two solitudes: Alan Sawyer's views on the media industry

Tuesday, May 30, 2006

"Hold, precisely, IBM conceives some": computerized translation versus human translation

I finally got a proper translation of the April 19th La Presse interview I posted a while back. The original La Presse article can be read at:

This came from IBM's translation department. It follows immediately below. Below that, I've got the translation provided by Google's 'Translate this page' function. It is VERY funny! One thing is clear... if this is state-of-the-art computerized translation (and I'm not saying that it is), we've still got a l-o-n-g way to go. And... the human translator spotted and corrected a misspelling of my name at one point in the article... the software translator, of course, missed that.

The thing I find interesting about interviews is that when I see a quote I usually find myself thinking "is that what I said?" or "is that what I meant?". When my spoken comments are translated from my original English into French and then back into English I have even less idea whether what I see in the translation resembles what I said or intended.

Professional translation

The advertisers are unanimous: Their TV ads are no longer being seen by enough people and the target audience is too broad, especially for young consumers. An expert in new media technologies, consultant Alan Sawyer from IBM Canada, visited Montreal to give them some pointers on how to adapt. He kindly gave us a few minutes of his time.

The record companies fell victim to it, with online music sharing. Neighbourhood libraries were the next to crumble, powerless against the likes of, which can deliver even the most obscure title to your door in just a few days. And very soon, the television networks will suffer the same fate.

We’re talking about the dreaded “generation gap”, a phenomenon that Alan Sawyer, media consultant at IBM Canada, came to warn about at a recent day-long conference on advertising and television organized by the magazine Infopresse.

According to Mr. Sawyer, the television audience is now divided into three groups that are drifting further and further apart. First, there are the "Massive Passives", the oldest of the groups, content to sit comfortably on their livingroom sofa soaking up shows on the tube.

Then there are the "Gadgeters", led by young professionals, who satisfy their craving equally through the TV and the computer, skipping over commercials with their personal video recorders.

The threat of the "Kool Kids"

But, according to Mr. Sawyer, it’s the next—third—generation that poses the biggest threat to the TV networks: The "Kool Kids", little fish in the big pond of new technologies, who combine content consumption with social interaction on increasingly portable devices. They have complete control over everything they watch, including advertising.

"Right now, this generation has no money, whereas the "Massive Passives" are rolling in it,” stated Mr. Sawyer. “But TV industry views the older group as nothing more than a steady source of income. On the other hand, the young pups represent a source of future income—which will start flooding in by 2012.“

According to Mr. Sawyer, in 2012, traditional TV will be toppled as the media of choice for advertisers, leading to decreased revenues, smaller budgets for shows, and eventually, the end of television as we know it.

This is fine to say, but what can we do about it?

"TV bosses need to embrace new technologies rather than resist them,” stated Mr. Sawyer, citing an IBM survey of media executives, which reveals a great deal of fear about the advent of video on the Internet.

Going digital isn’t enough

Television networks have absolutely no choice—not only do they need to start investing in digital programming, but also in digital assets management systems.

" succeeded because of its massive catalogue and its absence of inventory. The same goes for video: There’s a lot of content out there that isn’t broadcast, because there’s not enough demand, and therefore not enough related advertising revenue. But there are still people who want to access it, and it can be delivered in a profitable way over the Internet," explains Mr. Sawyer.

But making shows digital and slapping them on a Web site isn’t enough. The content needs to be indexed and catalogued efficiently, using innovative search engines—like the one IBM is designing right now.

Inspired by Google and the like, Big Blue is currently developing MARVEL, a multimedia search engine which automatically becomes “smarter” every time it’s used.

"Searching for entire 30-minute shows doesn’t cut it anymore. Web users want to be able to search the content of the shows," explains Mr. Sawyer.

Investing in risk

"Take risks," he concluded to his audience of television executives, including the head of Radio‑Canada, Sylvain Lafrance, and Pierre Karl Péladeau of Quebecor. “Invest in tests, start by making a few shows available on the Internet."

Of course, placing content on the Web raises all sorts of issues, both contractual (you need the broadcasting rights) and union-related (you need to pay the artists). Mr. Sawyer thinks this is why broadcasters that produce a lot of their own content, such as Radio-Canada, are in a perfect position to jump on the Internet bandwagon. But no matter how complex it may seem, the major networks have no choice but to follow suit.

"Otherwise, small companies will jump at the opportunity in their place, a lesson IBM learned the hard way," remarked Mr. Sawyer wryly, alluding to the dark years at his company, when young upstarts swooped in on the personal computing market that IBM itself had created.

Computerized translation

The advertising executives get along for saying that their televised advertisements are not seen enough any more and too largely targeted, especially to the young consumers. An expert in new technologies of the media, the consultant Alan Sawyer of IBM Canada, came to Montreal to explain to them how to adapt. One profited from it for him to speak.The houses of discs fell inside, with the exchange of music on Internet. The bookshops of district followed them, with the competition of which delivers in a few days to your door most obscure of the works. And very soon, they will be the chains of TV which will sink there.This chasm, it is that of the “pit générationnel” of which Alan Sawyer, consulting near the industry of the media at IBM Canada, came to announce the arrival at the time one day from conferences on publicity and the television, organized recently by the Infopresse magazine.

According to him, the public of the television broadcasts is divided today into three groups which move away more and more from/to each other. Initially the “passive solid masses”, oldest among all, which remain sitted on their armchair to be made offer the programs on the good old woman TV of the living room.Then, the “gadgeteux ones” (gadgetiers), young professionals at the head, who consume separately equalizes the TV and the computer to reach video contents, and jump the advertisements with their personal numerical recorder.

The threat of “Kool Kids”

But it is the following generation, the third, which threatens more the owners of television, according to Mr. Sawyer: “Kool Kids”, small fish in the bubbling water of new technologies, which interfere consumption contents and the social interaction on increasingly mobile apparatuses. They have complete control on all that they look at, publicity included.“For the moment, this generation does not have money, while the passive solid masses have some enormously”, Mr. Sawyer notes. But the latter get for televisions only one “maintenance of the incomes”. The small new ones, them, are “incomes to be cultivated” for later. And harvest will be done as of the year of grace 2012. This year, the TV traditional will lose its domination in the media of choice of the advertising advertisers, according to Mr. Sawyer. From there will rise from the falls of incomes, the reduction in the budgets to produce emissions, and of wire out of needle, the end of the TV such as one knows it.

