Old Media Gets New BoostTechnology trends point toward more HD, TV Everywhere and new Nielsen numbers 1/03/2011 12:01:00 AM Eastern
It’s been said that technologies
generally take longer than
expected to be adopted, and
that when they finally hit the mainstream,
they change the world in
ways few people imagined.
That adage will be particularly
important in 2011, as some older
technologies, such as high-definition
television, continue to slowly transform
the industry, and technologies
such as mobile and online delivery
of video move into the mainstream.
Usage of online video hit record levels in 2010, but “total online
video consumption represents less than 1% of total traditional TV
consumption when you are talking about professional content,” says
Brian Weiser, executive VP, director of global forecasting at Magna
Global, who is projecting
that online video advertising
will grow by 25% to
$1.7 billion in 2011.
But as Wieser and others
stress, 2011 is likely to see
some important developments.
And two technology
one obscure—will be crucial.
The former is the TV Everywhere
initiative by multichannel
providers to allow
their subscribers access to
tens of thousands of programs
online and, ultimately, on mobile devices. “It’s a big deal,” notes
Jack Wakshlag, chief research officer for Turner Broadcasting System. “TV
Everywhere [platforms] will be available in 70 million homes in 2011.”
Many programmers such as Turner are embracing TV Everywhere
because of a more obscure development: After years of work, Nielsen
is in the process of deploying a system to deliver combined TV and
online ratings. Programmers will get preliminary reports in January,
and the system will go live by mid-March, though the first official
reports won’t be delivered until late April or May, notes Matt O’Grady,
executive VP of product leadership at Nielsen.
Because programmers will get full credit for online viewing as long
as the content is viewed within three days of its broadcast airing, and
they run the same commerical load as linear TV, this will strengthen the
traditional TV business and encourage broadcasters and cable networks to make more content available
online. But it is also likely to put
pressure on Hulu and Netflix to reexamine
their business models.
Programs on Hulu’s free site
contain fewer ads than broadcast,
so viewing won’t be counted in
Nielsen’s combined ratings, making
it likely that the free part of the service
will have to change its ad load.
With traditional business models
spreading to online content, Netflix
may be forced to add advertising,
creating subscription tiers with commercials if it wants to compete for
rights. “You have $100,000 per episode being offered by Netflix, while
you can get a million or more per episode in syndication,” notes Brent
Horowitz, VP of business development at online ad specialist FreeWheel.
Meanwhile, overall TV viewing continues to grow, thanks largely to
a somewhat older technology—the high-definition 1080i images that
were first tested by Japanese public broadcaster NHK in 1969.
Hi-def wasn’t developed in response to digital media—the first HD tests
were analog—but it’s now having the unintended consequence of futureproofing traditional TV against other video platforms. “It’s gotten people
back into the living room, watching those big-screen TVs,” says O’Grady.
An amazing amount of HD work still needs to be done, however.
Only 25% to 35% of local broadcast stations have launched local HD
newscasts, and only a third of broadcasters were even equipped to
take HD ads as of the third quarter of 2010.
That means low-cost technologies for HD upgrades, or technologies
for centralized or automated operations that can reduce costs,
will once again be in vogue as broadcasters head to the National Association
of Broadcasters convention in April. Here, two less widely
discussed trends will be important to keep in mind: a faster move to
IP infrastructure, which runs on less expensive gear; and cloud-based
solutions, which require less capital and are cheaper to operate.
“The cloud is going to be the next big wave of computing in the media
and entertainment world,” says Gabriele Di Piazza, managing director/
media and entertainment in Microsoft’s communications sector. Microsoft
is working with such media operations as the Associated Press and
Tribune on cloud-based solutions for multiplatform content delivery.
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