Smaller TV audience slices, bigger pie, says NATPE 2009 keynote speaker Jon Feltheimer
Mobile is the message in NATPE intern Charles Ackerman's short video, "Technology at NATPE."
TV is better, bigger, more available and on the verge of a new golden age, if you believe Lions Gate CEO Jon Feltheimer. In his keynote at the recent National Association of Television Program Executives conference, Feltheimer forecast huge opportunities for those who can "think small" and uncover profitable niche markets.
"What we're witnessing are simple commercial rites of passage — the passing of one era that is essential to the birth of another," he said. "Old models don't die a sudden death; they simply transition to new ones.
"You wouldn't have said that the great variety shows like ‘Ed Sullivan,’ the ‘Smothers Brothers’ and ‘Laugh In’ were dead when, in fact, they were paving the way for new incubators of popular culture like ‘Saturday Night Live,’" he said. "Television is a living, breathing, fluid and dynamic medium, and the passing of old models is a positive development giving rise to the birth of new ones."
New markets and digital platforms are part of that continuum. Fear of this next chapter in broadcasting history means missing an enormous growth opportunity.
"Those who adapt best to the changing dynamics of the television landscape will be those who realize there are more television viewers today than ever before," Feltheimer said, "scattered across more viewing platforms, more day parts and more territories around the world. The ratings for the individual slices of the pie may have diminished, but the slices actually add up to a bigger pie."
The winners will be those who "think small" — companies that are agile, entrepreneurial and organized to profit from these smaller niche audiences in a world of any time, any place viewing.
"It won't only be measured by the number of television sets in use. Instead, it will be determined by a far more complex calculus of iPods, blackberries, PCs, PDAs and other mobile and multipurpose electronic devices that are becoming the new nerve centers of the digital marketplace."
Tuning in to mobile TV
From there, it's an easy jump to mobile TV as one of Feltheimer's "think small" opportunities. With the new U.S. ATSC mobile standard gaining momentum, NAPTE brought in a few mobile TV heavy hitters to discuss current field tests and new programming and advertising capabilities at "The Future of Mobile DTV" roundtable.
"Everyone agreed that broadcast mobile TV changes everything," said panelist Anne Schelle, Open Mobile Video Coalition executive director.
But free-to-air mobile TV doesn't displace premium services, according to Ray DeRenzo, senior VP at MobiTV, which serves between 4 million and 5 million mobile phone subscribers. Broadcasters bring in live local content, and that's important because live shows get the biggest audiences. But just as people subscribe to premium services at home, Schelle said that model will carry over to mobile TV.
The panel also noted that the ATSC mobile standard delivers something else that's essential for next-generation TV: an IP management layer. This layer supplies a framework for real-time services, Web access, broadcast widgets, etc. — in short, the interactive features that MobiTV debuted at NAPTE.
The handset "makes much more sense as a platform" for mobile TV, OMVC's Schelle said, because the capabilities required are already there — for example, touch screens.
"The devices are also personal — social networking, location services, personalized applications. All those things are what are coming on devices like the [Blackberry] Storm and Samsung's Eternity iPhone. Smartphones are really becoming entertainment devices," she said.
In mobile TV, interactive content means interactive ads. Srini Dharmaji, CEO at mobile advertising startup GoldSpot Media, shared insights about mobile advertising, gained from Goldspot's European tests of a new service that lets viewers buy movie tickets after seeing an ad. Not only does this make for a seamless user experience, it uses the back channel to give broadcasters and advertisers more — and more accurate — information about who's watching.
But all of these new applications will be collecting dust without the infrastructure to support broadcast mobile TV. ION Media Networks has been taking the lead in mobile TV field-testing and offered some hard numbers on performance and costs.
ION senior business advisor Dan Hsieh reported that tests show a coverage radius of 55mi-60mi for one transmitter. Implementation was quick and cost-effective, he said, giving the example of ION's Denver station, where a mobile transmitter was installed and running by two technicians in four hours.
For installing mobile TV services, "We're looking at $50,000 to $100,000 depending on what broadcasters already have," said the OMVC's Schelle. "If a station already has upgraded to digital HD, then the cost of adding mobile is at the bottom of the range. The barriers to entry are incredibly low. What it costs — in-band and out of band — to buy spectrum costs millions. If you look at bit rates, it's pennies for broadcasters."
Lessons from wireless history
For those who remain unconvinced that an explosion of mobile TV is just around the corner, the OMVC's Anne Schelle offers an analogy from her experience as a manager at American Personal Communications/Sprint Spectrum.
"The reason AT&T never got into wireless was because they had a study done that said that there would be only 1000 subscribers in the next 10 years. When I launched digital PCS — the first PCS licensee in the U.S. — you had people saying, 'people will never buy cellular.' We launched and had 35,000 subscribers in a month.”
Skeptics "are basing their view on what's been deployed to date," she said. "But once you understand the power of broadcast, it's an incredibly powerful medium. If you're going to have 1 million people watching the Super Bowl on mobile TV, it's not going to be on a cellular network. Consumers are willing to watch what they have at home on these smaller screens.”
Research in Japan and Europe shows that “they're watching for more than 30 minutes," she said. "Free-to-air changes everything."
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