Very well all that, but what necessary is to make?

“The owners of the TV must embark in new technologies rather than to resist to them”, says Mr. Sayer, by quoting a survey of IBM near leaders of the media, which show much fear in front of the arrival of the video on Internet.

To digitize is not enough

The chains of TV must absolutely invest in the digitalization of their programs, but also of the adapted systems of “management of the numerical assets” (digital assets management). “ succeeded thanks to its gigantic catalogue and its absence of stocks. With the video, it is similar: many contents are not televised because there is not enough request, and thus not enough of associated advertising incomes. But there are nevertheless people who want y to have access, and one can deliver in a profitable way with Internet to them”, explains Mr. Sawyer. But to digitize of the emissions and the “garrocher” on a Web site is not enough. It is necessary to index, to catalogue the contents efficiently, by using innovating systems of research. Hold, precisely, IBM conceives some.Like Google and others, “Big Blue” currently develops Marvel, a system of research in the video contents able to polish itself automatically as it is used. “That is not enough to seek half an hour emissions. The Net surfers must be able to seek inside the contents of the emissions”, explains Mr. Sawyer.

To invest in the risk

“Take risks”, it concluded in front of its audience from professionals from the TV, among which one counted the owner of Radio-Canada, Sylvain Lafrance, like Pierre Karl Péladeau de Quebecor. “It is necessary to invest in tests, by putting some programs on the Web to start.”Of course, to put contents on the Web poses problems of a contractual nature (it is necessary to have the rights of diffusion) and trade-union (the artists should be remunerated). This is why Mr. Sawyer thinks that the diffusers which produce much with the intern, like Radio-Canada, are particularly well placed to launch out in the turn of the Web. But whatever the complexity, the large diffusers do not have the choice to act.“If not, from small companies will come to benefit from the change in their place. IBM is well placed for the knowledge”, is ironical Mr. Sawyer, in allusion to the dark years of its company, which was made prick by small young people the market of the personal computing that it had however created.

Saturday, May 27, 2006

On toilets and the internet

When we first moved into our current house, we were on a flat-rate water plan. There was no meter and we paid an amount based on the number of sinks, toilets, bathtubs, washing machines, etc. that we had in the house. What we paid had no bearing on actual consumption. The previous owners were a medium-sized family whereas we were just a couple. The flat-rate plan was probably a great value for them since, at that time, there was only one bathroom serving 5 or 6 people. From a bathroom perspective, they paid based on 1 bathroom sink, 1 toilet and 1 bathtub regardless of how many people used them. When we bought the house (and prior to some badly-needed renovations) we, too, paid for 1 bathroom sink, 1 toilet and 1 bathtub, although our usage was theoretically only 2/5 or 2/6 what the previous owners’ usage had been. Had we stayed on the flat rate plan, when we added the downstairs bathroom, our monthly flat rate would have gone up. I’ve yet to figure out how having two toilets in the house instead of one could possibly increase the water consumption (barring leaks, of course), but that’s the way it worked. We now pay on a metered plan and save money (but others doing the same switch might have ended up paying more).

So why the heck am I rambling on about toilets? Well, the initial high-speed internet business model, formed 10 or so years ago, was based on a single high-speed connection serving a single computer. Some savvy users did connection sharing or had cable/DSL routers, but for the most part it was 1 connection : 1 computer. There may have been many non-concurrent users of that computer, but it was still 1:1. Just like having only one toilet... many potential users but only one at a time (please!). As well, (and I’m speaking in relatives terms here, compared to today) there really wasn’t that much content out there. So even when 2, 3 or even 4 computers in the home were sharing the connection to the internet, the volume of traffic was reasonable. Today, though, that’s changed. There’s much more content out there, some of which leads to very large downloads, and overall leads to much more traffic. And more traffic means greater costs for the ISPs. Traffic shaping / packet shaping is done to throttle back the QoS on some types of traffic (e.g. BitTorrent). While this may seem arbitrary and punitive to some users, the network operator would argue that it’s necessary to prevent overloading of the network. I certainly wouldn’t want my e-mail to slow down because all of my neighbours were watching video streams, downloading torrents and running 7x24 webcams for the benefit of their friends and family in Cardiff.

So, what are the options available to the ISPs? Well, I can think of the following:

#1 Flat rate
#2 Flat rate based on number of connections
#3 Metered
#4 Metered time-of-use

… and various combinations and permutations of the above. For cablecos, #2 is a familiar model. How many of us pay (or for that matter, don’t pay) our cable operator for additional outlets in our homes for our additional TV sets? Would we do the same for the internet – pay an extra fee for each computer we wanted to connect? Not likely, but maybe. Certainly a lot of folks wouldn’t. [Interestingly, though, it would probably be much easier to track this sort of ‘theft’ than it is to track similar ‘theft’ of analog cable signals.]

What about the basic flat-rate model – that’s essentially what most of us have today. Some folks are extreme bandwidth users while others aren’t. The blinking lights on my cable modem (well, actually, the non-blinking lights) tell me I’m in the latter category most of the time. Flat rate models inevitably mean that light users subsidize heavy users. Do I want to see my rates go up to subsidize someone (let’s call him Joe) who’s running full out all the time? Absolutely not. I want to pay a rate that is appropriate for my usage patterns and not subsidize Joe. Joe, on the other hand, does not likely want to pay a rate that actually reflects his usage – he’s got a good thing going now and he knows it.

And what about time-of-use metering. I haven’t heard anyone suggest this, but I think it’s an obvious thing to consider. Like any network (the telephone network, for example), there are peaks and valleys. Operators must build capacity to meet peak demand. If they can incent the customer to help balance the demand by shifting some traffic to off-peak times, it could be a win for the operators and the consumers. Download all the torrents you want at a low, low rate per GB, but only between midnight and 6 AM. Outside those hours – pay a premium to do so. Ironically, this is much like the old long-distance telephone billing model.

