IBC2014 Conference Report

TV broadcasting industry and several ICT industry players gathered over last weekend to Amsterdam’s IBC2014, the biggest European broadcasting event. As always, we report our key findings in this report.

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Broadcast industry faces the need to open up

Underlying theme at IBC was that the once-isolated and until recently very successful broadcasting industry now needs to open up, partner with new kinds of players and get used to much faster pace of innovation.

Image Communication’s CEO Charlie Vogt took the role of an Internet age spokesman and named five “positive disruptors”: IP delivery, over-the-top video, mobile, cloud and software-based solutions. As an example of old thinking, one broadcast technology exec called cloud as a synonym for outsourcing, even though the drastic impact of cloud is in new business models it enables.

The strongest call for innovation and disruption was heard in the keynote of Neelie Kroes, the outgoing EU digital commissioner. “Old rules are too tight for digital, there is room for deregulation” she stated and used Uber as a positive example. “Protectionism is not an answer.”

Consumers and their new online alternatives shape the TV business

The biggest disruption comes from changing consumer behaviour and – mostly American – Internet giants that shake up the market. “Suddenly the consumer is starting to talk to us”, as one broadcaster put it. During this decade the share of linear TV viewing will drop from 98 % to 77 % of all TV viewing according to Enders Analysis. In the UK 34 % of young adults are using online video subscription services.

Netflix is a clear market leader in online video subscription services in the US and in the UK with a market share of 46 % in both countries. In Germany the biggest service is local Maxdome, which belongs to ProSiebenSat1.

UK pay operator Sky has launched a separatedly branded online TV service for those households that are not subscribing to Sky’s “full-price” services. The Now TV service costs 6.99 pounds a month, compared to typical Sky pay subscription of 20 pounds or more. Two-tier model helps to compete with Netflix while maintaining higher value status of the flagship pay service.

UK indie cinema chain Curzon has rolled out an online film service that complements their theatre offering. Curzon is also film distributor, which gives them freedom to decide on delivery channels and thus possible to offer premium content online as well. It costs typically 10 pounds to view a film online in “Curzon Home Cinema” and registered customers receive the same 15 % discount as in theatres.

Big tech companies on the rise, small ones declining

Industry organisation IABM follows economic indicators of TV technology industry. IABM’s quarterly industry index reports that in Q2 the industry was showing an annual growth of 6 %. Large companies with revenues of over $10m reached 7 % growth while the small companies declined by 1,7 %. The divided development of big and small companies has continued from Q1 last year. Imagine Communications’s Vogt explained this by the notion that tech company customers – media companies – are consolidating, which means that also tech vendors need to be bigger.

Programmatic targeting of TV advertising emerges, measurement causes headache

Sky has launched this year their programmatic TV advertising service AdSmart, which allows advertisers target their audiences according a variety of factors. With the system, viewers’ ad breaks consists of those ads that are targeted to them. The ads are served also for Sky’s linear channels: the program content is delivered with broadcasting technology while the ads are transmitted over the Internet.

Measurement of viewing is a growing issue as targeted advertising systems are created and as TV advertising competes with well-measured Internet advertising. As TV viewing becomes fragmented –there are more programs with smaller viewer ratings – current way of measuring a small sample of viewers will no longer be exact enough. On the other hand, online viewing can be measured exactly. UK TV measurement organisation BARB presented their answer, called Dovetail project. The system, which is to be launched in 2016, will combine data from viewing devices with sample panel data.

To highlight measurement issues BARB’s Chief Executive Justin Sampson noted that when it comes to Internet advertising measurement, a big amount of video ads that are shown on the screen are actually not viewed by anybody.

Need to enhance TV user experience emerges as online TV services show the way in user-friendliness

It was nice to note that user experience was discussed frequently. The user experience of “traditional” TV has remained decades more or less the same. Growing number of channels have just been added to program guide grid, making content discovery rather difficult. Online TV services, on their behalf, have so far suffered from poor transmission quality. Now that transmission speeds and video quality are up, online TV is overtaking traditional television in usability. Online services normally provide recommendation features and their user interfaces are generally on a good level. It will become another challenge for linear TV to keep up with the user experience people get accustomed to in Netflix and other new online services.

