Share this Article
I always learn from opposing views and it helps shape my own perspectives. And with a room full of regulators and industry incumbents from Germany, Switzerland and Austria, I certainly faced a challenge in sharing my message that the TV industry is not some kind of unassailable behemoth that will beat back the Internet like a small insect.
But rather, that what happened and is happening still - in print, music and telecom in terms of industry disruption and dynamic shifts in the value chain - is certainly going to happen to them. Not if, but when.
Where I think I did succeed was in using technical issues to better illustrate that regulating the future of TV will be an enormous challenge as the Internet is largely unregulated while TV is largely over regulated.
The fact is, web browsers are now embedded in Smart TVs. Second Screen (media stacking) and Internet usage while watching TV is quickly becoming a consumer habit as smart phones and tablets penetrate the market on a massive scale. As TV and Internet become a hybrid it's only going to get more complicated in separating them.
Trying to strip that freedom back from consumers because the Internet is coming to the Big Screen and the Second Screen will be a huge controversy. Consumers don't want a Chinese Wall around their Internet, and it's much harder to add regulation (Internet) than it is to strip it back from broadcast television. Though they may try to meet in the middle, I suspect it's a battle that will end up in industry self regulation rather than government. HbbTV is not going to save them. There are just too many other players coming from all angles.
Don't get me wrong. I am not an anarchist. I believe that kids need to be protected and even perhaps some people need to be protected from their own behaviour. But I support self governing bodies rather than government.
We live in a new era of corporate accountablity and the idea that people or brands can wantonly rampage without facing consumer and public backlash is all but extinguished thanks to the Internet. As Wikileaks has shown, corporate secrecy is less secure than it ever was.
New technology is certainly an obstacle for regulatory bodies. But it's an accelerator for disruption... certainly.
Though many broadcast executives I am meeting seem to feel pretty safe. Those that are over 50 at least.
Allegorically, in my opinion, they are a bit like like the writers who wrote books by hand when confronted with the Gutenberg Press. They don't believe that the masses can make audiovisual content beyond a cat video or Charlie bit my Finger.. And they scoff at the "many to many" paradigm and Youtube in particular.
Think about it this way... as Nick Bilton so brilliantly noted in his groundbreaking book called, "I live in the Future and here's how it Works".
In 1424, the University of Cambridge, one of the largest libraries in Europe, had 124 hand-written books. When Johannes Gutenberg started printing books in 1452, the monks who had previously and painstakingly written all of the world's literature since writing began, scoffed at and derided the new form of books that were coming into the market. And were simply not worried about it as most commoners could not read anyway - and the modest reproductions couldn't stand anywhere near their exquisite work. Today the Cambridge Library has over seven million books.
The clergy and nobility thought they had it in the bag. But the printing press was to change the world as they knew it, stripping thought leadership from the clergy, kings, politicians and religious leaders. The ideas that appeared in print and were later widely shared pushed through, not only the reformation, but also the sciences and arts - levelling the ground and instigating what can only be called a Renissance on it's own.
When TV first started appearing, the Washington Post noted in 1929 that serious meetings were being held to discuss whether television would, "Detract from theater attendance when it is more fully developed". And through it's development, hundreds of articles published from the beginning until today have pushed the idea that television can corrupt and ruin society.
This is not a new idea... the idea that new technology changes the paradigm.
In Vienna, I did get in a great debate with a commercial guy from RTL Germany on future of TV on one panel. No blood spilt, but is sure is entertaining to bang heads with those who come from the opposite end of the spectrum when it comes to the future of TV.
I am not sure why some people really believe that people will put up with commercials far into the future. And it's not the first time I have run into this opinion. I would love to see a study in Germany, Switzerland or Austria... or anywhere for that matter - that shows that people either:
A. Love commercials
B. Understand that they need to watch commercials in order that content can be funded.
People just don't care. All they want is to watch what they want to watch, when they want to watch it, on whatever device they want to watch it on, wherever they want. Preferably without being disrupted by low level propaganda. And probably with an easier way to find content as 1000 channels on an EPG is ridiculous.