I think in the end we'll see a billing model that is similar to that used for airtime in the cell phone world. Depending on your anticipated usage pattern, you will subscribe to a plan that allows you to download as much data as you want up to a pre-defined limit for a fixed price and pay extra for everything beyond that. And, like cell phone plans, where evenings and weekends are cheaper/free, we will proably see something similar for data (although the reduced-rate windows will almost certainly not be the same). Tiered data plans are nothing new -- we see them today in the wireless data world (and no doubt will see combined wired and wireless data plans in the future -- soon, too, I hope! Anyone at Rogers listening by any chance?)

Electricity consumption has peaks and valleys, too, and electric companies are switching to time-of-use metering. We actually used to be on a voluntary time-of use electricity metering plan but it was discontinued. It saved us a lot of money, just by simple things like shifting our laundry to the weekend, running the dishwasher after 11 PM, and so on. Now time-of-use electricity plans are returning and this tine, they won’t be optional.

But I digress… back to the internet. Personally, I don’t see the flat-rate model surviving, and neither does the CFO of Rogers Communications, Bill Linton. At Morgan Stanley's 11th Annual Media & Communications Conference Linton predicted a move to metered billing. “The objective here is not to restrict usage. The objective here is for people to use this service as much as they want. We just want them to pay a reasonable amount for what they use. Usage is going up and it costs a lot of money to produce that capacity.”

So... is metered internet usage a good thing for the consumer? It depends. For some it will mean savings or at least cap rising costs. For others, it will cost more. Is metered internet usage fair thing for the consumer? Absolutely. You should get what you pay for and you should pay for what you get.

Friday, May 26, 2006

Out of the blue!

Today marks the end of my career with IBM Global Business Services. It was a very interesting time. Prior to joining IBM in 2002 I had been an independent consultant for 18 years. Zero bureaucracy. IBM has ~325,000 employees. As you can imagine, there is a need for a fair bit of bureaucracy in a company that size. I don't think I ever got over the culture shock, though. Starting Monday I'm back on my own. Back to zero bureaucracy!

And coinciding with my new-found freedom is the launch of my new website: (although it may be a while before the site has any substance to it).

I learned a lot at IBM. As a former freelance consultant, I often likened my time there to doing an MBA program in that I learned an awful lot about business that you never really understand or are exposed to as an independent. But unlike going to school for an MBA, and paying lots of money, I was paid lots of money to 'go to school'. But now it's over and I have Alice Cooper's School's Out For Summer running through my head!

Wednesday, May 03, 2006

Video Killed the Radio Star / Internet Killed the Video Star - wrong!

I heard the oldie Video Killed the Radio Star again the other day on the radio as I was getting ready to go for a meeting with a radio exec. The timing was very apt. I mentioned it to the exec but neither of us could remember the name of the group that recorded it (The Buggles). While searching for that tidbit of information, I came across this site featuring a parody called Internet Killed the Video Star. It's quite funny.

However, in both cases, the premise is wrong. Video clearly didn't kill the radio star. We have some very successful radio stars who weren't even alive when MTV premiered (and the first video they aired was Video Killed the Radio Star) -- ask Avril Lavigne for her opinion on that.

As for the internet killing the video star, well, I'll direct you to Amanda Congdon of Rocketboom ( with any questions you may have about that one!

Sunday, April 30, 2006

Panelist: Mobile Playback Forum

To Regulate or Not to Regulate...

May 11, 2006 - 12:00 pm to 12:30 pm -

How will the CRTC's decision not to regulate mobile content impact industry stakeholders and the future of the sector? What are the pros and cons? Did the CRTC drop the ball or would regulation have strangled this emerging entertainment platform and put Canada behind the eight ball?

Dr. David H. Jacobson, FIEEE, FIEE - Panelist
Director - Technology, Advisory Services
PricewaterhouseCoopers LLP

Alan Sawyer - Speaker
Managing Consultant
IBM Global Business Services

Peter Vamos - Moderator
Publisher, Playback
Brunico Communications Inc.

Saturday, April 22, 2006

Press: Couch potatoes of the world, unite!

We have nothing to lose but our addiction to the TV schedule

The Edmonton Journal

The ideal television viewer is trapped. There are sets in the living room, the bedroom, the kitchen and even the bathroom. The ideal television viewer tunes in with millions of others at the same time, to participate in a mass social event. The Grey Cup, Canadian Idol, or Oprah Winfrey upbraiding James Frey for being a liar.

According to a study by IBM Business Consulting Services, released this week, the ideal television viewer belongs to a group called the "Massive Passives." MPs remain the largest group of consumers in North America but their numbers are beginning to dwindle.

More than anything else, television is a delivery system. Ten years ago, the black box was the only way to access Seinfeld, according to a schedule designed by broadcasters. Viewers were forced to organize their lives around these schedules. Broadcasters sold ads according to this fortunate situation, for which executives today are already feeling nostalgic.

The IBM study, entitled The End of TV as We Know It, looks at the way on-demand, self-service technology like TiVo will disrupt the television "schedule" so completely that the broadcasters could lose control of content. Then there is the iTunes model, which will allow viewers to become independent programmers, choosing from a menu of sitcoms, dramas and sports events. Over the next five or six years, the potato will be liberated from its couch.

In the last while, all of my memorable television experiences have been plucked from shelves at video stores. I watched The Sopranos, Six Feet Under, The Office, Curb Your Enthusiasm and Trailer Park Boys according to my schedule. Unless I am in a hotel room, the only time I ever see The Daily Show is on the Internet. In June, I'll begin watching a weekly 30-minute Bill Maher web show on Amazon called Fishbowl.

The most interesting and curious aspects of The End of TV as We Know It are the implications for Canadian television. Until now, Canadian broadcasters have made most of their profits with American content. They are required by law to support and produce Canadian content, but they have often worked harder to get around the regulations than to tell homegrown stories with serious budgets.

In the future, as entertainment becomes borderless, CHUM, CTV and CanWest Global won't be protected by the CRTC. They won't be able to substitute Canadian Tire ads for American pharmaceutical plugs when they're simultaneously showing Survivor or CSI: Miami. In fact, the whole notion of a program interrupted by commercials could fall away, replaced by another advertising strategy.

