1. 2 Conclusions: broadcasters can play an important role in Convergence 3.0 Supplying high quality...
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Transcript of 1. 2 Conclusions: broadcasters can play an important role in Convergence 3.0 Supplying high quality...
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Conclusions: broadcasters can play an important role in Convergence 3.0
• Supplying high quality content which users can easily access
• Help network operators secure investment in new broadband networks
• Contributing to standards and protection for children and other vulnerable groups
3
Broadcasters’ approach to the internet: three phases
Stage Broadcasters’ use of the internet
Phase 1: IncrementalA minor supplement to the things they were already doing
Phase 2: StrategicCreating initiatives to exploit the internet as a new medium in its own right
Phase 3: Transformative
Recognition of the new opportunities provided by high capacity broadband
We are now in the early stages of the ‘transformative’ phase
4
So far, broadcasters have had a positive effect on internet development, although the scale is hard to quantify
• Promotion
• Providing rich content and shared resources
• Raising awareness and encouraging digital literacy
5
Quality content still hugely important
• Consumers clearly value professionally produced quality content
Source: YouTube
No
. o
f vi
ews
up
to
Ju
ne
2007
(m
illi
on
s) 117
87
6045
31 24
CBS UniversalMusic
NBC RCA WarnerRecords
NBA
1 2 3 8 12 18
2059 3747 191 26 820 286
YouTube channel rank
No. of videos uploaded
6
Securing trust and confidence online: traditional broadcasters are well placed to help
Question asked: “Please indicate the top three media sources you depend on for information on these topics”
Source: Forrester, Q2 2006
News
TV Newspapers Magazines InternetRank of the
internet
91% 63% 10% 16% 3
Business News 40% 36% 8% 13% 3
Sports News 62% 42% 6% 11% 3
7
High-speed broadband infrastructure will require significant investment
Proposed broadband infrastructure investment by country
Source: Capgemini
28%
46% 50%62%
75% 80%95%
Target year
Target homes
(millions)
Investment planned
Technology
11
€3bn
FTTN
2
€300m
FTTN
16
€3.4bn
FTTN
20
€6.7bn-€8bn
FTTH
12
n/a
FTTH
1.8
€100m
FTTH
47
€37bn
FTTH
2007 2006 2007 2008 2010 2008 2010
DTGermany
SBCUSA
VerizonUSA
KTKorea
HKBNHong Kong
BelgacomBelgium
NTTJapan
8
Promoting consumer and citizen welfare
• Three broad suggestions in developing policies
- Encourage competitive markets (lowering entry barriers and ensuring that consumers are sufficiently well-informed to make effective choices)
- Define and safeguard the public interest in the new convergent world (self-and co-regulation)
- Encourage broadcasters, other content owners and network operators to find ways sharing risks and rewards
10
Aims of the report
• This an independent study which examines:
- The role that broadcasters have so far played in the development of the internet;
- The challenges and opportunities ahead, as convergence progresses;
- How broadcasters and the internet can work more closely in future; and
- The key policy issues for debate.
• This presentation contains the provisional findings
11
The traditional broadcasting model differs considerably from the online world
One-to-many
Broadcasting
Many-to-many
Online
Linear Non-linear
Built narrative content Interactive and participative
Geographically constrained Global
Regulated in public interest Broadly unregulated
Zero marginal cost per user and an established
distribution infrastructure
Zero marginal cost per user but likely to require significant investment in infrastructure
However, these differences are reducing as we move towards a more converged communications world
12
But the internet has already offered significant scope for an extension of broadcaster activity
• Scale and freedom from geographical limitations
• Digitising (and monetising) the content archive
• New opportunities to deliver more specialist content in a commercially viable manner
• Increasing the richness and depth of broadcast content
• Building a stronger, more participative and more loyal audience
• Reducing costs
13
Broadcasters’ use of the internet can be described in three phases
Stage Broadcasters’ use of the internet
Phase 1: IncrementalA minor supplement to the things they were already doing
Phase 2: StrategicCreating initiatives to exploit the internet as a new medium in its own right
Phase 3: Transformative
Recognition of the new opportunities provided by high capacity broadband
We are now in the early stages of the ‘transformative’ phase – many broadcasters are now using third party platforms, such as YouTube,
to distribute their audiovisual content
14
So far, broadcasters have had a positive effect on internet development, although the scale is hard to quantify
The importance of information and entertainment in driving internet take-up suggests broadcaster influence has not been
trivial
• Promotion- Television is still, by far, the most dominant
medium – time spent consuming television is 8 times higher than time spent online
• Providing rich content and shared resources - Funding, talent, production resources, etc.
