OF TV

THE FUTURE

INTRODUCTION
Hello, Welcome to the rst of this year s useful & interesting provocations, a series of points of view about key issues in and around the communications industry. These are not meant to be pieces of crystal ball gazing, but genuinely held beliefs about things that are likely to come to pass in the next 18 months or so. They are also meant to be provocative. You are unlikely to agree with everything in here, but we hope that you ll nd it all (in the vernacular) useful & interesting. We also hope that it sparks conversation, conversation within your organisation but also conversation between our organisations about what we should be looking to understand as our world evolves. This month we ve chosen to focus on TV for a number of reasons. First o, it still represents X% of the UK s measured media expenditure. Now granted measured expenditure is increasingly an anachronism as agencies and their executional oerings diversify, BUT there is no denying that audio-visual content is hugely important to all of our futures. Indeed, in the US Google estimates that 90% of all media impacts are now screen based . . . Secondly, and perhaps more importantly there is lots of really interesting stu going on over the next 18 months in this space. We re very interested in Sky s AdSmart test in the broadcast stream, having been part of the original beta way back in 2010; we believe that the symbiotic relationship between social media (most notably Twitter) and TV oers a potentially rich vein of insight; we re quite obsessed by the quiet revolution that is going on at YouTube in terms of quality of content and audience delivery (from Jamie Oliver s Food Tube to TomSKA sTom Ridgewell); and we re fascinated by the continuing ability of great drama (or reality) to unite the nation. Probably the most interesting thing to note about that list is it isn t a load of technologies putting TV to bed, rather it is a list that acknowledges that the continuing ability of those generating great content is what oers us the evolving opportunity to engage audiences in our brand stories. So, what you ll nd to follow is a series of points of view from some friends of MediaCom ranging from Thinkbox and ITV to Twitter and YouTube. We sincerely hope you enjoy them and look forward to the conversations they spark.

TV actually drives more people back to the schedule. So, more TV watched and more screens to watch it on. Then there s multi-screening. After this last tablet-tastic Christmas more people are equipped to respond instantly to, or interact with, programmes and ads. This is making TV advertising more eective than it s ever been. While it s easy to exaggerate the level of multiscreening, it s making people feel closer to TV and enhancing their enjoyment. This is crucial if we want people to continue to watch 4 hours of TV every day.

TESS ALPS
EXECUTIVE CHAIR, THINKBOX
hen people talk about the disruption that the internet has brought to various industries it s always cast in a negative light. And, with the glut of post-Christmas highstreet casualties we re hearing about, you can see why for entertainment and leisure retailers. But, for some, internet and mobile is creating, if not exactly disruption, an altogether more positive form of evolution. TV is the shining example of this. The next couple of years are only going to continue this trend. Linear broadcast TV is rock-solid we re watching more than we did in 1993 - and we can now add live streaming of TV which proved so popular during 2012 s Olympics and Paralympics when people were at work. TV on-demand is also entering a new phase with more on-demand services easily available on the best screen in the home. Whether from existing pay or free set-top boxes (Sky, Virgin, Freeview, Freesat), or new suppliers like Youview, or Smart TVs, more and more TV sets will get connected, oering more choice and convenience. And we ve been as surprised as anyone to nd that easy catch-up TV far from cannibalising linear

At the heart of all this is great TV content. There s little point having expanding forms of distribution if people don t care about what they watch. The joy of social media is that it s revealing the passionate involvement people have with telly whether it is Game of Thrones, Fresh Meat or Mr Selfridge. This visible love is reigniting media planners interest in TV as they devise original ways of linking TV with social media. TV s resilience is inevitably attracting some new entrants to the industry, but the companies who make or invest directly in content will continue to hold the aces. The only thing I wish for in the next 18 months is an economic revival. A little more investment in TV advertising, now cheaper than it s ever been, could get turnover and prots moving in the right direction, as many advertisers are nding.

...FOR SOME, INTERNET AND MOBILE IS CREATING, IF NOT EXACTLY DISRUPTION, AN ALTOGETHER MORE POSITIVE FORM OF EVOLUTION. TV IS THE SHINING EXAMPLE OF THIS. THE NEXT COUPLE OF YEARS ARE ONLY GOING TO CONTINUE THIS TREND.

At ITV we understand that the media environment is changing. Viewers now have access to hundreds of channels and are forming relationships with digital brands that did not exist a few years ago. However, as our recent rebrand demonstrates, we also believe that we are at the heart of popular culture and that TV as a medium will remain there for the foreseeable and distant future.

