How is media
consumption
changing?
Ecom & Icomp Experts
Address Series
University of Hong Kong
Admiralty Centre
27 September 2005
The impact of convergence
Peter Olaf Looms
DR
Structure of my presentation
1. How is media consumption
changing?
2. What are the key underlying
trends?
3. What are the implications for
producing and distributing
digital media and services?
4. The road ahead
2
1. How is media
consumption changing?
3
Media - Supply Side
”A Niagara of supply”
Davies [2001]
4
Media - Supply Side
Media in the UK - supply side
1988/1989
1997
Increase %
Magazine titles
2,042
2,430
19%
Singles released
3,932
5,926
51%
Albums released
8,762
18,386
110%
Comm ercial radio channels
60
188
213%
Cinema multiplex s ites
14
118
213%
4
60
1,400%
380
16,762
4,199%
0
132 million
Infinity
TV-channels
CD-ROM t itles
Web-pages
5
Media - Demand
Media consumption in the USA
(hours/week)
1995
2003
Percentage
increase
Television
30.4
33.2
9%
Radio
18.7
19.5
4%
Newspapers
3.2
2.3
-28%
Weekly magazines
2.2
2.4
9%
Internet
0.1
3.3
3200%
Video
0.9
1.3
44%
Console games
0.4
1.4
250%
6
Media - Demand
Media consumption in the USA
(hours/week)
1995
2003
Percentage
increase
Television
30.4
33.2
9%
Radio
18.7
19.5
4%
Newspapers
3.2
2.3
-28%
Weekly magazines
2.2
2.4
9%
Internet
0.1
3.3
3200%
Video
0.9
1.3
44%
Console games
0.4
1.4
250%
7
2. What are the key
underlying trends?
8
Key trends
1.Individualisation
TV: what and when the viewer
wants...
...ultimately anything, anytime, anywhere
and on any device
• Us  Me
• Convenience
9
The viewer takes a decision before release
TIME SHIFT
ON DEMAND
”When you want”
”What you want
When you want”
Viewing with others
The viewer can take a decision after release
Viewing on your own
10
The viewer takes a decision before broadcast
Podcasting
Handheld PVR
On Demand (PC/mobile)
PSP/Handheld PSP/Handheld
Mediacenter
Mediacenter
Mediacenter
Mediacenter
PVR
Network-PVR
Viewing with others
On Demand
FastWeb
The viewer can take a decision after broadcast
Viewing on your own
11
Key trends
Collective
business models:
Individual business
models:
• Advertising
• Subscription
• Public Service
• Pay Per View (PPV)
• Pay Per Play (PPP)
• Pay As You Go
• State funding
• Licence Fee
• Mixed models
LOW RISK
CONTENT DIVERSITY
HIGHER RISK
MAINSTREAM CONTENT
12
Key trends
1. Individualisation
2.Demographics more elderly and
kids (although not
Hong Kong!)
13
Key trends
1. Individualisation
2. Demographics - more elderly
and kids
3.Globalisation
14
Key trends
1. Individualisation
2. Demographics - more elderly
and kids
3. Globalisation
4.Digitalisation
15
Key trends
1. Individualisation
2. Demographics - more elderly
and kids
3. Globalisation
4. Digitalisation
5.Fragmentation
16
Key trends
•1.
•
2.
•
Big
growth in supply of content
Individualisation
Modest growth in consumption
(hours
per week)
Demographics
- more elderly
Consumption
spread over more
and kids
channels/sites
•3. Channel/site
Globalisation share under
pressure
•4. Need
to be most cost-effective
Digitalisation
(more content for less)
5.Fragmentation
17
Key trends
1. Individualisation
2. Demographics - more elderly
and kids
3. Globalisation
4. Digitalisation
5. Fragmentation
6.Convergence
18
But what is
converging?
19
Convergence
From here....
Each media has
its own device
All media on the
the same device
20
Convergence in 1998
From here....
Device convergence
We forgot
the mobile phone!
Each media has
its own device
All media on the
the same device
21
Convergence debate today
From here....
Television
Radio
Internet
Telephone
Each medium has
its own network
All media on the
the same network
22
Convergence debate today
From here....
Network convergence
Television
Radio
Internet
Telephone
Each medium has
its own network
All media on the
the same network
23
Convergence: a layer cake...
