Monday, 11 January 2016

Updates coming soon - honest

Blog to be reinvigorated by moving over to Wordpress. Well, that's the idea anyway :-)

Friday, 2 January 2015

2015: The Shape of Things to Come



What to expect in 2015...(following divers consulting of runes, reading of entrails and magazine articles, digesting of press releases, talking to people, scrying, examining what has gone before, learning from history, and so on and so forth).

Winners

4K
The inexorable movement towards Ultra HD formats will continue, just not at the pace that the industry would necessarily like. To quote the Borg: 'Resistance is futile', but to quote Spock: "The needs of the many outweigh the needs of the few." 4K is certainly teetering on the cusp of being the high-end production format of choice, but won't accelerate normal consumer upgrade cycles until at least Rio 2016, if then. In the meantime, watch out for...

HDR
Arguably, this presents a greater uptick to consumer grade pictures than 4K does and, with the likes of the EBU stating that an increase in resolution alone will not have any impact on the market, is starting to pick up increased interest. Disney is one of the companies working in the field, and has developed an interesting post production technique that reveals the greatly enhanced images on 'normal' TV sets. A sleeper technology to an extent, but will probably move rapidly into the mainstream once a big production harnesses it.

High framerate
Same as above really, only the focus here is on sport where 60fps is seen as the bare minimum. The tech heads would like double that, but bandwidth and the sheer Brobdingnagian size of the resulting files will probably mitigate against that...

OTT
One of the shriller headlines from the tail end of 2014 banged on about a 30% decline in subscriber growth for Netflix in the US. That's a decline in growth, you'll notice, not a decline in numbers or anything else remarkably untoward. In other words, OTT will continue its Borgian dominance, the only possible brakes being a) the leading companies run out of money to commission ludicrously expensive 20-part series based on obscure fantasy trilogies b) the stock markets of the world continue their insane devaluing of anything where growth is anything less than spectacular (and their insane overvaluing of everything at the other end of the spectrum. Uber worth $41bn? I smell me a bubble) or c) the online advertising balloon finally goes up (see below).

Middle of the road

Drones
What goes up, must come down. Drones are increasing dramatically in popularity, especially for filming, and capability. £3000 will now buy you an extremely capable unit with an onboard 4K camera that can only be undermined as a broadcast tool by strong winds. However, the consumer end of the marketplace is making regulators twitchy and this is not just Ofsted and its ilk getting involved over privacy breaches; these are the CAA, the FAA, and all the world’s regulators of all the world’s airspaces who quite reasonably don’t like things flying in close proximity to jetliners. Near misses near airports are becoming fairly regular stories and, once they can prove they can hit the moving target that a rapidly evolving technology presents, the nascent industry is going to get regulated to the hilt in a fairly draconian manner and the temporary scaffolding of bans and restrictions will be replaced by something permanent and likely even more forbidding.

VR
Stereo 3D’s Lazarus-like return from the depths of history to dominate the world’s living rooms did not go quite as planned (ie it managed no such thing) so can Virtual Reality pull off the same trick? The answer has to be a qualified ‘maybe’. The technology in the labs is impressive, but turning that into a mass market proposition, making the technology cheap and robust enough, navigating the legal minefield of compo hungry claimants, getting the costs of filming down (Sky has found that creating 360º sets is unsurprisingly expensive) while learning a whole new lexicon of capture, and at the same time marketing the thing to a wary audience *and* trying to make money out of it…it’s a tall order. Expect much noise and bluster, conferences to start programming VR content etc etc, but not too much in the way of actual delivery.


Losers

Broadcasters
Time and time again the death of traditional broadcast has been overstated, but as we teeter on the edge of 2015 there is at least the sense that it is starting to have to fight a rearguard action if nothing else. In the US at least linear TV audiences are falling, with the likes of Netflix the main beneficiaries. What is interesting though is that despite all the money spent on original programming, less than 10% of Netflix viewing is spent with that content, the vast majority of it being on content from — yes, you guessed it — broadcasters.