WHATS REALLY EXCITING IS TECHNOLOGY IS GIVING VIEWERS NOT ONLY NEW WAYS OF WATCHING TV, VIA MOBILES, TABLETS AND GAMES CONSOLES, BUT ALSO MORE OPPORTUNITIES TO ENGAGE WITH WHAT THEY ARE WATCHING

FRU HAZLITT
MANAGING DIRECTOR, ITV
was a year that reminded us of the power of great television to bring audiences together in their millions to share in an experience. Looking ahead it s hard to see that power diminishing signicantly in the short term. For too long we all spent a lot of our time pronouncing the death of traditional media as new media came along, only to realise 10 years later that some of those platforms are more popular than ever. What s really exciting is technology is giving viewers not only new ways of watching TV, via mobiles, tablets and games consoles, but also more opportunities to engage with what they are watching be that programming or advertising. This is what I think will really enrich the TV experience going forward and make it a far more interesting and exciting industry than ten years ago. No longer are TV ads conned to the brand building function you can get immediate interaction with your audience direct from your 30 second spot right now and the ways of doing this and enriching that communication with your customers are only going to get more innovative and simple to implement.

2012

production. The person who puts the Dyson aside for a moment to record Skyfall on Sky+ HD using an app on their smart phone is being most un-British in their enjoyment of British skills. We can only hope that they watch it over a takeaway Thai and a glass of Chablis, for order to be restored. The UK is now the de facto media lab for the world. One (parochial) example: Sky invests relentlessly in customer satisfaction, which in turn oers advertisers new and interesting platforms, times and spaces. Sky s 800 software engineers are forever racking up the quantity and quality of apps like Sky Go; the On Demand service; and Sky AdSmart, launching this year, which allows dierent homes to see dierent ads within the same programmes. That is three major advertising developments, just mentioned as examples. This is television s best era ever, by miles. Just look at the vitality, diversity and quality of broadcasters, production companies, platforms, devices and most especially, programmes. Which are your favourites: Fresh Meat, A League of Their Own, Downton Abbey, Mock the Week? The BBC, Sky, ITV and Channel 4 are investing billions of pounds in programmes each year, and viewers are investing 4 hours a day of their time watching TV as a consequence, and more time besides via other devices. 2012 was an amazing year for television; but 2013 and 2014, we believe, will be better.

The BBC, Sky, ITV and Channel 4 are investing billions of pounds in programmes each year, and viewers are investing 4 hours a day of their time watching TV as a consequence, and more time besides via other devices.

Jeremy Tester

Director of Brand Strategy, BSkyB

was a magnicent year for the nation. We have seen some incredible sporting feats and witnessed moving and engaging dramas, both real life and scripted. The year s events, emotions and celebrations were projected and amplied by the media in all its forms, but even agnostics would concede that the medium of television has excelled, by engaging and uniting us all. Could 2013 or 2014 possibly be any better? Well, after the wettest year on record the weather could perk up a bit; but elsewhere there is much to be positive about as we look ahead. For instance, broadband speeds are faster than ever. The UK has taken to online commerce quicker than any other country in the world. We ve stopped trying to identify The Year of Mobile and are happily navigating The Decade of Mobile. The most economically active households are resplendent with games consoles, tablets, smart phones, laptops, audio systems and some beautiful, big new TVs. The grey economic backdrop is muing pockets of great creativity, ingenuity and success, from the extraordinary renaissance of the British car industry to design, software, lm and TV

2012

that these new platforms allow an inherently more direct relationship with a consumer and have more specic analytics with regard to their demographics, they are also attracting interest from non-traditional broadcast players; from telcos, to advertisers, to charities, to web portals are increasing their investment in content that is a truly collaborative creation.

Derren Lawford

Global Head of Programming + Scheduling, BBC iPlayer

f content is king then the key battles for audiences can be broken down into three concurrent clashes: Commissioned content vs co-creation Contextualisation vs commodisation Control vs Convergence

If content is king then the key battles for audiences can be broken down into three concurrent clashes: Commissioned content vs co-creation, Contextualisation vs commodisation, Control vs Convergence
Control vs Convergence Content owners and broadcasters have enjoyed a monopoly over what audiences watch, when and how. However new technologies have created two distinct challenges: 1. the prospect of access to content on multiple platforms and devices in multiple territories simultaneously 2. an expectation that dierent platforms will also provide audiences with dierent experiences. The challenge for the industry is not in recognising the benet new technological provide audiences, but working out how to encourage people to pay for the privilege. Contextualisation vs commodisation

