TORONTO – To compete with OTT players, does ad-funded TV in Canada need a ‘Big Hairy Audacious Goal’ to focus the entire industry? If so, what would that rallying cry look like?
The BHAG was one of the stated aims of an industry panel session on the future of ad-funded TV in Canada at the Future TV Advertising Forum Canada at the Steam Whistle Brewery in Toronto last week.
The panel did not unite over a single big hairy goal, but did identify some smaller furballs – like broadcasters needing to collaborate more on content creation, strengthening channel branding and improving audience measurement, and the sooner the better, as over-the-top video now accounts for 43% of TV subscriptions globally, according to Ampere Analysis in data presented at the conference. By 2023, OTT will account for nearly two-thirds of all paid TV subscriptions.
“We can make content that can compete with the best in the world but we need a steady and regular flow of funding for that content if we are to compete with Netflix and its $13 billion spending on content,” said Heather Conway, executive vice-president, English services, CBC, referencing Netflix’s rumoured ultimate spending level this year.
However, Corus CEO Doug Murphy noted that any regulatory changes that may increase funding are not likely to happen until 2020 (or much later, perhaps) as the “elected politicians are in election mode.” Murphy added that for broadcasters to diversify their revenue stream, they need to own more of their content.
The need to rely less on U.S. programming was echoed by Stuart Garvie, CEO of media investor GroupM, who also admonished broadcasters for making viewers search for their content. Garvie also spent some time as president of sales for Bell Media.
“The harder we make it to get to content the more piracy will grow and that’s one of the biggest threats.” – Stuart Garvie, GroupM
“I don’t understand why we are artificially restricting the ability to watch free TV when it doesn’t affect paid TV subscribers.” He argued that Canadian broadcasters must be focused on the consumer experience. “The harder we make it to get to content the more piracy will grow and that’s one of the biggest threats.”
Colette Watson, SVP, TV and broadcast operations at Rogers, sided with Garvie, that more needs to be done to improve the viewer experience but noted that “Rogers has spent hundreds of millions as a cable company and tens of millions as a media company to make these two work together.” She added that a “better viewing experience delivers a better ad experience.”
Murphy also agreed that broadcasters must do more to improve the viewer experience, and noted how new technologies like Comcast’s X1 platform, in use now at Shaw (BlueSky TV) and Rogers (Ignite TV) and soon to be at Vidéotron, will soon allow for the insertion of dynamic ads in linear, time-shifted, and on demand content in real time. “This will make for a much better experience and audiences will love it,” added Murphy.
Conway cautioned, however, Canadian broadcasters need to respond now to what she calls the “infinite content” that Netflix provides all without ads.
“The reason Netflix is number one is that they spend billions of dollars creating content.” She added, however, that, “I still like our chances in a world of infinite choice, and remember, our OTT is still TV.”
The CBC launched its OTT service last December and Conway noted that it now attracts one million viewers a month. She added 99% of OTT subscribers choose the ad-supported version over the ad-free one (which has a $4.99/month price tag).
The panel members agreed that, given Canada’s size, the need to collaborate has never been greater if they are to compete with the Netflixes of the world. Ironically, a presentation just before the panel discussion noted how Canada is increasingly a focus for local original Netflix production, which will open up new partnership opportunities.
“We work in the most disrupted industry in the world. We don’t have the scale in this country, so if we don’t collaborate we will be in dire straits,” concluded Conway.
This collaboration industry executives so often speak of could be that ‘Big, Hairy Audacious Goal,’ but in practice, it can be as elusive as Sasquatch.
