Broadcasting the internet
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Conclusions: broadcasters can play an important role in Convergence 3.0 PowerPoint PPT Presentation

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.

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Conclusions: broadcasters can play an important role in Convergence 3.0

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Conclusions broadcasters can play an important role in convergence 3 0

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


Broadcasters approach to the internet three phases

Broadcasters’ approach to the internet: three phases

Stage

Broadcasters’ use of the internet

Phase 1: Incremental

A minor supplement to the things they were already doing

Phase 2: Strategic

Creating 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


Broadcasting the internet

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


Quality content still hugely important

1

2

3

8

12

18

YouTube channel rank

2059

3747

191

26

820

286

No. of videos uploaded

117

87

60

45

31

24

CBS

Universal

NBC

RCA

Warner

NBA

Music

Records

Quality content still hugely important

  • Consumers clearly value professionally produced quality content

No. of views up to June 2007 (millions)‏

Source: YouTube


Securing trust and confidence online traditional broadcasters are well placed to help

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”

TV

Newspapers

Magazines

Internet

Rank of the internet

News

91%

63%

10%

16%

3

Business News

40%

36%

8%

13%

3

Sports News

62%

42%

6%

11%

3

Source: Forrester, Q2 2006


High speed broadband infrastructure will require significant investment

High-speed broadband infrastructure will require significant investment

Proposed broadband infrastructure investment by country

2007

2006

2007

2008

2010

2008

2010

Target year

95%

80%

75%

62%

50%

46%

28%

BelgacomBelgium

DTGermany

SBCUSA

VerizonUSA

KT

Korea

HKBNHong Kong

NTTJapan

Target homes (millions)‏

11

2

16

20

12

1.8

47

Investment planned

€3bn

€300m

€3.4bn

€6.7bn-€8bn

n/a

€100m

€37bn

Technology

FTTN

FTTN

FTTN

FTTH

FTTH

FTTH

FTTH

Source: Capgemini


Promoting consumer and citizen welfare

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


Aims of the report

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


The traditional broadcasting model differs considerably from the online world

The traditional broadcasting model differs considerably from the online world

Broadcasting

Online

One-to-many

Many-to-many

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


But the internet has already offered significant scope for an extension of broadcaster activity

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


Broadcasters use of the internet can be described in three phases

Broadcasters’ use of the internet can be described in three phases

Stage

Broadcasters’ use of the internet

Phase 1: Incremental

A minor supplement to the things they were already doing

Phase 2: Strategic

Creating 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


Broadcasting the internet

So far, broadcasters have had a positive effect on internet development, although the scale is hard to quantify

  • 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

The importance of information and entertainment in driving internet take-up suggests broadcaster influence has not been trivial


Broadcasting the internet

In many countries broadcasters are already leveraging their brands to build significant online presences

The most popular European broadcaster internet sites ordered by country ranking

Internet property

Country

Ranking among top 100 web properties

% Reach (Jun '06)‏

% Reach (Jun '07)‏

Increase of reach (%)‏

BBC Sites

UK

5

55.3

59.6

4.3

DR.DK

Denmark

7

36.8

33.2

-3.6

Publieke Omroep

Netherlands

7

33.0

33.4

0.4

MTV3.FI

Finland

7

45.5

35.3

-10.2

YLE.FI

Finland

8

30.9

30.9

0.0

TV2 Danmark

Denmark

8

32.0

31.4

0.6

V2 Sites

Norway

9

n/a

33.6

n/a

ORF.AT

Austria

10

22.2

22.0

-0.2

VRT Sites

Belgium

11

18.9

19.4

0.5

NRK.No

Norway

13

27.0

28.4

1.4

Groupe TF1

France

16

19.4

23.8

4.4

SRG SSR idée Suisse

Switzerland

19

15.9

17.3

1.4

Sveriges Television

Sweden

19

20.2

18.6

-1.6

Source: EBU


And in many countries broadcasters are developing increasingly sophisticated online offerings

And in many countries, broadcasters are developing increasingly sophisticated online offerings

Country

Broadcaster

Video streaming

On demand video downloads

Podcasts

Mobiles

RSS

Communities & forums

User-generated content

Business Model

UK

BBC

Yes throughout

IPlayer – BBC programming only, 7 days after airing

Yes, large radio section

Yes through-out

Yes throughout

Yes for most sections

Yes

Free, licence fee supported

ITV

Yes throughout – although clips only

On demand for 30 days after airing

Yes, minimal

Yes

Yes

Yes

Yes on ITV Local

Advertising

Channel 4

Yes throughout – although clips only

4OD – variable availability

Yes, radio section & T4

Yes

Yes

Yes for most sections

Yes

Advertising

US

NBC

Yes, including full-length episodes

Yes, from MSNBC

Yes

Yes, from MSNBC

Yes

Yes, through video uploads

Advertising

ABC

Yes

Yes

Yes

Yes

Yes

Yes

Advertising

CBS

Yes, including full-length episodes

Yes

Yes

Yes

Yes

Yes

Advertising

Italy

RAI

Yes

Yes

Yes

Yes, news and other ‘web channels’

