Dear Readers:
Every now and again, more frequently of late, our industry seems to be weighed down by what were previously deemed to be sound business and technical decisions. But as we struggle to respond to the demands of our stakeholders and the fickle choices of our customers, it can help to get a breath of fresh air. This week, The iTV Doctor spoke to one of our most experienced colleagues--one who managed to keep his vision in spite of the chaos in the television industry: CHANNING DAWSON, senior advisor at Scripps Networks. Following is a shortened version of our interview; the full transcript will be published in the itaas "iWay Newsletter" in November.
iTV Doctor: So, Channing, what are you up to these days?
Dawson: I've been pretty busy, in anticipation of the television marketplace expanding in 2011. A lot of us here (at Scripps Networks) are working on the TV Everywhere systems--that could go a long way to reinvent VOD. It's a re-vectoring of the whole on-demand market.
iTV Doctor: If you're looking at TV Everywhere, and literally it's everywhere, does that start moving you away from server-based content and moving everything up to the cloud?
Dawson: In essence yes, but it's not necessary for us to do that now. Most TV networks and their digital counterparts don't have to worry about that quite yet--we're still using a pretty strong infrastructure that allows us to store it locally; the needs for anything beyond that aren't big enough yet.
iTV Doctor: But it's clearly coming down the road. There is a point at which you have people using various and sundry tablets, readers, smartphones and more, to be able to view your content. And those are all mobile devices where the IP connection is the only way to work.
Dawson: That's right. You want to serve it up quickly and efficiently and you want to be where they are. And that means taking it to the cloud eventually, and we're all anticipating that, but I don't think the need for us is quite as bad as for those who need to serve up the content to 24 or 30 million homes simultaneously.
iTV Doctor: And they need a cloud strategy that is based on more efficient delivery to a mass audience, where you might have a cloud that is based more on being with the consumer wherever she is.
Dawson: And the volume for us is simply not as big. If we do 10 million videos a month we're doing pretty well. And that's mostly short-form. We've been pretty careful not to put too much long-form content out there. We've got some programming on Hulu, but it's mostly well seasoned content. So to a certain degree we haven't been called on to do that.
iTV Doctor: Is Scripps now feeling a little more empowered about the interactive side of all this, or is it primarily TV Everywhere now?
Dawson: TV Everywhere is not necessarily an interactive TV model. TV Everywhere is a good extension of television across platforms across a variety of consumer devices. And I think it will have a substantial effect on the VOD marketplace. It will start to substantiate moving long-form content to other devices, which would be supported by the C3 rating system. And with that it will become a more viable opportunity than VOD has been.
We look at interactive television several ways. Over the course of the last few years there has been really good technical work done, and enough business modeling done, to start to understand that interactive television could become a viable business model, and a viable business extension of regular television. I'll put "viable" in quotes because the RFI ad model is yet to be proved nationally. But there is a lot of testing and market trials going on, leading to the idea that stickier ads (that you can engage in) lead to higher brand recall and higher brand touch.
And I also think addressable advertising will eventually have a fairly substantial effect on the ad market. That has been proven by the local advertisers and by such visionary companies as Visible World, Navic and others, and it is now coming to the national scene. So in the next couple years, addressable will become a pretty big deal.
I'm not so wild about telescoping off ads and taking your eye away from television--I think that model will not work. But simple overlays, interactive VOD, interactive branded entertainment ads and the like will work fine. We may finally be entering the Jane Fonda workout tape phase of interactive television: we had to re-start somewhere, and that's a pretty good place to start because that's what we know how to do right now.
iTV Doctor: We also know that we can throw that RFI information to a companion device, whether that is a scannable coupon at Denny's for a buy-one/get-one breakfast, or a recipe, or something else. You get it off the television screen and onto something that is more functional to the consumer.
