For those who experienced the early days of television with its black-and-white images, limited channels and snowy pictures, today's television resembles “Star Wars” technology. Black-and-white shows like “Hopilong Cassidy,” “Sky King” and “The Ed Sullivan Show” were hits.
Sometimes the picture was snowy, but that was normal and expected. Viewers were satisfied with three channels, with maybe only one being in color. Stations stopped broadcasting at midnight because, after all, who watched television overnight?
Today's television experience, with high-definition pictures, multichannel sound, sports, prime-time serials, documentaries and even HD local newscasts, seems light years from yesterday's technology. Yet, even brighter days may be ahead. To understand how this industry will get there, it's worth examining the structural changes that broadcasters will need to make.
Today's viewers expect 100 TV channels, all in color, some in HD. In addition, viewers expect their entertainment centers to provide special features, including pay-per-view, video-on-demand, exclusive sporting events and even caller ID.
In most communities, the competition is between cable and satellite. Broadcasters used to deliver 100 percent of the viewing audience OTA. Today, less than 15 million TV homes use an OTA signal. The rest connect by cable, satellite and, soon, IPTV. (See Figure 1 on page 46.)
Why have broadcasters moved from the driver's seat to the back seat? What can be done to maintain or improve station revenue? Will cable, satellite, telco and broadband relegate broadcast television to the equivalent technological status of AM radio?
Today's demanding viewer
There are an estimated 110 million total TV households. Out of those, 73 million are connected to cable, 22 million use satellite, and the rest receive OTA transmission. It's anyone's guess how IPTV from the telcos will affect these numbers.
The average cable viewer receives 91 channels of programming. Most of the larger multiple systems operators (MSOs) and multichannel video programming distributors (MVPDs) will gladly supply hundreds of video and audio channels into the home — if you can pay for it. When that happens, the local station is no longer one-third or one-fifth of the viewer's options; it's often less than one-one-hundredth. It's pretty hard to maintain visibility in such a crowded field.
Today's viewers no longer tune to broadcasters' programming like they used to. Last year, 57 percent of TV viewing was from cable networks, not broadcast networks. Original content is moving to cable. For example, the NFL sold the hit program “Monday Night Football” to ESPN. Those games are now shown only on cable, with home team OTA exceptions.
Fortunately for broadcasters, even as the number of content channels has increased, so has viewing time. Last year, the average home watched more than five hours of television per day. That represents a 2.5 percent increase over the previous year. Experts say that even with the draw of alternative entertainment platforms, such as mobile video, IPTV and broadband, TV viewership will continue to grow at about 2 percent per year through 2008. Despite all the media options, viewers still use their televisions three to four times as much as they do computers or video games.
As broadcasters lose viewership, advertisers increasingly complain about paying more for less. Figure 2 on page 46 shows the average early evening news share for the three broadcast networks. An advertiser may have been able to reach 20 percent of the audience 10 years ago, but today, that advertiser reaches only about 15 percent — and at highly increased prices.
Local newscasts haven't fared much better. (See Figure 3.) Note the precipitous drop in viewership starting in 1999. While the rate of loss has diminished in recent years, local TV viewership is still declining.
Cable has an audience almost twice the size of broadcast, yet it collects only 30 percent of today's advertising revenue. Advertising executives say that this difference between performance and revenues makes the market prime for significant change.
On the upside for broadcasters, cable penetration has reached saturation. (See Table 1.) For the past five years, cable audiences have hovered around the 68 percent penetration level, with only a 2 percent change. Last year, penetration dipped by 0.5 percent.
Meet the new viewer
Is there opportunity for broadcasters in all this gloom and doom? The simple answer is yes, but realizing the potential revenue will require a different kind of station operation and new workflows. (See “Equipment list” on page 50.) The keys to success are new technology, staff flexibility and management's willingness to try different ideas.
Younger audiences are increasingly media savvy. They want more control over what they watch. They are the first to use PVRs, portable media players and broadband television, selecting content and scheduling it for delivery according to their needs. (See Figure 4.)
At the recent Broadcast Engineering News Technology Summit, David Payne, senior vice president and general manager for cnn.com said, “Younger audiences demand a different experience. Give them what they want on the schedule they want.”
Mobile gold mine
One interesting broadcast opportunity may exist in serving mobile viewers. Mobile television is frequently discussed, but rarely understood — especially when it comes to understanding the role of broadcasters. Yet, new information indicates that broadcasters can play a key role in the deployment of mobile television.
Last month, Nokia released an in-depth report called “This box was made for walking: How will mobile television transform viewers' experience and change advertising?” The report shows that broadcasters can become an integral part of this service. Specifically, it says:
- By 2011 mobile television will have more than 500 million subscribers.
- Mobile television will complement, not replace, traditional television.
- Local content will be the most-watched type of mobile program.
These three points should catch the attention of broadcast general managers and engineers. They show that mobile television may be an opportunity rather than a threat.
The report says that consumers will use their mobile devices to watch familiar content, such as news, weather, entertainment and sports. After local news, the second most popular programs are likely to be network newscasts.
Prime time for mobile viewing will be 6 a.m. to 9 a.m. and 6 p.m. to 8 p.m. Stations supplying news to a mobile deliverer will have to package and turn around newscasts quickly. There won't be time for lengthy post production.
Viewers will use their mobile devices while they commute (not drive) or have wait time. Studies also show that up to one-half of the users will watch mobile television at home. Lunch breaks also proved to be a popular viewing time.
