Media Strategy: it's about Geopolitics too

Stieg Larsson: speaking as a European...

If you are going to be an exporter of content, you need to know what other countries are looking for.

It’s quite simple really: they are looking for what they cannot do themselves. Nearly everyone prefers content from their own country, in their own language. We are all locked into our private worlds, languages and cultures.

Let us take some examples. Drama is expensive – something many countries can only afford in small quantities. Some countries produce only low-budget soaps – so they may provide a market for good-quality mid-evening series. Even countries which can afford some primetime drama will have be gaps in the schedule.

Because of the preference for own-language work, format licensing has been a huge success. The key elements of the production are locked into a format bible, which is, in essence, a do-it-yourself manual for the production of a hit show.

And some factual content is of generic interest, natural history being the most obvious example. I won’t be saying much about news here, but news footage falls into that category too.

There are also a while number of practical considerations that go beyond price. Content must accommodate a country’s viewing patterns and scheduling habits.

These are some of the questions that need answers before assessing the potential demand in a given market. This can all be done with a careful look at a given country’s media structures and outputs. I will be saying more about how to assess a given market in later posts.

However there are many intangibles, which are more interesting because they are seldom discussed in a commercial context.

Internet TV? Just buy a cable connector

From TV Debunked, Fortune Magazine, January 2011

The lead picture in this post – and nearly all the numbers -- come from a piece in January’s Fortune magazine. (Click on the caption for the link).

The writer, Jessi Hempel, has just received the brick-sized box enabling her to hook-up Google TV, and having played around with some of the cooler functions (like tweeting from her TV (@jessiwrites) she set out to watch some real stuff, namely of a recent episode of the sitcom Modern Family – but it’s not available. Or rather, she can get it from Amazon for $1.99 (if she is already a cable subscriber) or get old episodes from Netflix. Modern Family plays on ABC, and ABC like all the networks and major broadcasters, are teasing with the new media. At bottom, ABC still wants to keep you watching new episodes the way you always have, on their main channel. (You can see Modern Family on Sky1 in the UK).

In fact, the best new-tech option – if you live in the US – apart from watching it live on an HD TV, would be to catch up the latest episode on ABC.com. (From the UK, I could watch highlights of the next episode on ABC.com  but the latest full episode was blocked.)

All the devices in that picture, and the failures in their wake like Joost, add lots of convenience extras like search, and even more potential benefits like targeted advertising. But as Jessi puts it, “Netflix, Google and Apple can’t just swoop in and disrupt the $85 billion home entertainment industry. Their challenge lies in navigating the entrenched interests that make up the television business.”

So far they have not succeeded in doing that.

How to Avoid Piracy?

Release It, Legally and Soon -- at least that would be one simple message coming out of our work on Piracy. But it's far from a complete answer, for some content is not particularly prone to piracy.


And anyway, Piracy is simply a secondary consequence of a technology that enables  simultaneous global access to new content. (Each new distribution technology offered new opportunities for piracy: rogue employees at Hollywood studios have been stealing DVD masters and duplicating them for years).


But our clients, some of whom are global companies, are people with property to protect, and they need a proper plan for their releases. No industry can flourish if property rights can be stolen.


The critical choice for media companies is to determine the best release pattern, taking  piracy into account.


As above, not every type of content is equally vulnerable. A series like Lost is pirated if it's not made available shortly after release. On the other hand, German viewers enjoy watching science programmes of indeterminate age and pay for them.


Simultaneous online release is therefore one way to stem piracy. But the key question will always be: what impact does that have on other potentially profitable windows? For simultaneous release may limit sales down more traditional paths to channels with well-established audiences and solid revenues. (Then again, an early online release can create further buzz for the show. That’s why Warner Bros. released Vampire Diaries on iTunes for UK users prior to its ITV2 airing.)

How Hollywood Did It (Part 2)

In my post on November 23rd, I wrote about the way Hollywood studios had coped with both the recession and a collapse in DVD sales in 2009. They did it by boosting international sales.

For the Westminster Media Forum on Monday Nov 23, I tried to think about what we could learn from this. It was especially useful to hear from David Moody, Head of Strategy at BBC Worldwide, before I spoke. BBC Worldwide is the nearest thing we have to a Hollywood studio. 

(Where the Hollywood studios are concerned, we are talking about the big-selling international genres of Drama and Comedy. We are very good, in the UK, at natural history and other high-end factual content. And of course we have been very successful at creating reality formats, but drama remains the most valuable item  in a distributor’s catalogue.)

What are the lessons?

Compared with the UK, the US has found more funding sources for valuable new content. In the UK most commissioning comes from the four traditional broadcasters, BBC, ITV, C4 and Five. In the US it is coming from the networks, ABC, CBS, NBC, Fox (Desperate Housewives, House), basic cable like AMC (Mad Men, Breaking Bad) and premium cable, like HBO or Starz (Spartacus, The Wire). We need more diversity in the commissioning base.

Second, in the US, subscription revenue is funding a lot of new content. In Europe, too, subscription is TV's fastest growing revenue stream. But in the UK  it is not, yet, driving very much content production -- though it is growing on Sky.

