The emergence of IPTV as a viable distribution alternative to cable gives broadcasters an opportunity to develop new revenue streams based on two advantages: a highly developed sense of familiarity with their local communities and their high-quality production capability, according to Anystream chairman and founder Geoff Allen.
However, Allen believes for broadcasters to truly cash in on IPTV, they must do more than repurpose existing content. They must develop new local content that will attract viewers and help them cement distribution relationships with telcos rolling out IPTV services.
IPTV Update spoke with Allen to gain a deeper understanding of his perspective on how local broadcasters can benefit as telcos bring their IPTV services to the market.
IPTV Update: As local broadcasters see IPTV entrants like Verizon actively seek out their content for distribution — in the case of Verizon via FiOS — is there any insight you can offer for making locally produced content more appealing or more likely to generate additional revenue from repurposing for IPTV?
Geoff Allen: We have seen this coming internally for some time now. It hasn’t been overnight, but everyone is coming to the general consensus that the mode of transmission is becoming less relevant than it used to be, whether it’s broadband, QAM or over-the-air broadcast. It is really about who owns the content.
Local content has always been highly desirable. The interesting thing about IPTV and telcos is they are coming to the table with a unique position to tread on cable’s historical difference — local relevance and targeted advertising. Cable can provide locally produced content, and most are increasingly going into the backyard of local broadcasters.
However, if you ask “what is the lasting differentiator of local broadcasters?” it is not only the local content they produce now — but what also what they could produce.
Telcos are very interested in that. They wish to differentiate themselves from cable by doing things like video on demand and interactive TV applications. We believe they’ll be aggressive in trying new things.
Locally relevant video on demand content has tremendous potential for telcos. Think about what Time Warner is doing with local football and Comcast for local real estate. The strengths of the teclo and the local broadcaster are inverse. Telcos have strong networks but no experience in originating content. Local broadcasters have tremendous experience, great production capabilities and strong local content relationships. Cable increasingly has both. They are expanding aggressively beyond public access, educational and government channels into local news and community-specific local programming such as dating, real estate and sports. There is a tremendous untapped market for existing content and more and more that’s what local cable is doing in the community.
Anystream’s software helps content producers create on-demand content at a very low cost, and increasingly we’re seeing our products deployed for local content origination. Just as cable is increasingly working with local broadcasters, we see Telcos and broadcasters as natural partners for expanding local content on demand.
IPTVU: One of Anystream’s claims to fame is automatic repurposing of content. That seems like a nearly impossible thing. For instance, a 4:3 or 16:9 TV show presents one set of challenges, but now throw cell phones into the mix. Most of their screens are portrait in orientation. Can such a radical difference in aspect ratio be accommodated automatically?
GA: There’s the technology answer, and then there is the genre or activity answer.
Technically, it’s not easily without some acknowledgement of requirements during production. For example, pan and scan is not an automatic process, and often can diverge from what the director had in mind. A wide shot just will not represent well on a 200 x 200 pixel screen or a portrait screen. It won’t be reproduced as well.
The second thing that must be recognized is, "what is the activity of viewing on these devices?" It’s really “content snacking." We do it all of the time. For example, when we are traveling we’ll read a chapter of a book at a time.
I don’t know a single person who would rather watch a movie or "The Daily Show" on a cell phone than a 52in plasma if they could. But when it’s the only thing available, that’s great. Beyond "entertainment snacking," we find the content having a lot of success on cell phones is more utilitarian. Things like news, sports and weather are utilitarian. Screen size has an impact but the time you will use it as a primary device is not typically a long time.
This is not to minimize the technical challenge. It is not trivial, but the consumption models right now are still very much like a VCR — play, start, pause and stop — like on an iPod. There really isn’t any chaptering or ads to speak of, and content availability is still low. As soon as you add any of the Web’s advertising or interactive capabilities, the automatic production process becomes absolutely critical.
IPTVU: Can a repurposing system take advantage of IPTV’s two-way interactive ability when starting with non-interactive content, and how much of the process of identifying hot spots for interactivity, linking to appropriate destinations, etc., can be done?
GA: IPTV will mandate it. What advertisers love about TV is its immersive, high quality experience. What they love about the Web is the accountability. If you think about it from an advertiser’s perspective ads are content too. An advertiser doesn’t want to hand produce for every distribution platform. Ford — if they want to take advantage of metrics, they need more information in the ad. But they will not want to hand produce it for IPTV, a TiVo, an iPod, etc.
When brand advertisers have this immediacy of a two-way connection — with $60+ billion spent on brand advertising on TV — forget the nirvana of knowing exactly who’s watching. They would be ecstatic with zip code targeting. That’s far beyond what an advertiser can do today with broadcast TV. Cable can do it somewhat with zoned advertising in local and regional spots, but more targeted advertising has enormous potential.
Advertisers want to buy an experience, and they want to buy an accountability measurement. We are no longer only using "appointment TV. There are TiVos, iPods, video on demand and IPTV applications that will all demand different metering and metrics. Advertisements will have to be flexible enough to work within these various environments. During prototyping these ads can be handcrafted, but not once they reach scale — that’s when automatic production will be critical.
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