Channels and services
Device convergence
Network convergence
Media convergence
Market convergence
Device divergence
Regulatory convergence
24
Key trends
1. Individualisation
2. Demographics - more elderly and kids
3. Globalisation
4. Digitalisation
5. Fragmentation
6. Convergence
7.New/rebranded players
25
What are the implications
for producing and distributing
digital media and services?
26
Classical Value Chain in Publishing
Intellectual
Property
Rights
Production
of content
Distribution
Retail
Reader
Book
of metadata
27
Classical Value Chain in Publishing
Vertical integration
Intellectual
Property
Rights
Production
of content
Intellectual
Property
Rights
Production
of content
Distribution
Retail
Distribution
Billing
User
Book
of metadata
User
Web-site
of metadata
Intellectual
Property
Rights
Production
of content
Distribution
Retail
User
CD
of metadata
Intellectual
Property
Rights
Production
of content
of metadata
Distribution
Billing
User
Handheld
Device
28
Classical Value Chain in Publishing
Horisontal concentration
Intellectual
Property
Rights
Production
of content
Intellectual
Property
Rights
Production
of content
Distribution
Retail
Distribution
Billing
User
Book
of metadata
User
Web-site
of metadata
Intellectual
Property
Rights
Production
of content
Distribution
Retail
User
CD
of metadata
Intellectual
Property
Rights
Production
of content
of metadata
Distribution
Billing
User
Handheld
Device
29
From analogue to digital TV - many platforms!
DVB-T
DVB-S
DVB-C
DVB-S2
Analogue
TV
IPTV
ADSL
IPTV
FTTH
P2P
DVB-H
T-DMB
802.11
podcasting
30
Convergence: strategic responses (1)
Intellectual
Property
Rights
Production
of content
Intellectual
Property
Rights
Production
of content
Intellectual
Property
Rights
Production
of content
Intellectual
Property
Rights
Production
of content
Intellectual
Property
Rights
Production
of content
Intellectual
Property
Rights
Production
of content
Intellectual
Property
Rights
Production
of content
of metadata
of metadata
of metadata
of metadata
of metadata
of metadata
of metadata
Aggregation
into
Channels or
Services
Aggregation
Into
Packages
Contribution
Distribution
DigiTV
MHP
User
Access
Free-To-Air
User
Device
DVB-T +
TV screen
Aggregation
into
Channels or
Services
Aggregation
Into
Packages
Contribution
Distribution
VIASAT
(OpenTV)
User
Access
CA
User
Device
DVB-S +
TV screen
Aggregation
into
Channels or
Services
Aggregation
Into
Packages
Contribution
Distribution
Canal Digital
MediaHiway
User
Access
CA
User
Device
DVB-S +
TV screen
Aggregation
into
Channels or
Services
Aggregation
Into
Packages
Contribution
Distribution
TDC
(OpenTV)
User
Access
CA
Aggregation
into
Channels or
Services
Aggregation
Into
Packages
Contribution
Distribution
FTH
TDC
User
Access
DSL/FTTH
Aggregation
into
Channels or
Services
Aggregation
Into
Packages
Contribution
Distribution
TDC
User
Access
DSL/FTTH
Aggregation
into
Channels or
Services
Aggregation
Into
Packages
Contribution
Distribution
DigiTV
MHP
TV-Anytime
User
Access
Free-To-air
User
Device
DVB-C +
TV screen
User
Device
TV over IP +
TV screen
User
Device
TV over IP +
PC screen
User
Device
PVR +
TV screen
31
Convergence: strategic responses (1)
COPE
Create
Once
Publish
Everywhere
Production
Strategy
for
Content
and
Metadata
CROSS
PLATFORM
DELIVERY
Strategy
(Media
Convergence)
32
Convergence: strategic responses (2)
Intellectual
Property
Rights
Production
of content
Intellectual
Property
Rights
Production
of content
Distribution
Retail
Distribution
Billing
User
Book
of metadata
User
Web-site
of metadata
Intellectual
Property
Rights
Production
of content
Distribution
Retail
User
CD
of metadata
Intellectual
Property
Rights
Production
of content
of metadata
Distribution
Billing
User
Handheld
Device
33
Convergence: strategic responses (2)
CROSS
MEDIA
Production
Strategy
for
Content
and
Metadata
CROSS
MEDIA
Delivery
Strategy
34
Convergence: strategic responses (3)
Convergence and copyright
• Whether media focus on
vertical integration or horisontal
concentration having a long-term
intellectual property strategy is
vital
• Getting rights for content for
cross-media means getting an
early start on contracts
• Give yourself time
35
3. Youth
- are traditional media
including books
in danger of extinction
like the dinosaurs?
