75% of these will be connected. He says that smart TV isn’t a separate category but a price point in the overall line-up between HD and 3D.

Jeff Siegel notes that worldwide 50% of connectable sets are now connected (though Mat Watson of ITV disputed this for the UK, saying it is much lower)

Dara Nasr believes that digital and broadcast empower one another and the online/offline divide has disappeared

Consumer understanding

Nigel Walley believes it is a confusing time for consumers as there are different technologies, different players and different acronyms (DTRs/PVRs/DVRs).

For instance, an average household could have an IPTV for the Olympics, Virgin for their TV and broadband, a PS3 for the kids and a DVD player for Mum. All of these can play iPlayer but the BBC has done no strategic development to say which one is better. Nigel thinks Virgin should be the priority as it the best platform to correlate VOD viewing to the broadcast audience.

Unsurprisingly, Dan Saunders disagreed. He thinks a TV tuner with an internet connection allows viewers to augment broadcast to something meaningful – thus Samsung comes to the fore in Freeview homes.

Dara Nasr said that Youtube follow the user. To be a TV company they need to be on TV, though at the moment it is mobile that is growing their audience.

Nigel Walley questioned his strategy as on the same device there can be multiple versions of Youtube. Dara countered by saying this was because their API is open to external developers. They “want to be accessible everywhere, and see what wins”.

Oli Newton said it was not about names but what gives the best viewing experience. “It is being of the web, not on the web”.

Jeff Siegel agreed in that we should focus on features and not on definitions. On TV, the quality of the video is the main thing – scores and additional information can be mobile if necessary.

Nigel Walley feels the quality of the interface has been the main problem in the past but this is improving. In future, he sees Sky and Virgin could be the dominant app on a TV rather than a separate device, “but there is a technology race to go through first”. This might change how they are used – for instance Youtube is used differently on a TV to how it is on a PC

Nigel noted that another problem to date has been a lack of promotion of connected TVs. For instance, stores don’t have internet connections to enable them to demo it.

Oli Newton said that consumer understanding is the most important thing – they need to be able to ask the right questions in store. Apple’s “ad-ucation” has been good at this – even non-users know how to work an iPhone.

Impact

Nigel Walley sees the film industry as being most under threat as connected TVs can deliver a better experience. It will be hard to break through the system of broadcast promotions, trailers and TV guide features that build up a linear broadcast schedule.

Dan Saunders argued that connected TVs can only have a positive impact for companies like ITV – people are buying TVs to watch TV after all.

Nigel Walley then accused TV companies of not understanding the difference between customers and consumers. Sky and Virgin have customers with transactional records while BBC and ITV are trusted brands to consumers – thus they should treat BSkyB as a business partner rather than a competitor.

Role of EPG

Nigel Walley argued that platforms aren’t doing enough to promote channels. The EPG is dull and boring and wastes all the promotion that goes into a channel launch

Dan Saunders questioned the role of the EPG. It isn’t being used effectively for advertising and there is currently too much on the front page

Jeff Siegel feels it has to be consumer friendly before you can even consider advertising

Oli Newton feels that if you have a smart TV, you don’t care about the channels but the content – that’s where the power of the EPG is. The EPG is the best place to advertise “but has been woefully let down”

Nigel Walley concluded that “the EPG is still software, it is not yet a media”

Competing platforms

Oli Newton noted that there “content sinkholes” e.g. the Channel 4 programmes available on Youtube are different to those on 4oD and again different to those on TV VOD services.

Oli also feels that Youview “is a bit pointless” – other serices, that already had a head start on the interface and simplicity, are now occupying this space.

Nigel Walley said that the original Youview scope was great, but that was in 2007. Stores are already discounting things that are better than Youview.

Nigel finished by saying that with devices and manufacturers battling it out, broadcasters are now further down the value chain. However, they have the valuable content that lets them punch through.

The perception of disruption

Network effects hasten the rate of innovation. Therefore, the rate of technological change is faster now than it has ever been (at least if my memory of Solow-style exogenous growth models is correct.

This tends to be iterative. Small, continual improvements that improve the efficiency of processes and provide new opportunities for people to achieve their desires.

But, over time, this can be problematic.

Particularly with user perceptions.

The core proposition (and branding) of a product or service will try to remain fairly constant. But feature creep will bloat and complicate.

It is even possible that some innovations will supersede the original benefit in terms of usefulness and relevance, but it gets lost in the perceptions of users since it is only additive to the core proposition.

In order to focus upon the most useful innovations, a disruption is necessary. A break with the past.

Mobile is a good example of this.

Mobiles have evolved at a rapid rate. They got smaller as technological processes improved but then bigger as new features emerged. Cameras, music players and internet connectivity all augmented the core proposition – a device to make calls on, wherever you are.

But the internet has superseded the phone network. Email and social networks (and Skype) sit alongside voice and text, along with the numerous other benefits the mobile internet offers.

And a disruption was needed to make these innovations apparent. Because ownership doesn’t equate to usage.

This disruption was led by the iPhone.

Nokia has tended to lead technological innovations, but Apple repackaged the device. It brought back usability and simplicity, with the mobile internet at the core of the offering.

Nokia, Sony Ericsson and Samsung (NSS) may offer “smartphones” or internet enabled phones. But they are perceived fundamentally differently to the disruptors – Apple, BlackBerry and HTC/Google (ABH).

NSS represents an easy choice – a safe upgrade on something familiar with. The bells and whistles may be a bit shinier, but the phone is basically the same. And behaviour remains similar.

ABH are disruptive. They represent a new type of phone. People will think more carefully about switching. The benefits are framed in what is different or better to their current phone. Once they have invested, this behaviour needs to be justified and so they utilise the functionality. Behaviour changes.

The data from Essential Research’s Brandheld study illustrates this.

Looking purely at those claiming to own a smartphone (we gave them a consumer friendly definition outlining benefits; many wouldn’t know whether their phone allowed third party apps to be developed), there was no real difference in claimed internet use via a computer. ABH owners spend 25 hours a week online; NSS owners spend 24 hours.

But when the data for mobile internet usage is explored, a different story emerges.

  • 65% of ABH smartphone owners access the mobile internet every day; 29% of NSS smartphone owners do so
  • 78% of ABH smartphone owners access the mobile internet at all; 63% of NSS smartphone owners do so

The ABH figures are actually skewed by BlackBerry. 87% of iPhone owners say they use the internet on their phone on a daily basis. They are also far likelier to use services such as games, maps and commerce based services.

Is there hope for the incumbent? I’m not so sure. Clay Shirky noted, with regard to media companies, that there is no incentive to disrupt the core business model. Executives are used to things working successfully in one way, that they will seek to protect this for as long as possible rather than embrace the risk of the new.

Can this be combated? Maybe, but maybe not. It seems to be cyclical. Eventually the disruptor becomes the incumbent, and the process repeats itself.

On a sidenote, as previously mentioned I don’t think the iPad will disrupt the computing space. It is disrupting a market that is nascent; the mobile market was well established before it was disrupted. If anything, I think the iPad will just precipitate touchscreen laptops.

The data I used above was from Brandheld. More information about the project can be found here, and I’ve included a Slideshare presentation below that indicates some of the key findings (Although I worked heavily on the project and analysis, I didn’t write this document. As you can tell. I don’t possess Keynote and I would never include the word “insight” in a presentation)

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Image credit: http://www.flickr.com/photos/jesse_sneed/2383953694/