Channeling the Universe
October 2013
Channeling the Universe – Heading to the New Normal
We are channeling the universe, literally and figuratively, working to determine what the new normal is, if even there is one, and if there is, it certainly is not one size fits all.
From the literal point of view, as the Voyager 1 space probe left our solar system a few weeks ago, the press report was that it would continue to send back signals until the year 2020. Perhaps that year was intentionally set to coincide with the 400th anniversary of the Pilgrims landing at Plymouth Rock, although probably not.
While we expect those signals to tell us “something” the fact is that when it was launched in 1977, our technology base was sophisticated enough and NASA had the foresight to put the device on board. Today, all vessels launched include cameras to beam back images of far distant worlds and the images have become as commonplace as the images we see regularly from the International Space Station.
Figuratively, we have long ago dismissed the concept of the 500 channel universe described as the “future” as recently as 20 or so years ago. In due time, we came to recognize that it was really a universe of infinite channels, broadcast and narrowcast, long before the 500 channel universe was achieved or even achievable. Many of us recognized that was the direction in which we were heading, not necessarily realizing that the “normal” might not be so normal, and not knowing when the world of infinite channels would come to be.
Only in the last couple of years has the general public accepted the concept of the infinite universe. In fact, that universe will continue to change as methods of content creation and distribution evolve and various technologies, measurement systems and user patterns continue to take hold. The concept of “normal” may become obsolete.
A number of components of the broader change are occurring, some of which may turn out to be game changers. Let’s look at a few of those and attempt to project when and how they will gain enough traction “to make a difference” and reach the next generation or tipping point of changing to the new normal.
Fiber – The internet as we know it took off in earnest with the transition from dial up to broadband, defined as both DSL and cable. In order to truly leapfrog again, better fiber connectivity is vital, although, given the trajectory of mobile, ultimately more robust wireless spectrum is also required.
Google Fiber is presently only in a few cities. In time, this service will be rolled out to more locales, spurring competition as they seem to have done recently in Austin, the home city of AT&T, where AT&T has now announced its intention to provide higher bandwidth to its customer base, at least in Austin. Google’s efforts may also prompt Verizon to resume its FiOs deployment.
Thus, to achieve true IPTV as many believe to be the “ultimate future” cloud storage and delivery of all content, especially if/when UHD or 8K content is produced, more robust broadband is required, thus a faster rollout of fiber will serve to hasten the transition from current delivery systems to IPTV.
Will it change the way we buy our TV service? It will depend in part on the ways that the streaming services evolve. If several hit it big with a sufficient number of successes in their productions, causing a substantial migration of users from their normal, then the answer is yes.
Faster speeds and in turn higher capacity may also dramatically change what we are now calling the internet of things, a time when many devices, some mundane, some not, will have sensors that transmit data, big data.
Original content – Throughout the history of Television, new channels that have been created have frequently started with older content and eventually transition to original fare. It occurred in the 50s with first generation networks that put vaudeville acts and radio shows on TV with some original content sprinkled in. It occurred again as cable channels began to proliferate and is continuing as the next generation networks of NetFlix, Amazon Prime, You Tube, Hulu and others become more prevalent.
When the Weather Channel, Maxim, Vanity Fair and many others begin to create original content, it is easy to observe that change is in the air. Overall, it seems that there is a wave of original thinking going on as channels attempt to not do the “same old” in their quest to attract and retain viewers.
Indeed, with the foregoing, the march to original content is proceeding seemingly more quickly than in generations past. However, in time, they, too, will learn what studios and the big traditional and cable networks already know, that content production is risky from a commercial point of view.
Consumption of content – Perhaps the term TV everywhere is overused. Perhaps not. Many of us watch as our time permits, unencumbered by the “norm” and the options we have available seem to be growing every day. In fact, the historical windows of “normal” content production and distribution have been changing for some time. There is no longer a rule book of the order in which professional content is released as different sequences of release have been tried and tested, a process that will continue. The goal is to attract as many eyeballs as possible, a year round and ongoing practice.
It may even be a process that is less generic and more specific to a particular genre of product or just the whim/intuition of the execs making the release decisions. Binge viewing has been in the news a lot lately, due in part to NetFlix putting House of Cards first season all online at once so that subscribers could consume the series at their own pace. This is not new and is a concept that was popularized with the advent of TV on DVD in the last decade. With whole seasons on a DVD, producers were able to reap more value from their content than was heretofore the case with VHS, thus creating the incentive to develop much more original content.
While digital tools make it easy to do, it just puts pressure on the production workflow to complete a whole season of episodes at once. No longer is there a “normal” whole season in terms of a specific number of episodes or a start and end date. On the plus side, writers have more freedom in developing their character story arcs.
Measurement – So far in the “new” TV season, the prevalence of the DVR is being felt more so than in years past, with some shows anticipated to increase their live viewership by 100% or more once the final counts are done. C3 and C7, measuring viewers 3 and 7 days respectively from air date, supplements the overnight Nielsen traditional measurement, becoming the new “normal.”
In the early days of the season, with a plethora of new programs entering the marketplace, it may be difficult for some to watch within the 7 day window and indeed that should not preclude advertisers from reaching their share of the viewers.
In due time, dynamic ads will be inserted in DVR stored programming. The Thursday night show that in its live delivery has an ad for “tomorrow’s” new movie release could be supplemented a month later with whatever “tomorrow’s” release will be or even just a generic consumer product ad or whatever seems to be in inventory at the time the program is ultimately viewed. Higher capacity broadband will assist in the rollout of this technology.