Dawson: Bingo! Hence our interest in both mobile and iPad formats. They're perfect for ancillary content. And for our networks that are information-based nothing could be more appropriate for us than content that rides along with shows and that amplifies and extends shows, but that does not necessarily confound the viewing of shows.
iTV Doctor: And if you're putting this out everyplace you can find, how many times to you have to design, write, code, test, certify and more, for each device? It's insane.
Dawson: I don't think we'll ever get out of the complexity of the system: dozens of formats on dozens of different consumer devices. That's the great irony of Apple iTunes. Nobody would predict that such a proprietary, top-down system like Jobs has created at Apple would work, but by God it works so well! And all the Apple devices can read it. That kind of vertical integration of products is just brilliant, as opposed to this chaotic "open" software world that we're going through now. How many different set-top box types are there?
iTV Doctor: Last question: what are the top challenges for a network family like Scripps going forwards for the next 12-24 months--both in interactive television and TV Everywhere, because TV Everywhere and iTV intersect as soon as you get off the TV set.
Dawson: Like all networks, we have TV-oriented teams skilled at the TV business ecosystem and digital teams working on ways to monetize the digital environment. But perhaps for the first time, we're developing business models that bridge TV and digital in ways that have meaning and purpose. We're also extending television to other devices. That is not an easy chasm to cross, because they're two different cultures--a digital culture and a television culture--and the linear TV business certainly feeds both businesses. We need to grow a business underneath the linear television business that parallels and extends the TV business while continuing to grow the digital business. The language to do that, the engineering to do that, the lining up of the reasons to do it and the purposes for and the ways we have to monetize it are things that we are addressing.
Secondly, we still haven't solved the on-demand video monetization issue--the pre-roll, post-roll, mid-roll advertising. I don't know where we're going to see that end up. That's why I like the C3 model--it moves the cable television model over to the digital platform and starts to give it real viability. But if you're not part of or opposed to the cable model you're not going to like it. And we don't know whether viewers of long-form video will tolerate the ad load when we move the content to other devices. We've seen with DVR usage that they don't like the ads. They use the DVR's to AVOID those ads. We've got a real problem with this concept that we can just move television--as shown on the linear broadcast--over to digital. It just ISN'T going to work like TV. So what's the alternative? How do you make it more enhancing, more engaging? How do you get people NOT to skip the ads when it's the ads that pay for the content? So we've got an issue there.
And here's another point: we're moving away from a Web-based model to an applications model, and there are a lot of issues related to that. We're becoming less of a pure content production business and more of a content service business. How can you give me what I need, when I need it on the device I need it on, and don't mak
e it 50,000 pages of content because I don't have time to read that? Make it an application that I can use that's personalized, useful, relevant and timely. And do it for every single member of the audience spread out across the digital world. I think we have a lot of issues related to that. We can create the content, but can we create the highly personalized customer service to deliver what they want when they want it on the device they want it on and get paid for it at a fair profit? That's the challenge.
iTV Doctor: Thanks, Channing. Will we see you at TVOT NYC Intensive in New York on November 18th?
Dawson: Wouldn't miss it. See you there.
(Note: Channing Dawson will be a panelist on the TVOT NYC Intensive session, "New Interactive Platforms: Another Arrow in the Quiver or a Double-Edged Sword?" Other participants in the session, which will be moderated by TDG senior analyst, Bill Niemeyer, will include Jon Dakss, VP of technology product development at NBC Universal; Shalini Govil-Pai, group manager for YouTube and TV partner solutions at Google; and David Preisman, VP of interactive TV, Showtime Networks.)
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The iTV Doctor is Rick Howe, who provides interactive television consulting services to programmers and advertisers. He is the recipient of a CTAM Tami Award for retention marketing and this year was nominated to Cable Pioneers. He is also the co-author of a patent for the use of multiscreen mosaics in EPG's. Endorsed by top cable and satellite distributors, "Dr" Howe still makes house calls, and the first visit is always free. His services include product development, distribution strategy and the development of low-cost interactive applications for rapid deployment across all platforms. Have a question for the iTV Doctor? Email him at itvdoctor@itvt.com
