2007 Will be the Year When Creators Get Paid and Other Views from the Future of Television Forum

Authored by Jay Baage on November 17, 2006 - 4:58pm.

[Coverage from DMW/CEA/NYU's Future of Television Forum in New York]

During the “Mobile TV: The Next Frontier” panel, Jason Rubinstein, Senior Director, Mobile Video & Gaming Mobile Devices at Motorola remarked that there are a number of problems with formats, copyrights and bandwidth that have to be overcome before video applications will become a main stream application for cell phones in the US. “Mobile video is years behind where music is today”, he admitted.

Joseph Laszlo, Research Director, Broadband Media at Jupiter Research, further stated that there are approximately 3.7 million mobile video subscribers in the US today. His best prediction is that there will be 20 million mobile video subscribers by 2010. That might seem like a high number, but it is only a fraction of the over 200 million cell phone subscribers across carriers. In other words, mobile video is a nice add-on, but no killer application.

These modest admissions and projections might sound strange coming from a conference titled “The Future of Television”. Understandably one might anticipate hearing numerous bold and optimistic predictions, going so far as declaring that the rapid emergence of online and mobile video is spelling “game over” for mature television networks and traditional media companies. However, most of the speakers had a rather cautious view of the brave new world of television.

“We’re still going to have conventional big screen television for a long time”, said Tom Rutledge, CEO, Cablevision Systems Corporation during a keynote presentation on Friday.

He reflected that, sure, there is a dichotomy developing in television: viewers want bigger and better HDTV screens in their living rooms; while at the same time, they desire portable little screens, in forms of video iPods and video cell phones, that they can watch on-the-go. Nevertheless, the changing landscape of the television industry is happening in the form of an evolution, not a revolution.

Rutledge also spoke about the transformation that is happening on the advertising end of things, where there is still a tremendous need to reach consumers with information, but also an increasing demand for accountability. This is, of course, a huge challenge for the television industry in general, which is known to be poorly measured, but Rutledge also pointed out that there are also many exciting possibilities:

“If you look at Cablevision and cable TV in general, we can create something that has not existed before: the viewer can see a message on TV and actually place an order for the product or service being advertised through interactive television services. It is coming, but not tomorrow. It will take some time.”

Cablevision has already diversified its revenue stream though its “Triple Play” offering, which packages telephony, Internet and cable TV on one bill that costs, on average, over $115 a month.

“I hope when I’m Chuck Dolan’s age”, the 80-year-old founder and chairman of Cablevision, “the average cable bill will be $2500”, said Rutledge, who received a big laugh from the packed auditorium.

Another popular panel on Friday was entitled “New Television Technologies and The Battle for the Digital Consumer”. It was moderated by Shelly Palmer, Chairman of the Emmy Advanced Media Committee, who said that watching video on the Internet on sites such as YouTube is undoubtedly the big new phenomenon in television this year. On the other hand, Brian Cooley, Editor at Large, CNET.com, was quick to point out that there are still many pieces missing for this phenomenon to spread to cell phones:

“We have yet to see the advent of original content for portable devices.”

In the “Future of Television Advertising” panel, it was clear that the tone and focus of the discussion has changed over the last two years, when everyone was talking about the threat posed by digital video recorders (DVRs), like TiVo, to the advertising business model of traditional television networks. In fact, now the networks are discussing how DVRs are having a positive effect on viewing.

Meanwhile the issue of commercial skipping has taken a backseat to the challenge of creating advertising that is contextual and relevant to the audience:

“[30-second] commercials are still very, very effective. They are not going away. But many other forms of commercials are emerging. New technologies allows us to blend in direct marketing in a way that was not possible before. You are going to see new levels of sophistication and tailoring of commercials”, said Marty Yudkovitz, SVP, Corporate Strategy and Business Development at The Walt Disney Company and former CEO of TiVo.

Another interesting keynote presentation was given by John Rose, Director, Global Convergence Initiative at The Boston Consulting Group. He made a number of controversial, but relevant, observations on the state of the industry. His viewpoints included the following: consumer-pay models will not replace advertising-based models; appointment TV will gradually disappear; interactive/digital services will not “fill the gap” of money that is moving out of the traditional media space; and new competitors will emerge from historically unrelated businesses and win big. And all this will happen within a 3 to 5 year period.

[To download and view Rose's PowerPoint presentation, click here.]

“People will be watching more TV than ever in a few years, but the market will be segmented and there will be a number of new players supplying viewing experiences. There are alternatives to appointment TV, but networks are not running down that path right now”, commented Rose.

On the panel called “The Buzz About Consumer Generated Media” the issue of the networks role in the future of television came up again.

“If anyone in this room thinks that big media is going to control this space, you need a reality check”, said Steven Starr, CEO of Revver, a video-sharing site that splits advertising revenue with the contributors of video content.

However he got a quick retort from Eric D. Alterman, CEO, of KickApps:

“Don’t underestimate big media’s role in this space.”

Starr’s comeback sounded like a bold manifesto for the “user-generated” generation:

“2007 will be the year when the creator is getting paid. Creators are waking up. YouTube was sold for $1.65 Billion and the creators that drive the eyeballs got nothing.”

In the last panel of the day, “It’s Not Ma Bell Anymore: Global Interactive Networks and the Future of Television”, Eric Bader, SVP, Director of Digital Connections, got down to business. He said that brand awareness metrics are not enough for advertisers to move into this space full speed. What the industry needs are more reliable ways to segment the market and measure the effectiveness of the ads placed on these new platforms:

“The shortcomings in new media comes down to that there really are no ad models” for online video.

Michael Cai, Director of Digital Connections at Parks Associates agreed:

“The change in the television industry to new platforms is not going to happen overnight. No one wants to replace a $2 billion industry with a $2 million industry.”

Joakim Baage
New York