Television 2013 Digital Disruption

Television 2013

•  We will look at: – Television in Canada

•  Who is watching television? •  What they are watching? •  What services are they using?

– What trends are emerging? – What are the disruptive forces to watch? –  Innovative projects … – What’s next? – Question & Answer

TV Milestones in Canada

1950’s Launch of Canadian broadcast industry Conventional, over the air channels driven by advertising revenue & American programming

1960-1970 Launch of Cable TV

American & local Canadian channels 1980-1990 Launch of Direct to Home Satellite

Launch of 8 Specialty Channels – now over 200! Cable & Satellite distribution for an additional fee

1990-2000 Telco’s commence distribution through fiber lines 2000-2010 Over the top services emerge through internet delivery

Convergence & vertical integration, Video on Demand 2013  Mega Media Companies dominate landscape (Bell, Rogers, Shaw,

Videotron)

2013: What’s Happening in the Industry?

CHANGE: •  The television broadcasting industry has experienced incredible changes over the last

few years. Vertical integration is on the rise! Competition for subscribers/viewers is intense with TV Anytime/Anywhere in the Strategic Plans for all major players.

CHOICE: •  Consumers have more choice based on different transmission technologies such as

You Tub, Netflix, Smart TV App’s etc…. BUT are frustrated with high prices and a lack of ability to select only the channels they want to watch.

Is Anyone Watching TV in Canada?

And the Answer is….Yes (today)

•  13.8 million TV households (Population of 33,476,688)

•  99% of Canadian households have a television •  74% have more than one television •  33% are HD-equipped •  93% have either Cable or Satellite •  30% have a PVR •  18.2% had access to VOD Source: TV Basics 2012

How Much are They Watching? A Lot! ) in Canada

Persons 2+ = 27.36 Men 18+ = 27.30

Women 18+ = 30.18 Teens (12-17) = 21.36 Children (2-11) = 21.30

Source: The Nielsen Company, 2011/2012 season

Average Weekly TV Viewing (Hr/Min) in Canada Persons 2+ = 27.36

Men 18+ = 27.30 Women 18+ = 30.18

Teens (12-17) = 21.36 Children (2-11) = 21.30

Source: The Nielsen Company, 2011/2012 season

But is this the whole Story???

There is Nothing On TV Tonight!

According to TVB there were 331 Conventional, Specialty and Pay stations in Canada as of 2011. This

number is growing each year.

Conventional or Specialty? What Are Canadians Watching?

44%

43%

5% 8%

Canadian Conventional (44%) Canadian Specialty (43%)

US Specialty (5%)

US Conventional (8%)

How are we Viewing?

How Are Canadians Viewing TV?

How Are Canadians ViewingTV? Cable

Satellite

IPTV

Wireless Cable

What Exactly Are We Watching?

) in Canada Persons 2+ = 27.36

Men 18+ = 27.30 Women 18+ = 30.18

Teens (12-17) = 21.36 Children (2-11) = 21.30

Source: The Nielsen Company, 2011/2012 season

What Trends Are Emerging?

Even with the explosion of the Internet & OTT people are still watching television in Canada.

•  Viewers are watching more TV …but differently •  Multi-Screen is growing rapidly but not eroding television

viewing. •  Consumers want content anytime/anywhere! •  Quality is critically important – content, sound, pictures

and …services

What Trends Are Emerging?

•  Television is migrating to the internet. The percentage of Canadians using internet TV has doubled in the last 3 years! (internet TV can be web TV or IPTV)

•  Integration of social networks is being demanded! (Facebook, Twitter etc)

•  Time-shifted consumption (VOD) is on the rise. •  The percentage of Canadians ‘cutting the cable cord’ remains

relatively low. (More about this later)

•  Over the Top services (OTT) like Netflix and You Tube are now offering Original Programming and Quality Channels

But …which Trends are Disruptive?

Let’s take a look at a few that are changing the landscape of television in Canada. 1.  IPTV & Over The Top television (OTT)

2.  Multi-Screen & Social Media 3.  Cord Cutting & No Cord

The Impact of Internet TV on Canadian Programming. (Source: Source: Impact of Internet TV on Canadian Programminghttp://www.omdc.on.ca/AssetFactory.aspx?did=7251)

Disruptive – Internet TV & OTT?

•  Over the Top services (OTT) like Netflix and You Tube off another way for consumers to enjoy television. This is being driven by the migration to internet TV (IPTV), the ease by which we can access these offerings by Smart TV’s, the wide variety of content and low cost.

•  To add to this these OTT services

are now offering Original Programming and Quality Channels

•  IPTV Launch – Not So Long Ago

•  IPTV In 1994, ABC’s World News Now was the first television program to be broadcast over

IPTV Launch – Not So Long Ago In 1994, ABC’s World News Now was the first television

program to be broadcast over the Internet, is using the CU-SeeMe videoconferencing software. In Canada NBTel (now known as Bell Aliant) was the first to commercially deploy

Internet protocol television over DSL in 1999 Source: http://en.wikipedia.org/wiki/IPTV

Disruptive – Over The Top?

•  Main reason for using these sites is:

–  “watch whatever I want” (26%) –  “It’s Free” (15%) –  and “Catch-up TV” (15%)

•  You Tube is the most popular website used for content sourced online (64%)

•  In 2012 Netflix 20% of Canadians subscribed and 93% were aware of them

•  While game consoles, laptop computers & tablets are used to access Netflix…more people are watching Netflix on TV than any other device!

