Malcolm long associates communications + digital strategy 1 Private strategies and public policies...

malcolm long associates communications + digital strategy 1

Private strategies and public policies

What needs to change?

Network Insight forum - October 16th 2001

William Atkins malcolm long associatesTel: + 61 2 99222657 Fax: + 61 2 99299706 Email: [email protected]

www.mlongdigital.com


From now on it’s about segments

The digital, multichannel, iTV era marks a shift in the strategic orientation of media companies

Territorially-fixed ‘channels’ have been the traditional brand and marketing platforms for television BBC1, Channel 4, ABC, CBS

Their power will be challenged in the digital environment Power will be in premium content and service brands

Cross-border, cross-platform, multi-device – defined by consumer niches - CNN, ESPN, MSN, Bloomberg, MTV, Nickelodeon, Disney

Platforms will gain distribution gate-keeping power


Navigation: power of the EPG Programme listings an early driver of digital iTV

SkyDigital (UK) – 90% of subs use EPG at least weekly CanalSatellite (France)

77% subs use EPG weekly More innovative offering

– Mosaique – captures 82% of subs weekly

Usage is likely to grow Driven by better functionality and greater channel choice

Revenue benefit chiefly accrues to EPG operator… Spot and interactive advertising, EPG preferred placement

… and is most acute in hands of platform operator ‘First-screen’ advantage, familiarizes audience, sticky app


Information: second fiddle to EPG Weather, news, sports text remain key aggregators

Culture established in analogue era via Teletext and Minitel TPS (France) weather service used by 85% of subs weekly CanalSatellite used by 74% Teletext: news viewed by 63%, sport by 60% of UK households

Such ‘passive’ information services have benefits Develops ‘interactive habit’ with users Spot and interactive advertising Element of wider branded multi-platform offering

‘Get it on mobile, PC, TV etc’

Overall, revenue opportunities are modest even with customisation, but traffic can be monetized


Many routes to t-consumers BSkyB is putting emphasis back on the video stream

Channel-based selling is growing There are more than a dozen independent shopping channels on Sky – 10 of

them launched in the past year – chiefly general goods, also travel, jobs, dating

Primarily rely on call-centres to handle return path Benefits are consumer preference, speed and opportunity to up-sell

Sky shopping channels can be expected soon As platform operator it has valuable EPG advantage

This by-passes the expensive ‘pure’ iTV infrastructure For BSB, cost in set-top boxes alone has been £500m ($1.5bn) ‘Back-end dream team’ of BSkyB, Matsushita, HSBC and BT bore

huge costs before folding – and selling Open… to BSkyB There are valid uses for the click return-path – it’s just one of many


Betting is an early iTV winner Separate from Open, BSkyB developed Sky Interactive

Now Open folded into a single iTV entity – Sky Active Offers genuine push-button interactivity – harmonized with

content via the video stream Revenues for second half 2000 were £37m - £33m of

which came from Sky’s interactive betting service

Uses a small WML browser that allows viewers to watch TV sports coverage and place bets simultaneously Effectively a WAP browser on TV

Return path is telephone line connected to set-top box


DTT missed the starting gun

UK’s incubator experiment with pay-DTT is struggling ITV digital can’t match firepower of BSkyB and cable Since digital launch, new subs have favoured BSkyB 2:1 Still to reach 5% penetration – BSkyB is 30%+ ITV digital is suffering 23% churn – these subs become FTA

In Spain, Quiero is faring a little better But investors are baulking at a fresh capital round

In Sweden, MTG has pulled its five channels France, alone, is mainly free-to-air

Incumbents score two gifted digital channels


Short term, DTT will be limited Early-adopters of premium multichannel already

established on satellite and cable Cable and satellite platforms face less complex launch

issues DTT required more complex soothing of incumbent interests

Digital Terrestrial iTV squeezed by bandwidth limitations and ‘self-installation’ ‘Plug and play’ sharply reduces telephone return-path usage

‘Enhanced picture quality’ barely noticeable as a consumer issue in Europe

Best future prospect appears to be a free-to-air model – eroding early analogue switch-off


Australia’s serendipitous pause The DTT-datacasting hiatus in Australia allows

industry to reassess commercial and policy settings 1. A competitive, platform-neutral approach to

television and screen services, with regulation guided by ‘market voice’ – required to stimulate innovation

2. A warehousing of DTT spectrum for drip-feeding on to the market over the coming 10-12 years Big-bang approaches have been commercially painful Squirreling of spectrum is speculative and unproductive Allows for test-bed applications of cross-platform products

3. First step could be licences for EPG services and East Coast commercial TV channel licence


2008 Analogue switch-off

2007 New FTA licences?

Review of DTTD2005 Review of DTTB multichannelling Review of simulcast deadline

2004 Hard regional launch DTTV

2003 Review of HDTV quotas

2001 Hard launch metro DTTB, soft launch regional DTTB

2000 2010

Time to rethink review schedule

A review in 2002-03of the entire digital

screen industrywould be timely to

capture the commercialand operational

subtleties arising in a fragmented,

multi-platformenvironment


Thank You

www.mlongdigital.com

Malcolm long associates communications + digital strategy 1 Private strategies and public policies...

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