It will be all about content, Canadian content competing in the global marketplace of sitcoms, dramas, reality shows, movies, news and sports.

The End of TV as We Know It calls non-MP viewers "Gadgetiers" and, somewhat unfortunately, "Kool Kids." These consumers are the ones to watch, as they jump on technological advances and experiments. CBC is reportedly planning to "broadcast" Winter Olympics coverage in February to cellular phones. You can bet the industry will be taking notes.

If this spells doom for traditional players in Canadian television, it will be unfortunate for local news. However, if Canadian producers are willing to extract themselves from the old model early, they can start selling and packaging their content to Gadgetiers and Kool Kids -- and, somehow, to advertisers -- before the broadcasters and cable companies can catch up.

Canadian musicians and novelists have succeeded beyond our borders. Film and television producers, tap dancing for rich broadcasters who aren't interested in their ideas, have not thrived. However, if they're creative and nimble, and if they can find an audience in the new, borderless world of visual entertainment, the broadcasters' nightmare could be the storytellers' dream.

Read Todd's blog at

© The Edmonton Journal 2006

Press: Ottawa urged to revisit TV rules


Financial Post (National Post)
Saturday February 18, 2006

Canada must re-evaluate broadcast regulatory policies to keep up with changing viewer habits and the proliferation of alternate TV viewing channels, including cellphones and iPods, according to a report by a senior strategy consultant at IBM Business Consulting Services.

"The unlimited choice offered by way of alternate delivery channels could adversely affect the Canadian television industry," Alan Sawyer said yesterday in a Canadian companion piece to an earlier IBM report called The End of TV as We Know It.

The lucrative practice of substituting Canadian advertising in broadcasts of American shows is in danger, for example, because the new methods of watching TV shows are threatening to disrupt traditional scheduling, he said.

The ability of consumers to order shows and watch them whenever and wherever they want is bound to shrink the audience during traditional network broadcasts when Canadian ads can be seen.

Another troubled spot in the current system is the production of Canadian shows to meet minimum Canadian content requirements, said Mr. Sawyer.

"Content that is truly Canadian in nature will appeal almost exclusively to Canadians and, in the global perspective, that's a small market," he said.

"[I]f consumers have a choice — and they will have many — we can't let our regulatory policies that have been advantageous thus far turn into a competitive disadvantage for Canadian content creators and distributors, or advertisers."

The Canadian Radio-television and Telecommunications Commission determined several years ago that it would not regulate the Internet, a facilitator of much on- demand broadcasting in the United States.

But in September, the Canadian Association of Broadcasters, an industry lobby group, asked the CRTC to regulate mobile broadcasts following an introductory "experimental exemption" of two years. The CRTC has not made a decision.

Kevin Roberts, worldwide chief executive of media planning and advertising agency Saatchi & Saatchi, said yesterday that many advertisers are operating in "fear" mode as they anticipate the shift to alternative TV viewing methods.

Over the next 12 months, Saatchi & Saatchi's Canadian operation will work to break down traditional barriers between agency functions such as creative and planning to adapt advertising messages to fit new broadcast channels, he said.

Press: Who will provide content?

'New winners and losers to rise up in next five years'

Barbara Shecter
Financial Post; National Post

Missed the latest episode of Survivor? Not to worry, CBS, the U.S TV network, is selling weekly episodes of the hit show directly to viewers through its Web site.

If the recent trial becomes widespread -- it is one of many as networks attempt to let traditional TV viewers choose to watch a show when and where they want to -- the middlemen who help bring shows to your living room today could be cut out of the equation.

Of course, the vast majority of people still watch TV at home, but a recent IBM report predicts the "massive passives" who only watch what the networks schedule will be outnumbered by 2012 by people watching shows on their own timetable and not in front of their TVs.

Potentially at risk -- if they don't adapt -- are cable and satellite companies, which bundle groups of channels together to sell to a customer, and Canadian networks, which buy the rights to air U.S. shows within Canada.

Even Apple Computer Inc. or Google Inc., which have recently signed deals to distribute network TV shows on the Internet, may be left out.

"There's going to be a real battle for who is the supplier of content to the consumer," says Alan Sawyer, a senior strategy consultant in the media and entertainment practice of IBM Business Consulting Services.

Even the broadcasters themselves are at risk in a world in which shows are sold directly to the viewer, says Cynthia Brumfield, president of Emerging Media Dynamics Inc. in Bethesda, Md.

The CBS experiment, launched in January, opens up the potential for people who were never in the business to start making and selling programs -- in competition with traditional studios and networks.

"What used to be in the hands of very few people has now [potential to] become a mass phenomenon," says Ms. Brumfield.

A recent IBM report on the future of television says there is a lot of experimentation right now, but "what is certain is that new winners and losers will rise up in the next five to seven years."

Ms. Brumfield, who spent a decade as an executive policy analyst at the largest cable association in the United States, said cable companies fear being turned into "a commodity," paid merely for carrying programs into the home and onto a television or computer screen, rather than getting the higher fees for first gathering and packaging channels.

If a model such as the CBS direct-to-consumer experiment becomes the norm, cable companies "don't have a choice. They don't survive -- or they diversify into television and video businesses," says Ms. Brumfield.

Mike Lee, vice-president of strategy and development at Toronto-based Rogers Communications Inc., Canada's biggest cable firm, says he expects consumers will ultimately opt for "a mosaic" of TV viewing, with passive home viewing remaining a part of it.

Still, he says, Rogers is getting in the game by investing in wireless, high-speed Internet and video businesses that can offset losses from the traditional method of broadcast delivery.

Ms. Brumfield says "it's anybody's guess" what broadcasters will look like it 10 years, but they will probably adjust as other media have to new competitive challenges.

The big U.S. broadcast networks have already been adjusting to competition from the growing number of specialty TV channels. The broadcasters are likely to continue to cut costs and rebuild their business models around cheaper, "ultra-mass market programming" such as reality shows, predicts Ms. Brumfield.

