The Pay-TV Industry’s Long Game


Let’s jump straight in. Linear TV is dead because online VOD services are what people want. This headline from 2014 was a typical attack on broadcasting –

“Netflix CEO says broadcast TV will be dead in 16 years.”

Just recently and six years into that prediction, Netflix started a LINEAR TV service akin to broadcast, online (in France). Streaming linear is now the norm for many online services. In the end, and to please most of the viewing population, you have to create small changes to existing habits and please as many people as possible with different access choices. I have discussed this often in previous posts. To gain volume viewership, you have to satisfy a vast demographic, and many people don’t want to spend 20 minutes searching for content, which is the norm in streaming – Linear is convenient and has been in the market using the good old EPG since 1981.

DAZN, who professed to be the new ‘Netflix of sport,’ talked about their LINEAR service offering just a few days ago in a conference and added insight into why they are signing up with Pay-TV Service providers. Their streaming dream and takeover of sports stuttered to a halt, exacerbated by COVID with the lack of live events. However, before COVID, DAZN was already struggling, and when the pandemic really hit, they immediately sought investors to shore up the company. The volte-face of the ‘Netflix of Sports’ and D2C disruptor was a pragmatic move and a strategy change needed to keep the DAZN legs pumping.

Broadcast TV isn’t dead nor dying; it is merely morphing and has another medium (the Internet) upon which it rides. Pay-TV is TV that you pay for but the phrase is often used to describe the traditional cable and satellite service bundles are now aggregating streaming service as channels or additional VOD stores. Its all going to look the same soon.

In fact in the USA the ATSC 3.0 NextgenTV will be an IP Stream over the air, which means that they will have the ability to offer streaming-like service. 5G will too look to be the new TV ‘high-speed-access-to-the-home.’ While all of this is good for consumers the business model of TV remains as complicated as ever – You have to pay for access to premium content (Pay-TV) – unless it is funded by another method such as advertising.

The difference today is that you can take as little or as much content as you want, depending on your budget (not necessarily desires). Consumers are simply giving up on certain pay-walled content or pirating it in this complex a la carte landscape. The technology boundaries are blurring – how long will it be before the subscription costs start blurring, and we have a market that levels out price-wise … not long methinks.

TV Fragmentation Reigns


Some years ago, it was plainly evident to anyone who has any common sense that the world of media and entertainment content would fragment. In the transition from broadcast to online, the opportunity seemed clear to content owners that a global reach for their content was as simple as putting it all online and direct-to-the-consumer. However, the business, at the time, just wasn’t ready for this and quite frankly still isn’t prepared to allow that to happen ‘carte-blanche.”

I wrote on this topic in 2009 and an update in 2012. It is now 2020, and content rights, geo-blocking, and market dynamics all inhibit the passage of content from broadcast to over the Internet worldwide. Like websites, there is a myriad of Apps all purporting to offer the same content, but in reality they do not. Still, the truth is that national, regional, and content licensing remains an industry sticking point – there is not going to be a central repository of content that we can dip in and out of.

Sports are the most affected in recent years and coming up against the complexity of the industry. Pay-TV has been able to keep sports as one of the mainstays of its premium tier offers and, in some instances, they offer less popular sports (lower tiers), often at odd times of the day i.e. not prime time. This causes a dilemma for these sports as they sign-up to broadcast deals (often behind pay-walls), limiting their rights to show the games on other platforms such as OTT in particular. Happy to be considered good enough for broadcast TV, but then caught in the mouth of the lion.

The industry adage of ‘What I Want – When I Want – Where I Want’ still cannot be satisfied. Content owners have fragmented or gone vertical, leaving the consumer foraging for certain content across all manner of locations. The costs are mounting up and the consumer is becoming disheartened.

On a recent weekend, I wanted to watch Wales against Scotland and saw that it was not on my NBC Sports Gold app. I quickly went hunting and could not find the match on any platform that I was subscribed to. How frustrating! Very, very disappointing! Even the pirate sites that I found were asking for money (naturally) so its not an option.

At home I have a Cox subscription (it wasn’t being shown on any channel) … I also have a NBC Sports Gold rugby pass but it didn’t show it, Netflix – don’t do sport – Hulu – don’t do sport – HBO Max – don’t do sport … then there is DAZN purported to be the Netflix of sports – don’t do International rugby in the USA – Rugby Pass – geo-blocked … #WTF what’s the point? I am feeling hard done by and frustrated. I am tempted towards piracy – it is cheap and is available. Doesn’t the industry understand that they have an issue?

