The future of TV Content by Ned Wiley, Managing Director, Axel Springer Digital TV Guide

Jan. 4, 2012 - PRLog -- DCM: What is the biggest challenge for content owners right now?

NW: The top priority for everybody is making sure that you’re continuing to get monetised in distribution systems that are becoming increasingly open. In the past, taking the example of the music industry, it was a very closed system. Closed doesn’t necessarily mean bad, it’s just that’s the way the value creation chain worked. The labels owned the rights to the creative content and published it exclusively on physical media – the consumers had to go out and buy an album and had very little choice over how they were able to consume content.
All of that changed forever with technological developments. The arrival of Napster and services like that resulted in the complete opening of the system through piracy. Over the years there’s been gradually some claw-back of control, but considerably less than the situation 10 years ago. But at least the content owners have re-acquired the ability to control and monetise some of that content.
As technology permits the opening up of historically closed value chains and distribution systems, the biggest challenge to content owners is how can they retain at least some control over the ability to monetise that content?

DCM: What’s the top priority for you at the moment?

NW: We’re in a slightly different area. We’re in content discovery, and particularly video content discovery. We can’t do anything unless we have the technologies in place to help people discover content. I think we have made enormous steps in that direction together with our partners at Philips Technology, who have developed breakthrough self-learning, artificial intelligence - based personalized content recommendation systems at their APRICO Solutions operation. The other part of that puzzle which we’ve just completed and are in the process of deploying is being able to implement that across systems that respect the way that people are now consuming digital content.
Now that’s changing a lot: the previous models like personal video recorders, Sky+, and TiVo were embedded or client-based deployments of these technologies. That’s changed for two primary reasons. Firstly the desire that people have not to have everything concentrated on a specific device, but rather to have it on a much less expensive device and access to a full range of content on a truly on-demand basis. The technology has moved on to permit streaming of content, and broadband penetration is up a lot. Connection to the internet on the main video consumption device, which is the television set, is increasing. Connected devices are increasing because of the number of people who are acquiring those devices.
The direction is very clear. Sooner or later, people are going to have access to any kind of video content that they want, at any time they want and on any device they want. This whole issue of multi-screen video consumption is something that didn’t exist 3 years ago, the tablet didn’t exist 3 years ago, so that means those are all challenges and we’re working to provide the content discovery experience across a range of devices and in a way which permits distribution through cloud technology.

DCM: Who do you think will have the biggest impact on digital development over the next 2 years?

NW: I can’t say who it’s going to be but I can say what it is that they’re going to have to do. They’re going to have to provide a wonderful consumer entertainment experience which permits those viewers to have access to the kind of content that they want, and even the kind of content that they don’t know they want yet, but that they will like, in an environment that will be consistent with this notion of being able to consume anywhere, anytime, in any environment. You’ll know you’ve hit that sweet spot when you’ve created that uniquely attractive, easy-to-use experience in a way that represents good value for money.
We all too often forget about value for money in the business. I remember hearing a presentation from a Wall Street analyst who said remember that the bottom 40% of the US population are earning on average $22,000 per household per year. So going to them with a fantastic multi-screen experience and expecting an ARPU of £125 a month is going to be the difference between two or three meals a day. If you look at the value equations which are emerging as real home runs, which are moving ahead quickly on this, look at something like Netflix.
What accounts today for 30% of total internet traffic in the US? Netflix. Not just 30% of video traffic - 30% of ALL traffic. If you look at the deal they’re offering, it’s pretty much anything you want for $5.99 a month. Who’s going to say no to that?
So the issue viewers will be facing is that now they’ve got all this stuff, how the hell do they find what they want? Part of the issue is that you don’t always know what you want. This feeling of being overwhelmed by choice will be a major problem for consumers, and helping them overcome that feeling will be a big part of what defines a truly exceptional TV experience.

DCM: What is the biggest challenge you face right now?

NW: We are inevitably required to insert ourselves into ecosystems over which we do not have complete control. That means if we look at the experience of a network operator, each of them has a set of enormously complex issues, if you look at legacy boxes, control over their own network, their own organisational issues - there are all kinds of issues related to each network operator. Then there are technology partners that get involved: everyone providing conditional access and middleware to people providing different types of devices; whether or not part of the ecosystems in hybrid or OTT systems have access to consistently reliable broadband connections.
If you’re going to provide content discovery in that context you have to be able to acquire metadata about all kinds of content: linear broadcast, non-linear OTT content, VOD libraries. All that metadata has to be flowing through the backend of the distribution channel; then you have to provide a system whereby somebody picks up a remote control or touches a screen and expects within 400 milliseconds to have a personalised recommendation. Think of all the players in that ecosystem that are involved in doing that. Mastering the ecosystem challenges to delivering that experience is our biggest challenge.

DCM: What technology or digital idea do you wish you’d come up with yourself?

NW: iTunes or Netflix. iTunes is the one that would get my vote, for sheer courage and the ultimate breadth and way it emerged entirely unexpectedly and disrupted the market and changed the rules of the game.

DCM: What are you most looking forward to at DCM Europe 2012?

NW: We’ve discussed some of the big questions and I’m looking forward to hearing from people about their ideas and how to provide that kind of experience and develop the kinds of business models which will permit the monetisation of content. We have another part to this, which is that our service is in good measure dependent on new forms of advertising - another way of monetising the value-added which we’re providing in this experience of easier content discovery. I’m interested in hearing from people who are there to talk about personalised advertising, driven by the fact that technologies now permit this.
I also like to be surprised. I love coming away thinking ‘I didn’t expect to hear anything about this’ and no matter what my expectations are I’m always pleasantly surprised by meeting somebody I didn’t expect to talk to.

Hear from Ned at DCM Europe , where he’ll be on a panel at 12.30pm on January 18.

Event website:  www.dcm-eu.com

Event dates and location:  17-19 January 2012, London

For more information, interviews and media accreditation:

Tel. +44(0)20 7370 8485
Email: info@dcm-eu.com