With so many ways to watch TV on demand the real challenge is how the audience make sense of what it is they can watch, what it is they want to watch and the extent to which they want to pay for the privilege. Services like Netix, Lovelm, Hulu etc are increasingly positioning themselves as curators of the content they re acquiring for subscribers rather than just a monolithic vault of content with endless opportunities. For Global iPlayer, curation is the cornerstone of our editorial strategy. Why? Because people s leisure time is precious, so this new generation of services need to make it even easier than traditional TV to choose how and what to watch. How? Well it could be a backwards EPG, algorithmic recommendation, You Tube annotations, real time social media screen overlays or thematic on demand collections. The players that provide audience with the most compelling context for what and how it is they are watching in the digital age will in my view provide the most value to consumers. We live in a world of bewildering choice and access to content, from DTO, to SVOD, to consoles, set top top boxes and Smart TVs. As such, the value of having a reputation for making content easy to navigate and access cannot be underestimated as it may well convince consumers to be the customer of one service as opposed to another.

Commissioned content vs co-creation Traditionally, TV content has been prescribed to the audience via a well established pipeline: development, commissioning, production and broadcast. That remains the case, but increasingly for younger audiences they want to feel like they have some involvement; that content is not only engaging but actively engages with them. The most powerful way for that be achieved is by the audience helping to shape it. That could be crowd sourced ideas or calls to actions to contribute an aspect of a show. Alternatively it could be self-developed, commissioned, produced and broadcast content on alternative platforms like You Tube, Yahoo, Vimeo etcwhere perpetual audience engagement and involvement is encouraged. Increasingly the best of these formats and talents are being approached by traditional TV channels like SB.TV. Crucially given

of international co-production market that the 800k-2m per hour costs require. The result in consumption terms is that dramas denes everyone from ITV to Netix (2/3 of whose viewing is serialized TV drama, the market for which it describes as exploding .) In production, it s creating what the Harvard Business School famously called a war for talent. Onscreen, the services of name TV actors are tough to secure even for the biggest projects. Oscreen, production schedules are driven by the availability of proven writers. And in production, proven producers are a rare earth to be valued above all, to the extent that 2013 sees more startups than ever built around commissioning and producing talent, and backed by studios and large indies (including ours). It adds up to an industry in foment, creative apogee, transition and existential challenge all at the same time. And the central dynamic? Quality, quality, quality: think Sherlock, Spooks. TWO: Internet video. It s been with us seemingly forever, but is also now an extraordinarily powerful new player in entertainment. YouTube has 798m viewers, Daily Motion 114m and Vimeo has 85m. Add BBC iplayer, 4OD, ITV player, and the shiny new platforms like Netix (27m domestic and 6m international subscribers), Hulu, Amazon Prime. Taken individually and together, these are creating an entire ecology of TV that is brand new, constructed on completely dierent business models, and both a challenge and an enormous service to conventional production. Take US-based Maker Studios the largest talent-driven video content network in the world. Maker has some 2.2bn views on YouTube per month, averaging around 3-5 minutes, and 150m subscribers, 40% of them on mobile. It owns and operates channels and serves an ad per 7 minutes of video with a CPM of $2. It s nding talent, stars, material, audiences - and it s looking for distribution beyond YouTube too. My own employer Shine has a similar company called Channel Flip with very strong UK penetration, and the sheer open-mouthed moment when I realized how big some of their audiences were

for, say, a teenager in Swindon who records videos from his bedroom, was reminiscent of the early 1990s and the way Channel 4 at the time was able to bring on new talent using its TV schedule. Fail to interact with this emerging audience as YouTube adds a subscription layer (coming soon, possibly at an initial 100% revenue allocation to the producer to get it going) and you could be left way behind.

Alex Connock

Director of New Business, Shine UK

emember watching a drama series weekly for the whole Autumn? Well when Netix launched Walking Dead, 230,000 people watched ALL 13 episodes in one sitting. That s some change. In fact, for a decade, everyone has been staring into their increasingly large TV sets (4k Ultra HD being the new wave, say Lenovo) looking for a glib direction TV would take. Narrowcasting into multiplicitous niches? Interactivity in set-top boxes? Pay TV around programme brands as channel killers ? The truth is almost everyone is right - and wrong. Multiple, contradictory trends happen at once in TV. That s why it is just SO much fun. Let s just pick two big trends. ONE: Big drama. From Breaking Bad to Downton, to Game of Thrones, Homeland or The Killing - every channel everywhere needs a dening dramatic brand. That s not just the terrestrials either in fact drama investment and creativity is being driven intensively by the pay channels as well as free to air ones, from Sky Atlantic in the UK to Showtime in the US, and by the kind