Again, more diversity needed. 

TV Viewing on the Internet: some real numbers at last

Source: BARB/comScore/Attentional

Anyone running a serious TV business will want to know precisely how much time people are spending watching traditional TV content on the Internet.

The figures in this chart are, we think, the first accurate figures for the viewing of TV on the Internet in the UK. I will explain why later.

They tell us that the average viewer spends just three minutes and twenty seconds a week watching BBC content on the Internet.

You may be surprised at this low number. The Internet is a world of large numbers. Streams, downloads, requests, hits measured in millions.


So what is going on?

We think the figures in the chart are reasonably accurate because they are based on a large panel of viewers and because they measure durations of viewing, not just hits on sites or pages. That means they can be aligned with traditional TV measurement systems like BARB in the UK.

Does this mean producers can now find out – objectively – how long people spend watching their shows on the Internet?

Not yet, but we are getting there.

Up till now there has been a surprising lack of hard data about Internet video viewing in the UK. Published figures almost invariably relate to the BBC iPlayer. For example, a BBC press release from February this year read: “This month BBC iPlayer has doubled its requests from 61.5 million in January 2009 to 120.3 million in January 2010.” Other than telling us that the iPlayer is doing much better in Jan-2010 than it did in Jan-2009, it does not allow us to gauge the iPlayer’s overall contribution to the viewing of BBC content. How, for example, did 120.3 million iPlayer requests compare with viewing to BBC! in January 2010?

Research by BARB in the UK, using a relatively small sample, estimated that the average person spends about 14 minutes per week watching TV programmes on the Internet via a PC or laptop. Since average adult viewing via standard TV sets in the UK is 27 hours per week, this suggests that only about 1% of TV content viewing takes place online. Naturally, the figures were higher for 15-34s, who spent, on average, 26 minutes watching TV programmes on the Internet. Nevertheless, since they too spend more than 20 hours a week watching TV on standard sets, this still only represents 2% of their TV viewing.

Now comScore, the Internet measurement company, has taken things a step forward. ComScore has large Internet panels in a number of key territories that can provide demographic level information. Where broadcasters have allowed their content to be tagged, comScore can even add title level viewing data.

We may be seeing the beginnings of a systematic attempt to capture viewing on the Internet. What everyone is waiting for, though, is a way of measuring the viewing of particular titles. But unfortunately here in the UK we are not able to touch the real motherlode of title level data yet, though we have been told by comScore that they’re working on it.

Here’s what we can tell you. Let’s start with all Internet video consumption (both streamed and downloaded) via PCs and Laptops, not just the viewing of TV content. That means everything from music videos to user generated content to pornography. Using the comScore figures we can work out that the average person in the UK spent 2 hours and 17 minutes a week watching video content on the Internet in September 2010. (That compares with 26 hours and 13 minutes of watching a TV set. So the total Internet video audience is still quite small relative to TV, only 8.7% the total TV audience.)

YouTube is by far the biggest player here, accounting for 34 minutes of weekly Internet viewing, 25% of the total. The BBC sites, which come next, account for 3 minutes and 20 seconds of weekly Internet viewing, which, as shown in our chart, is just 2.4% of the total. Clearly the bulk of the Internet video content watched in the UK is still a mix of music videos, user-generated content, pornography and, no doubt, pirated stuff. It’s certainly not traditional TV.

The BBC’s 3 minutes and 20 seconds of Internet viewing per week in fact makes only 1% of the 5 hours and 2 minutes a week the average person in the UK spends watching BBC1.

Connected TV’s may one day change everything. But right now what we are watching on the Internet is only – occasionally -- traditional TV.

A year or so ago one couldn’t attend a new media conference without speakers and delegates talking about how we were nearly at the tipping point when traditional television viewing would collapse. The evidence to date suggests something different: it seems that many of the traditional TV broadcasters are simply seeing the Internet as another useful way of distributing their content and tying people in to their brands, just another platform through which content can be distributed for the benefit and convenience of the viewers.

(Thanks to Farid el-Husseini who did the calculations and corrected my draft)

How Did Hollywood Do It?

I have written posts about the way the Hollywood studios countered the recessions before (October 24). 


The chart on your left tells the story in more specific terms. It is an interesting story, one that I hope has lessons for others.

In 2009 the sales of DVD’s by the Hollywood studios collapsed. The collapse was dramatic and quite sudden,  dropping by nearly two thirds between 2007 and 2009.

But, amazingly, their total revenues did not collapse. Revenues dropped, but not by nearly the same mount. Why?

Because the studios raised their international sales, from below $7bn to nearly $9bn, which helped to close the gap left by the collapse of the studio’s DVD revenues.

The front runners in this turnaround were Fox and Sony.

Next week the Westminster Media Forum, on Monday 29^th November in London, is holding a workshop event called  The UK creative industries in the international market. Guest Speaker is David Moody from BBC Worldwide’s Director of Strategy.

At that event, I hope to be able to say more about how and why they did this, and how they achieved this turnaround.

I will also be asking what lessons there might be for the UK and other European countries.