The Australasian IPTV Conference took place in Sydney on October 22-23. It was attended by CSB’s Research Officer, Allan Cameron.
The conference gathered together a number of leading figures and interested parties from the entertainment and telecommunications sectors. It focussed on the challenges faced by these sectors in attempting to establish IPTV in Australia and New Zealand.
Firstly, a definition. IPTV (or Internet Protocol Television) refers to high quality video content delivered to consumers via an internet connection. This is often understood to involve a set-top box streaming content directly to a TV. It may include a Video on Demand service, through which consumers can choose what they want to watch, and when. The term is also often applied to proprietary online content delivery platforms such as Joost. It does not apply, however, to open delivery vehicles such as YouTube.
Secondly, a qualification. IPTV still faces a number of hurdles. There are immense technical challenges. Copyright holders (such as the movie studios) still tend to favour ‘packaged’ media and are grappling with the difficulty of controlling piracy. And consumers are increasingly resistant to any attempt to ‘lock down’ their media experiences.
The changing landscape
For these reasons, much of the conference focused on present media realities, which have to some extent overtaken the industry’s vision for IPTV. A number of speakers noted, for example, that it is now quite common for people to watch TV and surf the net simultaneously. People are also used to video on the internet via YouTube and other sites - video that is free and not controlled by a single industrial player. Meanwhile, many consumers are now uploading their own content.
As a result, there was much talk of the decline of ‘sit-back media’, and a persistent focus on the ways that TV and the internet are drawing together. Speakers such as Jennifer Wilson (NineMSN) and Mark Pesce (FutureSt) emphasized the ‘empowerment’ of consumers and their growing attraction to ‘lean-forward’ media (such as the internet). They also argued that media companies will need to embrace the growth of user-generated content, and make this a part of their overall strategy. This includes the notion that consumers themselves are becoming content distributors in the era of social networking.
Channels and platforms
At the same time, large media companies are looking for ways to seed their content across multiple platforms. With this in mind, Jack Ford (Managing Director, Sony Pictures Entertainment Australia) showcased his company’s latest content offerings. These include Afterworld, a series consisting of 130 two-minute episodes, which will appear on pay TV, MySpace and Telstra Bigpond’s content site.
American TV networks such as CBS, it was observed, are also repackaging themselves as ‘content providers’. Content is thus increasingly platform-independent. At the same time, content providers can no longer assume that a single delivery channel will be sufficient.
Some of the most heated debates were around TV-based media consumption. For example, will Yahoo7’s new TiVo service (which allows people to record TV shows and watch them later) be a viable model, or will consumers seek even greater control via delivery models that more closely resemble the internet? Panellists disagreed over this question.
Meanwhile, Stephen Langsford and Tony Aduckiewicz, the respective CEOs of Quickflix and Video on Demand/Civic Video, argued over the viability of Video on Demand (VOD). Langsford suggested that technical challenges were holding VOD back as a viable business, while Aduckiewicz argued that the problem is really on the demand-side, because consumers are only interested in the latest feature films. Langsford, however, maintained that there is significant demand for niche content. Based upon the success of Quickflix, he is convinced that Long Tail economics will eventually drive the success of VOD.
Online content - From micro-audiences to the mainstream
For Mark Pesce, the rise of niche content means that we must now take seriously the notion of ‘micro-audiences’, which can number anywhere from ten consumers to several thousand. In this context, searchability and community-building become central factors in the success of online content. Meanwhile, Ian Vaile of Fairfax Media emphasized the value of combining ‘transient’/ short-term and ‘permanent’/ long-term content. He suggested that providers who have traditionally specialized in one or the other will need to learn to do both.
Robert Hutchinson of the ABC spoke of the overwhelming demand for post-broadcast downloads of shows such as The Chaser’s War on Everything – in some cases, the online viewership has exceeded broadcast viewership. The ABC has decided to embrace this phenomenon. Hutchinson believes that the higher production values of network-based media will continue to provide a competitive advantage in the online environment.
Robert Petty, of ROO Online Video Network, painted an optimistic picture of the market for online content. He suggested that this market is increasingly globalized, and that Australian producers should aim for an international focus. Several speakers also noted that the overall trend in internet video was towards longer-form content, often cut up into ‘snackable’ pieces.
Business models - the Big Question
Business models for online content, however, continue to be an area of uncertainty. The consensus seems to be that subscription-based models are unpopular with consumers. Ad-supported content is clearly preferred, but this presents its own difficulties, particularly in terms of mobile-phone based media, where the tolerance for clutter and interruptions is very low. For this reason, suggested Jennifer Wilson, mobile media devices may work best as an ‘adjunct channel’ for other content platforms.
Many now feel that online ‘post-roll’ advertising has proven ineffective, but there was disagreement as to whether ‘pre-roll’ advertising was more successful. There was also much discussion of ‘embedded advertising’, which appears at first glance to be ‘product placement’ under a new banner. Nonetheless, some content producers are beginning to explore strategic relationships with advertisers, involving longer-form content laced with promotional elements (subtly or otherwise).
While the conference focused a great deal on the technological and logistical challenges facing IPTV, the discussion turned persistently towards the key issue of screen content. If there was any agreement about the outlook for the media industry, it was that we are facing a time of great uncertainty – and great opportunity. No-one yet has all of the answers, and this in itself makes the area a rich field of creative and business possibilities.
