David Brennan – ‘Digital, Schmigital’
David Brennan, VP research, Flextech Television
I’m glad Hugh took on the job of explaining the technology behind digital, because I’m not sure I could have done it. What I can do is talk about what all this technology might mean for the broadcasters and – even more importantly – the viewer.
I thought I’d hide my ignorance with a grand title, like “The Impending Digital Television Revolution” but I quickly realised that would simply set me up even more. So, I decided to quote Christine Walker, who summed up the whole thing in one simple, elegant phrase.
Digital, Schmigital! Because that just about sums it all up.
After all….
We all know that digital is going to happen.
We are all pretty sure that it is going to take off. In fact, that becomes a self-fulfilling prophecy, assuming the government decides to switch off analogue in the next decade.
But there seems to be a general feeling of “so what?”. Which may be caused by the sheer complexity of it all. Whatever the reason, every broadcaster I can think of is having to plan for it in some way or other.
What I’d like to do in the next ten minutes or so is have a brief look at some of the myths that seem to be springing up about the digital revolution, and simply pose the question – ” can they possibly be true?”.
The four myths that I seem to be coming across time and time again are;
“Digital television will profoundly affect people’s lives”
“It’s the niche channels that will prosper”
“The viewer will become an interactive junkie”
and
“Channel brands will be irrelevant in a digital future”
Let’s look at some of the evidence.
GOING DIGITAL
First of all, apart from us media folk, people are not quivering in anticipation of the digital future. Even when the news media have been full of the latest developments – arguments over the set-top box, the DTT bidding war – people give it less attention than a Lib Dem election broadcast. And why? Because it’s technology, and people are not turned on by technology. They may be totally apathetic about it. They may know very little about it. It may even scare them a bit. But it doesn’t get them excited. Only the applications can do that and viewers don’t fully understand them yet, as every piece of research we do on this issue demonstrates. Here are just a few quotes from some of the qualitative research we’ve carried out recently…
But there’s little doubt that digital television will become a part of most people’s lives within the next few years.
This is just one of many sets of projections that have been produced in the last year or so, and it’s one of the more conservative. The hardware will take care of itself – people will naturally join the digital club as soon as they upgrade their TV sets. But its likely to be the content – the so-called ‘software and all of its many applications – that will bring them into the subscription market, and keep them there.
That’s the main reason why I believe digital television will have a major impact on people’s lives. Because it’s multi-functional. It does not rely on there being a market for a single application. It provides a number of potential applications, and viewers will use many different combinations of them.
And that provides a major challenge to those of us who are going to be providing the programming for this market. Because although we are still very much part of the analogue age, we have to think digital. Particularly in terms of devising channels – or services – which can transcend single applications. Interactive programmes. Channels which offer a mix of programming and transactional services. Programme genres which can take advantage of internet access to provide complementary information. The list goes on.
So let’s jump ahead to the second myth I suggested – that, as the airwaves open up and channel capacity becomes far less of a restriction, that a whole raft of niche, special interest channels will rise up and make their mark. Wrong!
First of all, it is extremely unlikely that the 200+ channel capacity that digital satellite or cable will be able to provide will really mean 200+ actual channels. In fact, most of them will be needed for Pay Per View, Near Video on Demand and interactive services. Most experts reckon that – at most – there will only be around 60-80 individual channels provided as part of the service.
Secondly, economics dictate that there will be very few stand-alone special interest channels. Sure, there are still some sizeable, cohesive niches left, but they are few and far between. Besides which, individual channel providers will struggle as critical mass becomes more and more important in terms of obtaining distribution, advertising revenues and programme rights.
What is already starting to happen is that the existing channels are becoming more niche in order to cut through the clutter and claim a loyal following. At Flextech, we have banned any use of the three words GENERAL, FAMILY and ENTERTAINMENT in any combination whatsoever. We have found that viewers need a very clear idea of what your programming remit is, otherwise they won’t bother to find you. This ‘niching’ process can happen in two ways – either a channel re-defines itself (as Bravo and Challenge TV have recently done) or a successful element of a channel’s output is given a channel of its own.
Let me give you a couple of examples of the latter.
In a couple of months, Discovery will be launching Animal Planet, which focuses on nature programming, for which Discovery is very well known.
And, a few weeks ago, we took the successful teen element of the TCC schedule and gave it a channel all of its own. We’ve called it Trouble.
Whilst Trouble is now one of the top 3 channels in its daypart for older children and young adults – beating Nickelodeon, MTV and Cartoon Network – the two channel relaunches I mentioned have also reaped immediate dividends by becoming more niche.
Bravo – which has up-dated and redefined its cult image – has increased audience by an impressive 43% and has appealed to its core audience – 16-34 Men – to the extent that they are watching the channel 72% more than they were before the launch.
Challenge TV – which has evolved from the success of the gameshow programmes on the old Family Channel – has seen an immediate increase in its ratings – +17% for All Adults and +31% for Housewives.
The net result of all this fine tuning was an overall increase in viewing to all Flextech channels of almost 10% and, most important of all, a much clearer profile of viewing to each channel. That’s important because, to survive in the future, these channels are better off being highly valued by a few than being vaguely useful to many.