"It's rare to see expensive, high-quality content on the broadcast networks any more and I think we can expect them, in the short-term to continue cutting costs and appealing to the widest possible array of viewers," she says.

The challenge in Canada is not as great yet because blocking technology prevents Canadians from watching U.S. shows on their cellphones and iPods. But Canada's TV networks are, nonetheless, preparing to fight for their place as distributors of content.

Canada has the "infrastructure" for distribution arrangements similar to those being tested in the United States, says Kathleen Dore, president of TV and Radio at CanWest MediaWorks, which owns the Global television network and the National Post.

"I think the toughest part of it is just sorting through all the rights on content where there are many rights holders."

Broadcast rights have emerged as a flashpoint in the United States and illustrate how messy it can be to rush to sell shows on alternate channels without first ironing out who deserves a piece of the action.

One battle pits the U.S. networks against their affiliates, smaller station groups that use network programming to supplement their own local programs.

The affiliates say the nation-wide availability of shows through Internet downloads is robbing them of viewers for network shows, and they are not being compensated for the resulting loss of advertising revenue.

Even cellphone companies are getting into the mix, squabbling about who should receive a slice of the $1.99 per download.

"They're all doing a very careful dance," says Andrew Zolli, who runs consultancy Z+ Partners in New York. "They all want as big of a cut as they can get."

Mr. Sawyer, of IBM, says Canada's biggest broadcasters must adapt before a new system takes hold because they rely heavily on selling advertising during broadcasts of hit U.S. shows.

Broadcasting the shows at the same time they air in the United States guarantees more viewers for advertisers because audiences in Canada will see Canadian ads whether they are watching a show on Canada's Global or CTV or on a U.S. channel such as CBS or ABC.

In the new world, when there may not be a schedule to adhere to, the Canadian networks will lose that revenue advantage.

Nothing will happen overnight, Mr. Sawyer says, because Canadian networks still spend a good deal of money to buy U.S. shows for traditional broadcasts and their big U.S. partners aren't likely to want to disturb that relationship.

"Canadian networks are valuable customers of U.S. content creators. [They] certainly don't want to alienate them," said Mr. Sawyer. But "if the conventional model disappears entirely, it's a whole different dynamic."

The IBM report says one strategy TV networks should pursue is to use viewer familiarity with them to their advantage -- to draw in viewers who are surrounded with a plethora of choices but little direction.

Jeff Leiper, director of Canadian market strategies for communications consultancy Yankee Group, says Canadian broadcasters should be increasing the amount of programming they make, and paying for it through repeated broadcasts on multiple channels including video iPods and mobile phones.

"This is exactly what they need to be doing. Locally produced and owned programming, multi-platform, that can be re-used over and over without significant cost or rights negotiations," says Mr. Leiper.

© National Post 2006

Press: Television to morph into new medium

Television to morph into new medium

Rosie Lombardi

(16 Feb 2006)

Television has come a long way since the simple, halcyon days of rabbit ears and a tiny three-channel universe.

According to a new report from IBM, disruptions in the television industry today will lead to long-term upheavals as dramatic as the music industry's trials and tribulations. By 2012, the landscape will change so profoundly that the television industry will need open content and standards-based delivery platforms to generate revenue.Text

The report, dubbed The End of TV as We Know It: A Future Industry Perspective predicts that by 2012, the landscape will change so profoundly that the television industry will need open content and standards-based delivery platforms to generate revenue.

The report identifies several forces that are threatening TV's traditional business model and its traditional lifeline: advertising. These forces include:

· Fragmentation of viewing audiences, who divide their time between multiple media choices, channels and platforms;

· On-demand, self-programming and search features that allow consumers to bypass ads entirely.

· And competition between telcos, cable companies and Internet for viewers, and the associated ad revenue

"This is happening faster than the entertainment sector has recognized – the established supply chain is changing under their very noses," says Alan Sawyer, a Markham-based strategy consultant with IBM consulting services.

According to IBM, these disruptions will likely have a negative impact on Canada's television industry and culture, Today, Canadian advertisers have an advantage due to the CRTC's (Canadian Radio-television and Telecommunications Commission) requirement to substitute Canadian signals, which run Canadian ads, if programming is available simultaneously on both Canadian and U.S. channels.

It says that advantage will evaporate if alternate sources of content exist. Moreover, the CRTC's Canadian content rules will be harder to preserve as an increasingly Internet-based television (IPTV) landscape emerges.

But not all IPTV is created equal, says Sawyer. Two different types of IP-based television are being developed, he says, and they have different regulatory requirements. "IPTV as offered by telcos – television delivered over their existing twisted-copper phone lines – will have to address the CRTC's regulations. However, this is different technology from acquiring television programs via the Web and viewing them on a computer, which is not regulated today by the CRTC. Whether the CRTC can or should attempt to regulate that is a question up in the air."

But Carmi Levy, a research analyst at London-based Info-Tech Research Group Inc. says there is no question the technical capability exists for the CRTC to control both types of IP-based television. "The CRTC can, if it so chooses, continue to lock down advertising as television evolves," he says.

He points out that Google Video already screens searches for the originating country, and will return a "Not available in your country" error message if a Canadian IP-address attempts to access the US-based Super Bowl, for example.

The IBM report states the entertainment industry will need to address the co-existence of two major types of viewers/consumers with different content delivery requirements. The "Massive Passives", the largest group today, will continue to support the traditional passive TV viewing experience. However, smaller but more influential early adopter segments, personified by "Gadgetiers" and "Kool Kids", will demand a more interactive media experience, driving radical change in the industry.

Platform-agnostic content, mobility of the media experience, individualized pricing and an end to traditional broadcast schedules and release windows will be needed to satisfy these tech-savvy consumers, the report says. "Kool Kids want to watch television when and where they want on whatever device they choose," says Sawyer. "And the lines between television and gaming will blur."

Demand for delivery of television to cell phones is starting to become significant in North America, he says, But hard numbers are difficult to come by, as there is limited availability of content and few cell phones have this next-generation capability in Canada and the U.S.

"With the upcoming Olympics, there will be much more broadcasting to cell phones, and we'll be able to see what the real demand is, if wireless providers disclose how much audience they draw," says Sawyer. "So this is also the early adopters' Olympics."

