During Cisco’s business session ‘Lessons Learned: Implementing New Business Models’ at IBC 2011 Connected World in Amsterdam, general manager for service provider video at Cisco Everth Flores, discussed four key growth factors between now and 2015 for digital video and online content in the broadcasting industry:
First of all, in 2014 there will be an average of 10 screens per home which are be able to receive video. Second, broadband will see a fourfold speed increase allowing faster connections. Thirds, almost three billion people will have internet access or will be able to connect to the internet. And fourth, there will be more rich media content from both traditional and new sources.
Distrubution of content
To keep up with these developments content distributors have to be able to create an infrastructure in which content is available everywhere anytime which is reflected in Cisco’s VideoScape infrastructure which allows video content to be shared on any device on both managed and unmanaged networks or services. The VideoScape strategy is based on three basic principles that Everth Flores described:
- A unified experience no matter the platform or device. Cisco looks beyond the platform such as Android based TV’s or iOS devices and creates an infrastructure that allows distributors to show their content independently of the platform.
- A customized user interface and user experience (UI/UX) which allows for universal TV (or should we say content) guides and which is adapted to the platform that is used to optimize the experience.
- A cloud environment supporting multi-screen formats while retaining the quality of expectations of a user.
This strategy was placed in context by the session panel who provided great insight in the application of these principles and their take on this changing environment.
First Steve Plunkett, director of technology and innovation at Red Bee Media Ltd, contributed his insights about the demands of the broadcasting industry to provide content anywhere, and how power is shifting towards the consumer. The company used to focus on B2B markets by providing video distribution and VOD services for broadcasters. However, viewers have become consumer and the industry is shifting from a B2B to a more B2B2C or even B2C market. To support this shift the company introduced their RedPlayer which he introduced with a video:
Watch it: http://www.youtube.com/watch?v=qw-kFXIBNp0 (Embedding disabled by request)
Next, Joe Inzerillo, senior vice president multimedia and distribution for MLB Advanced Media, talked about the MLB.tv digital content platform and showed a video of their PlayStation3 application. An important aspect of MLB’s strategy to provide content (it’s more than just video) is to make the experience native to the device. He notes that current STB’s don’t have the system requirement to provide a compelling and native experience as is provide on the PlayStation3. And by offering a broader context with in-game analytics, player statistics, DVR metadata, and multiple feeds (cq. home and away feed), they combine a ‘vertical experience with a horizontal offering’. This horizontal offering is showcased in their iPad app which allows users to ‘swipe’ content in the screen which makes it a more tactical (and in some sense tacit) experience. Being aware of the platform and interface is the key factor in their commercial model. The difference in screens, interface, and setting, changes the advertising and sponsor model for each platform and audience.
The last guest is Jan Paul Dekker, who is responsible for digital productions at RTL Netherland. And important aspect of RTL’s online strategy is the use of their own technology and innovations. RTL does not use external content delivery networks (CDN) and owns the editors and video players. He notes how the television setting is the most important environment within an household to experience and watch video content. Therefore, the first step is to find consumers’ needs since 85% of RTL’s audience still watches linear television without skipping traditional commercials.
A changing business model
After this, the session focused on how the market changes and new offerings have changed the business model and processes within the business. Steve Plunkett notes how you have to expand your expertise to multiple areas and devices. You have to understand the proprietary aspects of the new platforms and calculate whether the platform will be successful since many earlier ‘new’ platform have died already. For example, Joe Inzerillo describes how with the launch of the original iPhone MLB.tv wasn’t sure of its success and made a very basic application which was represented at the launch. There seems to be a shift from mobile to ‘connected’ devices. There is no ‘used to be’ to which you can compare changes and developments and therefore the decision on which platform you’re going to developed is based on speculation.
The last part of the discussion is centered around rights issues and geographical markets. As Joe Inzerillo notes
‘the internet doesn’t accept geographical boundaries, but broadcasting rights do’.
Online television is still experimental, and the right consumer revenue moments and possibilities have yet to be developed. However, while entering new foreign markets can be expensive and complex by finding local broadcasters and distribution partners, online distribution platforms provide a more scalable infrastructure and allows for expansion to any B2C market.
The session provided an interesting insight in the current status of the technology and the practical application within broadcasting markets. Especially the shift from pure B2B players to more B2B2C players changes the dynamics of the completion and markets. Combined with the increasing number of platforms and connected devices the new business model and players involved has still to be defined.