So, all in all, there will be more niche channels in the digital future, but most of them will be based on what is already available.
The third myth – the viewer as interactive junkie – is perhaps the hardest to disprove. You never know exactly how people are going to use an application which has not even been fully developed yet.
But when people are given the opportunity, they don’t seem to welcome it with open arms. This is partly due to the attitudes towards technology I referred to earlier. It’s also partly to do with television viewing being essentially passive entertainment, used to escape or relax. Whatever the reason, anecdotal evidence from around the world suggests that viewers will not use interactivity for the sake of it. Trials which TCI have been involved in, for example, show that traditional television viewing is hardly affected by the availability of interactivity.
That does not mean viewers will not use interactivity when it suits them, it just means that it will not take over the TV screen.
There appear to be two main reasons why viewers will make use of the interactive services available through digital TV.
The first is to enhance the viewing experience. This is more true of some programme genres above others. If they are watching a sporting event, for example, they are likely to want to call up action replays or switch camera angles as a matter of course. Game shows have a huge potential for viewers joining in at home. This last point is emphasised by the fact that Challenge TV has so far had more than 200,000 responses to its Prize Time spots – which is about as interactive as you can get with just a telephone and a TV set.
The second reason why people will use interactivity will be to save time from other chores. Speaking personally, I can’t wait for the day when I can order the weekly grocery shop from the comfort of my own armchair – comparing prices from a range of retailers first – before pressing the ‘Confirm’ button and settling back to watch the football whilst the goods in question get packed and delivered. This form of interactivity will not reduce time spent watching TV, it will create more leisure time – which can then be spent watching TV.
And so to the final myth which I keep hearing. The one that says channel brands will be irrelevant in a digital future. This is a relatively new one, which has evolved as we have come to realise just how much influence the dreaded EPG – the Electronic Programme Guide – can have on viewing behaviour.
I could spend a whole presentation on this subject alone, but suffice to say that the EPG will be the gateway to viewing in the digital world and will provide the viewer with a whole range of different ways to find out what’s on, where and when.
The argument is that, if the viewer wants to watch a sitcom at 8.00 on a Tuesday night, he or she merely calls up the sitcoms on the EPG and decides which one to watch. Who needs channels – if Cheers is on, does it matter where?
There’s a certain logic there, but I don’t buy into it. I think channel brands will become even more important in the next ten years, for four very different reasons.
First of all, not everybody will use the EPG’s, either because they don’t like the technology or because they just love surfing the channels.
(The Schedule research which we have been conducting for almost two years now shows a significant minority of cable and satellite viewers who enjoy the randomness of surfing the channels. But you can’t surf 80-odd channels – you will only surf the ones you think there is a good chance of finding something that appeals to you. Which is where channel branding comes in)
Even those people who do use the EPG are likely to use the channel brand as a kind of ‘quality guarantee’ – certainly for those programmes which they have never heard of before. And, let’s face it, there will be more and more of those programmes in the future.
But they may not even want that much choice in the first place. All the research we do shows that viewers have reached saturation point in terms of the choices available to them. Although the EPG’s will make more sense of these choices, just imagine if you sat down and decided to watch your sitcom on Tuesday night. And let’s say 25 of them come up on the screen. Would you really want to choose between 25 programmes of the same genre? Probably not. But the EPG will be extremely flexible. Its editing facility will allow people to scrub some channels from the selection process, to make choice simpler. And what is likely to determine which channels stay on or come off? Channel branding of course.
But the main reason why channel branding will become even more important is tiering. At the moment, most channels are available as part of a large ‘extended basic’ package but in future it is going to be much more flexible, with subscribers being allowed to choose their ideal package of channels from different tiers offered by the distributor – either BSkyB or the cable operators. How can a channel expect to get selected in the first place, unless they are strongly branded and subscribers see something there that they want?
In a way, there is a strong parallel here with consumer branding in a digital, highly interactive environment. With transactional television, consumers will be able to compare prices and buy the product they want, with all the choices displayed before them. But consumer branding is going to become more important in this environment, not less. When you have almost limitless competition and the consumer is buying remotely, the seal of quality or trust is vital to that purchase decision.
All of which strongly suggests that channel branding is going to be crucial in the digital future. Which is good news for the planned launch of the BBC’s subscription channels in time for the start of digital. After all, what better branding platform could you wish for?
CONCLUSIONS
I’m sorry if this has been a bit of a ramble, but there is so little known about digital television and yet so much to say about it. The opportunities are endless, but so are the potential pitfalls.
What I can say with some confidence is this – things will never be quite the same again but neither will they change completely.
It’s up to us, the programmers, to provide programming which makes most use of the potential offered by digital TV, but doesn’t forget why it is that people watch television in the first place.
Digital television will change many things. How people access programmes and channels. How viewing becomes more selective and the viewing experience is enhanced. How the television set becomes a form of communication with the outside world, rather than simply a receiver of images from it. How advertising works in an environment where communications and the purchase process are inextricably linked.
It’s hard to imagine all of this in an analogue world. But we have to. Otherwise we won’t be part of the digital one.