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Nigel Milan
Nigel Milan, Managing Director, SBS
I might start with a quote from that well-known futurist and commentator on our times, Hunter S. Thompson:
The television business is a cruel and shallow money trench. A long plastic hallway where thieves and pimps run free and where weak men die like dogs but you get free cookies.
I think that Mr Thompson's comments still stand. Of course he was wrong on one point: in these days of economic rationalism you no longer get free cookies.
The world of digital television is still evolving but the cynic in me suggests that Hunter S. Thompson may, at least at the core, be right, no matter what the complexion or the complexities. Digital television may indeed become another "cruel and shallow money trench". Throwing money at something when the dividends are uncertain is, and always has been a risky business. It is especially risky when access to, and use of digital TV is still evolving and adapting, and when there is no real consensus among advertisers and proprietors on what the returns are likely to be.
In fact, there is no real consensus on what will drive digital take-up. So to borrow from John Howard's lexicon: what are the core reasons? More and better channels and programs? Improved picture quality and sound? Or could it be what we might call the non-core? The add-ons? The EPGs? The interactivity? SBS believes that multi-channelling and the expanded content it brings will be, and will always be the major inducement for digital conversion.
Now of course that doesn't mean to say that there aren't other reasons and some of them, of course, will contribute. The digital age is reshaping human communication through radical changes in broadcast technology and consumer electronics. It is giving television viewers unprecedented choice and control over what they watch, when and how. Yet the paradox is that until now television has been remarkably resistant to radical change. The television set and its method of signal reception have been with us since 1956. Over that time there have been evolutionary changes. The transition of black and white to colour, from mono to stereo, from small screen to large screen and additional delivery systems have given us cable and satellite access. The VCR was an add-on, something that many of us still haven't mastered. Then of course DVD came along and we are struggling to master that. But there have been no huge quantum changes, at least until now.
Digital enhancements give us programming choice and convenient, customised viewing. Instead of audiences we have become participants. We do not just watch: we interact. But it has to be good, exciting, engaging, rewarding. In other words it has to be worth the effort, the money and the time committed. I am reminded of the remark by Andy Watson: "Anyone will watch a great TV show on a crappy TV. They will not watch a crappy show on a great TV". Content is king.
So where's the money going to come from for all of this? As a public broadcaster SBS got the answer it did not want from the last federal budget: there would be no money for multi-channelling we were told. So it’s up to us to do the best that we can. We have used our existing resources in the past three years to build a complex multimedia organisation that delivers analogue television and radio programs as well as five digital services. These are: the digital simulcast of our main channel, the World News Channel, SBS Essential, and two SBS radio services we now replicate on digital television. Of course if we had extra funds we could generate extra content, particularly a suite of channels allowed for under the government's multi-channelling provisions.
In the meantime, we are ploughing on, developing new applications and interactive enhancements. Last Sunday for instance we unveiled the new interactive content on our soccer program The World Game. This includes a soccer quiz, details of exclusive SMS competitions, up-to-date soccer news headlines, program details and presenter profiles. The interactive options are available only to the television audience that is watching through the Austar platform. The Austar set-top boxes are capable of storing additional content that can be accessed by the viewer using the television remote control. But this of course is a window on what will be available through free-to-air in the future. Of course, this type of interactivity is not new to Austar viewers. However, SBS is the first free-to-air broadcaster to develop an interactive application on this platform. It is important for SBS to be ready for these types of innovations when free-to-air television has the same capacity.
SBS also led the way in 2000 when it launched the interactive weeknight drama Going Home. This was a world ground-breaking series that utilised audience feedback via the show’s website chat room to shape the plot for the following day. More than that, Going Home did something we had never tried before: programs were scripted, shot, edited and broadcast on the same day. Now, three years later, the concept has been sold to several American and European stations. SBS in partnership with Sun Microsystems also pioneered the first interactive application for MHP, in this case for the Dateline program. That was several years ago and the innovative developments and trials continue, and so does our analysis of market conditions.
Recently our new media division analysed the top 100 programs on Australian television and found 85 per cent have what we call five star websites. These sites are integral components of the programs’ make-up. They provide extra content and value to the on-air product. They are the online equivalent of a glossy brochure. Basic publicity and promotion are enhanced by a simple guest book or forum. There are online events, chats, email services, interactive gimmicks and access to related web sites. As you would expect there is also network-wide program cross-promotion. Product promotion of course, is routine too.
In many cases web sites are no longer an adjunct to a program but a multi-layered, multi-media experience in their own right. Digital interactivity via television is another level of exploration of that. Pre-selected programming through EPGs throws out traditional viewing patterns and behaviours. Passive, loyal and strict channel viewing is being overtaken by highly idiosyncratic program selection. As a result, advertisers are being forced to reassess their strategies to find different ways of delivering their ads. So how do you make money? Good question; and it seem that everyone is looking for the answer. There is no doubt about it. Digital has changed the broadcast landscape along with satellite and pay TV. Channels are proliferating, program choices have multiplied, audiences are fragmented, and those trends are continuing.
The comfortable presumption of a captive mass audience belongs in the past. In broad terms the networks’ share of viewers has decreased while levels of viewing remain fairly constant. In other words, access to a wider choice of channels does not transpose into increased viewing, but rather into discriminating viewing. Add to that the attention-pulling attraction of the internet, video games, cinema-going and even text messaging, and it is obvious the audience pull for television network viewing is diminishing.
In a multi-channel, multi-media environment, viewing patterns are changing, especially for the young. The channel loyalty is nowhere near as entrenched as it once was. These audiences are comfortable in a digital environment where interactive programming seeks out their opinions, offers rewards, provides extra information and elevates the television show into an entertainment experience. Big Brother offers audiences a voyeuristic excursion through a camera-filled household with the opportunity for viewers to register an SMS vote for the housemate of their choice. Along the way, viewers couldn't help but notice their preference for Freedom Furniture, KFC and Pizza Hut takeaways.
