IBC 2015: Netflix, new tech and silly predictions

Raymond Snoddy reports on this year’s International Broadcasting Convention – where all anyone wanted to do was talk about Netflix.

There was all the usual futuristic stuff at the enormous IBC exhibition and broadcasting conference in Amsterdam over the past few days.

More than 55,000 visitors were able to see the latest drones in action – the ones that shoot high quality live TV pictures rather than people – and the latest in immersive journalism conveyed through virtual reality.

Put a visor in front of your eyes and you are transported back to the sad days of the killing of black American teenager Trayvon Martin – a killing by a member of a neighbourhood watch that the courts found to be “self defence”.

You are transported back to the place, complete with the emergency calls, although the “immersive journalism” does not, mercifully, re-create the actual moment of the shooting.

For fans of ever better quality pictures there is more on the way. There is always more.

Even before 4K television sets have established themselves in the consumer market, 8K pictures could already be seen – in the exhibition halls of Amsterdam.

Consumer electronic companies are expected to start the work of manufacturing 8K sets in two years or so and the launch of the first 8K television channel is pencilled in for 2020.

For many broadcasters the main preoccupation at IBC was “the N word,” as in N for Netflix.

Netflix executives declined repeated invitations to attend and speak, although the N word came up in the sessions time after time.

Netflix was raised repeatedly, mainly by those who believed, or more precisely worried, that Netflix and OTT (over the top) imitators were slowly undermining traditional commercial television business models.

There was a sort of proxy representation of Netflix, at least on the creative side, by House of Cards author and Conservative peer, Lord Michael Dobbs.

Lord Dobbs fell out with the BBC over the last series of the original drama more than 20 years ago and asked for his name to be taken off the screen credits.

By way of contrast, Netflix offered complete creative freedom and guaranteed, allegedly, $100 million to complete the first two series totalling 26 episodes and included the commitment of Kevin Spacey as the American Francis Urquhart, Francis Underwood. Unsurprisingly, Dobbs agreed to go ahead with the project.

The author is off to Baltimore soon for the filming of the fourth series and promised a fifth series was on the cards.
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But what of Netflix itself? Is it the major disruptor of existing broadcasting financial models that is claimed?

It depends very much who you talk to. To some it is just a “pay library service” – second run television programmes and old movies topped up by a relatively small number of high quality originals such as House of Cards, Narcos and, this week’s announcement, Beasts of No Burden with Robert Redford and Jane Fonda. They of course get all the media attention as they are intended to do.

Bruce Tuchman, president of AMC, the Breaking Bad company, warned however that the OTT players in the industry were putting pressure on the “big bundle” subscriptions that drive profits in the US cable industry.

Netfix would have no interest in destroying cable entirely through “cord-cutting” because broadband is used to carry its service, but what if consumers opted for “skinny” bundles of channels and started to refuse to pay for the dozens of channels they hardly ever watch.

Tuchman argued that audiences are increasingly – particularly younger ones – becoming more and more choosy “and only top quality content will make it.”

From the award-garlanded Netflix House of Cards onwards, movie production standards are being imported into television drama.

There was a major behaviour change in which consumers increasingly chose what and when they wanted to watch.

It was a view echoed from the floor by a more than middle-aged delegate, who downloaded a drama series for the first time and watched it over a single weekend.

Partly to his own surprise, he liked that mode of viewing and was already looking for other drama series to download.

The obvious point is that binging viewers are simply not available to watch the pictures and the ads of the commercial broadcast networks.

At the conference Roger Lynch, chief executive of OTT start-up Sling TV, predicted that OTT services would be in 35 million homes by 2022 and that over 20 years OTT services would be in every home.

The tension over the future of viewing habits was underlined by a piece of IBM research for the fifth annual IBC Leaders’ Summit where executives confess their concerns about the future in off-the-record sessions.

The disconcerting news is that viewers in all the major European countries are increasingly demanding everything, when they want it, on all of their devices. They also want it to be cheap.

They might think that, but I couldn’t possibly comment, as Francis Urquhart put it in slightly different circumstances.

Yet according to IBM three quarters of broadcasters say they believe that non-linear broadcasting will overtake linear in terms of volume within five years. Even more controversially, a smaller majority, but still a majority, believe revenues will follow suit within the same period.

This is almost certainly nonsense. The end of linear broadcasting, and with it channels, has been vigorously forecast for at least two decades.

In 2005 the BBC said all broadcasting would be online by 2012.

These people never learn from their mistakes, other than to move the end game forward surreptitiously by five years when the occasion demands. Watch for the BBC doing it again within the next few months.

Clearly audiences are getting more demanding even if they sometimes ask for the impossible but OTT viewing so far adds up only to a small slice of overall viewing time, as does mobile.

Will Netflix inherit the earth as Amazon and Facebook appear to have done and as its share price, however volatile, appears to suggest?

In July Netflix said it had a total of 65.5 million subscribers, 42.3 million in the US and the rest abroad.

But according to one of the anonymous speakers at the IBC Leaders’ Summit, for every dollar the company makes in the US it loses a dollar overseas – largely because it has to sign up all its contracts in advance before it has any subscribers.

There are obvious problems. The more success Netflix has the more the film and TV companies will charge for their programme supply deals, and the more imitators will be attracted to the market, including those very IP owners.

Make lots more original content and the monthly subscription will have to rise, turning Netflix into just another pay-TV operation but one without its unique selling point: its low cost.

The one thing you can be sure of is that the N Word will be a point of discussion and contention at least until IBC 2016.