According to Socialnomics by Erik Qualman, 78 per cent of consumers trust peer recommendations. Only 14 percent trust advertisements. Only 18 per cent of traditional TV campaigns generate a positive ROI. The NYTs notes that hit TV shows have most-skipped ads on Tivo.
From Television Remixed: The Controversy over Commercial-Skipping by Ethan O. Notkin. Albeit an American study, I am sure resonates everywhere.
If there is one thing that viewers of network television would agree on, it is likely to be the annoying nature of commercial advertisements. One study found that 65 per cent of the consumers polled "feel constantly bombarded with too much marketing and advertising."
In addition, 69 per cent of those polled were interested in "products and services that would help them skip or block marketing." Part of the problem is the advertising industry's use of the widely accepted "saturation marketing" model, which calls for massive increases in the number of advertisements. The emergence of "spam" in the last decade has also contributed to the growing perception of advertising in general as untrustworthy and disrespectful to consumers.
Too many people in this business are far too subjective (they look at their own behaviour or their own demographic). Or they are complacent with the idea that the only demographic that matters are the baby boomers and anyone over 30. It's now the second time someone has uttered - "who cares", when I mention Generation Y and Millennials leaving linear TV in droves last night at dinner to a TV executive.
I guess they will be retired by the time it does matter. That was my thought.
Someone else's problem.
So I was pleasantly surprised to see the patriarch of Transmedia, Henry Jenkins opine on the same topic from a US perspective in my inbox today. The End of Television as we know it.
What follows are some of the key indicators that the nature of television is undergoing some radical shifts as we write (some of them are discussed here, some did not get talked about because of time limits, and some have occurred since the conference, but they all represent good background for watching this session).
— YouTube announces that 100 media companies and celebrities have signed up to launch their own channels for content distribution and the company has solicited a broader and more diverse group of people to curate their own playlists, directing attention on content which Wired describes as having a "cable feel" but being "way more niche than cable ever could."
— Surpassing the speed and scope of the earlier Susan Boyle phenomenon, Kony 2012, a 30 minute documentary about child soldiers in Africa, reaches more than 77 million views in under four days through grassroots circulation, drawing more eyeballs that week than the highest rated television series on American television and the top grossing Hollywood box office hit that week, combined. Its success has since been followed by the global circulation ofPsy's "Gangem Style," which has helped to introduce KPop content into the U.S. Market.
— Hulu is offering an extensive array of international television programs as exclusive online content to their subscribers, suggesting that national borders are increasingly arbitrary in terms of television consumption, even for U.S. consumers.
— Netflix commissions House of Cards, based on their insights into the tastes of their consumers, releasing a seasons worth of episodes at once to encourage binge viewing. Netflix also brings back Arrested Development, suggesting there is life on the web after cancelation for cult shows.
— Rob Thomas finances the production of a new Veronica Mars film at least partially on the basis of funds raised from fans via Kickstarter, breaking all records by raising more than 2 million dollars worth of production costs in a single day. (See the discussion of these developments I ran here on the blog a few weeks ago)
— Amazon announces that it is commissioning eleven pilots for production as web-based television series, with the pilots to be available to the public, which will help decide which ones will go into full production.
— Some media observers note that brands may have gained greater advantage over their spontaneous social media responses during the Super Bowl blackout than they did for their paid advertising during the event. In any case, most of the brands now release their spots to YouTube and other video sharing sites prior to the Super Bowl event itself.
— According to the Pew Research Center's Project for Excellence in Journalism, "Among adults younger than age 30, as many saw news on a social networking site the previous day (33 per cent ) as saw any television news (34 per cent ), with just 13 per cent having read a newspaper either in print or digital form."
— A federal appeals court in New York upholds a lower court ruling in favor of Aereo, Barry Diller's Internet startup company, which streams content from local stations via the internet without compensating the original rights holders.
— Cablevision and Verizon have filed legal action challenging the bundling of television networks as an unreasonable constraint on trade and a threat to innovation.
