MOST AGREE THE PRIMARY reasons why Netflix – and for that matter all web-based media – has a growing advantage over traditional media are the streams of data they gather and use to make real-time decisions. It’s the so-called Big Data that web-based companies gather to make magic and produce profits.
At Thursday’s Content Industry Connect event hosted by the Banff Media Festival organizers, one attendee (we’re told it was a fellow named Ahmad Iqbal from a company called Atendy) asked what is the best question I’ve heard put to a panel of broadcasters in a very long time, saying: “What is your data strategy?”
Damn. Wish I’d thought of that one.
Iqbal pointed out that Netflix’s software knows, for example, “at minute 15 when a new character was introduced (during a program), engagement went up,” so, he asked more pointedly: “How are you understanding what the consumer really wants and how fast can you deliver that?”
Dammit. Such good questions. But were there good answers? Not especially.
Netflix knows all of the viewing habits of all of its 40-million-plus subscribers (it’s thought to have about 4 million in Canada alone, but the company does not break out subscriber numbers by country) and can quickly, automatically, tailor its viewing recommendation engines for individual consumers and even use algorithms to help create killer content – as it did with its ultra-popular House of Cards (for more on that, read this).
All of that makes for happy customers who binge-view content they enjoy, knowingly pushed to them by their favourite internet video portal.
Netflix is thought to have a huge data lead in this respect, and they surely do. But they should not have had one. Through the digital set top boxes which have been in market long before Netflix, cable companies have long had the ability to gather serious direct insight into what their subscribers prefer to watch – but that data has never been used to tailor programming or advertising. For the most part, it has sat fallow. That meant opportunities to better personalize TV have been lost. In the ages before Netflix when cablecos and broadcasters were swimming in profits, using STB data was thought of as something that would be “nice to have” and few pushed for it. With Netflix and others now getting so strong, that data simply must be put to use immediately if broadcasters and BDUs are going to compete in the Big Data economy.
As Corus Entertainment’s COO Doug Murphy said on that CIC panel: “The BDUs have the data.” Added CBC English Services head Heather Conway: “We’re very reliant on our partners, the distributors. We’re going to have to partner (to get at this information).” She suggested a third party company which could aggregate the data and make it useful, without violating anyone’s confidentiality, not unlike how BBM is the third party between individual TV raters and the broadcasters.
“It’s all about data – and understanding the customer both from an audience intelligence perspective and from an advertising one as well." Keith Pelley, Rogers Media
“It’s all about data – and understanding the customer both from an audience intelligence perspective and from an advertising one as well,” said Rogers Media president Keith Pelley, whose company, of course, has state-of-the-art cable and wireless businesses, too.
Pelley told attendees of a sports show he enjoyed on Sportsnet (he didn’t name it) was performing so poorly in the BBM ratings, essentially zero, but “I thought, I just don’t believe it, so I went and looked at the set top box data and there were a hundred set top boxes in Brampton alone watching that program.”
So, while a few thousand people carry portable people meters given out by the Bureau of Broadcast Measurement, Rogers Cable has a direct view on how many of their 2.3 million (nearly all are digital now) subscribers are tuned to what channel, when, how long they stay watching, if and what they record, when they change the channel and so on (to say nothing of the data produced by their nearly 10 million wireless subs). The other big BDUs can all do the same thing.
If Canadian television companies are going to compete with the likes of Netflix or Amazon or YouTube, this data should certainly be an important part of the process when programmers decide to spend multi-millions on new shows and salespeople try to bring in the money to cover that spend. Pelley admitted that day is coming. “The sophistication of data and being able to monitor and monetize how we look at ratings is going to change over time,” he said.
In fact, Rogers has spent 18 months building an audience intelligence platform with profiles of over 15 million Canadians in an effort to try and predict what they want and to better provide myriad products and services. “What that tells us is just mind-boggling… It’s unbelievable what that data can tell you,” said Pelley.
(Ed note: We’ve asked Pelley for an interview to find out more on this and hope to have something further in the coming days.)
Of course, privacy is always raised as the number one reason why set top data can’t be used. It’s a myth, say many. Netflix bases its programming decisions directly on the viewing habits of their subscribers, which they take straight from their subscribers as they choose and watch. Cable, satellite and IPTV companies would be doing nothing different if they began employing STB data in their programming and advertising decisions. There are no privacy concerns as long as the individual customer’s data is treated confidentially, perhaps through a third party such as Rentrak in the U.S., which is an aggregator of American STB viewership data.
Of course, the industry must be 100% open about what it is doing and reassure its customers it is doing nothing different than what Google or Amazon or YouTube or Wal-Mart is doing – and give them the option to opt out, as Bell has here.
Even the Rogers recommendation engine currently available on its Nextbox 2.0 platform can only make those recommendations by knowing what its owner has watched in the past. With all this data gathering already in the market, the “privacy” concern seems an unwarranted roadblock to the use of STB viewership data.
We’ve also learned the issue of STB data is front-and-centre with the Commission as well, having been the subject of a number of recent meetings the industry has been called to with the CRTC. In December, vice-chair broadcasting Tom Pentefountas launched a fact-finding mission by sending letters to all industry stakeholders asking them to come in and talk about STB data.
"Let’s get with the 21st century here. TV is being disadvantaged."
“Our pitch is ‘let’s get with the 21st century here. TV is being disadvantaged. When we go on the web, we can tell you all sorts of information about who goes on our web site, so no wonder advertisers are flocking to web based media’,” one broadcaster who asked not to be named told Cartt.ca. “We’re all wringing our hands about the broadcasting system and cord-cutting. Well, if we could be more competitive in tracking, collectively, I could tell you more about who is watching and can better program and schedule.”
Besides the privacy straw man, there are two other more real issues blocking the use of STB data. One, the BDUs have not said so outright, but some fear the carriers want to be paid to give up such data; and two, the big BDUs (all of whom are vertically integrated) have seen the data and perhaps they don’t really want everyone to know what’s really being watched and when.
However, “if everybody has this data, you can make a much more compelling pitch to advertisers. Everybody can,” said the broadcaster. “As long as it’s kind of in-secret, even the BDUs can’t use it.”
As Mr. Iqbal pointed out, this is a Big Data world now where algorithms are successfully predicting what is going to be a hit, what you want to watch and which ad will appeal to you. It’s certainly well past time Canadian BDUs and broadcasters gathered and deployed set-top data to improve, even save, their businesses.