This season we’ll see Twitter sentiment entering the measurement arena as a part of the Nielsen ratings due primarily to the prevalence of second screens and fans Tweeting their thoughts while watching one of their favorite shows. I’ll be watching to learn about the impact and will be curious as to what occurs when someone is watching beyond the current 7 day cycle. How many Tweets in the longer time frames matter?
And Facebook recently announced which shows, especially new shows, created the most chatter on its social network.
Will Twitter and Facebook provide statistically valid data as to the entire viewing universe? Probably not. But then again, the new norm may not require that, as the system provides data that is targeted, if not statistically valid. Producers and networks may use the information to cancel a show that might have been renewed based on the old measurement methodology, or they may now have sufficient information to renew a show that heretofore might not have been given enough time to find its audience base previously.
When IPTV becomes the norm, measurement will be much simpler and far more accurate. The analytics will be able to provide information far more relevant to the advertiser than is now the norm.
TV sets – Consumer electronics devices are undergoing rapid changes as the HD transition is essentially complete with better than 75% of US TV households now having a flat screen TV and presumably most with HD service and better than 50% of TV HH having more than one. Both percentages will continue to increase as will the “3 or more” sets per household.
Support systems and workflow for HD are in place and have been for some time. It will take time to bring 4K and 8K into the ecosystem. There are lots of pros and cons as to if/when that will occur, but that should be an easier transition than the one from standard to high definition.
It is just a few months until CES when we will be hit with a barrage of new sets and related devices, from mobile phone and tablets to a plethora of TVs, LCD, LED, OLED, UHD/4K, curved and flat to name some and that only includes what we know now, none of which may be considered the “norm” as all are viable and each represents a personal choice. There will be more come January as more vendors begin to show 8K even before 4K/UHD has even made negligible inroads.
The new normal? The new normal is that there is no new normal as we continue to channel the universe. What is on your channel?
As for The Shindler Perspective
We have been fortunate to have a tradition of becoming involved in concepts and technologies early in their life cycles through our advisory services and in prior hands on management roles. These include very early involvement in CGI, digital filmmaking and related tools, digital restoration, digital cine cameras, previs and 3D as we advise companies, entrepreneurs and others to assess the impact of the “next” thing, whatever that may be.
SMPTE – The latest is 4K or as it is now officially dubbed as UHD. On Monday October 21, 2013 I will be moderating a panel at the new business track for the SMPTE Conference entitled Who Will Make Money in the 4K Ecosystem? Panelists are from Forward Direction Group, IHS, Imagination Technologies and Piper Jaffray. This topic has a lot of supporters and its share of naysayers. We’ll explore both sides of the issues.
Digital Hollywood – The next day, October 22, continues my long time honor of producing and moderating discussions at the Digital Hollywood Conference.
Bright and early that day at 7:45 AM is The Future of TV: From Primetime to MultiPlatforms: Wall Street Analysts Meet Entertainment Executives. Join me and panelists from Forward Direction Group, PriceWaterhouseCoopers, MESA/2nd Screen Society, Metan Development Group, VDIO and Wedbush Securities as we explore the latest thoughts about the future with a group that has well thought out opinions.
Later in the day, at 10:45 AM will be The Blockbuster Strategy – Hollywood’s Billion Dollar Creative Edge – The Making of an Entertainment Franchise. Tentpole movies have dominated many aspects of the content ecosystem, making this topic especially pertinent. Join me and noted author and producer Lynda Obst, AMC Theatres, IMAX and The Third Floor as we delve into the topic. A similar session on this ever evolving topic was especially informative, engaging and well attended at Digital Hollywood Spring. It was covered by The Hollywood Reporter in case you missed it.
Recent events – As a follow up to the NAB interview, Steve Waskul of Waskul Entertainment on Waskul.TV conducted another, more in depth interview at the Intel StudioXperience™ at Siggraph.
The topic of working with companies in China is on the minds of people through the entire entertainment industry. We covered it at Exploring the US China Relationship for Amplify Roundtables at an event hosted by United Talent Agency.
I was pleased to be a contributor to Production Pipeline Fundamentals by Renee Dunlop. The book due out shortly, is now avail for pre-order on Amazon.
Trends in the Marketplace and Other
We are constantly keeping our eye on trends in the marketplace that shape all manner of products and services in entertainment and entertainment technology. In between these periodic consulting newsletters, we post comments, links to informative news articles, comics reflect reality and news of events we attend and speaking engagements on LinkedIN, Twitter, Facebook, Google +, the VES Forum and the PreVis Society.
In the coming months, we’ll be watching such diverse topics as consumer electronics, TV and content production and distribution, virtual production, box office, incentives and the transition of the Tonight Show to a new host and its impact on a very competitive environment we call late night wars, among others.
Comics reflect reality – The US just celebrated Columbus Day. Wonder what Chris would have said when he arrived in the new world if social media was in existence? Tweets are the new normal.
Blondie and Dagwood have their take on reality shows, too. Does the audience sometimes root for a show to be canceled?
Roberta Shindler and I hope that our clients, prospective clients and friends are had a wonderful summer for those in the Northern Hemisphere and a not too cold winter for those in the Southern Hemisphere.
Please feel free to send your feedback on what you read here, pro or con or other matters of interest to you.
For The Shindler Perspective, Inc.
Sincerely,
Marty Shindler
Chief Executive Officer