Here’s a quote from Todd Juenger, a media analyst with Bernstein Research, speaking in the New York Times: “The ratings have just disappeared. You have audiences leaving ad-supported television for non-ad-supported television, and I don’t think that they are coming back.”

What can broadcasters do? Take control of their archives back from third parties and maximise the benefits of online technology; use data analytics to provide advertisers with realtime and finely targeted ad markets; start realising the economics of the long-tail; make sure their apps are available on as many platforms as possible; and perhaps even go so far as to invest in some decent programming.

Then when we all start writing about the death of traditional broadcast at the start of 2016 we can talk about how it is less of a death and more of a phoenix-like transformation. Or something  like that

Online advertising
What clothes does the Emperor fancy wearing today? Google’s admission that the majority of online ads are not seen by human beings was either the shock of the online century or simply confirmed all of your suspicions, depending on your point of view. The fact is though that this stat — 56% of ads are never seen — is one of the few reliable ones when it comes to online ads whose sale is more akin to snake oil than slot allocation.

Those that remember vividly the dot com collapse at the start of the century — ancient history now by web standards — may start feeling the odd moment of deja vu as the year unfolds. And certainly those that operate in a media space that is supported online by ad revenue and a $/view payment that can best be described as challenging even when it works are going to start looking at new business models.

The one to watch is Vessel, a short-form video service set up by former Hulu CEO, Jason Kilar, which is launching at a ‘long-tailish’ payment of $2.99 supported by what is referred to as ‘limited’ advertising. Kilar reckons that this will deliver a whole new level of payment to content creators, which could be as great as $50 for every thousand views — nigh on 20x the rate earned from free, ad-supported distribution. All that remains to see is whether viewers will sign up and actually pay for the service, not to mention the rather interesting facet of what demographic they will be.

Monday, 15 December 2014

EPL rights set to reach dizzying new heights of unreality



Back of the net. As widely predicted, the reality distortion field has been switched on and the English Premier League has submitted its invitation to tender to the UK broadcasters. The regulator is watching, however, though whether it will just succeed in driving the prices up again when and if it acts is another question entirely.

What remains astonishing about the EPL is how much the prices of the rights have gone up since Sky first bid a headline-grabbing but now paltry-looking £302m for them in 1992. Very conveniently for those of us who like statistical synchronicity, the rights awarded to a joint BT/Sky bid two decades later went for almost exactly ten times as much, namely £3.018bn, and they are currently and confidently forecast to top that again this time as some deep-pocketed players weigh in at the table, with Al Jazeera — a late withdrawal in 2012 — chief among them.

For the record, £302m is £569m in today’s prices.

It has, of course by no means been a smooth curve of ascendency, with the regulator having a pronounced impact on pricing, almost always to the EPL’s benefit. Back in 2005 Gordon Brown, for it was he, was instrumental in getting the anti-monopolistic hounds of the EC to back off the EPL, the league promising to package its rights for sale to two broadcasters as a minimum as a result. That opened some very weighty floodgates, with the £1.25bn or 77% jump from £1.77bn to £3.018bn between 2009 and 2012 being particularly eye-watering as BT became the first of the disruptive telcos to enter the fray and knock ESPN out of the game as a result.

Cost of Sky’s all-in package in 1992 = £16.99
Cost of Sky’s 1992 all-in package in today’s prices = £31.82
Actual cost of all-singing, all-dancing Sky package in 2014 = £76.25

This time round the regulator’s hand can be seen in the inclusion of some Friday night games in one of the packages, a bid to head off Virgin’s complaint to Ofcom that the number of live games on offer is kept artificially low, and thus prices artificially high, thanks to the Saturday 3pm blackout.

All in all the live rights to 168 matches, 14 more than the current deal, split into seven packages are on the table, with no single buyer allowed to acquire more than 126 matches. There is also a near live long-form package containing 212 matches aimed at the on-demand market and an IP-based clips package for all matches. These will be sold in a second wave, with the main activity on the live matches expected to take four months and drag on to a decision in March.

