Perceiving The Window: The Future Of Television West Conference 2009

The key at the Future Of Television West Conference was the aspect that the content is out there and continues to expand but with the advent of such sites such as Hulu, the key question becomes windowing. In a specific thought that mirrored the beginning of the videotape era nearly 30 years ago with rental pricing only and other angles, the aspect becomes cyclical in a constant motion.

The Future Of Advertising It becomes a matter balance back and forth. Bill Bradford, SVP at Fox Digital Media, asked the question of what happens when we reach the tipping point [with the aspect of content versus money to pay for it]. Steve Mitgang, the CEO of Veoh, seems to think the matter is evolving, saying that the heads of the ad agencies are now providing aspects of a digital package in addition to a classic package. Liz Heller, CEO of Buzztones, agrees that there is a level of interest for experimentation in the sector. A good perspective in this arena of who is actually experimenting on the consumer with different promos they do is the forward thinking Tivo. Dani Grindlinger, Director Of Ad Sales at the DVR company, says that with their showcase on the service, they can engage the consumer more. But it all comes down to keying off the original placement of the 30-second spot. Mitgang offers his perspective saying that CPMs are going to rise. The agencies want to take the audience their clients are most interested in and get four times as much money from the companies to place ads. It is just making it happen. The time is here already explains Mitgang. Right now, you get dimes and nickels but soon it is going to be 50 cents a pop. It is just a matter of the evolution of the function.

Ed Montes, Exec VP of Havas Digital, offers his opinion, saying that it is an issue of scale. A lot of times when you are talking about digital, there is a tendency towards absolute numbers. But different models are emerging and the aspect of what constitutes good business continues to change. Montes cites Lil’ Wayne as a good example of what to do. Wayne is notorious for remixing his tracks and putting them out for free. However he is one of the highest selling artists in the past 12 months. The other hurdle that keys into advertising in this sector is keying in the right advertising with what the consumers want. Mitgang says it is the number one problem that Veoh is trying to solve. It is however a problem across the sector that has existed for awhile. Grindlinger of Tivo makes the point that they are trying to make TV more discoverable in their programming. The aspect that they figured out that is in search mode, a user is more likely to engage in advertising content. However, she says, when they lock into what they want to watch, they disengage from the advertising. Heller of Buzztones gives props to Tivo saying that it changed the way people watched television. It comes down to a question between speed and connections within the decisions of the audience.

Kevin Reilly – Keynote Before Reilly, the President of Entertainment at Fox Broadcasting, entered the room, one specific attendee/speaker had voiced his frustration with the fact, in his mind, that no one in terms of executives was offering solutions or new approaches to any of the problems. He pulled people up onstage while Reilly, who was stuck in traffic, was coming over from Burbank. Interactive for sure but this was the first such attendee to get up and speak to this feeling frankly. After settling in, Reilly addressed the incumbent thought that TV is dead. His first job in the TV industry was in 1988. He started to see news articles even back then saying that network television was a dinosaur. He says that even though there is massive change currently occurring in the arena, the more things change, the more they stay the same. Back in 1988, MTV kept growing. Reilly says that you could see the cable shares going up and the network shares coming down. The point though in his mind is that if you create the right show, the audience will watch. The fundamentals of the game for him haven’t changed. He says that people dump on advertising but there is so much info coming out now, that people might miss advertising if they don’t have it.

In the current state of the business, some networks might go away while others will evolve. Reilly comments that we are living through an era where is much misinformation in the media from so-called “experts”. Reilly says that he helped developed “The Sopranos” at a network but nobody went for it. “Law & Order” by comparison was a pilot that came over from CBS who passed on it. At the time [at NBC], he was focusing on a series called “Nasty Boys”. Whatever you think happens, it goes the other way once in a while. He finds that more often than not the contrarian becomes the victor. For example, a couple years ago, he says, some people thought video on the web was a short form experience only which has since been proven wrong. Pilot season, he says as well, has outlived its usefulness. For Fox, “Idol” launched off the summer. The mid season is now the high season. Coming out of the writer’s strike, Fox went to year round pilots. In an ideal world, they can do this on a roll he believes. For example, Fox is going to premiere Ryan’s Murphy’s new show “Glee” after the second to last airing of “Idol” and then go ahead with normal episode run in September. Reilly believes this is risky but they have to try it. Right now, he points out, there is an average of 118 networks in the home but the viewer only watches 16. There are diminishing returns on the amount of networks. Reilly thinks that the negotiations are soon going to go in a different direction. In terms of his perception of Hulu, he says they run 30 seconds of pre-roll advertising and have a very high CPM rate but the success doesn’t pencil out.

People are seemingly becoming more comfortable with the online experience. This is the training of a whole new habit in his eyes (which is fine with him if only they were making the same money as they did in TV). That is the balancing element they are dealing with. One solution he thinks might be “windowing” in terms of staggering the available times and dates of certain shows to give them exclusivity to the networks and cable affiliates before putting them online. It is purely consumer related. Also the way that TV finances its shows, he says, has changed drastically. Before the pot of gold was the syndication but that business model has gone though severe contractions. Pop culture and mass media, in his mind, have always had a symbiotic relationship which created a uniformed experience. The consumer however now is so fast in ways to shorthand with the new technology to the point that it is getting away from the people that are actually creating the product. The ubiquity of content is moving fast now and it is not in lockstep with the consumer. For Reilly, he sees that it is a big transition but believes out of it is going to come some really great opportunities.

After a bit of cocktails that evening around the Tropicana Bar at the Hollywood Roosevelt Hotel, the following day after lunch offered some perception of the ever changing video landscape.

