5 posts tagged “television”

internet code

Back in the analogue age, television was easy to understand. You made the programme, people watched the programme, and if the programme ever saw the light of day again, everybody complained about the blessed repeats! The long tail has certainly changed all that; we now need Primary Rights, then Secondary Rights, if you’re lucky Format Rights, if you’re clever Mobile Rights and Digital Rights, and don’t forget good old International Rights.

The ever changing digital age has thrown up a great deal of confusion - or should that read negotiation. One thing for sure, as things move forward with speed, we need to glance back at how we’re working and adapt the process because new business needs new models.

The music industry has had to be ahead of the TV game. As music distribution has moved from in-store to online, the major record companies have implemented - with some success - digital rights management (DRM) in an attempt to deal with the evil of piracy. But it has found the existing models of rights payment collection wanting, especially when a project crosses borders.

While the TV industry is now coming to terms with the fact that you can go online and watch Martini Media (anytime, anyplace anywhere), it’s also starting to work with DRM systems to prevent file sharing piracy. The various business models might even have been conquered as to how these things actually get paid for, with a mixture of pay-per-play, subscription and even advertiser-supported.

What hasn’t really been worked out is who owns what, and what happens when the pictures cross international borders.

Anyone who has tried to do an international co-production or attempted global distribution on a programme which contains third party rights knows the issues. The problem - sorry opportunity - with the internet is the cross-border freedoms it allows.

The problem – sorry challenge - then is to try and protect a rights model which is dependent upon limited nation specific rights or find one which works cross-border. This is certainly the case in music where different publishers and distributors stake claims on the same piece of music in different territories.

Programming made from third party sources – music, film clips, TV archive - is traditionally produced on a need to use basis and the same could be said of contributors’ clearances or artists’ rights. If you’re making a programme for two UK showings then that is what you’re paid to do and the programme is made and rights cleared on those terms – no online – no mobile – no international. How very analogue! And even when there are no third party licenses and it’s just actors, presenters and writers with residual payment agreements, an analogue option seems the simplest.

Can you hear the call for “a buy-out” coming in the conclusion?

Buy-outs are a touchy subject; they have the whiff of denying somebody of something they deserve. It’s not the concept of the buyout that’s the issue of course it’s the level of money offered. And here’s the conclusion – if we’re going to able to produce programming which can be distributed digitally we need to have Martini clearances, and if we’re going to able to get them we need to be paying fair prices for them. All we have to do then is find out who we give the money to!

DigitalLogoTick

The internet is a dangerous place. My advice is, if you have anything to hide, never take a ride on the digital superhighway. The internet knows your name, it knows where you live and importantly it knows what you spend your money on. What did you expect?

The internet is not a free ride, all that great free content comes at a price, and the currency is information.

 

I’ll say it again, the internet is dangerous place. Don’t ever go on it.

 

At a time when television is looking deep into its soul and its very integrity is under scrutiny the internet is not a place for those who run free with the regulations to hide.

 

Television has been caught telling lies and there’s a bit of bridge building to be done in the credibility stakes. Hang on though isn’t it the internet that’s full of identity thieves, phishers and credit card scam artists? Let’s get this in perspective. Television is going through a number of crises of confidence, which boil down not just to a breakdown in trust but to a breakdown in the funding models which underpin it. And you might say that technology or for that matter digital media is the cause of all of or most of those woes.

 

Namely “fragmentation of the audience” – everybody is on the internet or mobile phone or XBOX, and “ad avoidance” – everybody is on the internet or etc.

 

Some of the suspicion about television brought about by the recent “phone scandals” have not been bad people doing bad things, it’s too simple an accusation, that plays to a too readily to jury too eager to convict. The rush to phone revenue and the subsequent dependence upon it, is linked to the structural problems with traditional advertising revenue brought about by the fact that everyone is on the internet!

 

There is a case for suggesting that the convergence of television with the computer brought about by IPTV whether that’s application (Joost) or browser (html) based or in the case of the Vista MediaCentre platform might help restore some of the trust.

 

If part of the inherent danger of the internet is its intrusive nature, part of its allure is the blatant transparency that it provides.

 

The Microsoft Channel 9 forum which is based on the United Airlines inflight audio service “Channel 9” which allows passengers to listen in to the flightdeck, is a great example of the transparency that the internet allows.

 

It’s a forum where Microsoft employees and developers discuss stuff with Microsoft users! (You know all this.)