DR has a problem...
Youth and television
15-24 year olds have never
watched much TV.
Currently 20% of them
watch less than 15 minutes
a week TV
(TV drama in Danish)
Source: Gallup TV-meter 2004
37
DR has a problem...
Youth and television
Youth and radio
Average weekly
listening in 2003:
21 hours 54 mins.
Radio is on the decline
There are many other
radio-like options...
Source: DR
Whole population
12-19 year-olds
Figures from 1998-2003
38
DR has a problem...
Youth and television
Youth and radio
Youth and other digital media
81% of all 8-12 year-olds
Play PC games daily
52% play console games
The average kid spends
nearly an hour a day
playing electronic games
39
Source: Gallup (2002) for Børnerådet/Youth Council
DR has a problem...
Youth and
Youth and
Youth and
media
Youth and
Translation:
1 billion SMS for
HKD 130/month
if you sign up for the
free SMS service
television
radio
other digital
mobiles
Youth have a varied and
voracious appetite for all
things digital - but we
know too little about it
The mobile is the most
ubiquitous personal
device - 96% of all
15-24 year olds have one
A typical user sends 20
SMS messages a day
Source: Gallup Telekom Index, 2005,
Center for Ungdomsforskning, Århus
40
DR’s problem is legitimacy
Licence-fee funded
Public Service
broadcasting
= Something for
everyone
It’s a problem is DR
has nothing to offer
the youth
41
But publishers have problems too
42
But publishers have problems too
Year
7-9
10-12
13-15
total
Yes, I read
2004
78%
94%
90%
88%
now and
1998
62%
93%
90%
80%
again
1993
64%
92%
91%
83%
I can’t read
2004
20%
0%
1%
6%
yet
1998
27%
1%
0%
11%
1993
19%
2%
0%
10%
No, I never
2004
2%
6%
9%
5%
read
1998
11%
5%%
11%
9%
myself
1993
7%
6%
8%
7%
Source: Bille, Trine et al. Danskernes kultur- og fritidsaktivititer 2004 – med udviklingslinier
tilbage til 1964
[the Danes’ cultural and leisure activities 2004 – with trends back to 1964].
Published by AFK for the Danish Ministry of Culture
43
DR’s problem is legitimacy
Two hypotheses:
As yet we do not
know which of
the two is right.
Dare we run the
risk that it will
be A?
A.
If DR loses the young as
viewers, listeners or
users of public service
then they are lost for
good
B.
Media consumption
patterns are a reflection
of phases in life. The
young will return to the
fold as they get older
44
DR’s problem is a global one
What
Do we know about
young people?
Is
there anything
we can do as a
result?
How
Can we reach a better
understanding of what
makes them ”tick” as
media users?
45
Intensity
Intensitet
Diurnal
rythmn
D¿gnrytme
100%
dr.dk
DR1 TTV
90%
80%
RADIO
TV
70%
60%
50%
40%
30%
20%
10%
23-2 4
22-2 3
21-2 2
20-2 1
19-2 0
18-1 9
17-1 8
16-1 7
15-1 6
14-1 5
13-1 4
12-1 3
11-1 2
10-1 1
9-10
8-9
7-8
6-7
5-6
4-5
3-4
2-3
1-2
0-1
0%
46
Kilde: RedMeasure/TV-meter/Radioindex
Legitimacy - a question of reach
Media
Distribution
Analog tv
DTV
FM
DAB
Internet
Mobile
TV
Radio
Web
Services
Votes
Quiz
Community
1. More and better offerings on ”old” media
47
Legitimacy - a question of reach
Media
Distribution
Analog tv
DTV
FM
DAB
Internet
Mobile
TV
Radio
Web
Services
Votes
Quiz
Community
2. New offerings - media and services
on the platforms the young use - to maintain reach
48
Boogie TV
form. fascination
content. identification
music. 60-70%
VTR
lifestyle
film fashion friends games parties sport dating stars
- but also current affairs etc.