And the cost? Deloitte has predicted a 14% hike in premium sports rights this year and the expectation is that will be happily blown apart and the rights might rise as high as £4.5bn; not quite the 77% of the 2009/2012 period, but at 67%, not too far off either.

Will Ofcom interfere? Will the BBC lose Match of the Day to an ITV aggressively chasing the highlights package? While it’s hardly comparing like with like — there are more matches, online to consider, etc etc — it’s an instructive exercise to wind back time and calculate how much Sky would have had to have paid for the rights in 1992 at today’s prices. The answer is a whopping £2.4bn. In other words, it’s highly doubtful if this whole careening bandwagon would have been unhitched and set off on its path at all if screening football cost as much then as it does today.

Sunday, 7 December 2014

Why Sky investigating VR is good for VR




According to Broadcast, following its £400k investment in Silicon Valley start-up Jaunt last year Sky plans to conduct immersive VR trials on up to 15 shows next year to discover more about the technology’s potential. This is a profoundly good thing. Stereo 3D might have crashed and burned in the marketplace but Sky did it better than anyone and its pedigree for investigating new tech is pretty exemplary.

Of course, it also has a pronounced commercial edge, but it does seem to be able to pull off the neat trick of being able to explore new tech without the shackles of having to demonstrate value to license payers, for instance, while also doing it well. Arguably one of the reasons stereo 3D failed was because there was so much awful content out there. Indeed, we have it on good authority that most of the stereo 3D content provided by ESPN to Sky as the result of various contra deals between the to companies actually broke most of Sky’s QC rules and, to European eyes, was close to unusable.

European eyes, you say? Yes, it does seem that there was a powerful Atlantic rift between the US deployment of the technology and the European, with pronounced differences in the way that convergence was treated at the heart of it. Whether that was down to personal taste in the upper echelons or whether it was down to the dominance of the Cameron | Pace group’s kit in the US market and the way that that tended to work as opposed to the (arguably superior) 3Ality Technica driven Europe is a bit of a moot point. Either ways, it wasn’t very good.

Just because you can make Avatar doesn’t mean you can capture a baseball game.

So, it’s good to know that Sky is taking a point position on VR, another paradigm leap with a whole new visual lexicon and capturing a range of genres from sports to LE and drama to test out the way it works. So far it seems, the results have been mixed, with one of the keys to success from the viewer’s point of view apparently resting in having a lot to look at. Visually busy comedy Trollied = good, Arcticly bleak drama Fortitude = bad. Having to build 360º sets to accommodate all this = expensive.

One of the interesting things that is cropping up too is that the audience needs plenty of audio cues to direct their gaze. Once the director no longer has complete control of the viewer’s perspective  they can wander all over the place and techniques such as reveals have to be engineered in a much more finessed way: grab their attention in one direction, sneak in an actor behind them, yell boo! etc.

For our money, this is a technology that has nature docos written all over it. Sport?  That might prove to be a bit too quick in the end, which given the normal pay-TV business plan might cause some problems. It might well go on to find a niche in the adult, one-handed audience too. But all the arguments about viewers being reluctant to wear glasses were only rehearsals for the derision that will be heaped upon VR headsets, not to mention the attendant lawsuits when little Jonny trips over the cat. But, even despite all there caveats, it will be genuinely fascinating to watch the trials as they progress.

Tuesday, 18 November 2014

Of Ofcom, the NFL, blackouts, and the future of football rights in the UK



Rights, rights, baby: Following a complaint by Virgin Media, Ofcom has opened an investigation into how the EPL sells domestic live rights for matches. With the reputation of the football business in as parless a current state as Sunderland’s defence, you can only hope it will have more teeth than Fifa’s latest whitewash. But events in the US show that change may be in the air.

The next Premier League rights tender is expected to kick off in the new year with the next tranche of three-year deals announced before the end of the current 2014-15 football season. BSkyB and BT Sport are the current incumbents. BT acquired two of the seven available rights packages in the three-year cycle from 2013-14 to 2015-16, for £246m per season, with Sky acquiring the other five packages for £760m per season.