The Block has taken product placement to new heights. In fact the program seems to have been built around the products, all $2 million worth. These programs appeal to the TV networks because they are cheaper to produce than drama or comedy. They appeal to the under 40s, a key demographic, and that makes the advertisers happy. The Internet, magazine, newspaper, television and product spin-offs are mind-boggling. This form of ‘brandcasting’ may well be the future. But I'm certainly not a convert and I suspect the cross-promotional overkill could be counterproductive eventually. One clear negative is that these so-called reality shows polarise viewers: they either like them or loathe them. They become formulaic and they do not appear to generate network loyalty, or program loyalty.
It may be that advertisers have to play a more subtle game, and link the content instead of using traditional ads. Product placement could become more pervasive and persuasive. Experience to date shows that interactive ads are regularly placed at the end of programs to avoid disruption of the viewing experience; but then the risk arises that the viewer could leave the broadcasting stream and fail to reconnect. To succeed, interactivity must be worthwhile, convenient, efficient; and of course if possible fun.
The content must be worth the effort. Slow access or weak content will not do. Otherwise it becomes an annoyance, an application tried once or twice and then simply abandoned.
Not all programs will suit interactivity, in fact they could be distracting and ultimately unwelcome. One of the simplest applications we tried at SBS turned out to be one of the most successful.
Last year, at the end of our popular Tales From a Suitcase series we ran a crawl in the closing credits asking people: ‘Tell us your story about migrating to Australia.’ We expected a handful of submissions. Instead, we got 22,000 emails. That’s interaction at its very simplest. Program makers want to engage their audiences, and viewers want to identify with characters and their stories. That’s what makes for good, compelling television.
There is no killer application, no single format or winning formula when it comes to digital interactivity. Like any technology, digital will adapt and modify to meet consumer needs. Just think for moment how the telephone has metamorphosed. It’s now a camera, a voice and email message machine, a calculator, a diary, and a calendar. Some people even talk into it. A device that was invented to convey conversation is becoming the darling of a new generation who prefer to use it to send text messages. At other times it’s a voting machine for TV shows.
Digital television is a crowded field of innovation – an example of the chaos theory in action where complicated solutions need a chaotic environment in which to survive, indeed thrive. Changes and improvements in digital technology will continue as new equipment and devices come on the market.
Up to now, the focus has been on technical production, transmission and receiver specifications and that has involved broadcasters, manufacturers, producers and advertisers. But the test of success lies with our audiences. They will decide what to see and how to view it. And audiences will also determine the successful model for interactivity. Revenue opportunities will follow, but for the time being, interactive television remains in its infancy. We probably know more about what doesn’t work, than what does.
The issue is: How can viewers cite interactivity and video-on-demand and EPGs as reasons for choosing digital, when they don’t know what they are, or how it will benefit them! Technology uptake can be fast, like fax machines. But it can also be slow, like the number of people capable of time-setting a VCR. It’s interesting to read predictions that personal video recorders, PVRs, will be in 15-20% of European households by 2005. And yet broadcasters and advertisers have only scratched the surface of the revenue opportunities these devices hold. As one writer observed, "So far PVRs have been used as little more than souped up video recorders".
Interactivity was given a solid workout in the United States with the recent Super Bowl. Despite all the whiz-bang technology, the access to instant replays, personalized camera angles, information and statistics, more people used their TiVo boxes to replay Britney Spear’s new Pepsi commercial than to replay parts of the actual football game.
Advertisers rejoice! But don’t get too excited. It’s no good having smart TVs but confused consumers.
Digital will radically alter the viewing experience and revolutionize the way we use television – that’s true – but it’s vital that viewers feel in control, instead of passively accepting programs at a time someone else chooses. The same goes for ads. PVRs are telling customers that they are in control, that they don’t have to sit there, sponge-like, passively absorbing ads that don’t interest them. Audiences are becoming more fragmented because of multi-channel and multi-program choices.
This segmenting of audiences means that more advertising spots are required across a wider range of programs and channels, each in turn reaching smaller audiences. That’s fine if you want to target niche markets, but what about the mass market?
Advertisers know that digital, like Pay TV, is no real threat to the free-to-air channels’ dominance of the advertising market. Why? Because the FTAs reach a mass market, not a series of niche audiences. They can deliver big audiences quickly.
To reach the digital market, the onus will be on advertisers to deliver something that viewers will want to explore, and to deliver it without disrupting the core program. The good news for advertisers is that they will have greater knowledge of the consumers’ viewing choices, as well as their product preferences, by tracking their individual channel requests and interactive responses. Rather than a diverse mass audience, digital interactivity will deliver individual groups, which raises the potential for highly targeted advertising.
Television is a survivor. It’s responded well to evolutionary change, but now it’s on the cusp of revolutionary change. But is the technical revolution outpacing societal change? Maybe so!
There is a sizeable population out there that’s being asked to throw out their life-long entrenched viewing habits. The television is their principle source of entertainment – it’s a box in the corner and they don’t want it to talk back or, even worse, think for itself.
And then there’s that other generation who have grown up in a multi-channel, multi-media environment. They have multiple choice entertainment and very little loyalty for a medium beyond their control. So the revolution will almost certainly be staggered, with the new technology co-existing with the old, rather than competing.
Digital is here. It’s up to us to make it work to our advantage. Remember the TV series Mission Impossible? Well, your mission, should you choose to accept it, is to convince your industry colleagues that digital is not just inevitable but destined to become an indispensable enhancement of the viewing experience. And, remember, unlike that tape on Mission Impossible, with digital there’s no chance that the system will self-destruct.
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