• Raising awareness and encouraging digital literacy- Particularly true for some specific demographic
groups
15
In many countries broadcasters are already leveraging their brands to build significant online presences
Source: EBU
The most popular European broadcaster internet sites ordered by country ranking
Internet property Country
Ranking among top
100 web properties
BBC Sites UK 5
DR.DK Denmark 7
Publieke Omroep Netherlands 7
MTV3.FI Finland 7
YLE.FI Finland 8
TV2 Danmark Denmark 8
V2 Sites Norway 9
ORF.AT Austria 10
VRT Sites Belgium 11
NRK.No Norway 13
Groupe TF1 France 16
SRG SSR idée Suisse Switzerland 19
Sveriges Television Sweden 19
% Reach (Jun '06)
% Reach (Jun '07)
Increase of reach (%)
55.3 59.6 4.3
36.8 33.2 -3.6
33.0 33.4 0.4
45.5 35.3 -10.2
30.9 30.9 0.0
32.0 31.4 0.6
n/a 33.6 n/a
22.2 22.0 -0.2
18.9 19.4 0.5
27.0 28.4 1.4
19.4 23.8 4.4
15.9 17.3 1.4
20.2 18.6 -1.6
16
And in many countries, broadcasters are developing increasingly sophisticated online offerings
Source: Broadcaster sites and Human Capital analysis
AdvertisingYes on ITV
LocalYesYesYesYes, minimal
On demand for 30 days after
airing
Yes throughout – although clips onlyITV
AdvertisingYesYes for most
sectionsYesYes
Yes, radio section & T4
4OD – variable availability
Yes throughout – although clips onlyChannel 4
AdvertisingYesYesYesYesNHKJapan
AdvertisingYesYesYesYesYesYesYesRede GloboBrazil
Free, licence fee
supportedYesYesYesYes
Yes, including full length episodesSVTSweden
Free, licence fee
supportedYesYesYesYesYes
NED 1(part of NPO)
Netherlands
AdvertisingYesYes, news and
other ‘web channels’
YesYesYesRAIItaly
AdvertisingYesYesYesYesYesYes, including full-
length episodesCBS
AdvertisingYesYesYesYesYesYesABC
AdvertisingYes, through
video uploadsYes
Yes, from MSNBC
YesYes, from MSNBC
Yes, including full-length episodesNBC
US
Free, licence fee
supportedYes
Yes for most sections
Yes throughout
Yes through-
out
Yes, large radio section
IPlayer – BBC programming only, 7 days after airing
Yes throughoutBBC
UK
Business Model
User-generated
content
Communities & forums
RSSMobilesPodcastsOn demand
video downloads
Video streamingBroadcasterCountry
17
Information and communication are the key drivers or internet take-up
The drivers for internet take-up
Source: Ofcom, 2006
18%11%
12%12%
13%16%
20%20%
26%22%
20%28%
43%46%
Recommended by friends or family
Shopping/ banking/ booking
Entertainment
For the Children
Keep up with technology
Communication
Information
Owners
Intend to get
18
Looking ahead, we are entering a new “transformative” phase
• High capacity broadband makes possible the delivery of high quality long-form audiovisual content
• Web 2.0- Changing user/content relationships- Increasing democratisation- The increasing importance of search and
content navigation
• New business models- Content provision- Paying for the infrastructure
19
The broadcasting value chain is being transformed
DistributorBundlerProducerTalent & Resources
Devices AudienceNavigationGatewayDistributorBundlerProducerTalent & Resources
Devices AudienceNavigationGatewayDistributorBundlerProducerTalent & Resources
Devices AudienceDistributorBundlerProducerTalent & Resources
Devices AudienceNavigationGatewayDistributorBundlerProducer The internet
• The content value chain, previously controlled by a small number of broadcasters, has been opened up to anyone with an internet connection and an idea
• In an online world, equipped with powerful search tools and user recommendations, bundling is arguably much less important
• Distribution, navigation and consumption are all made possible through the internet
Ideas
20
New online services have emerged, with richer content and greater functionality
Live and pre-recorded video broadcasting
User-created blogs, including text, pictures and hyperlinks
User-created ‘encyclopaedia’
Photo sharing
Social networking, allowing uploaded music, text and pictures
Video sharing
Live and pre-recorded video broadcasting allowing captioning and insertion of pre-recorded video packages
Live and pre-recorded video broadcasting
Site Functionalities
21
And whilst television remains hugely popular and important, there has been clear migration online
Source: Ofcom
216
170
36
6.9 3.70
50
100
150
200
250
television radio internet fixed mobile
min
ute
s p
er d
ay p
er p
erso
n
Time spent using communications services 2006
-3.6% -2.0% 158.0% -8.0% 58.0%change2002-2006
22
Both internet ‘reach’ and provision of content online continues to grow at considerable rates
Broadband subscriptions and growth amongst top countries
Source: Netcraft.com
Net
he
rlan
ds 0%
20%
40%
60%
80%
100%
US
AC
hin
aJa
pan
Ger
ma
ny
Fra
nce
So
uth UK
Ital
yC
ana
da
Sp
ain
Bra
zil
Au
stra
lia
Mex
ico
Tu
rkey
Ru
ssia
Po
lan
dB
elg
ium
Sw
ed
enIn
dia
0
10
20
30
40
50
60
70Millions of subscribers
Annual growth (Q1 2006 to 2007)
Source: Point Topic
Growth in the volume of hostnames and active websites
199
5
199
7
199
9
200
1
200
3
200
5
200
7
12.525.037.550.062.575.087.5
100.0112.5125.0137.5
0
Active
Hostnames
23
In this third phase, broadcasters could, if they meet the challenge, have a greater role to play
Broadcasters can help drive further internet development by:
• Supplying high quality content which users can easily access
- Creating clear expectations for users about the nature and reliability of available content;
- Providing the vital roles of aggregator and navigator;
- Helping later adopters to make sense of the internet.