competitions
guests
Events - tie-ins to things around the country
49
Boogie - video clips on TV/web
50
Boogie - radio on FM (P3)
adio
Monday-Friday from 2-3 pm
51
Boogie - digital radio on the Net
24/7
The original Internet player
In 2002
52
Boogie - www.dr.dk/boogie
53
Boogie Teletext s. 505
54
Boogie tv crawler - SMS
55
Boogie TTV crawler
Our attempt to make ALL
Viewer contributions available
56
SMS chat on TTV
No longer in use by Boogie
57
Boogie club/community
58
Boogie club/community
59
Boogie
Media
TV
- what do we offer on our platforms?
Distribution
Analog TV TTV
FM radio
boogie TV
Radio
Web
Internet
video clips
P3
boogie net radio
boogie site
Services
Boogie-list
TTVTVSMS-greetings crawler crawler
Community
boogie community
Mobiles initially a mechanism for participation
Participation rates upto 30% for kids and teenagers
60
Cross media format
Boogie is an integrated
format on the platforms
YOU use
Synergies
Boogie is there for you
when YOU want it:
What you want
When you want it
Where you want it
61
Boogie 24/7 (Mon-Fri)
• Accessibility
• Participation
6 am
12 noon
6 pm
midnight
Watch Boggie on TV
Send a greeting - SMS
Check out Boogie Top 10 on TTV
Listen to Boogie on P3 (FM)
Listen to Boogie radio (Web streaming)
Find info at www.dr.dk 62
Network with other members of Boogie community at www.dr.dk
The road ahead
63
I believe too many of
us editors and reporters
are out of touch with our readers.
Too often, the question we ask is
‘Do we have the story?’
rather than
‘Does anyone want the story?’
As an industry,
many of us have been remarkably,
unaccountably, complacent’
64
Speech by Rupert Murdoch
to the American Society
of Newspaper Editors.
April 13, 2005.
65
What is happening is, in short, a revolution
in the way young people are accessing
news.
They don’t want to rely on the morning
paper for their up-to-date information.
They don’t want to rely on a god-like figure
from above to tell them what’s important.
And to carry the religion analogy a bit
further, they certainly don’t want news
presented as gospel.
Instead, they want their news on demand,
when it works for them.
66
The challenge of convergence
Content is King
• It is not enough to
have good content...
67
The challenge of convergence
Content is King
Context is Queen
• It is not enough to
have good content...
68
The challenge of convergence
Context is Queen
• We need to
understand user needs
and the physical and
social setting of media
use
69
Mobile audience segments
Active
users
SMS
28%
Basic
Phone
Intensive technology
buffs
10%
Advanced
Phone
Basics
Technology
ignoramus
22%
=?
Source: Gallup Telecom Index 3 kvt 2004
Base: Har personligt mobiltelefon
40%
=?
Passive
Users
70
Video for handhelds
Mobisodes
GRPS
EDGE
UMTS
4G
DVB-T
DVB-H
T-DMB
Media-FLO
802.11
71
Video for handhelds
Sport highlights
GRPS
EDGE
UMTS
4G
DVB-T
DVB-H
T-DMB
Media-FLO
802.11
72
Video for handhelds
...or just TV?
GRPS
EDGE
UMTS
4G
DVB-T
DVB-H
T-DMB
Media-FLO
802.11
73
Video for handhelds
...or just TV?
PPV
Subscription
Free-to-air
(licence)
Free-to-air
(sponsored)
Business
Models
and
Price
Elasticity
74
Strategy
Content is King, Context is Queen
•
•
•
Understanding people as
consumers - especially the youngis central to survival in the long
term
Vertical integration is an option
but horisontal concentation
(cross media and cross promotion)
is a way of hedging bets
Multiple platforms require a good
copyright strategy - start early!
75
Infrastructure
Content and Metadata
•
•
If content cannot be found, it does
not exist! The importance of
metadata
Plan for a COPE infrastructure for
producing:
•
•
Content for multiple platforms and
cross media
Metadata that can be transformed to
multiple platforms accurately, quickly
and cheaply
76
Thank you for listening!
Peter Olaf Looms
DR/Danish Broadcasting Corporation
TV-Byen
DK-2860 Soborg
DENMARK
Until 4Q 2006 when we move to
DR-Media Village
77