Disruptive - Original Programming?

Netflix and You Tube are disruptive technologies because they are turning the broadcast model upside down. They are doing this through their original programming strategies. You Tube now offers high quality HD programming available on dedicated channels. Netflix invested 100 million dollars to obtain the rights to two seasons of House of Cards. Their first original program was Lillehammer. Original programming puts them on an even footing with traditional broadcasters.

OTT is expected to impact Canadian audience share by 6 share point (27-33%) if Canadian content regulations are not put in place.

Disruptive – Social Media? Dick Costolo – CEO, Twitter

In an interview with CNBC Costolo said his company is transforming how people watch TV. “We used to have the few people in your living room that you were having a shared conversation with about what you were watching. It’s now exploded beyond the bounds of the living room and it’s the world that’s having a conversation about what we’re all watching.”

Sources: Photo: Bloomberg|Getty Images , Quote: http://www.cnbc.com/id/47285315/page/5

Disruptive – Multi-Screen?

•  Multiscreen describes the ability to watch television and also email, text, Twitter or Facebook from another internet enabled device. It is disruptive in as much as it forces broadcasters and content creators to focus on Anytime/Anywhere viewing as well as integration with social networks.

•  Multiscreen is popular with 18-30 year olds.

–  They enjoy the experience of multi-tasking –  Tend to watch more TV because of it –  Demand anytime/anywhere viewing

•  Note: The majority of media viewing still takes place at home (85%).

For detailed charts on a wide variety of viewing activities: (Source: CTAM http://c.ymcdn.com/sites/www.ctam.ca/resource/resmgr/intouch/ctam_canada_intouch_volume24.pdf)

Disruptive – Cord Cutting?

•  Cord Cutting …not yet disruptive –  Deloitte Canada is predicting less than 1% of Canadians will abandon

TV services they’re paying for from cable, satellite or telecom providers in 2013.

–  According to Duncan Steward, Deloitte’s Director of Research, “They see three pillars that prevent cord cutting: Reality TV, Sports and News.”

•  No Cord… a trend to watch –  This category represents the 10% of the Canadian population who do

not have satellite or cable service. These individuals say ‘price’ is a factor and they put a high value on obtaining media for ‘free’

–  Profile: 14% are male between 18-24 years

(Source: OTT Broadband Video/Oneline TV Behavior & Attitudes 2012)

In Canada the number of Canadians who pay for traditional TV services was up in 2012. Source: http://www.huffingtonpost.ca/2012/12/13/canada-cable-cutting-live-tv_n_2295236.html

What’s Coming Next?

What are broadcasters doing? ‘To stand out, broadcasters and producers are bringing people together using strong brands (formats, actors, and presenters), daring to mix up genres and explore themes that go off the beaten track, as audience coming back” Source: Julia Esperance, Media Consultant, Eurodata TV Worldwide •  (Source: http://www.mediametrie.com/eurodatatv/communiques/nota-international-tv-trends-season-2012-2013.php?id=778

Source: Eurodata 2012 http://www.mediametrie.com/eurodatatv/pages/january-2013-newsletter.php?p=126&page=162#art2

What Can We Expect To See?

According to Eurodata TV’s “One Television Year in the World” 2013 the key trends from Broadcasters included: •  Audience engagement as the primary focus for digital strategies •  Development of companion applications to extend beyond linear

broadcast –  Apps on your television, tablet, mobile devices –  Play along with TV & reality to – get into the action

•  Don’t just watch – play along •  Go deeper into the action •  Tight-knit community of passions •  We’re all in the show now!

–  Broadcasting of exclusive content –  Second Screen –  Optimized exploitation of social networking –  Click if you ‘like’ –  Share what you are watching and earn rewards

What are broadcasters doing? ‘To stand out, broadcasters and producers are bringing people together using strong brands (formats, actors, and presenters), daring to mix up genres and explore themes that go off the beaten track, as audience coming back” Source: Julia Esperance, Media Consultant, Eurodata TV Worldwide •  (Source: http://www.mediametrie.com/eurodatatv/communiques/nota-international-tv-trends-season-2012-2013.php?id=778

Innovative Projects

•  Dallas in the US – The comeback was accompanied by the game Rise to Power, an app that allowed the user to accompany the character of their choice through the season in order to win prizes. This strategy allowed TNT to beat all of major networks on the night of the premier.

•  Les Revenants on Canal+ in France – was the most watched original series the channel ever broadcast. In addition to visual quality they offered an interactive website delivering clues after each episode.

•  100 Days of Nice in Denmark – relying on social networks, a well-known journalist gives himself 100 days to establish good manners and general niceness in his country. A real movement launched on the web before the program started airing in order to support the project.

But What About An Entire Channel utilizing these Disruptive Technologies?

Let’s take a look at a project that combines many new and innovative elements of disruptive

technology.

https://vimeo.com/64127471

What’s Coming Next?

June 13, 2013 the CRTC announced consultation on 20-year old broadcast regulatory regime and

what needs to be reset.

According to Jean-Pierre Blais…”Broadcasting, as we once knew it, is no longer – and will never again be the same, so it’s time to ask: do the

assumptions that lie beneath our current regulatory policies still hold true?”

This isn’t a space poised for disruption. It’s a space that’s already been disrupted – to such a degree that it can make your head hurt to think about

it. What TV-lovers may want more than anything is simplicity – and if ever there was a company good at providing that, it’s Apple.

David Zax

THANK YOU

QUESTION & ANSWERS