 

But the logic behind such a bold and open move of naked collaboration flies in the face of corporate confidentiality and it goes like this “there’s no point trying to hide what we’re doing because everyone can see” – which probably leads to “look if you’re going to do bad things on the internet you’re going to get found out, so why not do good things instead.”

 

It is the intrusive nature of the internet that provides the transparency that TV needs to help demonstrate it actually has nothing to hide, it is this Channel 9 principle that admits there is no point in hiding.

 

The big question is whether TV and by this I mean the broadcaster and production community is going to take opportunity of the internet seriously. We are at a bit of crossroads. TV needs to embrace the potential of personalised digital distribution which allows for the deeper more meaningful engagement we hear about. But first it has to get its head around the content and not just use digital distribution as a substitute for linear TV.

 

There’s a real opportunity here.

 

But as I might have mentioned the one thing the internet does well is know who’s watching, how long they watched for, what they were watching before and where and when they went to after.

 

There’s some real value in that level of transparency.

Casino

All bets are on

A television broadcaster is a casino, and it plays by house rules. Rule number one – the house wins.

Here’s how it works. A brand wants to advertise, it needs to hit a key demographic, but it also needs those eyeballs by the bucket load. A broadcaster needs that brand’s money. The broadcaster gambles on developing content which will attract enough of the right eyeballs so that it can unlock the brand’s money. The gamble is that the cost of the programming across the entire schedule will be more than matched by spend of the brands through advertising and sponsorship.

Historically in the commercial sector the house has always won. There has always been enough cash left after it has paid for the content for the broadcaster to pay shareholders, dividends and bonuses.

From a broadcaster’s cost point of view, they have always kept content producers and owners at the end of a long chain. The true value or income generation capacity of key content has never really been passed on to the owners or producers. The broadcaster, the distributor of that content has been the true beneficiary of the value.

Another way of looking at it is that the brands have overpaid. The key benefits of advertising and sponsorship are not up for debate, not here anyway. The ability to deliver and then report on the ability to deliver has been the bedrock of the media planning and purchasing industry. However as the distribution market has become more complex with the addition of new distribution channels, everybody’s margins  are being squeezed. Brands are questioning the value for money of purchased media. Especially when the data, which they have been used to being consistently positive and transparent for the past 40 years, suddenly starts heading in a murky and negative direction.
So-called proliferation of choice has had a direct effect on the earning ability of broadcasters from advertising and sponsorship revenues. It has also hit the media planning and distribution agencies, which as a cost plus industry have found that they are chasing ever-tightening margins. For the Brand Centric Creative agencies any real or threatened downward spiral in the effectiveness of their creative pitch also puts under threat their ability to charge their clients.

Meanwhile some distribution channels have freed themselves from reliance upon advertising and sponsorship income. To subscription services, such as digital  television (SKY Television DST) ad income is jam.

Bottom line –

There’s a fall in audience figures and resulting drop in income across the board for broadcasters from advertising and sponsorship. This fall is a direct result of the decline in effectiveness of purchased media to deliver audiences.

What does this mean for Broadcasters?

They have to free themselves from expenditure based on the income from advertising and sponsorship revenue.

What does this mean for Creative Agencies?

They have to rethink their brand communications to get away from brand associations and reliance upon purchased distribution and into content.

What does this mean for Media planners and purchasers?

They have to create the means of distribution within content to support purchased media plans.

What does this mean for Content producers and owners?

They have to look at forms of income other than broadcasters producing at risk.

Now there is no need to push any panic button, what has just been described is a trend, it is not the end of a system which has meant that everybody has got paid, all along the line from the Creative Agency Planner down to the Broadcaster’s sales force. But it is a significant trend.

Those who have predicted that the two-headed monster of proliferation of choice and technological advances in the guise of Personal Scheduling Devices such as Tivo and SKY+, would bring down the established media order have as yet been proved wrong, and long may they continue to err.

Broadcasters are not about to let open the flood gates and give airtime to agencies and producers who work directly with brands and create content to the detriment of

a well established media purchase strategy.

Meanwhile brands are not about to clasp the bosoms of producers and distributors and risk the relationship with their loyal agencies, especially when the new guys carry no proof or rather even promise of future proof, whereas the old guys have been backing up their deeds with facts figures and research since the first meet.

But Advertiser Funded Programming does not belong in the same obsolete file as interactive television, 3G video, or Internet bannering for that matter. Although it has been much heralded and not really arrived it doesn’t for once mean that it isn’t coming.

