(Regarding the news in advanced TV from last week – Google TV – I think it could be a Big Deal and a Game Changer. Possibly, maybe. There are a lot of “devils in the details” in gaining consumer traction. Plus, gaining advertiser, network and operator traction will depend on business side issues including the Fear Of Google that has prevented Google TV Ads, in the two years since its 2008 launch, from expanding past local avail inventory on DISH (and some national avails on DISH from a handful of networks). I’ll be covering Google TV in more detail in a coming newsletter.
One thing I’m sure about Google TV, it’s generated a lot of interest. I got my two cents into Business Week today – I’m quoted in the BW article Advertisers Give Google TV a Warm Reception.)
Week before last I attended The Cable Show (aka NCTA) in LA – the glitz of the cable network side of the business with the raw excitement of the cable operators’ initiatives (maybe raw excitement is overstating it). Nonetheless, there were some interesting trends in evidence, here’s a topline look at some of them.
Mood up – Attendance (about the same?).
While NCTA has not released attendance figures for 2010 (2009 in Washington DC was about 12,000), the show floor seemed as crowded as last year. What was definitely up was the mood of the attendees. Cable networks and operators are both reporting improving financials as the economy recovers. Technology vendors seemed to be in a good mood too as the cable operators appear to actually be moving forward on various advanced TV initiatives.
This year’s Big Theme – the coming (date not specified) world of All Devices Welcome Cloud Based Cable IPTV.
CEOs and other execs from the cable operators were very eager to tell us how the cable TV plant is going to integrate with the full range of consumer purchased devices that can consume IP delivered video. And that the cable plant itself is going to go to IP based delivery and a cloud based architecture to support this plus provide more rapid services development. Comcast CEO Brian Roberts even admitted the pace of cable’s innovation has been too slow (oh really?), asserted there’s been a “pivot” in that pace and said he wants to “liberate from the box” (the operator owned set top box). Dear Cable Operators – it’s like I don’t even know you anymore.
As an optimist, I’d like to believe that cable is really speeding up the pace of innovation and I’d love to see a flexible TV plant happen. It could open up television viewing to support a wide range of new services and provide more value to cable subscribers. However, regarding cable company pronouncements of national scale deployments of advanced technologies, I’d like to quote Elvis – “A little less conversation, a little more action please.” On the list of things we’re still waiting for in mass scale – adequate program guides, interactive TV applications (EBIF and/or tru2way), addressability (aka targeting), a broad portfolio of VOD content from ad supported TV networks, VOD ad insertion, adequate VOD measurement, non-cable company device compatibility (how’s that CableCard thing going?), a 100% digital plant and a robust TV Everywhere.
(A final Google TV note, for now. Was the MSO’s NCTA 2010 embrace of All Devices Welcome Cloud Based Cable IPTV and declared acceleration in their stipulated too slow innovation driven by their knowledge of the Google TV announcement coming the next week? Just saying…)
It’s iPad Mania!
It felt like the iPad has created a Teachable Moment for media and cable C-level executives about digital technology innovation with regards to video. Over and over the iPad was cited in the general sessions. Comcast’s Brian Roberts even showed a very cool iPad demo via a video. It showed a well executed prototype iPad program guide that also functions as a remote control. Select a program and the set top box changes the channel. Even cooler… the iPad was not directly controlling the set top through the IR port. It was sending a command up through the broadband connection to the cable plant and back down to the set top (via an EBIF app on the box). (You can see a video of it here.) It also integrates with social networks to enable sharing recommendations. Innovative, well done and rapidly developed. Maybe the cable companies are changing their stripes. Maybe.
The Secret of Success in Getting Your Digital Media Product Traction With Media and Cable Companies.
Get the teenaged kids of media and cable C-level execs to use it. If I had a dollar for every time they cited their kids’ use of media on a general session panel, I would have had enough for several top-shelf drinks, which I felt like I needed after hearing that example so much. A cautionary note… teenagers living in extremely prosperous households may not necessarily be representative of all 307 million people in the United States.
Where Did Linear Addressable (aka Targeted) TV Advertising Go?
In 2008 and 2009 it got a lot of talk from CEOs on the general sessions and cable execs on the panel sessions. In 2010, it was as if it didn’t exist. But, early trials have shown it improves advertising efficiency and advertisers really want addressable TV. So what’s up? I spoke to a number of industry insiders and consensus opinion is early field trials indicated linear live addressable on today’s cable plant is just too technically challenging to be deployed in scale.
Given that advertisers really want addressable TV advertising, where is the demand likely to go? First, it may go to the satellite TV providers as they have declared they are moving forward with it. And it could go to VOD addressable, provided the operators deploy the means to do it. Finally, it will probably go to broadband video, where standard web tools make it much easier to target ads, even though it is more difficult to gain the demographic data to base the targeting upon.
A further note on addressable TV advertising – a demo of DVR-based ad insertion
I saw a very interesting demo at the NDS suite. It was a NDS/BlackArrow demonstration of DVR-based addressable advertising insertion into timeshifted or live TV viewing. (Full disclosure – I was part of the team when BlackArrow was founded and spent four years there so I’m prone to be in favor of this concept.) TV ads are stored on the DVR hard drive, selected by various demographic criteria and inserted into a program as it is viewed.
While this was technology demo and not a fully productized offering, it was running seamlessly on a Cisco Explorer DVR set top that cable operators are currently buying, providing a plausible path for rollout. DVR-based insertion seems to be a very scalable way to deploy addressable advertising. And while it is limited to households with sufficiently capable DVRs, those are likely to be households more desired by advertisers because of their demographics and they are more “at risk” for ad exposure because they have DVRs.
Fox Cable announced the first online diginet from a major cable network family that isn’t ESPN
(A diginet is a TV network without a linear TV channel shown via broadband or VOD or both – ESPN’s diginet being ESPN3.com)
It’s Speed2 – a broadband-based live streaming and on-demand network offering motorsports programming not seen on the Speed linear TV channel (namely no NASCAR and a lot of European race series not available on TV in the US). It will have a “beta” launch in June on Time Warner Cable in Charlotte, NC and then rollout in other markets and operators over the summer. It does have a TV Everywhere like aspect – you have to be getting the Speed linear channel to be authenticated to watch Speed2. Speed2 will have both SD and HD content and include some of Speed’s back library of shows on-demand.
So why is it a big deal to be the first non ESPN diginet? First, ESPN is such an outlier because their enormous carriage fee revenue stream (SNL Kagan estimated at $4.08 per subscriber in 2009) gives them the financial headroom to launch ESPN3. By comparison, Speed was estimated to get $0.20 per subscriber. And, to me, ESPN3 has seemed like an extension of ESPN rather than a new network. Admittedly, Speed2 feeling like a separate network could well be a function of my being a huge European motorsports fan and my getting excited about access to racing with acronyms few understand (like BTCC, WTCC and FIA GT1 / GT3). At any rate, I’ll be tracking the business model implications of Speed2 closely.
This is a related offering to that described in the The Diffusion Group report I co-authored with Colin Dixon (I recently started contributing to TDG as a Senior Analyst, in addition to my continuing billniemeyer.tv efforts) – The Economics of Over-the-Top Online Delivery – How Television Networks Can Shift to Online Content Delivery. Speed2 is similar to the model proposed in the report in that it will offer live streaming and on-demand online content in SD and HD, and (while not noted by Fox Cable) undoubtedly contain advertising. There’s no mention of pay per view or subscription fee based services. Time will tell if those are on the Speed2 roadmap.