More platforms, more interactivity, more revenue

Brooklyn, NY: The consensus among many of the panelists at the Future TV Show North America here in February was that when it comes to the future of TV and the opportunities derived from digital advancements, the glass is half full.

Keynoter David Poltrack emphasized the positive aspects of the move to digital for traditional broadcast networks, highlighting CBS’s digital strategy that focuses on the segment of “fully connected” viewers - that growing number of households with both digital television and broadband connections.

Expanded reach

Poltrack, Chief Research Officer for CBS and President of CBS Vision, a year-old division of the network tasked with researching new technologies, chided those who fear the demise of television.

“Every time a new medium comes along in the television marketplace, the feeling is that it’s going to knock out the old and that we should be threatened by this new technology,” Poltrack said. “Instead, as content providers, we see great opportunities from this for ourselves and also for the advertisers that use our medium to communicate to their consumers.”

The behavior of this upscale and fully connected audience contradicts the notion that only young people are involved in new media viewing, Poltrack said. Access to the technology is more relevant than age; in fact, the “fully connected” viewers are now the highest consumers of the top ten network television programs.

Cross-platform viewing

Since CBS made its primetime shows available on the Internet last fall, online viewing has taken off. Poltrack said streaming has increased tenfold on a monthly basis and is continuing to grow. Not surprisingly, CBS’s top-rated shows, including “CSI” and “Survivor,” as well as ABC’s “Desperate Housewives” and “Grey’s Anatomy” and Fox’s “House” are also the top-rated programs for online viewers.

Poltrack said that downloading primetime programs is also prompting viewers to watch them on the television screen as well.

“After watching programs on the Internet, people are as likely, or more likely, to watch these shows on television,” he said. “There is no real cannibalization by the Internet of regular programming. In fact, it actually contributes to regular television viewing.”

A majority of viewers use the new platforms to catch up on their favorite shows, but Poltrack reported that more than half of the people this year who streamed television programs sampled new programming like “Jericho” and “Heroes” before they saw it on a television network. This momentum helped networks overcome the difficulty of increasing awareness and sampling for new shows and ultimately helped build the TV audience for those shows.

Most panelists supported Poltrak’s belief that advertiser-supported models will continue to be the principal revenue drivers in television, broadband, and eventually on mobile.

Poltrack believes that the current pay-for-video model for mobile content is a barrier to mobile video growth.

Rick Mandler, Vice President of Digital Media Advertising for Disney/ABC Media Networks also sees the expansion of new platforms as a complement, not a competitor, to the more traditional network models for viewing and revenue. In May 2006 ABC was the first network to launch an ad-supported Internet streaming network with a limited number of its primetime programs.

The offerings have been greatly expanded. Cast as a premium environment for the sponsor, each episode is essentially owned by the sponsor and includes billboard sponsorships with three net commercial pods in a one-hour drama.

Mandler said the ad breaks present “a rich experience,” and urged advertisers to think in interactive terms.

“If you don’t take advantage of [interactivity], you’re not maximizing the opportunity,” Mandler said. “We’re asking advertisers to create something more interesting than the 30-second spot.”

Rick Mandler, Disney/ABC

High expectations

Mandler credited the adoption of HDTV as a significant driver in flattening the erosion in network television viewing and added that network investments are paying off.

“HD is a real driver of viewing habits and to the extent that broadcast networks have been creating early entrants into HD and creating large amounts of HD programming, this leads me to believe that’s pulling viewers back into the broadcast viewing experience,” he said.

Mandler also predicts HD viewers will carry their high expectations for quality to other platforms, creating pressure for comparable viewing experiences on other platforms including broadband, mobile and handheld devices.

The user is king

Most panelists concurred with Mandler’s assertion that consumers now play a bigger role in determining availability of content.

“Last year, I would have said content is king,” Mandler said. “But I think we now have a more sophisticated view and we understand that it’s more than about creating content; it’s about creating a great consumer experience.”

Seth Murray, general manager of Search & Discovery for Comcast, crowned the user as the king who is in control of time, place and programming; the one who is looking for “what I want, when I want it, wherever I want it.”

The evolution of the medium was summed up by Chris Pizzurro, Vice President of Digital, New Media Advertising Sales and Marketing for Turner Entertainment.

“The definition of TV is changing,” Pizzurro said. “Let’s take an iPod, which was an MP3 device a year ago. When you put video on that device, it becomes a television. So I make the case that TV is actually growing to other devices. It’s because of the programming, it’s the quality, it’s the story line. It’s all those things we associate with television programming.

‘TV’ was never the box - it was the programming that was on the box. So that now that you see TV-level, quality programming going onto broadband or onto an iPod, I’ll argue that ‘television,’ - the definition - is now broadened and actually growing.”

Bob Liodice, president of the Association of National Advertisers, acknowledged that, when it comes to future revenue opportunities, many advertisers and agencies are bedazzled and confused by the new platforms and are trying to find what models best suit their needs.

He noted that improved accountability and targeting opportunities of the new platforms are particularly appealing. But perhaps the best news for content providers came with his conclusion that “video, in its totality, whether big or small screen is something that is high on the list of all marketers and advertisers. There is no way in heaven that I could ever foresee that revenue base going down across all particular platforms. I would be absolutely stunned if that were the case.”

Copyright 2007 IMAS Publishing (USA), Inc. Reprinted with permission from TV Technology, March 7, 2007.