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Tuesday, July 21, 2009

TV or not TV...

This is an article I wrote which has been published in the latest issue of Film Ireland.

One thing is for certain. The television is going nowhere any time soon. As a screen to watch stories unfold – be they live action or animated in form – the television is and will remain the hearth of the home. However, how we interact with that screen and how we receive content over it is changing at a rapid pace. In order to understand these changes, there are three key areas that we need to look at: 1) The technology now underpinning television 2) the audience watching it and 3) the business models funding it.

Firstly, understanding the change in technology is perhaps the most crucial aspect. Many in the broadcasting sector have mistakenly viewed the evolution towards digital as simply a switchover from the analogue signal to a digital one (with the EU pressuring nation states to facilitate the switch-over by 2012). However, this belies the underlying reality of the situation. The technology platform – which was once the humble cathode ray tube television set – is rapidly becoming a much more complicated piece of kit. Now it is a flat, high definition screen with the ability to receive a digital signal, either through a built in tuner or with the help of a set-top box or games console. Added to this are increasingly new functions such as personal video recording capability (PVR), USB ports to attach peripherals and more importantly, broadband connectivity. Quite simply, the television is no longer a television in the strictest sense. It is a broadband-enabled computer with a lovely wide screen. Picking up a digitally broadcasted television signal is just one of the many functions it can do much like the way voice communication is now just one of the many functions on a mobile phone.

The second significant change is the audience profile. In an IBM report - entitled, tellingly, “The End of Television As We Know It” (2006)- they divided the new audiences into three unsubtle but distinct categories: the Massive Passives, the Gadgetiers and the Kool Kids. If you find yourself being drawn to the television to watch the news when you hear the Angelus bells, you are most likely among the “Massive Passive” audience (age 35 years and up). This is the generation who grew up with the television screen and the accompanying broadcasting schedule as the centrepiece of their living room and evening entertainment.

The Gadgetiers (age 25 – 34 years) are those digital natives who have grown up with email and internet access as a central feature in their lives and have a much more “lean forward’, interactive relationship with the screens that they view content over. The Kool Kids (25 and below) are a younger, more technologically sophisticated audience capable of multi-tasking across a series of screens – mobile phone, notebook and television. In fact , they differentiate very little between screens, seeing them merely as windows for consumption the consumption of content. This is either through ‘grazing” (digesting 3-5 minutes worth of content at a time) or “feasting” where they schedule large swathes of downloaded content for themselves.

IBM points out – and this is verified again by PriceWaterHouse Cooper’s latest Global Entertainment and Media Outlook 2008 -2012 report - that there is a distinct “generational chasm” opening between the digital migrants (or Massive Passives) and the Digital Natives. Those working in the entertainment business for the next five to seven years will need to cater for the more conservative tastes of the latter audience (business as usual) while still providing for the increasing demands and more progressive tastes of the Gadgetiers and Kool Kids.

Finally, the most challenging change is in regards to the business model underpinning content creation. The increasing fragmentation of the television audience through digital channels, reduced audience shares and aggressive competition for eyeballs from other devices such as games consoles and internet-enabled devices has meant that the traditional sources of funding for content creation are under huge pressure. Added to that is the movement of advertising spend away from traditional platforms such as television, radio and print to the markedly more measurable internet platform. This is all having and will continue to have a devastating effect on budgets for independent content creators. However, the “silver lining“ perhaps is that it has never been so easy to connect with an audience thanks to the increasingly ubiquitous distribution platform of the internet. (661 million broadband enabled households by 2012, according to PWC). While a viable and sustainable revenue model is still to emerge, logic would dictate that content creators and advertisers should be able to find a happy middle ground to continue entertaining their respective audiences, potentially at the expense of the increasingly redundant middle-men i.e. the broadcasters.

In terms of Ireland’s position in all of this, we traditionally have had quite an inward-looking unimpressive broadcast sector. With the exception of animation, our film and television content rarely travels which is disappointing considering we are an English-language speaking territory. However, as a country where we have excelled is in the area of financial services, technology and software. In a recent article for Enterprise Ireland’s Technology Ireland magazine, I argued that we could conceivably take advantage of the opportunity that is emerging in terms of the convergence of media and the new demands that it is having on the old traditional media structures. The same opportunity existed in the 1980’s in regards to financial services and the Irish government was canny enough to facilitate the establishment of an International Financial Services Centre. The opportunity for an International Content Services Centre is ripe – a clearing house and legal services hub for global content – the new currency of the 21st century. This could be the middle ground between content creators and their audience, facilitating the transactions and rights clearances necessary to cater for the increasing global demand for content. It is a big idea. But then again so was the IFSC.

posted by Neil Leyden @ 4:34 p.m.


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