Broadcasters: you’re more innovative than you think
At this year’s IBC, broadcasters admitted that they were rubbish at innovation – but they’re doing themselves down argues Raymond Snoddy, who cites a whole host of reasons why they’re wrong.
Football fans like to shout across the ground at their rivals: “You’re rubbish and you know you are.” Although the word used is not always rubbish.
Sometimes fans even admit noisily their own team is rubbish, or worse.
At this year’s International Broadcasting Convention (IBC) in Amsterdam there was the rare spectacle of broadcasting executives appearing to admit that they were rubbish at innovation.
Senior executives attending the closed-door IBC Leader’s Summit were polled on who they thought were the most important innovators in the communications industry.
No less than 67 per cent thought the real innovators in the communications industry were the big new giants in the jungle – such as Google, Facebook, Amazon and Twitter.
Only five per cent of broadcasters nominated themselves as key innovators.
At a superficial level the result is almost too obvious to comment on. It is commonplace that the big American corporations, which have sprung from nowhere to become mega-billion international players through the use of either new disruptive technologies or innovative approaches to the consumer, have been brilliant innovators.
Yet broadcasters may be doing themselves down and may not be as rubbish as they think they are.
Over the past decade there has been no single disruptive technology on the scale of a Twitter bursting into the firmament but a whole series of seamless improvements that have transformed the viewing experience.
They have included ever-higher resolutions on both screens and cameras. Last year’s IBC majored on 4K ultra high definition television. This year 4K was almost old hat and the future had already moved on to 8K.
The quality of screens and picture resolution are just a small part of the modernisation of every aspect of the television experience from the introduction of smart TVs to the importation of movie production values to drama series such as Breaking Bad, and innovative methods of storytelling.
We also now take for granted that the latest news and pictures can be instantly dispatched from almost anywhere on earth and even from Mars.
The cloud threatens to transform television production methods even further, including the insertion of ads in real time into the live television stream.
The march of IPTV – the transmission of live programming via the Internet rather than conventional broadcasting – has already begun.
Research for the Leader’s Summit by Deloitte demonstrated that the continuous stream of relatively small, evolutionary, individual innovations in the broadcasting industry have all added up to a remarkable outcome.
Despite an enormous increase in competition for viewers’ time, not least from gaming over the past decade, average daily viewing hours have risen in Europe from three and a half hours to just under four hours.
At the same time television advertising has increased from $34.7 billion in Europe in 2004 to $38.9 billion between in 2013.
Yet there was no sign of complacency and across the sessions at IBC and the CTAM cable conference in Copenhagen a few days later, there was a clear understanding of the need for continuous innovation – and not just in technology.
At IBC one senior British broadcaster warned that innovation must not be kept in a ghetto but should spread throughout the company “from the cleaner to the chief executive.”
In Amsterdam, David Abraham, the Channel 4 chief executive, announced the latest innovation from a broadcaster which has had a very respectable record of embracing the new since its inception.
From next year Channel 4 will roll out All 4, an integrated home for all its digital content. “Now” is where viewers will be able to watch all of Channel 4’s suite of broadcast channels while “On Demand” will pull together all of the broadcaster’s on-demand video content.
“We don’t think the future is about the decline of linear and the rise of on-demand. We think it about being very creative and visual about how to blend the two and use the strengths of both,” Abraham insisted.
Yet there were two potentially disruptive television technologies on offer at both Amsterdam and Copenhagen – IPTV and SVOD – subscription video-on-demand being offered by the likes of Netflix and Hulu.
Naturally, Charlie Vogt, chief executive of Imagine Technologies, a company that develops innovative software for IPTV, argued it’s only a matter of time before broadcast television is dead and everything moves to the internet.
Pressed, he predicted this would start to happen in two years – only to be told by a Finnish broadcaster that in Finland, a highly cabled country, it was happening already.
While everyone was prepared to accept the concept of IPTV inevitably winning, most thought eventually it would take a very long time – another case of evolutionary innovation.
As for SVOD, the best known of the over-the-top service operators, Netflix already has 50 million subscribers in 40 countries.
With Netflix launching in no less than six new European countries this month alone, including Germany, Switzerland and Belgium, it could be heading towards 100 million subscribers worldwide before long.
Surely this amounts to a disruptive communication technology – finding a new low-cost way to address the market to the detriment of incumbents?
The evidence so far suggests that Netflix is a supplemental service that cable or satellite subscribers add to their existing packages, rather than a replacement for them.
Deloitte estimates that by the end of this year 50 million homes globally, 10 per cent of them in Europe, will subscribe to conventional pay TV offerings plus at least one SVOD service.
And according to Nielsen research SVOD accounted for only a small proportion of viewing among the top 20 per cent of Americans who use online streaming to get programmes – 22 minutes a day compared with 242 minutes spent watching live TV.
While Netflix founder Reed Hastings explained in Copenhagen his ultimate ambition to ring the globe with his service, it was not a straightforward process.
In each country the break-even target date was between three and five years because the company first had to pay for programme rights before it had any subscribers.
Overall, there can be little doubt that broadcasters are far from rubbish at innovation.
Newspapers have faced even greater threats to their business model than television, and it is far from clear that there has been such a continuous and comprehensive stream of innovation from newspaper executives.
Innovation, or the lack of it, is just one of the issues to be addressed at MediaTel’s seminar on the future of national newspapers on Monday.