Kim Anderson

Kim Anderson, Nine

Today I would like to discuss briefly three principles to bear in mind in moving forward in the digital arena. These are the three things we have learned in the very brief period of Australia's digital broadcasting regime, and also from my experiences at ninemsn.

1. Don't let technology drive your business

Technology excels at hype. We all get caught up in it, but every time I have been dazzled by technology hype it has failed to deliver on the promise. In the early 1990s, Kaleida Labs, a division of Apple Computers, introduced an early adopter and developers scheme in the United States for a technology called ScriptX, which would revolutionize multimedia authoring. ScriptX was a multiplatform authoring environment based on object-oriented programming, that would finally solve the issue of dual authoring for the Apple MacIntosh and Windows CD ROM market. Apple spent millions of dollars with broadcasters and publishers to develop programs/products in ScriptX. But when times turned tough for Apple, Kaleida Labs was an early casualty and funding of ScriptX ceased.

We need to cautious in our adoption of technologies for interactive TV. We can't let the technology drive our business. And, just because we can doesn't mean we should. I am talking here, as you are probably aware, of Multimedia Home Platform (MHP). We need to be very pragmatic about the fact that MHP is not yet delivered and that the adoption of such technology has never been implemented before in a horizontal or retail market. When it is delivered and proven robust we will invest in it by developing applications, but only if the solution is commercially viable for both the network and the consumer.

Now I don't want you to misinterpret what I am saying. The Nine Network has endorsed MHP and is committed to an open platform. We will endeavour wherever possible not to develop in a proprietary platform. We will work as closely as possible with the other free-to-air networks, and anybody else who wants to be in this space, in order to develop an open platform for the market. I want to be very clear on that.

We believe that an open platform should speak to as wide as possible an audience. And, that it should apply not only to television but also to pay TV, the Internet, to mobile phones, and in fact to anything that speaks to future convergence of services.

We need to build a single platform for a market the size of Australia and given the cost of the technology. It would be disastrous commercially for the industry if we ended up with a situation similar to that in the UK, where the BBC have to deal with up to five platforms, authoring programs and applications three or four times to different broadcasting streams. But if you look at what is happening to BSkyB, and the development of XML and WML browsers in places like the UK and Finland, we can see that we will eventually get to a single open platform, regardless of what route we all take.

We also think we should leverage wherever possible, leverage each other's infrastructure. The recent talks between BSkyB and ITV about sharing their infrastructure are indicative of where we should go in this market place. We should also, as mentioned earlier, avoid doubling up on infrastructure, as we have seen with the Telstra and Optus cable rollouts.

Through the FACTS strategy group, the back channel group, the business drivers group, and others, we are also working hard to ensure that wherever possible we can leverage one back channel. And in addition, that we can leverage one infrastructure for that back channel. MHP at present only handles conditional access by application. For a single platform to emerge in Australia this issue will need to be addressed.

If there's one message I would leave today, it is that we are trying our hardest. If it is going to take time to do that, then give us the time to do it. We are very conscious about not jumping into decisions just to satisfy pressure being put on us by various agendas in the market place.

2. Don't let your current business drive your agenda

Yes, we are a part of the Nine Network and we have learned that we need to leverage that brand. In the early days of ninemsn we did not leverage Channel Nine's brand. Many of you will remember that we had about 260 URLs at one stage, from Getaway.com, to Sidewalk.com. Most of our battles were fought over whose brand it would be: Nine Sport, ninemsn Sport, or Wide World of Sports? Very quickly we learned that we were best off leveraging the Nine brand. The brand was Nine and MSN, and so we would have one URL, ninemsn. When we made that change our brand recognition went up by nearly 10 per cent.

So the ability to leverage your brand and your existing infrastructure is very important. But protecting the brand can lead to stagnation and a reluctance to change your business to meet new challenges, particularly in a mature business where it is hard to find growth. It is better to build a new business, and find growth, rather than trying to spend your whole day managing cannibalisation of your existing business. While cannibalisation needs to be managed, you need to have in place other growth strategies.

3. Don't let the media drive your agenda

The media can and often does hijack your key messages unless you keep them simple and consistent. The problem for broadcasters over the past 12 months is that there has been a number of key drivers of digital, not just one. Apart from the end-game, which is the turn off of analogue broadcasting, we also have widescreen, clearer pictures and better sound, program enhancements, datacasting, interactivity, and high definition. Trying to get those into a single message for a consumer is difficult, to say the least. It is not hard to see why the media can hijack messages, particularly when we have so many complex issues to get across to our audience.

So it is very important to keep your messages simple and consistent. We are constantly grappling with how to explain to a consumer what interactivity is, and how to build continuity and consistency into that message? I'm perplexed by the fact that a program enhancement is not an ongoing experience for a consumer. I don't think that I can sell a set-top box on the basis that every now and then as a consumer I might get a multiview, or a program enhancement. I have to look for the consistent drivers for me in the brand message. I am not suggesting by any means that I have the solutions for that. I am hoping Liz is going to give us some answers here.

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