Yes, that’s £1bn per season. Find another £100m — less than the annual wage bill at Manchester City — and you could fund ESA to send a Rosetta probe to a comet every year if you so wished. And the price is only going to head upwards from there, with all sorts of fevered speculation regarding how much they will go for in the next round of bidding as BT and Sky continue to slug it out for viewer eyeballs.

So, why the investigation? Well, Virgin (currently priced out of the comeptition) says the current arrangements for the collective selling are in breach of competition law and, in particular, that the proportion of matches made available for live television broadcast (41%) is pegged artificially lower than other European leagues.

Now, a lot of this stems from a historic edict designed to protect attendance at football matches that sees rights holders barred from broadcasting matches that kick-off at 15.00 on a Saturday. This sort of thing happens across sports and continents, but in the new media landscape such protectionism is is no longer guaranteed.

In 1975, for example, US regulator the FCC passed a blackout rule which meant that any NFL games that failed to sell enough tickets could not be shown on free television in the home team's own local market. 39 years ago, as a result almost 60% of NFL games were blacked out on broadcast TV because not enough fans were showing up at stadiums. Today, less than one percent are blacked out — two games in the entire 2013 season and 15 in 2012 — and TV contracts contribute “a substantial majority of the NFL’s revenues,” according to FCC Commissioner, Ajit Pai.

The FCC rule change doesn’t mean blackouts will disappear just yet because the NFL has clauses written into existing contracts with regional broadcasters that guarantee them, and many of those contracts last until the early 2020s. But it will certainly have great trouble enforcing them once more after the next contract negotiations and the whole thing does at least set a precedent.

Of course, the NFL can argue that it’s the existence of the blackouts that have ensured those currently healthy attendances. But, if that is the case, perhaps they can be seen to have done their work now. And returning to this side of the Atlantic, you certainly cannot argue that the top flight of the EPL, with their season ticket waiting lists and extremely deep pockets, are in imminent danger of fan desertion if their match just happens to be shown live at 15.00 on a Saturday afternoon.

Yes, gate receipts go down, but payments more than compensate. Research undertaken by Adam Cox in Broadcasting live matches and stadium attendance http://footballperspectives.org/broadcasting-live-matches-and-stadium-attendance (2012) estimates that gate revenue is reduced by an average of 19.7%, or £232,237 based on the average gate revenue for all clubs when a match is broadcast live. Payments to each club from the EPL, meanwhile, total on average £4.12m per game broadcast (2007-08 season figures, now substantially more).

Anyway, Ofcom, while acknowledging that an investigation could have an impact on the next tender process, is going to look and see whether there has a breach of the UK and/or EU competition law.

“Ofcom is mindful of the likely timing of the next auction of live UK audio-visual media rights, and is open to discussion with the Premier League about its plans,” said a statement. “Ofcom understands that the scheduling of football games is important to many football fans, in particular attending 3pm kick-offs on Saturdays. The investigation will take this into account and Ofcom plans to approach the Football Supporters' Federation and certain other supporters' groups to understand their views.”

One to watch…

Monday, 17 November 2014

100m reasons why Sony could succeed in owning the world’s living rooms



I am the one and Sony. In many ways OTT is a technology that has been successful in spite of its best efforts. Competing services offer limited and exclusive bouquets of content, different STBs may or may not allow you to stream your DRM-protected content around your house, and all these services are buried in user interfaces that look and function like they’ve been designed by one-armed gibbons, and not very bright ones at that. Can PlayStation Vue really change that?

In a word: perhaps. Which might sound a tad qualified, but is positively glowing compared to many of their rivals. Certainly it has there important factors in its favour: existing numbers, content and experience.

For starters, the numbers that Sony can command in the living room space are impressive. The Vue service, which is rolling out slowly across the US initially, can eventually expand to reach 80m Playstation 3s and somewhere in the region of 14m PS4s worldwide (liable to be 20m or thereabouts by the time the service gets beyond beta).