Industry observers will all be avidly watching the evolving scene, "Pull up a chair and watch the show – the fun is just beginning," says Levy. "It will be interesting to watch this over the next couple of years as content providers, televisions stations, cable and telecom companies all jockey for position. Who will own the conduit to consumers' homes? Whoever prevails will be sitting on a huge revenue stream."

Copyright © 2005

Press: Televolution: No longer just sitting there

No more lapping up what the networks dish out; now we cherry-pick our TV fare

The National Post
Barbara Shecter

Each time he gets ready for one of his frequent trips to various parts of the world Peter Lowes, a New York-based consultant for Deloitte & Touche LLP, downloads his favourite TV shows from his computer to his iPod.

"If you are travelling the whole time like I do, the video iPod becomes 'TV to go' and a great way to stay up to date on shows, as well as be entertained on long flights," says Mr. Lowes, a 15-year veteran of the tech business who was recently passing through Toronto en route to Edmonton.

Only a decade ago, Mr. Lowes, like the rest of us, made appointments with his television set. We'd be sure to be home on, say, Thursday nights to catch the latest instalment of Friends or ER. If we had to be out, we would make the effort to set the VCR. Taping offered us the advantage of being able to watch when we wanted -- and to fast-forward through commercials.

Still, it was largely a passive experience, one that gave us little control over what we watched.

But personal video recorders and video-on-demand subscription services offered by cable companies have now given us -- the viewers -- more control than ever before over what and how we watch television programs.

Indeed, in just the past six months, more dramatic shifts have taken place as major media players, from ABC to Google Inc., have unveiled deals that allow viewers, such as Mr. Lowes, to watch their favourite shows on their iPods and mobile phones.

"You can even set it up to automatically download the newest episode in a series every time you synch the iPod with your PC [computer]," gushes Mr. Lowes, an outsourcing specialist who travels frequently to London and Sydney, as well as throughout North America.

The shift is sending ripples across the television industry, causing broadcasters to re-think the way they produce and schedule shows, advertisers to seek out ways to keep up with and communicate with a mobile customer, and cable companies to ensure they stay part of the equation by getting programs to the viewer.

"The magnitude of change we saw over 50 years in the traditional TV space will be repeated or exceeded in the next five years," says Alan Sawyer, a Toronto-based senior strategy consultant in the media and entertainment practice of IBM Business Consulting Services.

"And everyone, the content creators, networks, affiliates, distributors, regulators, advertisers -- and the consumer -- will be affected in a big way."

In a report published in January called The End of TV as We Know It, consultants at IBM predict a radically different terrain within six years, as traditional "appointment" TV audiences, who sit in their living rooms waiting for what the networks have programmed, are overtaken by those who will set their own TV-watching agendas.

As a result, the report concludes, the way we watch TV now will shrink as a habit and a revenue-generator for networks and cable operators.

Rather than receiving shows for free, viewers are now paying for the privilege of watching when and how they want. The price for downloading a show: $1.99 for a recent episodes and, in a some cases, advance screenings for $2.99. Many purchases are believed to be impulse buys, made by someone waiting in a line or riding on a subway.

"We've gone beyond, 'Are people going to watch on a small screen," says Bernie Gershon, senior vice-president and general manager of the ABC News Digital Media Group in New York.

"It's moved to 'What are they going to watch and how long are they going to watch? Is it going to be clips or are they going to watch a movie?'"

The concept may sound strange to someone who just purchased a giant flat-screen television for their living room, but the recent flurry of deals involving all three major U.S. networks suggest a major transition is under way.

"In the house, [people] want a big screen. [But] when they are on a train or walking about, they want a cellphone," says Mike Lee, vice-president of strategy and development at Rogers Communications Inc.

Why is this happening now? TV executives say improved technology is providing a better picture, and nearly ubiquitous gadgets such as cellphones and iPods are creating demand for programming they are eager to meet.

Andrew Zolli, who runs consultancy Z Partners in New York, says the proliferation of tiny screens on cellphones and iPods in purses and pockets has made content producers the kings they were expected to be in the late 1990s.

"There are more screens out there than there is content to fill them, so there is a mad scramble. The content producers are going to become the darlings again. This is where people thought the AOL/Time Warner deal was going to go," Mr. Zolli says.

Still, he says, the quality of viewing on the small screens can't rival the big-screen experience of the home entertainment theatres.

"It's just above suck-a-tude -- this is not 'gather the family around, we're all going to watch the iPod'," Mr. Zolli says of the quality of shows such as The Office and Lost that he downloads from Apple's iTunes. "That's just not going to happen."

Still, Larry Kramer, president of CBS Digital Media, says he is in the download game because the network doesn't want to miss out on "new or different audiences" that might be drawn in to watch Survivor and CSI on TV through iPod viewing or through Google's vast reach.

At the same time, if episodes are made available on the network's own Web site, loyal viewers may pay to watch a missed episode at their convenience, he says.

The vast experimentation that is taking place south of the border has brought longstanding issues to the fore in Canada, such as how advertisers will reach target consumers in a world in which potentially commercial-free shows are available on demand.

"You're not just dealing with the traditional 30-second spot anymore," says Cynthia Fleming, Toronto-based executive vice-president of media planner Carat Canada.

Advertisers have begun to experiment with product placement and sponsored shows, but their efforts are made more difficult by the multiple forms on-demand viewing is taking. "There's not a [new] standard that's out there," says Ms. Fleming.

The shift from the couch potato to a more mobile, on-demand viewer has also raised new issues, such as how cable TV operators and even the traditional networks themselves fit into a business model in which shows can be sold directly to the viewer through whichever device they choose?

The IBM report says tech-savvy consumers who demand to watch what they want, when they want, at individually tailored prices, "will challenge long-standing business models to lead the industry to ... an end to the traditional broadcast schedules and release windows."

The loss of the traditional "prime time" schedule in the evening could have major implications for Canada's broadcasters, which make much of their money by selling Canadian advertising that is inserted into U.S. shows when they air at the same time in Canada.

There could also be implications for cable companies, which could potentially be left out of distributing broadcasts entirely.