I’ll keep up my hopes of getting – What I Want -When I Want – Where I Want, but I don’t think that will be for quite some time, if ever!

TV Middleware – The long and winding road.


cogs

The digital TV middleware/OS market has been in full and continued development since the early 1990s. For the last 28 years, the TV receiver software (digital) has remained a fundamental building block or foundation stone of Advanced Television Services. Middleware/OS continues to evoke strong opinion and is a much-maligned. Despite this, it remains firmly ensconced in the digital TV business, forming part of the DNA that is interactive digital television, whether we like it or not.

BTW: There is very little that has not already been tried in the TV domain and not a lot of ‘new’ inventions when it comes to the world of TV.

e.g. Voice made its debut back in the early 2000s. We laughed at it back then; now it is a must-have technology in a very packed content world. Gesture control came and went and now, according to many TV experts, it’s going to be micro-gesture going forward. There was face recognition capability, widgets, and Social Media on TV and good old 3D! Well, let’s not go there …

Along the digital TV software journey, there is one constant = the infamous middleware/OS, and we have seen many solutions come and go, with the resurrection of some technology blocks that were once tried, disliked and considered not fit for purpose. These solutions have a new lease on life now that the STB/CPE products have much faster chipsets and huge memory capability. Not to mention that the transmission medium, which has developed at an equally impressive rate allowing for the offsetting of services in a client-server arrangement. Flash, HTML, JavaScript, and Java are examples of once used, refused only to see a re-introduction into the TV landscape. Back in the 90s, a company called Liberate (part of Oracle) (Liberate Technologies: Taking Strange to New Levels, 2009) had championed an early web-like solution, only to see very expensive, clunky, slow, STBs that led to extremely dissatisfied customers. Flash for the STB/CPE came and went. We had Java as part of Open Standard initiatives right across the TV landscape but back then it didn’t manage to make enough headway to stick. Java is once again back under the umbrella of Android, with their 4th or 5th time out of the middleware/OS starting blocks. The finish line is a long way off before there can be a single winner declared. This is truly a long and winding road.

Here is a long and incomplete list:

  • powerTV
  • OpenTV Core
  • MediaHighway
  • MicrosoftTV
  • Liberate
  • NDS core
  • MHEG
  • DAVIC (MHEG + Java)
  • MHP
  • OCAP
  • ACAP
  • MHP-GEM
  • ARIB B23
  • JavaTV
  • EBIF
  • GINGA-J
  • ON-RAMP to OCAP
  • Various flavours of Linux Distee
  1. OpenTV 5
  2. Frog by Wyplay
  3. Espial
  4. Alticast
  • Boxee TV
  • Horizon TV
  • InView
  • Oregan
  • WebOS
  • Tizen
  • iOS
  • Tivo
  • FireTV
  • Roku Brightscript
  • Google TV
  • Android AOSP
  • RDK
  • Android TV
  • ATSC3.0

So what else do we have in store for the STB/CPE as we blend Broadcast & Internet and look to create new and exciting services for a future generation? Who knows where the digital TV middleware/OS industry will finally settle.

Video Wars – Amazon in YouTube Blackout


Needless to say there are spats in the Broadcast world when there are negotiations for carriage fees. We have channel blackouts regularly announced, which often get resolved when both parties come to an agreement.

As the world of Internet based TV solutions trundles ever onwards a spat has happened between two of the giants. There will be an agreement eventually but it is funny to see that they are just recreating what happens in the land of Broadcast.

Amazon in Youtube Blackout

 

PLEASE STOP PREDICTING THE DEMISE OF TRADITIONAL TV – IT’S BORING!


tvoldHere we go again! … Old TV versus New TV … Because you can open a TV channel on the Internet you can make money and therefore traditional TV is dead!  Since the AWS announcement certain ‘TV Experts’ have declared it so.  There are so few people in the world that can predict the future (i.e. ZERO) but there are people who can look at the past and the present and then extrapolate ideas of how things MIGHT work out: Seldom are any of them right.

