Production IPTV - The upside of online.
Far from undermining TV viewing, the rise of media player technologies shows how online can become an integral part of broadcasters’ content strategies.
In just 18 months, consumers have not only embraced online TV as part of their media diet but have come to expect to receive long-form entertainment from sites dominated by the UK’s leading broadcasters.
This outcome can hardly have been anticipated in the summer of 2007 when Channel 4, ITV and the BBC launched their on-demand services as a last-ditch defence against the rising tide of broadband video portals.
Where YouTube, MySpace, Metacafe and others had achieved phenomenal success serving up short- form user-generated material, Joost (and others such as Babelgum and Veoh) offered professionally produced long-form content. Together, these businesses threatened to undermine the mass TV audience, siphon away advertising money and, perhaps most importantly, hijack control of online programming.
By offering legal access to recently broadcast content, aided by strong brand recognition and cross-promotion on TV, broadcasters have managed to harness a significant portion of digital demand for themselves.
BBC iPlayer, which registered 276 million views in 2008, is widely credited with installing not only the online TV habit among the nation’s TV mainstream, but also wider familiarity with the concept of on demand. Yet iPlayer only took off (in December 2007) when the original download-only version was replaced with a streaming model that worked on Linux and Mac PC as well as Windows machines.
“The changes we made don’t seem that radical but, at the time, believing that consumers wanted instant gratification rather than wait to download was a bit of a leap in the dark,” says Eric Huggers, director, BBC Future Media and Technology.
“There are three reasons why iPlayer succeeded,” says Huggers. “First, we removed the technology barriers. One click and you are into audio or video. Second is the sheer volume of content. Half the BBC’s linear programming is online, with ambitions to make it all available. Third, it is truly multiplatform. IPlayer is available on TV (Virgin Media), consoles, MP3 players and iPhone.”
Cross-platform accessibility, which the BBC has made a priority, has been shown to boost online TV traffic. Joost claims volumes to its website grew 20% after it launched on iPhone; views for Five’s on-demand platform Demand Five leapt 75% as soon as it offered Flash-streaming in January, while a third of iPlayer’s views last year came from Virgin Media.
In the face of new media alternatives, average daily TV viewing did, indeed, decline (by nearly 4%) between 2003 and 2006 but predictions of TV’s demise have been greatly exaggerated. Current average weekly viewing is about 28.2hrs, the same as it was a decade ago. For all the hype about catch-up services, they still represent an extremely small proportion of total TV viewing (less than 1%, according to Barb).
ITV director of television Peter Fincham insists: “The landscape has changed hugely but TV is still uniquely placed to deliver a high quality immersive entertainment experience. People are now conditioned to catch-up but it is linear broadcast that creates the sense of must-see event”. He adds: “Catch-up is also a gateway into the archive but people like the schedule, they like the way a channel serves them select programming at a certain time or day.”
Instead of cannibalising the TV audience, the argument is that on-demand usage has increased loyalty to the schedule. Downloads from iPlayer add 10% to the overall audience for shows such as Torchwood, according to the BBC, although, without a recognised cross-platform ratings tool, the influence of online viewing on TV is debatable, if not unquantifiable.
“The linear schedule remains important as a signposting mechanism,” agrees Rob Webster, Sky’s director of channel and operations. “It’s much easier to market 24 through the Sky1 primetime schedule than it is as part of a collection of titles bunched together in an on-demand library.”
Broadband TV services are used by 78% of users out of a desire not to drop out of broadcast schedules, reports commercial TV marketing body Thinkbox. “(The fact) that both broadcast and online TV platforms are growing simultaneously, underlines how they fulfil different needs and that they can co-exist and promote each other,” says chief executive Tess Alps.
Perhaps the biggest fear is that new digital platforms will distract youth audiences. To some extent this is already happening. Research firm Attentional reveals that conventional viewing among 16- to 34-year-olds has been declining faster than other age groups.
Broadcasters have, however, managed to arrest the wholesale desertion of younger viewers by syndicating content online and promoting shows through social networks. Now, young adults are investing more time in other media but not necessarily at the expense of TV, which is most likely to be watched at the same time as internet browsing. Indeed, TV shows dominate conversations on sites such as Facebook.
One of the often cited causes of media fragmentation, the growth of user-generated content (UGC) on sites such as YouTube may face problems of its own. Deloitte reports that UCG may become ‘fundamentally challenged’ in 2009, as a growing number of sites restrict or decline to host it, given the challenge in selling advertising adjacent to amateur clips.
This could prove an opportunity to indie producers looking to capitalise on the internet’s emergence as a distribution platform. However, its potential to transform the business of content owners is far from clear. “It’s extremely difficult to make money. I don’t think anybody has truly cracked how to do it,” declares Danny Meaney, founder of New Media Partners, which advises producers on internet sales. Screen Digest predicts online TV will represent less than 2% of total TV revenues by 2012.
At Babelgum, ad revenues that return to the producer are proportional to how long/how often their programming is viewed on the platform. “For traditional licensing arrangements we share net ad revenues with content providers on a 50/50 basis,” explains Mark Cranwell, director of content acquisition. “We can in some cases offer cash advances - generally where an element of exclusivity is involved - which is then recouped from the back end.”
Off the Fence has sold more than 300 hours of content across Babel-gum, Joost, FactualTV and blinkx. According to director of sales Bo Stehmeier: “As these platforms mature, they have been finding their core audiences, and dependent on those, we find business models that work for both parties.”
Endemol, All3Media, Fremantle and 3DD are among dozens of content owners that have struck online deals. “The only way to crack it is by experimentation,” says Meaney. “Even if they’re not earning a lot, these companies are learning a lot. The market will definitely come and those companies in the game now will have a good head start.”