What has been described is a landscape, or more so perhaps a route map of how the money moves around, from brand to agency to broadcaster, it is this route that is changing. The money is now finding it can short cut some routes and trigger savings. Was it ever thus, and this is a force, which cannot be stopped.

If it is more efficient for brands to generate their own content, and then sponsor it rather than to wait for the right content to come along then they will do it.

If it is more efficient in the right part of the schedule, for the broadcaster to create income opportunities without expenditure then they will allow them.

How the agencies divvy up the money along the way is for them to fight out, and has it ever been thus.

What is different is the emergence of a new force in this landscape, the content producers or owners. Previously a procurement chain has kept them in their place in the supply process of purchased media, they are starting to crawl up the ladder nearer to the brand. Again this is something not looked favourably on by the incumbent agencies. Someone else trying to feed at the table is the last thing they want, when they are fighting to maintain their own portion control!

So what should brands do?

Firstly they are not about to abandon the traditional routes of communicating, and they are to about to sacrifice their hard worked out relationships and income and cost bases. They have systematically worked on their margins squeezing every last ounce of value for money out of their suppliers, it is doubtful they can get a better deal.

What they can do is make their communication work harder. They can start to become media owners, and use this media to communicate with their consumers.

This has been laughingly called “Brandcasting” and refers to Advertiser Funded Programming.

Advertising Funded Programming is an unsuitable moniker, after all with the exception of public service broadcasters (and even then the picture is far from clear) isn’t all  programming funded by some kind of advertiser function? And since when has the funding route been a suitable model for describing the activity! If ‘my’ 67%wage, 15%equitity, 10%endowment, 8%inheritance, funded mortgage deserves a snappier title then AFP might also qualify for a better name. And finally it is not advertising which is releasing the funds for the activity. Advertising is advertising and it exists in the regulatory space provided by different media.

 “Werbung” and “Nocitas” flash before the viewer’s eyes in and

to remind the viewer that what they are watching has a commercial message rather than an editorially independent one. “Advertisement Feature” is blazoned across print periodicals when the very nature of the content is purchased. If AFP is funded by anybody it is by the sponsorship idents, which surround the content. – Sponsor Funded Programming?

Legislation is there to help consumers distinguish between overtly commercial messages and those meant for unsullied entertainment, education and enlightenment. And brand owners should never be frightened of the distinction. As consumers become more media savvy they can spot a sales pitch, they are not frightened of them either, as in the legislation they trust.

Cleverer harder working communication does not mean duping the consumer, with

hidden implicit brand messages and product placement.

Working harder means creating your own communication platforms upon which existing channels of communication can be based. It means short-circuiting the waiting game for the right content to come along and creating it yourself. It means putting the creative power of agencies and the purchase know how to work behind the battering ram of meaningful content. It means using this content to work as a media platform for new and more direct communication techniques. It means ownership of an activity, which can be used as a tradable commodity for, either in direct media purchase or to generate future revenue.

Further and perhaps most importantly it puts the brand at the heart of the activity.

This isn’t a threat to Broadcasters, it’s an opportunity. They will still get ad revenue they will still get sponsorship revenue they will still get a split of the phone voting, they might even still get a split of the IP, despite changes in the Communication Act, which restricts the leverage broadcasters exercise upon rights holders as a means of taking ownership in projects they broadcast. It could provide broadcasters the means to move beyond the world of the 12, 24, 42 inch screen as Restoration, Pop Idol, Big Brother or The Big Read have demonstrated so well in their own unique ways, engaging audiences across the nation, and this is perhaps really an indication of that opportunity. Brands could provide a powerful new distribution channel off screen for broadcasters. Providing it is undertaken with integrity, co-partnering raises many positive possibilities for better future growth.

Branded content be it a programme created by a brand based upon a brand proposition designed to deliver:

- A key demographic,

- A digital channel, tv or radio distributed via digital satellite or an ADSL link in store

  or  at home,

- A quiz played via mobile phones in a closed loop within a cinema chain,

- A movie, an album, or a magazine.

is coming.

One could hope that the content owners are now in a position to take a share in the profits hitherto taken exclusively by broadcasters, and thereby be granted access to, that all-powerful broadcast tool - the schedule.

But, increased broadcast specialisation or narrow-casting has created the opportunity to target niche audiences, and has further fragmented the broadcast audience.

For producers who have always been content owners, this creates a dilemma.

One possible future provides them with a greater opportunity to fund production from alternate sources and take a greater stake holding in the format, but at the same time it threatens the strength of the market they are supplying, it bites the hand that previously fed them.