By the way, notwithstanding the progress of video content over the Internet (OTT) there is an abundance of closures:

Fullscreen, Afrostream, Sportflix, Go90, Vessel, SeeSo, Redbox Instant, Xbox Entertainment Studios, Samsung Video & Media Hub, Stickam, Flickr Video, Metacafe, Justin.tv, Veoh, Blip.tv, vidiLife

Can you make money in OTT Shelly Palmer? – You make it sound so easy … (Why not try starting a video business and see how it goes).  It’s OK here is someone who has done it: This is a real OTT story Afrostream Closes – This is an amazing insight into the $$$$$$$ that are needed to survive and it openly describes the full impact of what it takes.

If  a 2% Churn rate is an issue for a Pay-TV provider why is the following statistic not an issue to the on-line video businesses?

“OTT Churn Rates Pass 50%”

We do not know how this industry will pan out. Fragmentation, Churn, Net Neutrality, Content Investment and the Pay-TV businesses not just rolling over and dying is some, but not all of the things to be considered when predicting the future of TV … And touting Statistics does not make you an expert…

The rigours of life and television … is still the same as it ever was.


Let’s open with a quote from Colin Dixon’s (of NScreenMedia) well written article on TV viewing habits, where we are debating (in the comments) the merits of the small screen in the mix of viewing devices.  We all have our opinions on that.

On-demand, live, and online viewing peak at the same time

What is interesting and to me, and hardly a revelation, is that people all watch TV when they can or want to. It is generally around the same time, in the evening after work, after homework and after the kids bedtime (if you have some of course) – This is called PRIME TIME VIEWING – i.e. it is when you are most available to consume content uninterupted. So no matter where it comes from, Prime Time content is still Prime Time content.  The TV industry and ‘wannabee TV operators’ (i.e. Facebook, Twitter, Snapchat et al) think they can all have you as their sole Prime Time viewer…

I have covered this time and time again – Despite all of the content that is available, on all of the systems we have, we all have a limited window of time that we can offer this particular entertainment medium.  Most stats reveal that it is the same window of opportunity on a per country basis, which is enough for the news, a couple of TV shows and/or a film.  There is simply too much TV available today to fill everyone’s 15 years-of-lifetime-TV-viewing (yes we spend around 15 years of our lives in front of the TV).

Nothing new: Rebecca Lake a financial journalist from North Carolina – published this in 2015

What’s the most popular time of day for watching TV?
Prime time is when the majority of viewers are tuning in, with nearly 2 hours of daily TV watching taking place between 8 and 10 pm. Daytime TV airing between 11 am and 4 pm comes in second, with people watching about 1 hour and 40 minutes on average.

However when Robots take over our jobs we will have more time to watch much, much more .

INTX is dead – Is this the beginning of the end of trade shows as we know it?


 

The International Broadcast Conference 2016 ended a few weeks ago. IBC is but one of many trade shows of 2016 very full TV trade show calendar. It is, I am afraid, an anti-climax to be back in the office, having toiled for the best part of a year to have a presence that was worthy of a large multi-national in the TV technology space. Don’t get me wrong it is a buzz being there, with great products and great people, meeting comrades in arms from all facets of the industry – But at what cost to the business, our health, and the environment? Naturally, on the first day, there is the anticipation of getting the show on the road; the doors open and in they all swarm – from the serious businesspeople to the tire kickers who are merely sent to look at the competition’s wares or the many amongst them who are looking for a job. We live the noise, the hustle and bustle and aching feet: Then suddenly it is all over – WHAT! All that work and suddenly back to the office … Yes, an anticlimactic end to the high of a trade show.  Let’s get ready for the next.

ATTENTION: Then out of the blue INTX (The NCTA Cable Show) was culled, and we were all stunned by the news! Is it the start of the demise of the traditional Trade show?  What next? How will this work out?

That led to some reflection.  Perhaps we are just kidding ourselves with this form of ‘peacock tail presentation’ of our wares because if we were to condense the actual ‘real-opportunity-for-sales’, we would see that the ROI is at best a little light from most if not all trade shows when they have gone on for far too long. Those of us who have done multiple TV trade shows will understand what I mean. It goes like this – A whole bunch of companies spend thousands of hours (and millions of dollars) organizing pop-up buildings to house technology presentations to have customer meetings and prospect for new clients. We ship the demos from around the world to that pop-up location (a place very unlike where they would be used) – They are expected to faultlessly work as if installed at a consumer’s home or an operator’s plant (for the back-office stuff). Booth ‘staff’ stand there in their corporate colors hoping that the sales team bring them prospects to see the TV offering. Yes! TV programs accessed with a remote control or tablet, which is the same as or similar to all their competitors in the same and adjacent halls. Oh! But wait, this is different it is from the ‘Cloud,’ you can get rid of your cable/satellite costs now, isn’t that wonderful? – Are you looking for such a solution? Oh! There is an RFI out. Great! Here’s my business card. INTX have called out the trade show in the quote below.