• Helping the internet to adjust to a world in which it will have to pay more attention to citizens’ concerns about standards and protection for children and other vulnerable groups.
• Help network operators secure investment in new broadband networks
24
Quality content is still hugely important, both for consumers and in setting standards
• Consumers clearly value professionally produced quality content
Source: YouTube
No
. o
f vi
ews
up
to
Ju
ne
2007
(m
illi
on
s) 117
87
6045
31 24
CBS UniversalMusic
NBC RCA WarnerRecords
NBA
1 2 3 8 12 18
2059 3747 191 26 820 286
YouTube channel rank
No. of videos uploaded
• The economics of programme production still suggest that a high production value programme needs mass audience exposure on a broadcast channel to ensure a return on its upfront investment
• Although it is possible to create content specifically for the internet, the promotional and marketing costs will be prohibitive in most cases
25
Securing trust and confidence online is also crucial, and traditional broadcasters are well placed to help
Question asked: “Please indicate the top three media sources you depend on for information on these topics”
Source: Forrester, Q2 2006
• A GlobeScan survey revealed that the most trusted global news brands tested include the BBC (with 48% across the 10 countries saying they have a lot or some trust) and CNN (44%)
• Consumers, particularly for news and factual content, clearly place most reliance on traditional broadcaster sources
News
TV Newspapers Magazines InternetRank of the
internet
91% 63% 10% 16% 3
Business News 40% 36% 8% 13% 3
Sports News 62% 42% 6% 11% 3
26
High-speed broadband infrastructure will require significant investment
Proposed broadband infrastructure investment by country
Source: Capgemini
28%
46% 50%62%
75% 80%95%
Target year
Target homes
(millions)
Investment planned
Technology
11
€3bn
FTTN
2
€300m
FTTN
16
€3.4bn
FTTN
20
€6.7bn-€8bn
FTTH
12
n/a
FTTH
1.8
€100m
FTTH
47
€37bn
FTTH
2007 2006 2007 2008 2010 2008 2010
DTGermany
SBCUSA
VerizonUSA
KTKorea
HKBNHong Kong
BelgacomBelgium
NTTJapan
27
Broadcasters may work with network operators to help secure this major infrastructure investment
• Enders Analysis estimate that the total cost of
deploying fibre to the home (FTTH) to 90% of UK
households would be €14bn
• Network operators may have to shoulder the burden of
investment, but are not certain of the returns
• Broadcasters may be able to help by agreeing
innovative deals with networks, to share risk and
rewards
28
There will also be important roles for policymakers in promoting consumer and citizen welfare
• Over regulation will stifle growth and innovation; under regulation risks a wild-west-style ‘free for all’
• We assert three broad suggestions in developing policies
- Encourage competitive markets by lowering entry barriers and ensuring that consumers are sufficiently well-informed to make effective choices
- Define and safeguard the public interest in the new convergent world drawing on aspects of self-and co-regulation, rather than transferring old style broadcasting regulation to the broadband world
- Encourage broadcasters, other content owners and network operators to find ways sharing risks and rewards
29
As a result, we argue that there clear consumer and citizen benefits from a symbiotic broadcaster/internet relationship
• There have already been some impressive success stories as broadcasters begin to recognise the opportunities of the internet
• As we move into a more converged media and communications world, the future development of broadcasting and the internet will be increasingly closely linked
• Broadcasters and leading internet players depend on, and will benefit from, working closely with each other