Viewers will snack on video for short periods rather than watch full-length programs. Content for small screens must be packaged for proper display. Simply shrinking your wide-screen HD image to fit a 2in × 4in screen isn't sufficient. Such packaging would be easy but worthless because the focal points would remain too small for mobile viewing. (See Table 2.)
Instead, mobile content must be reformatted for smaller screens. Newscasts must focus on talking heads and close-ups, not widescreen or studio two-head shots. Graphics need to be short, snappy and large.
Mobile viewers also want customization, much like they get from TV Web sites. Viewers who don't care for sports might be intolerant of having to watch 30 seconds of last night's game. Let viewers choose what they want to see, and then deliver it.
Mobile television will require shorter ads, typically five or seven seconds. This will necessitate new production techniques. Copywriters will have to shorten copy, use larger, easy-to-read graphics and get to the point quicker.
One upside is that content can be interactive. Consumer-initiated ads will be popular with both viewers and advertisers. Also, location-dependent ads will be possible, as two-way media players will be equipped with GPS positioning.
An issue that is sometimes overlooked is the two-way video nature of the mobile platform. Expect viewers to not only view your content, but also to be willing to supply you with content. Mobile players will come equipped with high-resolution cameras and video transmission capability. Technology already exists to automatically ingest mobile phone news clips. Think of the news possibilities.
Finally, while these viewer needs may sound like challenges, the benefit is the first-rate audience they bring. Research shows that the 18- to 34-year-old mobile audience is a highly desired demographic by advertisers. This audience tends to be tech savvy; they're the ones driving YouTube and other personal video Web sites. These folks are ready to spend money and aren't intimidated by technology.
The analog turn off
Broadcasters should view the death of analog as an opportunity to recapture their lost audience. It represents a once-in-a-lifetime chance for TV stations to give viewers a free OTA multichannel experience. Viewers will be excited to learn that their favorite OTA station can now provide them with up to six programs simultaneously — in addition to prime time HD.
Right now, OTA audiences are miniscule, so the next two years are the perfect time to try new ideas. There aren't 500,000 viewers watching Channel 4.3, so if it crashes, big deal.
Experiment. See what works in your community. Look for partners. Develop video podcasts. Soon cell phones will be able to capture and store both streaming and video clips. Viewers will charge their cell phones overnight, and when they wake up, the phones will have already have downloaded the morning news and other personalized content.
This is an exciting time in our industry. While some complain, “It's the worst of times,” others see just the opposite. To them, the challenges are exhilarating and will lead to a successful future. One thing is for sure: The end of television as we know it is truly at hand. Martha would say, it's a good thing.
Year Cable households (in thousands) Percent of U.S. households that own televisions 2001 69,490 68.0 2002 73,230 69.4 2003 74,430 69.8 2004 73,860 68.1 2005 73,930 67.5 Table 1. The number of cable households in the United States has not changed greatly in the last five years, fluctuating between 67.5 percent and 69.8 percent since 2001. Figure courtesy The State of the News Media 2006.
Broadcasters need to modify their workflow to provide viewers with mobile television. Using a sneakernet and linear editing techniques are neither fast or efficient enough to enable multichannel, mobile and streaming technologies. Let's look at some of the equipment that will be needed.
A multichannel, building block automation design is a must. Another option may be the one-box-per-channel solution. The system must accept business office drivers for scheduling and output commands to servers, for play-to-air, play-to-Web and play-to-mobile channels.
Allow for multiple play to air channels. While the station may only need an analog and digital channel now, expect more air channels to be added later.
Be sure the automation system can ingest multiple feeds, perform QC, and stage them for play without operator intervention. You will also need to build an as run log for billing on each channel.
Don't forget that sometimes the station will broadcast in HD, and other times in SD, with additional channels. The automation system must be able to make the proper multiplexer switches without visual or audio impairments. This can be more difficult than it may seem if the initial planning isn't done correctly.
Buy only what you need today. Storage costs are dropping, so don't pay today's prices for tomorrow's needs. Just be sure you can add capacity in modular chunks. Don't settle for a server that can only be upgraded with a forklift.
The streaming and mobile channels will need format and scan conversion. Again, these functions must be automatic and foolproof.
The images may also need to be groomed for proper display on small screens. Several companies have demonstrated equipment that has the intelligence to identify key image features and perform real-time zoom to them.
This type of function is key in light of mobile viewers' needs. Images must be properly groomed for display on small screens.
Current television that is repackaged New TV content Prime times Much shorter, concise news briefs Talking heads, close-ups 6 a.m. - 9 a.m. User interactivity of reality television and game shows Snackable content Midday prime User-generated content Mobisodes Midday Segmented programs Visual spectacle 6 p.m. - 8 p.m.
Table 2. What will people watch? People will watch a combination of original broadcast content, plus new content specifically made for mobile consumption. This content must be supplied in snack-sized segments. Figure courtesy Nokia.
- Palmer, Shelly, “Television Disrupted,” Focal Press.
- Orgad, Dr. Shani, “This box was made for walking: How will mobile television transform viewers' experience and change advertising?,” Department of Media and Communications London School of Economics and Political Science, commissioned by Nokia.
- “The end of television as we know it: A future industry perspective,” IBM Business Consulting Services, 2006.
- The State of the News Media 2006, Project for Excellence in Journalism, www.stateofthenewsmedia.com/2006.