Tubular Vision


Apologies in the delay in writing this up. I’m doing a little “timeshifting” of my own.

On Tuesday, I went to two unusually interesting conference / industry things. The first was e-consultancy’s roundtable on social networking and how it is affecting marketing, the second was Chinwag’s “Web TV takeover“. Both incredibly ripe topics, with some amazing contributors, although Chinwag’s was marred as usual by the venue. This is not something that can be said of the e-consultancy event, which was in a room with some of the best views of London I’ve ever seen (see top). 

Anyhow, e-consultancy are going to post the output of that roundtable which is also held under Chattam House rules so I don’t want to go into too much detail but suffice to say, it was fascinating to sit in a room and have a discussion which started out talking about how marketers can use social media and ended up being about how social media completely re-writes the landscape, forcing actual product innovation, deep customer insight and a whole new way to look at the companies’ relationships with their staff. Sort of Hughtrain meets Purple Cow, with a fair sprinkling of Facebook of course.

Web TV promised to be similarly fascinating, whether you’re a traditional broadcaster or a online specialist, the convergence of the two seems inevitable and fraught with difficulty.

As I mentioned earlier, as with previous events, The Slug and Lettuce on Wardour Street really didn’t spare any effort in attempting to ruin the staging of the event, including turning the volume control on their fridges to 11, staff walking out the kitchen shouting instructions, banging doors and so on.

This wasn’t helped by some audience members the wrong side of a couple of bottles of Chardonnay and shouting obscure tangential comments when not engaged in noisy side conversations.

Some really interesting takeaways in any case. Starting with definitions and a useful break down of the structure of the end-to-end delivery.

The whole panel agreed remarkably quickly that Web TV was IPTV and could be broken down into ‘closed’   networks (Virgin, Home Choice etc) and Open ones (You Tube, Joost). IPTV could also be divided between download and streaming (with the note that YouTube looks like streaming, despite technically being download), and the further consideration between what was sent out from a central point (e.g. 4oD) and what could be distributed over P2P networks (Joost).

In terms of modeling the business process, a good summary was given (by, I think Alexander CameronUPDATE (thanks to Sam Michel) by Alan Patrick of Broadstuff Consultancy). The stages are:

Content Creation: Whether that’s UGC, a studio or repuposing archives

Aggregation: Bringing the stuff together to make shows / channels

Distribution: Getting it to consumers. Clearly this being where the ISPs come in. A key point was made that the network operators on mobile arguable make too much on this. Online, perhaps, they make too little.

Reception: The cost of providing sophisticated set-top boxes may be prohibitive but it provides lock in in a way that using a browser doesn’t – although certainly a better experience. Clearly changing habits and technology in the home are as much a driver of this as what the broadcast networks want to do.

Each of these elements has unique (and often substantial) costs. There are only two real ways of making money – advertising and charging the user directly. Clearly the effectiveness of traditional, interuptive ad formats is being challenged (and a long debate over Google’s (and Bright Cove’s) overlay formats took place at this point). However, it was also suggested that customers would pick ad-funded free content over paid-for content every time. Cosmo Lush (what a great name) from 4oD explained that 4oD continued to experiment extensively with monetisation models and did not, for now, have a single settled strategy.

An amusing moment when Mr Lush (as the only real representative of the broadcast media) was asked whether advertising would completely migrate off traditional TV. His answer was “yes”.

He also talked briefly about a currently small market for “download to own” – the digital equivalent of the box-set market of old. This is currently constrained by confidence in ability to store digital media, but could become hugely lucrative.

The conversation then turned to piracy with Ben Lavendar from LoveFilm Alex Cameron pointing out that piracy was actually what people were doing most (the ‘predominant business model’ as he put it). Clearly the digital video content market will face many of the challenges of the music market in coming to terms with that.

BrightCove’s Raghav Gupta discussed whether a central repository for content would emerge. His answer was that content owners would need to think about a “blended distribution” of their content across multiple analogue and digital platforms. I couldn’t help but wonder whether we don’t have a single home for content already. BitTorrent.

However, the most interesting part of the conversation from my point of view came during the questions. If the current (internet) ISPs feel that they’re being relegated to “pipe-owners” in an increasingly commoditised market, how will they deal with ever more huge amounts of IPTV being run over their networks, with everyone but them seeing the benefit? The risk is that they will start to ‘shape’ (bugger about with) the traffic as it goes through their networks or even align with particular content producers and aggregators in return for a share of the revenue. This could be disasterous and threaten the open nature of the internet. It’s a debate we need to have soon, although not a particularly new one (see Net Neutrality).

It was suggested by one of pannelists that the BBC would deliberately kick this debate off around their new (and frankly awful) iPlayer. I hope they do. This is something we need to resolve before internet becomes the distribution channel for all TV content.

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