BBC Sees Potential in DownloadsNew revenue streams: TV shows via PCs 3/20/2005 07:00:00 PM Eastern
Later this year, BBC Broadcast will launch a service that will allow PC users to download seven days' worth of television shows. Price, however, has yet to be determined.
The project, called IMP, for Interactive Media Player, makes downloading possible via online broadband connection. Plus, users can program it to record future programs automatically.
“We've heard from a number of commercial broadcasters in the UK and Europe that they are keen on unlocking new revenue streams from content already broadcast,” says John Pink, director of sales and marketing for BBC Broadcast, which is investigating commercial insertion for its ad-based clients, such as UK-based commercial networks. (BBC Broadcast, a subsidiary of the British Broadcasting Corp., handles TV playout and other technical services for the BBC and other UK broadcasters.)
And the online market is growing. Online analyst firm eMarketer estimates that advertisers will spend more than $1 billion on online rich media (nonstatic spots vs. ad banners), a 35% increase over 2004.
New revenue models include pay-per-play, subscriptions and targeted advertising. The viewer could be required to fill out a short questionnaire providing some general household data, so commercials could be tailored to meet a specific demographic.
Typically, content distributors and owners dislike having TV content available via broadband, fearing stolen content, falling ratings and the “Napsterization” of TV. The BBC, however, sees it differently. By making content available online, the network believes, it can serve viewers better and build loyalty.
“One of the challenges is, we're making the last week of content available for nine BBC channels,” says Pink. “That's a lot of program material.” The first part of the BBC trial involved 1,000 users who could download and store TV content on computers. The current phase involves improving the user interface, search function and how viewers will use the product.
Secure delivery systems
“We're looking hard at media planning and inserting promos and ads,” says Pink. “The information we gather lets us see trends that otherwise wouldn't be seen.”
But to ensure success in a broadband environment, the delivery mechanism must be secure enough to prevent copying and illegal distribution. BBC Broadcast, which currently uses Microsoft's Windows Media 9 format, says its system is difficult to hack.
Content downloaded onto a computer cannot be accessed unless the viewer gets a unique ID key from the BBC. Once the content is unlocked, the viewer gets a week's worth of unlimited BBC shows. But those keys, and the digital rights, can be changed.
“You're always going to have some people who will pirate media,” says Pink. “But if you make it easy for the consumer—that they can pay a few cents and get the content easily—who would go to great lengths to steal it?”
A unique aspect of the system is that the BBC will rely on peer-to-peer file-sharing to offload some of the traffic. As users copy the original file onto their computers, each computer then acts as a server host.
“It takes the load off the supplier to provide the proper amount of bandwidth,” says Adam Hume, BBC Broadcast head of digital publishing and a futurologist. “It's an effective way to reduce the infrastructure costs as each consumer becomes another distribution node.”
Although the peer-to-peer approach can help cut server needs, Hilmi Ozguc, CEO of Maven Networks, a company whose download-delivery system is used by A&E Television Networks and National Geographic Channel, sees some flaws. “It will be a turnoff to consumers once they realize their computer is being used as a server to help organizations deliver content,” Ozguc says. “And there is currently a negative association with peer-to-peer networking.” For many consumers, peer-to-peer means stealing content, not sharing it legally.
However, Bob Greene, Starz Entertainment SVP, advanced services, sees some potential in the model; both Starz and Hollywood studios are investigating the technology.
“Peer-to-peer gets a bad rap because the business model it's associated with involves stealing,” he says. “But in the right environment, it can be a great experience for the consumer and the content holder.” Starz Entertainment recently doubled the number of movies available on its PC-based movie service to 300. The service, called Starz! Ticket on Real Movies, costs $12.95 a month for unlimited downloads. Starz relies on Real Network's Helix digital-rights-management (DRM) system.
With the BBC system, even if users download content from another person's computer, they still need to go back to the BBC for the key. Hume says that, with a 2-Mbps connection, it takes him a little less than 30 minutes to download a 30-minute program.
Making content available 24/7 is close to Hume's heart.
He is chairman of the TV Anytime standards body, a global association of organizations working to create standards that enable content distributors to efficiently take advantage of consumer-based storage devices, such as PC servers and DVRs. Microsoft, NDS, BSkyB and Disney are all members. TV Anytime is currently working on next-generation standards that will allow content to be published to different services, such as broadband and mobile devices. It's akin to XML for video.
“The big challenge is that TV Anytime is a chicken-and egg situation,” says Hume. “It only works if you buy in across the whole value chain, from content providers to distributors. Some in the industry are reluctant to make DVRs fly because of current business models. But those models won't carry on forever.” One business primed to take advantage of the BBC Broadcast model is VOD.
Today, download services like Starz or the BBC depend on PC users. Current broadband service is available only to PC users, but that could change. Increasingly, cable set-top boxes have Ethernet ports on the back, allowing them to receive broadband signals. Once the port is activated, broadband service could be available to TV users. For movie studios and other content owners, that means VOD content can reach the consumer's TV without relying on the cable operator.
Greene says that capability could be unlocked within the next 12-24 months, although some hurdles remain. First, a simple user interface needs to be put in place so users can access broadband content as easily as they access VOD or subscription VOD services. Second, the DRM needs to be incorporated into the set-top box.
“Just because you can access the Internet doesn't mean you can handle DRM,” says Green. “It will be easier to get content onto portable media players [PMPs] than on the set-top box.” Getting content on PMPs, however, is a much smaller market opportunity than reaching hundreds of millions of TV viewers.
“We're on the verge of the TV and Internet convergence becoming real and viable,” says Ozguc, citing consumer appeal of the personal video recorder (PVR) and TiVo. Reaching consumers isn't the only way to capitalize on downloading; there is also an industry component. A&E Television Networks uses a Maven Networks system to deliver full-length video screeners via the Internet instead of shipping thousands of preview screener videotapes to international affiliates and programming clients. It makes the screener process cheaper—and faster.
“Their customers and affiliates have access to screeners and can watch them in full-screen, DVD quality,” says Ozguc. “That's the only thing that is certain about these services: Whatever the product, it needs to match the experience of watching the content on a TV set. That's why downloading and playing it off the disk is the only way to go.”