While Canada isn't as advanced as the United States in video experimentation through computers and iPods, "we certainly expect that to unfold in Canada," says Jennifer Bell, a spokeswoman for Alliance Atlantis Communications Inc., the Toronto-based producer and specialty-TV broadcaster.

Big private broadcasters such as CTV and Global will "face the challenge of selling American programming to Canadians when every indication is that their hold on audiences will diminish as they lose the advantages of carriage and spectrum scarcity," says Jeff Leiper, Ottawa-based director of Canadian market strategies at telecommunications consultant Yankee Group.

"Who are Canadians going to turn to for Desperate Housewives? A behemoth like Apple or Google, or a broadcaster like CTV in a world where CTV's raison d'etre is rapidly diminishing?"

Not everyone is convinced we are technologically prepared to leap into this new world.

Craig Moffett, a vice-president and senior analyst at Sanford C. Bernstein & Co. LLC in New York, told a U.S. Senate commerce committee this month the telecommunications infrastructure is "woefully" unprepared for widespread delivery of video over the Internet.

Mr. Moffett said it takes more bandwidth to download a half-hour sitcom than to receive 200 e-mails a day for a year. "Downloading a single high-definition movie consumes more bandwidth than does the downloading of 35,000 Web pages," he told the committee.

Mr. Moffatt said that telecommunications networks aren't prepared for such downloads to become commonplace.

© National Post 2006

Press: 2012, l'année où la télé est morte

Nicolas Ritoux

La Presse, Montreal
Le mercredi 19 avr 2006

Collaboration spéciale

Les publicitaires s'entendent pour dire que leurs annonces télévisées ne sont plus assez vues et trop largement ciblées, surtout auprès des jeunes consommateurs. Un expert en nouvelles technologies des médias, le consultant Alan Sawyer de IBM Canada, est venu à Montréal leur expliquer comment s'adapter. On en a profité pour lui parler.

Les maisons de disques sont tombées dedans, avec l'échange de musique sur Internet. Les librairies de quartier les ont suivies, avec la concurrence d' qui livre en quelques jours à votre porte le plus obscur des ouvrages. Et très bientôt, ce seront les chaînes de télé qui y sombreront.

Ce précipice, c'est celui du «gouffre générationnel» dont Alan Sawyer, consultant auprès de l'industrie des médias chez IBM Canada, est venu annoncer la venue lors d'une journée de conférences sur la publicité et la télévision, organisée récemment par le magazine Infopresse.

Selon lui, le public des émissions télévisées se divise aujourd'hui en trois groupes qui s'éloignent de plus en plus les uns des autres. D'abord les «passifs massifs», les plus vieux d'entre tous, qui restent assis sur leur fauteuil à se faire offrir les programmes sur la bonne vieille télé du salon.

Ensuite, les «gadgeteux» (gadgetiers), jeunes professionnels en tête, qui consomment à part égale la télé et l'ordinateur pour accéder à des contenus vidéo, et sautent les annonces avec leur enregistreur numérique personnel.

La menace des «Kool Kids»

Mais c'est la génération suivante, la troisième, qui menace le plus les patrons de télévision, selon M. Sawyer: les «Kool Kids», petits poissons dans l'eau bouillonnante des nouvelles technologies, qui mêlent la consommation de contenus et l'interaction sociale sur des appareils de plus en plus mobiles. Ils ont le contrôle complet sur tout ce qu'ils regardent, publicité incluse.

«Pour l'instant, cette génération n'a pas d'argent, tandis que les massifs passifs en ont énormément», constate M. Sawyer. Mais ces derniers ne procurent aux télévisions qu'un «maintien des revenus». Les petits nouveaux, eux, sont des «revenus à cultiver» pour plus tard. Et la récolte se fera dès l'an de grâce 2012.

Cette année-là, la télé traditionnelle perdra sa domination dans les médias de choix des annonceurs publicitaires, selon M. Sawyer. De là découleront des baisses de revenus, la diminution des budgets pour produire des émissions, et de fil en aiguille, la fin de la télé telle qu'on la connaît.

Très bien tout ça, mais que faut-il faire?

«Les patrons de la télé doivent embarquer dans les nouvelles technologies plutôt que de leur résister», dit M. Sawyer, en citant un sondage d'IBM auprès de dirigeants des médias, qui montrent beaucoup de crainte devant l'arrivée de la vidéo sur Internet.

Numériser ne suffit pas

Les chaînes de télé doivent absolument investir dans la numérisation de leurs programmes, mais aussi des systèmes adaptés de «gestion des avoirs numériques» (digital assets management).

« a réussi grâce à son catalogue gigantesque et son absence de stocks. Avec la vidéo, c'est pareil: beaucoup de contenus ne sont pas télédiffusés parce qu'il n'y a pas assez de demande, et donc pas assez de revenus publicitaires associés. Mais il y a quand même des gens qui veulent y avoir accès, et on peut leur livrer de façon rentable avec Internet», explique M. Sawyer.

Mais numériser des émissions et les «garrocher» sur un site Web ne suffit pas. Il faut indexer, cataloguer les contenus de manière efficace, en utilisant des systèmes de recherche innovateurs. Tiens, justement, IBM en conçoit.

À l'instar de Google et d'autres, la «Big Blue» développe actuellement Marvel, un système de recherche dans les contenus vidéo capable de se peaufiner automatiquement à mesure qu'on l'utilise.

«Ça ne suffit pas de rechercher des émissions d'une demi-heure. Les internautes doivent pouvoir chercher à l'intérieur du contenu des émissions», explique M. Sawyer.

Investir dans le risque

«Prenez des risques», a-t-il conclu devant son auditoire de professionnels de la télé, parmi lesquels on comptait le patron de Radio-Canada, Sylvain Lafrance, ainsi que Pierre Karl Péladeau de Quebecor. «Il faut investir dans des essais, en mettant quelques programmes sur le Web pour commencer.»