So, let's call that an installed base of 100m devices. In the meantime, it's gaming-oriented PlayStation Network has 110m users in 63 countries worldwide, so it also has demonstrated experience in scaling up for this sort of thing in its favour

Plus, of course, it owns some interesting properties on the content front. In fact, when the whole concept of OTT first appeared on industry radars a handful of years ago, Sony was one of the  companies that appeared at the top of everyone's list of corporations that could really leverage them there synergies.

It's taken the company a long time to fulfil that promise, but it seems to have learned from the mistakes of those that have gone before. Licensing deals have been struck with Discovery Communications, Fox, NBCUniversal, Scripps Network Interactive and Viacom, while it will also offer some live linear programming from CBS and affiliates among the 75 or so channels available. Three days’ worth of programming appears on demand in the EPG, while Sony is also making much of the service's advanced recommendation and smart search facilities.

Interestingly for its long-term health, the online TV service will also become available on iPad fairly rapidly and later will appear on more Sony and non-Sony devices.

So, why might Sony succeed where the might of others — Google, Apple, Amazon et al — does not necessarily guarantee success? Because it’s already the incumbent, basically. 100m Vue-capable consoles are already linked to TV screens worldwide — the majority of them in living rooms as befits seventh and eighth generation gaming machines rather than languishing in bedrooms. No reprogramming, no changing settings, no faffing and fiddling about with cables: 100m machines hooked up and ready to go.

Price it right and the beleaguered corporation could have something to smile about again. And seeing as how we’re using a pic of the Big Bang Theory to illustrate all this: Bazinga!


Monday, 10 November 2014

The latest US OTT machinations



A quick update to the update: Obama wades in: http://www.whitehouse.gov/net-neutrality

There is so much news coming-out of the OTT market in the US at the moment that we’ve had to create it its own graphic. Today: the latest developments in the on-going net neutrality debate coupled with a small Canadian codicil.

First up, net neutrality. The FCC is, as we and the rest of the entire internet has mentioned before, looking at reclassifying broadband provision as a public utility in an attempt to effectively wrest back control of the whole concept from the open market.

As an ISP quite looking forward to the extra payments a two or even three speed internet would unlock, Verizon (the ruling in whose favour sent the whole edifice tumbling down and kick-started the debate at the start of the year) is somewhat opposed to this. Hence a bit of sabre-rattling and some veiled threats that the whole thing could be heading back to court sometime soon unless the FCC changes its stance.

Poor old Tom Wheeler and the FCC though are caught in something of a cleft stick. Not reclassifying ISPs as telecoms providers will probably lead to the development of the fast lane/s and be good for the ISPs and bad for consumers; while an attempt at reclassifying will be good for the content providers, bad for the ISPs and good for the consumer that’s seeking choice.

Is is a genuine regulatory crossroads but one of the key arguments, one reiterated by everyone from the White House to the CEOs of the likes of Kickstarter, is that there is a wider issue here too and that a free and open internet is about more than just being able to watch 4K films from Netflix in bed. That paradigm of greater consumer choice extends out to the whole internet in all of its multifarious and diverse uses.

Should the FCC prioritise its duty of care to consumers, or should it be looking to encourage the growth of industry? Answers on the back of a postcard please…And as to the implications for the rest of us, the chances are that it will put a very large cat amongst a flock of rather nervous pigeons.

Neelie Kroes, the European Union’s commissioner for the digital agenda tweeted earlier this year “Maybe I shd invite newly disadvantaged US startups to EU, so they have a fair chance.”

Not so much runaway productions as an entire runaway industry…

But then they have to be careful where they run to. Canadian lawmakers, for instance, are reportedly thinking about extending the production quotas that require all broadcasters to carry roughly one third of Canadian-produced content on to the OTT providers; not to mention asking them to contribute to the general pot that everyone else pays into to shore up the Canadian production industry. Netflix and Google have gone on record as saying they’re rather unimpressed.