TORONTO – Call this a case of bad news, good news.
The bad news is that TV Everywhere still faces some serious hurdles before it can really take off for cable operators, telcos and other video service providers. The good news is that video-on-demand (VOD) may be on the cusp of reaping significant ad revenues for Canadian pay TV providers.
These twin assessments of the market for advanced video services emerged from the packed CTAM Canada Broadcaster Forum held Wednesday at Toronto’s Westin Harbour Castle Hotel. In back-to-back panel sessions, cable operators, programmers, equipment vendors, online experts, audience measurement specialists and other industry officials debated the prospects for multiscreen video and VOD services in the new digital media world. Cartt.ca editor and publisher Greg O'Brien moderated both panels.
Speakers on the first panel, which covered the evolution and future of TV Everywhere services, agreed that multiscreen video platforms from the traditional providers are still scrambling to find their footing in the market more than four years after the concept was first introduced. They blamed its slow development on a number of factors, ranging from technological holdups to content rights negotiations to a lack of imagination.
Although the technical issues have now been resolved, several other major barriers remain, said Eric Bruno, vice president of video product management for Rogers Communications. Bruno cited the pay TV industry's oft-frustrating attempts to secure multiscreen and out-of-home viewing rights to content from programmers over the past few years.
"It's difficult enough to explain to our own executives," never mind to consumers, he said. "We've got to get the rights to make sense."
Bruno, who previously helped develop Verizon Communications' FiOS TV service and multiscreen video fare, also argued that traditional pay TV providers lack the "imagination" and "experience" to develop multiscreen features and apps at the required fast pace – a pace being set outside the traditional TV business. That quick innovation pace is "new to a lot of folks trying to do it," he noted, unlike such Silicon Valley giants as Apple and Google.
Sean Fernie, senior director: online content & business development at Shaw Communications, said TV Everywhere also hasn't taken off yet because service and content providers have been reluctant to change what has long been "a successful ecosystem" in which both parties prospered. The big question, he said is "how far do we push that change?"
Fernie also contended that the pay TV industry needs to do a better job of educating consumers about the multiscreen video available to them via their existing subscriptions – and marketing the concept more effectively. He also believes the development of easier subscriber authentication systems for multiscreen services will make a big difference.
"I think it's still very early days for us," he said. "It's evolving quickly."
Cassey Tan, senior manager of content and convergence (smart TV) for LG, said both broadcasters and distributors have devoted "a lot of energy to the protection of their business models," instead of engaging consumers. But, he said, LG's partners are now starting to focus on what consumers want. "Learning early is better than learning later," he noted.
Glenn Purkis, category manager for Xbox Live Canada, warned that the pay TV industry could get left behind if it doesn't move forward much faster on TV Everywhere. With large global players now offering "hyper-niche content" over many channels on the Internet, traditional service providers no longer hold a monopoly over quality video programming.
"The tools are there," he said. "If it's not done by this industry, they [consumers] will find different ways" to access the content they want. All agreed consumers are in fact, doing it already.
Jeremy Butteriss, director of strategic partnerships for Google Canada, said younger consumers (35 and under) studied by his company are seeking ways to engage that traditional TV cannot fulfill. He said 85% of these people use social media every day and that "they switch devices or platforms 27 times an hour" in their desire to "share and contribute" to the ecosystem. "They have ADD," he noted only half-jokingly.
THE SECOND PANEL, FOCUSING on making money off non-linear content, offered more comfort to video service and content providers. Speakers predicted that a new golden age could soon start for VOD, as the pay TV industry moves to adopt new systems for measuring the rapidly growing amount of on-demand viewing and advertisers start to take notice of the premium targeting possibilities.
"It's not a matter of where the viewers are; we know they're there," observed Jack Tomik, chief sales officer for Rogers Media. "It's really a matter of tracking down all the other places and having the infrastructure to monetize them." Basically, in order to sell ads on VOD platforms, those viewers must be measured.
BBM president Jim MacLeod said his company will soon release a system for measuring on-demand viewing up to seven days after a program is initially broadcast, with an even more advanced system for tracking 28-day playback in the works. With playback of programming on other video devices now accounting for about 4% of all TV viewing, he said, that system should boost program ratings and give advertisers metrics for measuring on-demand's reach.
"As the industry moves, we'll be ready to move with it," he said. "This is an opportunity now to take these impressions and monetize them."
The key is making sure the industry hits the gas on this while viewers are engaged with distributors’ VOD platforms and not going elsewhere to find content – and while advertisers are lined up to buy space in that stream. Tomik assured the audience that clients are desperate to get their ads into the VOD space – and it’s just a matter of delivering critical mass – something which Rogers and Shaw working together could pull off.
Errol Da-Re, senior vice president of sales for Shaw Media, noted that Shaw's Global network now offers 95% of its linear programming schedule on an on-demand basis. He said this VOD programming alone attracts 2 million to 2.5 million views per month. "It opens up a whole new category for sales," he said. "The fact that we're not monetizing that is a shame, a shame for our advertisers, ad agencies and everybody in the ecosystem."
Pointing out that Rogers is "losing millions of dollars" in ad revenue because of a lack of on-demand ratings, Tomik concurred. "Everybody's getting a free ride and we're paying the ticket," he said. "This stuff has to be paid for. The consumer has to pay for it one way or the other."
Fortunately, Tomik and Da-Re agreed, the problem can be easily solved. The senior Rogers and Shaw executives vowed that they would soon sit down "over beers" and create some kind of cross-industry group to aggregate, promote and sell on-demand advertising once the forthcoming viewing measurement is in place.
And in an effort to hurry that conversation, Rogers senior vice-president of content, who moderated the opening panel of the Wednesday Forum, even delivered a couple of beers to the stage for each of Tomik and Da-Re – and it really seemed as though something will get off the ground soon on this.
– Staff
