We’re still watching it, but everything else has changed – Richard Callanan
Is this the future of television of which Eamon de Valera expressed himself ‘somewhat afraid’ during his live inaugural address on the first night of broadcast by Teilifís Éireann in 1961? Probably not, the fear currently felt by the operators of conventional broadcast TV has little to do with ‘Communications imperialism’ or ‘Americanisation’ or even the threat posed to ‘Sound radio’ and ‘Living theatre.’
Faster broadband and better compression are in the process of making dithering pixellated live online delivery of TV programming a thing of the past. These and other developments are already giving us online delivery of audio-visual content which is indistinguishable from that delivered by cable or satellite. What this means for the TV industry’s traditional standard-bearers and their role is currently the subject of much fevered debate.
Convergence – meaning TV and internet sectors becoming parts of a single bigger beast – has been a central tenet of the conventional wisdom in both industries for some time. But more recently the digital cash-rich new kids on the block have started to flex their muscles. In one incidence, by generating premium content and taking it directly to the consumer they managed for the first time to cut the broadcast networks completely out of the loop.
The increasingly blurred distinction between the delivery systems is going to give rise to more so-called cord- cutters who abandon their subscriptions
House of Cards is a drama series in which Kevin Spacey plays an unscrupulous Washington political insider. But what has grabbed the headlines is less the medieval machinations of its characters than the fact that the one-hundred-thousand-dollar production was entirely financed by and released exclusively on its own platform by online video rental giant, Netflix.
So until very recently all the players in the industry knew who the competition were and roughly where each of them came in the pecking order. The major networks were undisputed kings of television with a stranglehold over distribution through conventional broadcasting channels and an unassailable position in content generation. Today new players with digitally deep pockets are shaking up an industry which was already struggling with how to meet the challenge of new content delivery platforms, dwindling advertising performance and massively changing consumer habits.
These changes have cast all sectors of the industry into uncharted waters. Cinema, Gaming, 3D, HD, Ultra HD, Laser, Smart, Multi-screen are just some of technical advancements currently being pitched or touted for the near future to a globally declining market for televisions by manufacturers.
Also with the industry in such a state of flux it was inevitable that some manufacturers would seek to hedge their bets. So Panasonic introduced their ‘Smart’ TVs which can download third-party apps in an attempt to allay customer fears about an expensive gizmo being rendered obsolete by content-delivery developments. Similarly, Samsung developed their ‘Evolution Kit’ which is envisaged as being an upgrading kit for your TV.
Rumours abound about Apple launching an iTV. Analysts are of one mind that if such a product is launched it will need to be much more than a beautifully-designed piece of kit for receiving TV programmes. The kind of returns Apple expects from new product launches will not be available for just another TV if Sony’s recent balance sheets are any indication. So much was made of recently-revealed high-level talks between senior people at Apple and their counterparts in the cable companies but nobody has said whether Apple are looking at more than the content tie-ins with the likes of Netflix, Amazon and Hulu which the four million buyers of the Apple TV device currently enjoy. But with so many big beasts already at that this watering hole it is very unlikely that Apple will – even with their robust negotiating tactics – manage to achieve anything like the kind of market dominant position they managed to establish for themselves in the music industry with itunes.
But the real battleground has moved on from the competing technologies of the televisions themselves. With the abandonment of 3D, the physical technology has for the moment almost certainly reached a plateau. Apart from anything else it is now a struggle to find enough content of sufficiently high production quality that it does not visibly creak when viewed on an ultra HD 110 inch screen from across the width of a suburban living room.
With the abandonment of 3D, the physical technology has for the moment almost certainly reached a plateau
Web-connected smart TVs are now commonplace offering access to streaming services like Netflix or Hulu, web browsing, video chat, downloadable apps and games. But the real challenge is the creation of a seamless interface to help viewers find what they want to watch, when they want to watch it. It is arguable that during this period of rapid transition that there is no one size fits all solution.
The high-performance digitally connected end of the market while growing rapidly is still dwarfed by the traditional traditional TV consumer. According to TAM Ireland 91% of the average twenty-five hours per week of TV watched by Irish viewers is live – that is watched as broadcast on the schedule. The balance of just 9% is either via personal video recording(PVR) devices or on connected devices via online players.
So according to TAM the outlook is bountiful for our conventional TV broadcasters with the amount of TV being watched by Irish viewers increasing by an average of eight minutes per day between 2010 and 2012. But valid questions are being asked elsewhere about the Nielsen Television Audience Measurement system which measures 40% of the world’s TV viewing behaviour across five continents and has been providing the ratings measurement service in Ireland since 1996.
Nielsen ratings are based on a sampling method developed in the 1950s which relies in Ireland on monitoring the TV viewing habits of 1,050 households with a device called the people meter installed in each home on the viewing panel. Each people meter is connected by telephone and is auto-dialled by Nielsen central each morning to access the record of the previous evening’s viewing. But it is not just that the people meter sounds like a dated sci-fi piece of kit. In the US Nielsen’s recent decision to add 160 homes to the 22,000 Nielsen TV monitored households – from which to measure Internet-delivered content but not before next September has been widely derided as too little too late.
When Nielsen reported that President Barack Obama’s 2013 State of the Union address had the smallest TV audience for the annual speech since 1990, it was the Nielsen report and its lack of credibility which became the news story. Google and Facebook analytics are now providing advertisers with far more accurate and detailed feedback on campaign reach and performance than can be gleaned from the audience figures generated by the Nielsen sampling method.
But Nielsen is fighting back with tie-ins with twitter to get a measure of social network activity surrounding a programme and the purchase of a company called SocialGuide which professes to analyse “the social impact of linear television”. We will see by the end of their current Irish contract in 2017 whether TAM Nielsen can rediscover the kind of market-relevance and credibility which will take them back from the brink of extinction.
There is one issue about which Nielsen is absolutely correct – our love of TV is as strong as it ever has been. In Ireland we are watching almost four hours of it a day. But every aspect of how we are watching it is changing.
As we watch TV over half of us are now also using a laptop, smart phone or other connected device to engage with each other and even with the programme makers. A full 40 percent of Twitter’s traffic during peak usage is about television. The 19-49 demographic ratings for a show more than doubles when viewership during the week following the show’s scheduled broadcast are included. We are increasingly choosing not just what to watch but where and when to watch it with little regard to to broadcast schedules.
It’s also where we get our TV. Cable TV and the internet are already travelling over the same pipes. The increasingly blurred distinction between the delivery systems is going to give rise to more so-called cord- cutters who abandon their subscriptions to cable or satellite to access TV directly and exclusively over the internet.
With the advent of fully-functioning online delivery of TV the regulatory walls built by national broadcasting legislators are no longer an effective bar to new entrants into the TV business. Similarly, national broadcast regulatory authorities such as our own Comreg are going to become increasingly irrelevant sideshows.
With BBC television centre about to become a hotel and apartment complex and our own Montrose increasingly taking on the appearance of a semi-abandoned car-park it can safely be said that all the comfortable old certainties of the television industry are well and truly gone. But change will come slowly.
The half a million people who watch the Late Late Show live on the TV in the corner of their living room at half nine every Friday night are not going anywhere in a hurry but they are indisputably a dying breed.
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