However, online TV still has its problems. According to study by Brightcove, an online video tech company, the top three consumer frustrations with VOD content are slow loading speeds/buffering (36%), ‘annoying adverts’ (28%) and inconsistent quality across devices (26%). People’s expectations on transmission quality have also risen and should a video start loading slowly, consumers easily abandon the clip. As many video services earn by pre-roll adverts, this has a direct economic impact. Brightcove’s VP of Product Management Phil Costa told that one second increase in video player load time would lead 10 % of the viewers to abandon the video.

Google’s twofold TV strategy builds on Android TV and YouTube MCNs

Google’s Europe boss Matt Brittin presented a polite keynote stressing that Google is “a partner, not a predator”. He stressed that people want to be “fans” and Google will help that on all possible platforms. On the other hand, of course, those fans are “audiences” for advertisers.

Google intends to succeed with TV even though Google TV platform didn’t take off. Two cornerstones in Google’s TV strategy are bringing Android operating system on TV sets and YouTube. YouTube-based so-called multi-channel networks, or MCNs, have quickly become important media channels for especially young people.

Research project demonstrates automatic subtitling and translation

Research project EU-BRIDGE, led by Karlsruhe Institute of Technology, demonstrated their technologies for automatic speech recognition, subtitling and translation. In the demo the system was able to convert spoken English to text. Further, the text was simultaneously translated in other languages.

In a pilot implemented with BBC, the system created automatic English subtitles for BBC’s local weather reports. According to researchers, the technology is not yet 100 % accurate but is about to reach a level where it can be used commercially.

Commercial partners for the project are Red Bee Media, Pervoice and Andrexen.

Once commercially available such technologies will completely change subtitling and translation workflows.

Some second screen cases

There was not as much hype about second screens as before, but I found these cases worth reporting:

  • Shazam’s voice-based advertising recognition system was demonstrated live and it worked out smoothly. (Screen shot on a Shazam ad below)
  • UK app Cinime records audio watermarks during film viewing in cinemas and can present advertising messages, offers or interactive games (screen shot below) during cinema ads or once the film has been viewed. Cinime users can also receive offers etc. by scanning movie posters. These functionalities were also demonstrated successfully. (The other question is whether second screen concept really works with film content and in cinema setting. For advertisers this is obviously interesting.)
  • Tellyo is a new service that allows social media sharing of clips of a broadcast that just was on TV. The stream of channels utilising the service is stored on Tellyo server and users can access last three minutes of what was on air. The revenue model is based on advertising delivered with the clips. Tellyo referred to Finland’s MTV3 channel experiences, that user created Tellyo clips were shared more than channels own social media postings.
  • Japanese broadcasters are piloting a joint second screen app called SyncCast. User picks the channels he or she wants to follow. Broadcasters then send second screen messages related to each channel. The user will see those messages in a timeline-like format. Messages can include interactivity or link to appropriate web sites.

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For the tech oriented: CDNs enroll solutions for traffic growth

Video data traffic in broadband networks is growing extremely fast. Akamai’s chief architect Will Law listed six key technologies that content delivery network (CDN) operators will deploy in the near future to answer data traffic growth:

  1. HEVC video codec
  2. IP multicast delivery (lack of standards mentioned!)
  3. MPEG-DASH unified delivery format
  4. Storage density is growing faster than computeability (allows local storing of the most popular content)
  5. Hybrid HTTP/UDP protocol (addresses packet loss problems in remote areas)
  6. Peer-to-peer

 

 

Timo Argillander

Timo toimii sijoitusyhtiö IPR.VC:n managing partnerina ja Digital Media Finlandissa neuvonantajana. Timolla on pitkä kokemus strategiatyöstä ja muutoshankkeiden läpivienneistä yrittäjän, ammattijohtajan, konsultin ja sijoittajan rooleissa. Timon erikoisalaa ovat muuttuvien liiketoimintaympäristöjen ansaintamallit ja teknologiamuutosten tulkinta.

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