Fail to interact with this emerging audience as YouTube adds a subscription layer (coming soon, possibly at an initial 100% revenue allocation to the producer to get it going) and you could be left way behind.

wasteland to many commercial broadcasters. Of course, younger audiences are at the forefront of this and the near disappearance of children s programming from linear viewing including the BBC s agship channels worries many corporates around the world. Understandably, the incumbent industry has done their best to hold back the tide and, compared to all other media, they have done a very good job. Why do you think ITV are aggressively pursuing acquisitions of Indies? They all have a big incentive - TV, or linear broadcast via terrestrial network, has been a massively protable industry in the last 40yrs and had many of us thinking that it is the truest form of entertainment. In a world of screens though, there is no longer an homogenous thing called TV alone and it strikes me that even ThinkBox (the TV industry s own association) appear to have acknowledged this crucial point as we move to a world of Content delivered across multiple screens. Along similar lines, I believe ATVoD have struggled to regulate the IP-connected video world in the UK because they benchmark all online services to a TV like experience .

next 5 years. That said, Red Bull s Stratos jump on YouTube was watched by 8,500,000 people in HD simultaneously across the world... ITV1 would be proud of that number in prime-time now. Oh, and it cost Red Bull absolutely nothing in Media Costs. Advertisers are paying for my non-watching of Dancing on Ice, which they will increasingly stop doing and this will unwind the industry and drive the inevitable success of IP-connected video. Fragmentation onto IP-connected platforms is not to be feared by the advertising community but should be embraced. It will inevitably produce much higher engagement, greater transparency and better results thanks to realtime data and improved targeting. Bill Gates famously quipped We always overestimate the change that will occur in the next two years and underestimate the change that will occur in the next ten the real question is where are we in the cycle?

Ashley MacKenzie
Founder + CEO, Base 79
s I write this, I am sitting in front of my 48 HD TV watching Dancing on Ice on ITV1. Well, I say watching, of course, I m not really (I m writing this!) and I doubt a signicant percentage of the audience BARB says are watching really are either. A bottleneck of analogue bandwidth in to the home and a historical context of only 1 or perhaps 2 TV sets in the house produced a remarkably concentrated audience where the job of the programmer was really to appeal to the widest audience possible thus share of audience became the main measure of success. There is an inherent assumption in the TV industry that people would watch, it was just a question of whether they would watch your particular channel. Programming against the competitor channels is a common strategy. All of this changes in the IP-connected world where households have multiple screens (I have 11 screens in my house where I can watch watching YouTube, BBC, ITV, Netix, Channel4, SKY etc). This together with high Broadband penetration and all-you-can-eat data packages is generating the explosion of reach and time spent viewing online that now compares with many broadcast networks in key demographic groups. These viewers are becoming a marketing

In this world of multiple screens, we believe in polarisation into On-Demand viewing vs. Live events with audiences continuing to fragment.
In this world of multiple screens, we believe in polarisation into On-Demand viewing vs. Live events with audiences continuing to fragment. On-Demand will relentlessly move on to IPconnected platforms as the concept of timeshifting gets turbo-charged. Viewers will really watch the programmes because they chose to. Live remains the bastion of linear broadcast while the cost of delivering live across IP remains high and so ITV et al will remain dominant for the

talking place alongside the discussion on screen. Such was the impact they decided to involve an extra guest a member of the panel tweeting from their home. Sky s Monday Night Football found that the quality of the tweeted discussion alongside their analysis was such that they built it into the format of the show. Broadcasters are starting to realise that this is a win-win. Formats are being improved, and engagement is being enhanced by bringing the audience closer the show. We ve seen evidence of audiences using social media as a Twitter EPG , if they are bored with Eastenders they can see which shows are trending right now on other channels.

Bruce Daisley
Director, Twitter
he year ahead looks exciting for those excited about technology and those of us who love great TV. There s been increasing volume of discussion about the second screen ie the use of phones, laptops or tablets alongside the consumption of TV. In the last year alone we saw a more than doubling in the volume of discussions about TV shows on Twitter.

So where does this take advertisers? Well it helps keep audiences engaged in TV like never before. Live TV remains the biggest show in town because if audiences don t watch the show live they will miss the subversive audience commentary that the second screen provides.

the challenges has been for broadcasters to work out how to use this new technology to add value for their viewers.
But the exciting part is that we are just getting started here. One of the challenges has been for broadcasters to work out how to use this new technology to add value for their viewers. There has been rapid experimentation. BBC Question Time found that just by dropping a hashtag on screens thousands of conversations started