From the INTX website – “We believe large trade show floors, dotted with exhibit booths and stilted schedules have become an anachronism. Contemporary venues emphasize conversation, dialog, and more intimate opportunities to explore and interact with technology. Ending INTX gives us a clean slate, and we are excited to explore presenting our industry in new and different ways.”

Coming back from a trade show is quite an anti-climax because having crammed in hours of meetings throughout the year it all seems over too quickly. So much time to organize – so quick to end.  Remember those hundreds of international calls to decide on people, product, and placement. The ideas garnered for storytelling; the designing of phrases to capture the attention of prospectors who may want to buy some TV technology, and all of the stress of deadlines. There are so many heated debates and petty arguments that take place on the way, all over many minor things before the show even begins, such as shelving or no shelving, screen sizes, story sentences and then BAM! It is all over in a flash, torn down with mountains of carpets, cable and crap dumped in the trash. Am I the only one that finds that disappointing? What happens to all the people that fill the IBC halls full of intellectual phrases such as; ‘World Leaders in …, Best in Class Providers of …’ Well they all go home and prepare for the next event that is right around the corner.

The question is – In 2017 and onwards do we need to spend millions of dollars on steel girder structures, carpeted concrete floors and millions of megawatts of expensive electricity for TV, 4K UltraHD, VR, HDR demos that only live for a week? It is not ecological, sensible or healthy for humans, let alone the planet. The NCTA thinks not.

N.B. In the USA alone Tradeshows generate an incredible 600,000 tons of trash every year, just to show-off ‘product and services’ to the 60 million people who attend them. Ironically we even have trade shows around Waste & Recycling!

All of this wasted money and mountains of trash that we pour into landfills and incinerators is especially troubling when the poor are still starving, and the world around us is a bubbling hotbed of xenophobia and warmongering.

Meanwhile, back at base, there is the post trade show autopsy that discusses how it went, were the goals achieved, what can we do better? Of course, there are good points to be had at all of these events. Some people/companies will have maximized their presence with press, analysts, customers and prospects. We have the positives and the negatives from all corners of the enterprise, we do write it all down, share it and get on with business. Then in a very short space of time we brush off our dusty last show personas and look towards the next show, which is the BIGGY – CES2017 … Where it all starts over again in a more gigantic and irrealistic manner.

p.s. Who has a better idea of how to get all these worldwide industry executives to your people, to your stuff? That is not an easy question. Because if a show does not close down like INTX has, we will always be present the following year.  The reasoning is that if we are not then the Company must be in trouble.’

Millennials are killing TV – LOL!


While researching this topic I noticed a slight difference in the definition of the group Millennials.  WJSchroer defines them as born between 1977-1994. Pew Research says this of Millennials in the chart below = Generation Y (1981 -1998).

ft_16_04_25_generationsbirths

  • McCrindle Research Center defines Millennials as being 1980-1994 and “Gen Z” (i.e. post-millennials) as being 1995-2009
  • Strauss and Howe use 1982 as the Millennials’ starting birth year and 2004 as the last birth year.

We use the term Millennial very liberally in 2016. They are seen as the group that will decide the future of many things, including Television.  We constantly hear that Millennials do not consume TV like the other groups before them.  They have a dislike of pay-TV services and do not have Televisions in their homes (Errrm! What if they live with people of a previous generation?).  Is all of this noise around Millennials a true gauge of the future of the world of business?  I have a feeling that if you were to look at those born in 1981 and those born in 1998 you would see an enormous difference in their perception of the world and how they function in it.   Millennials are not all born equal.

‘Millennials’, like the Gen X group, is just too broad a group for it to mean anything.  It has become a psychobabble term for writers and speakers to put some credibility on a particular target market, to justify their reasoning for their theories on how to win them over…It gives them kudos, and we do not question. I am however, questioning the use of this term as an accurate or relevant marketing justification.