Yes

Advertising

Netherlands

NED 1(part of NPO)‏

Yes

Yes

Yes

Yes

Yes

Free, licence fee supported

Sweden

SVT

Yes, including full length episodes

Yes

Yes

Yes

Yes

Free, licence fee supported

Brazil

Rede Globo

Yes

Yes

Yes

Yes

Yes

Yes

Yes

Advertising

Japan

NHK

Yes

Yes

Yes

Yes

Advertising

Source: Broadcaster sites and Human Capital analysis


Information and communication are the key drivers or internet take up

46%

Information

43%

28%

Communication

20%

22%

Keep up with technology

26%

20%

For the Children

20%

Owners

16%

Entertainment

Intend to get

13%

12%

Shopping/ banking/ booking

12%

Recommended by friends or family

11%

18%

Information and communication are the key drivers or internet take-up

The drivers for internet take-up

Source: Ofcom, 2006


Looking ahead we are entering a new transformative phase

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


The broadcasting value chain is being transformed

The broadcasting value chain is being transformed

The internet

Ideas

Talent &

Talent &

Talent &

Talent &

Producer

Producer

Producer

Producer

Producer

Bundler

Bundler

Bundler

Bundler

Bundler

Distributor

Distributor

Distributor

Distributor

Distributor

Devices

Devices

Devices

Devices

Gateway

Gateway

Gateway

Navigation

Navigation

Navigation

Audience

Audience

Audience

Audience

Resources

Resources

Resources

Resources

  • 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


New online services have emerged with richer content and greater functionality

New online services have emerged, with richer content and greater functionality

Site

Functionalities

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

Live and pre-recorded video broadcasting


And whilst television remains hugely popular and important there has been clear migration online

And whilst television remains hugely popular and important, there has been clear migration online

Time spent using communications services 2006

-3.6%

-2.0%

158.0%

-8.0%

58.0%

change2002-2006

250

216

200

170

150

minutes per day per person

100

50

36

6.9

3.7

0

television

radio

internet

fixed

mobile

Source: Ofcom


Both internet reach and provision of content online continues to grow at considerable rates

Millions of subscribers

Hostnames

100%

137.5

70

Annual growth (Q1 2006 to 2007)‏

125.0

60

112.5

80%

100.0

50

87.5

60%

40

75.0

62.5

Active

30

40%

50.0

20

37.5

20%

25.0

10

12.5

0

0%

0

UK

Italy

1995

1997

2005

2007

1999

2001

2003

USA

India

Spain

Brazil

South

China

Japan

Russia

Turkey

Poland

Mexico

France

Canada

Sweden

Belgium

Australia

Germany

Netherlands

Both internet ‘reach’ and provision of content online continues to grow at considerable rates

Broadband subscriptions and growth amongst top countries

Growth in the volume of hostnames and active websites

Source: Point Topic

Source: Netcraft.com


In this third phase broadcasters could if they meet the challenge have a greater role to play

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


Quality content is still hugely important both for consumers and in setting standards

1

2

3

8

12

18

YouTube channel rank

2059

3747

191

26

820

286

No. of videos uploaded

117

87

60

45

31

24

CBS

Universal

NBC

RCA

Warner

NBA

Music

Records

Quality content is still hugely important, both for consumers and in setting standards

  • Consumers clearly value professionally produced quality content

No. of views up to June 2007 (millions)‏

  • 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

Source: YouTube


Broadcasting the internet

Securing trust and confidence online is also crucial, and traditional broadcasters are well placed to help

  • 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

Question asked: “Please indicate the top three media sources you depend on for information on these topics”

TV

Newspapers

Magazines

Internet

Rank of the internet

News

91%

63%

10%

16%

3

Business News

40%

36%

8%

13%

3

Sports News

62%

42%

6%

11%

3

Source: Forrester, Q2 2006


High speed broadband infrastructure will require significant investment1

High-speed broadband infrastructure will require significant investment

Proposed broadband infrastructure investment by country

2007

2006

2007

2008

2010

2008

2010

Target year

95%

80%

75%

62%

50%

46%

28%

BelgacomBelgium

DTGermany

SBCUSA

VerizonUSA

KT

Korea

HKBNHong Kong

NTTJapan

Target homes (millions)‏

11

2

16

20

12

1.8

47

Investment planned

€3bn

€300m

€3.4bn

€6.7bn-€8bn

n/a

€100m

€37bn

Technology

FTTN

FTTN

FTTN

FTTH

FTTH

FTTH

FTTH

Source: Capgemini


Broadcasters may work with network operators to help secure this major infrastructure investment

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


There will also be important roles for policymakers in promoting consumer and citizen welfare

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


Broadcasting the internet

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


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