John Edwards – Keynote The CEO of Move Networks spoke of the evolution of the company which is trying to par its way into the video aggregation business in terms of direct deals. Edwards makes the point that live events are a way of connecting with the consumer. Without the brands (like ABC and the like) they would not be anything. His key in particular was angling that content bundles will be important as the business models continue to evolve. For example, for some of their live events, they are integrating game controllers to control the watching of the different angles. However this seems cost prohibitive. The other problem, as Edwards pointed out, is that right now across the board there is an inconsistency in the delivery. The IPs as they are now for the most part might not survive. He then broke down the chain. The Internet TV service strategy involves many different elements in the forms of big media, movies, live events, cable nets and advertising but in order to make them work you need simulcode, live ad ingestion, live reporting and DRM contol. The mix of these interlocking necessities create complications that must be solved before any money is to be made.

Stars Of The Web: Online Video Innovator Showcase All the time there are new people pushing the bounds. The key with the internet savvy right now is hooking up with the right money to make their creative ambitions work without affecting the basic nature of what they are doing. In this panel, the person who stood out was Greg Goodfried, the CEO of EQAL, who helped create “lonelygirl15” for the You Tube generation. He was brought in to create “Harper’s Globe” which is the online companion to the new CBS’ closed series mystery Harper’s Island which was touted at this year’s CBS Winter Press Tour. There was a lot of prevalence by creator Jon Turtletaub on the effectness of this type of marketing and it is seen as a first test of the new CBS Interactive division. Goodfried commented that, aside from the video blogs, private messaging within the site will be key while the forum is built for heavy traffic. Felicia Day, another panelist who helped create “The Guild”, keys into the thought that the internet is the Sundance of our times, and it will control. evolve through corporate as that market did as well.

Online Video: Global Opportunities & Challenges With the advent of Hulu, the challenge is how to measure the success of this new habit. People are watching but the tracking mechanism is still being developed. Each site records a view a certain way. Starting off the panel here, Eric Garland, CEO of Big Champagne, says there has to be a standardization put in place at some point because there is many intracies as to measurement of statistics online. Joy Marcus, the US General Manager of Daily Motion, responds saying that though there is a thought for standardization, they are being bombarded by many different proposals that might or might not be the next new thing. This is a major challenge for a distribution company in picking the correct system. The challenge, in Marcus’ eyes, is that you effectiveness a half a billion people coming online in the next 5 years. The key will be globalization but the fact is that localization comes into it as well because you have to speak to them in their native language. The other angle is that everything has to be geo-targeted because of copyright laws. She thinks we are going to see something like “Hulu Latin America” in the coming years. She doesn’t knows if that is good or bad for the industry. Right now there are literally millions of people uploading content but there is no uniformity at the end of the day.

The key according to Vin Bhat, General Manager of Saavn, will be (echoing Kevin Reilly’s comments from the day before) the day and date windowing of content versus geography. The importance of metadata also becomes crucial because if people can’t find the material, it does no one any good. Some people are doing pretty well with the essence of metadata in his view but others are talking a lazy approach. There are ways from a scientific perspective, in his opinion, to “sniff” browsers. It is not about trying to force a piece of content on a certain platform but about optimizing content for that platform and targeting it directly. Unlike before with the traditional music industry and the free versus paid model, he thinks the TV elements are moving away from that problem. I personally disagree since that is exactly what we are getting into although this time intricacies content creators are giving it away for free through streaming elements like Hulu rather than charge a subscription. Ultimately that is what it might come to.

Mobile TV & Video: Opportunities & Challenges Facing Television The battle as to the reach and impact of where the video elements will impact onto mobile devices remains to be seen. A lot of elements are side loaded but as the bandwidth over the cellular network continues to improve, the playing field will change. John Lawson, EVP of Strategic Initiatives at ION Media Networks, says that DTV mirrors mobile in that it is just a wireless state of a distribution platform with a specific task. What ION is doing, he says, requires a new chip set. LG is making theirs handsets but it will be an open standardization for mobile. He believes that it is a great opportunity for providers with one-on-one content. He explains that ION understands that people use mobile television as television but mobile can be seen more as “personal television. The problem is that despite growing customer acceptance, they is still a lack of a business model to make money. However, the carriers they are working seem to understand the curve. Daniel Tibbets, the EVP of Go TV Networks, see the hurdles as well but points out that the iPhone has changed what the world of mobile can do in just 18 months. The opportunity they have begun to see is how to do mobile in a hurdle-free way. Go TV Networks, he says, is a big leader in subscription models. It is just a matter of pushing people in the direction they need to go. Tim Connolly, VP of Mobile Distribution for ABC/ESPN Media Networks, sees it as a opportunity to make the differential between what brands of a product are and what brands of a channel are. For example he says, his division does “Lost” elements on the mobile website that are different from anything else. Contrast that to the brand of the “Disney Channel” which itself resides within each of the shows created for that channel. For a cable niche channel, there is one approach but with a broadcast network like ABC there isn’t as much of a consistent theme between “Lost” and “Ugly Betty”. Connolly also reacts to the comment that the Far East (particularly Korea and Japan) are supremely ahead of America in adopting the phone possibilities of mobile video. His response is that all those companies in the Far East are now going underwater and having to look for government subsidies. This is all because the standard for making money has not been set globally yet. This arena has become a global economy so what happens to one affects the other.

The Future Of Television West Conference brought to the forefront the key that the ideas of new television are closer to fruition and the problems of the merge between TV and Online are becoming clearer. What is not clear is how the big content companies and networks will deal with it. They don’t want to lose their audiences but money needs to be made. Online and Mobile Video need to be more controlled for this to happen and the insistence in the adoption of “windowing”, which served the videotape industry well back in the early 80s, might be the model to place the habit back in check. But that is easier said than done. For a culture that is now used to seeing all this programming for free hours after its broadcast, moving in reverse might be a losing battle.

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