We use this pigeon-holing method because we need factual evidence i.e. numbers to support our ideas and conclusions on modern consumption.  e.g. Millennials don’t do this; Millennials don’t do that, and by the way here is a pie chart to prove it. These Millennial statistics worry me because they can easily deliver misinformation, they do not go deep enough to find the real cause of a generation behavioural shift.  I just read a fantastic article on this subject by  Laura Marsh @lmlauramarsh – The Myth of the Millennial as Cultural Rebel | New Republic.  In it, she talks about reasons why Millennials car share, flatshare, dont buy houses, marry late etc.  She states that ‘Millennials in the USA are feeling the pain of lower living standards,’ which therefore naturally impacts their spending and attitude towards the world around them.  Laura hits the nail on the head many times in this wonderfully written piece. She writes, … when headlines of “Millennials are killing the X industry” could just as easily read, “Millennials are locked out of the X industry.” There’s nothing like being told precarity is actually your cool lifestyle choice.”

lifeevents

Just to wrap this up – My argument is that Millennials are not any different than previous generations, other than they live in an era where technology has enormously changed the world they live in.  In fact it has changed the world for all generations still living.  I recently read that we have now reached the tipping point in society where technology is actually causing more unemployment than the creation of new jobs. This could be a life-event factor as Millennials have less disposable income. Millennials also choose to stay single longer.  However they do have many ‘life-events’ just like everyone before them … So while they are young, adventurous, virile and sporty, why would they plonk themselves in front of a TV.  I see a lot of them down the pub having fun, socialising or out playing sport.  What I believe is that as they grow older Millennials settle down, get married, have babies, buy houses and eventually flop in front of the TV when tired after a hard day in the office.  Marketing to them in that mode changes, but they are still considered somehow a different audience.

When you dig deeper, it is indeed revealing that there is a flaw in the narrative regarding the group we call the Millennials.  The people who are killing industries with their non-conformist lifestyle.

 

 

The Reality of the Lazy TV Audience


So let me start with a few extracts from a blog piece that was written by Mr. Will McKinley a New York writer and author. Why? Well, I want this subject matter (Streaming versus Linear TV) to not be seen as my opinion (because I don’t have the clout when it comes to people taking note of what I say … But I do say things that other more famous people say, often way before them – Sometimes that is frustrating. Sometimes it reassuringly delights.)

I love the convenience of streaming. It’s thrilling to have easy access to every episode of shows (and movies) I love, and have loved for my entire life. But, in a landscape where there’s so much choice, having everything can almost feel like having nothing. There’s no call-to-action, no immediacy, no reason why I should watch one thing over another right now. But perhaps more importantly, there’s no shared experience…

But perhaps most importantly, a linear network means that someone else is doing the work for you. Because sometimes you just want to plop down on the couch and watch, not assemble your own custom lineup from across multiple streaming platforms (and I speak from experience, because I subscribe to pretty much all of them)…

Will on-demand streaming be a dominant force in TV? No doubt. In a sense, it already is. But creatively curated linear programming will always be an important option. They call TV viewers couch potatoes, not couch amateur TV executives for a very good reason. Never underestimate the laziness of the American public.

While this ‘Linear versus Streaming TV’ narrative plays out across the world, it was interesting to see at IBC 2016 show in Amsterdam that TV technologists can now introduce SVOD content into EPGs as if it were a Linear channel. There are also companies that will, for a small fee per annum, curate Free on-line programmes for you (e.g. Rabbit TV’s Freecast) so that you do not have to do the hard work of being your own amateur TV executive – Thank you, Will McKinley, for that expression, which I too have used in many previous articles to express the burden TV viewing is becoming.

Let’s not forget that TV, despite its modernisation, is a product that has to appeal to the masses. i.e. The old, not so old and the very young. I don’t like to use the term Millennials because they too will have life-events that will make them lazy couch potatoes. So as far as the majority of TV viewers is concerned, being entertained must not be hard work. So if TV streaming becomes the norm, we will be expected to be our own TV show curator, which means that we will end up stuck in a viewing rut, as our limited knowledge of what is available from the global pool of entertainment is limited by our ability to memorise the planet’s content. Yes, we are we now expected to take the cognitive burden of knowing what content is available from what provider and whether we have already seen it or not by having to dig through all the buried content.

Live broadcasts are also an opportunity to encourage sampling by channel-surfing new viewers, in a way that streaming will never offer.

I agree with Mr. McKinley when he says that we still need the lazy person’s option for a long time to come.