— Facebook invests heavily in becoming the central vehicle for supporting mobile television around the world.
— Participant Media announces that their new television network, Pivot, will be available to "cordcutters" through a mobile app, whether or not they subscribe to cable television.
Couple their observations with some of my recent research and writing:Network TV is the US is tanking according to a few pundits:
Broadcast ratings in the key 18-49 demographic tumbled by 17% during the winter months when compared with a year earlier, according to Goldman Sachs, which called the decline: "the sharpest pace on record." NBC and ABC are lucky to get five million to tune in to anything.
..."Ad revenue slipped at Fox too, partly because 'Idol' has lost nearly a quarter of its viewers this season, on top of a 50 percent decline over the previous five years."
"The networks are getting picked at from every direction," said Jessica Reif Cohen, the senior media analysts at Bank of America Merrill Lynch. "This year was the tipping point," she said, "when the television ratings really fell apart."
...BelkinHarris Interactive surveyed US internet users on their willingness to replace cable TV with digital media subscriptions and found that 12% strongly agreed with the statement: "I would consider replacing my cable/satellite subscription with a streaming media subscription (e.g., Netflix, Hulu Plus) in 2013." Another 18% said they somewhat agreed, indicating that a total of 30% of respondents were inclined to at least consider cord-cutting.
From a recent TV App Market article:
A recent report from Leichtman Research Group found that major multi-channel video providers had a net loss of about 80,000 subscribers over the past year, compared to a net gain of about 380,000 over the prior year. This marks the first time there has been a net industry-wide subscriber loss over a four-quarter period (since LRG began tracking the industry over a decade ago).
As for the second screen naysayers I met and never had time to drop numbers on at the event.
Here they are. Tablets and Smartphones will be ubiquitous within five years. And so they should as they will revolutionalise education and entertainment. People love to use them while watching TV today and the numbers clearly show.
— In US, 77 per cent use TV & internet simultaneously (Nielsen)
— 50 per cent do so every day (Google/Clustalabs)
— 41 per cent of All Viewers Second Screening Daily While Watching TV, 30 per cent Using VOD services (Ofcom)
— 86 per cent of US smartphone and 88 per cent of tablet owners use it while watching TV once a month (Nielsen)
— 45 per cent use their tablet while watching TV daily (Nielsen)
— 44 per cent of total tablet usage is while watching TV (Nielsen)
— 72 per cent of under 25's in the UK comment on programs via social networks (Digital Clarity)
— 62 per cent of TV viewers pick up the phone as soon as TV advertising break starts. (Nielsen)
— Over half (56 per cent ) of US households have at least one TV connected to the internet, and smart TV penetration doubled in the last year from 12 percent to 25 percent. Close to a fourth of net-connected game console time is spent viewing video, a rate highest among Sony PS3 users (29 per cent ) (TDG)
— 50 per cent of Canadians have a second-screen device at hand most of the time while watching TV and 19 per cent have one all the time. This means that producers and broadcasters are now facing the challenge to captivate and retain the attention of viewers in this multi-screen environment. (Canadian Radio-television Telecommunications Commission (CRTC)
— 19.4 per cent of TV watchers who engage in second-screen activities shop for products seen in ads (NPD)
— Viewing video on mobile devices tripled in 2012 - 300 per cent for smartphones, 360 per cent for tablets (Adobe)
— 92 per cent of respondents report watching online video in 2012 from 77 per cent in 2011. (Accenture)
— In Australia, interacting with social media while watching TV drives a 9 per cent increase in program engagement and throughout the program amd cumulative increase in engagement is 26 per cent (Seven Network)
The headline is an ode to an REM song from the 90s... for those that remember!
Which of the conclusions I have just drawn do you think is the most relevant to the broadcast industry in Europe? Or in Germany specifically? Why?
What have you learned about your audience in the last six months that surprised you? How has that changed your marketing campaigns?
I’m always looking for great examples of creative cross media campaigns to share with the rest of the world, especially if they’re not in English. Have ideas? email me at expathos AT gmail DOT com.