So, in another possible future, broadcasters are not about to open the flood gates and allow their supplier to crawl up the food chain. They will continue to protect access to the schedule. Broadcasters claim to have sufficient funds to finance the programmes they choose to and are do not need to take “free” programming with strings attached which creates income opportunities without expenditure.

So content owners, as has happened in the States, might need to become broadcasters too. This is more than “Brand-casting”: it is a brand becoming a broadcaster.  The digital future will make this opportunity available to hundreds more producers/content owners.

It may only be a small percentage of the overall content market, but it’s all going to be small percentage from now on. That’s the point; the odds have got tighter for everyone.

I watch a lot of Television, I’ve always watched a lot. There’s a great deal of resonance in the shared experience of Hong Kong Phooey - Not the Nine O’clock News and the Rise and Fall of Reggie Perrin. I can recite most of it all - still. Twenty or even ten years ago, everybody knew the names of the Blue Peter presenters even the grown ups.

Go on, what are the names of the current lot?

My kids watch a lot of television. But their experiences are more solitary. They have both grown up with the “benefit” of a multi-channel environment. There are only four years between my kids, and already they have different tastes and different opportunities.

There are more programmes aimed at my two year old than there were only four years ago. They have no shared experience in Bob the Builder, Thomas the Tank Engine and Teletubbies. - In the four year gap the landscape has already changed. Four years ago it was wall to wall Bob and Thomas - programme scheduling has got more complex.

Children’s television is a very competitive market. It is dominated by the BBC which has two very large stations in the digital arena CBBC aimed at 7+ year olds, and CBeeBies  aimed at pre schoolers.

These channels are on Cable, Sky Digital and Freeview (Digital Terrestrial) Platforms. The market is dominated by big players with well branded channel offerings - Viacom with Nickelodeon, Nick Toons, Nick Jr; Turner with Cartoon Network, Boomerang and Toonami; Fox with Jetix; Disney with Disney Channel, Toon Disney and Playhouse Disney, it is a very crowded space.

Discovery have Discovery Kids, plus there’s a kids music station called pop which funnily enough shows kid friendly pop music!

With the exception of the BBC stations and Discovery Kids all of these channels carry advertising. The BBC cannot carry advertising  and Discovery doesn’t because of the way in which Discovery kids business is structured.

Meanwhile the traditional free to air market has changed alongside the developments in the digital space. BBC One is now a mere promotional platform for CBBC and CBeeBies and it effectively “opts out” to these new digital channels. ITV is finding things the most difficult and has sort output deals with the digital big boys.

ITV of course has the most to loose, as there is no CITV digital platform which ITV1 can act as a driver for. It has also not capitalised on the massive licensing opportunities which others have - notably the BBC with Tinky Winky etal. In reaction CITV has entered into a joint venture with Viacom with its Nickelodeon brand.

Put simply there is no shared experience because of market fragmentation. It’s also the speed of this fragmentation has taken hold.

Like Sport before it, where the digital platform has taken a strangle hold, children’s tele is an example of the supremacy of digital over analogue tele.

It also acts as an example of how broadcasters have identified a niche and bombarded its audience with choice. This is synchronised with highly lucrative product licensing, brand extensions, interactivity, online experiences and phone revenues.

Children’s tele is a portant for what is to come in the wider broadcast environment. Because it is highly targeted - it is able to move quicker, it also benefits from the fact that the audience knows no different, they are not harking back to the good old days of tele, they are busy enjoying what they’ve got. Kids are also netwise and mobile friendly, they are keen to engage.

This sends a shiver down my liberal parental spine where my kids can be picked off by marketeers. But hey I’ve got to deal with that as a responsible parent. As I said, my kids watch a lot of television and they can already tell the wheat from the chaff, and there’s plenty to choose from.

If I take a step back and look at how these businesses as a television producer then I can look into a possible future of how programmes will be financed in other genres. Product licensing, brand extensions, interactivity online and phone revenues are the buzz words of the marketing community, they sit alongside so called AFP as part of the new communication tools set to integrate into a larger strategy of engagement. As someone charged with looking at how to finance television production in a market where there might be dwindling advertising revenues, the broadcast landscape of the children’s market is a template for a possible future.

What I shouldn’t do is get carried away and start to make rash predictions about a brave new world of more transparent commercial relationships, between marketers and broadcasters. Children’s television is unique and  it’s audience is unique. What the Children’s television does demonstrate is that things have changed. The viewers experience is different form that of ten years ago, and the business structures behind the programme production has changed. These changes will only continue.