Bien sûr, mettre du contenu sur le Web pose des problèmes d'ordre contractuel (il faut avoir les droits de diffusion) et syndical (il faut rémunérer les artistes). C'est pourquoi M. Sawyer pense que les diffuseurs qui produisent beaucoup à l'interne, comme Radio-Canada, sont particulièrement bien placés pour se lancer dans le virage du Web. Mais quelle que soit la complexité, les gros diffuseurs n'ont pas le choix d'agir.

«Sinon, de petites compagnies viendront profiter du changement à leur place. IBM est bien placé pour le savoir», ironise M. Sawyer, en allusion aux années sombres de sa compagnie, qui s'est fait piquer par des petits jeunes le marché de l'informatique personnelle qu'elle avait pourtant créé.

Tuesday, April 18, 2006

CRTC takes hands-off approach to mobile TV

April 13, 2006 - Media In Canada
Top Stories

by Patti Summerfield

The CRTC has ruled that mobile TV services offered by Bell Mobility, Rogers Wireless, and Telus Mobility are exempt from regulation under its New Media Exemption Order.

Additionally, the Commission is asking for input from Canadians on its proposal to exempt mobile TV services delivered and accessed over the Internet. This is all very good news for Canadian advertisers and consumers says Nick Barbuto, director of interactive solutions at Cossette Media in Toronto.

"From an advertising perspective, it definitely means more opportunities. I think many advertisers will find unique ways of bringing great content to consumers."

Kevin Hung, supervisor at Starcom Mediavest agrees. He says that the deregulation will allow advertisers who are more willing to push the envelope, the creative freedom to create content that speaks directly to their targets.

For mobile TV and broadband streaming to gain widespread penetration, an advertising model may be what is needed to make it financially accessible to consumers. Right now the cost of streaming broadband content is quite expensive. Barbuto says in hindsight, paying $4 to watch a movie on a cell phone may not be such a good idea at the end of the month since it actually ends up being about $25 with the extra data costs. He also predicts a big increase in micro-content producers.

Barbuto adds, "I think on a bigger trend, this idea of the CRTC making way for technology is going to have huge implications from an advertising perspective. As they continue to rule on these topics, they'll have to readdress VOD and other areas within the media landscape that technology has touched and changed so dramatically. That's going to open up new advertising opportunities right across the board."

Nothing new here, despite the attention this got. This is the same thing the CRTC said a while back. However, what is possibly of interest is the fact that they're leaving the barn door even as the cows are starting to escape. It may be harder for the CRTC to close the door in the future, without stepping in a lot of cow shit in the process!

Why do I subject myself to this?

Last week I went to see UB40 in concert at Massey Hall. I've been trying to go to one of their concerts for 20 years or more, but it just never happened. I recall a couple of times when I was in other countries and UB40 had just been there or was going to be there just after I left. At last, my wish to see this band live, in all it's glory, was to be fulfilled. Or so I thought.

A couple of weeks ago I went to see Great Big Sea at The Carlu. I'd 'seen the Sea' before, and not too long ago, but they're worth seeing again. Or so I thought.

In both cases, the sound mixing sucked. Big time. The vocals for Great Big Sea were pretty much inaudible. On top of that, the stage was backlit -- with the spots aiming right up into the balcony where we had the misfortune of sitting. For UB40, the bass was cranked so high the sleeves of my shirt kept moving to the rythmn. I admit that I was only about 10 rows away from the speakers, but still, that's overkill (or overbass). Again, many of the lyrics were lost (and would have been regardless of the bass). Why do they always crank the music so it drowns out the vocals?

Time and again I go to concerts, spending big bucks for the best tickets I can get. Time and again I come away disappointed by the sound.

After the UB40 concert I decided to spent a fraction of what the ticket cost to buy a concert DVD over the internet. I haven't got it yet and, obviously, it's not the concert I saw, but I bet the sound will be well-mixed and I will enjoy the experience much more on my home theatre system than I did at the live show. I'm still glad I saw them live, but it sure wasn't the experience I hoped for.
So, as for live concerts, I ask: why do I subject myself to this? And will I never learn.

Monday, April 17, 2006

FOX cuts new distribution deal with affiliates

FOX Television has signed a six-year deal allowing its 150 affiliates to share in the revenue from alternative distribution of its television programs.

It is the first major agreement announced to address the increasingly testy relationship between networks and affiliates over alternative new non-broadcast outlets-including the Internet and iPods — for the distribution of television content.

The agreement, whose details have not been confirmed by the parties, allows FOX to make 60 percent of its primetime schedule available online the morning after the shows air, the Wall Street Journal reported. The formula is complex, but stations essentially will get a 12.5 percent cut after costs when a show is distributed to alternative media platforms.

FOX, owned by News Corp., will initially be allowed alternative distribution of six hours of programming. That will climb to 100 percent of its primetime schedule by the third year of the contract. As part of the deal, the stations agreed to continue to help pay a portion of the $713 million FOX must pay the National Football League each year under its contract.

The first of many such deals, I'm sure.

Tuesday, April 11, 2006

Validation for new media?

TV programming created especially for cell phones, handheld computers and the Internet has officially arrived as its own medium. Six broadband-specific shows have been nominated in a new category of the Emmy Awards to be given out later this month.

Those who haven't been taking the new distribution channels should view this as a form of industry validation.

Press: Modern consumer is no longer shackled to a TV set


The Gazette

Montreal, PQ

Wednesday, April 05, 2006

If television networks don't take risks with radical and diverse ways of showing programs, they will lose the fierce battle for evolving viewers.

Alan Sawyer of IBM Consulting Services delivered the ominous message to jittery TV professionals who are finding new competitors in cellphones, iPods and websites.

The modern media consumer is no longer confined to his TV set, Sawyer said. A new generation of "gadgeteers" expect their programming when they want, where they want and through the means of their choice.

They are turning to the Internet and their mobile devices to get it, and non-TV businesses are filling that need.

"DVDs, video on demand, digital video recorders and peer-to-peer file sharing are breaking conventional business models," he said. The challenge for networks is to meet that demand while finding alternate sources of advertising revenue beside the 30-second spot.

© The Gazette (Montreal) 2006

A glimpse into the future of TV?

CHICAGO (MarketWatch) -- Walt Disney Co. said Monday that it would stream several hit ABC shows such as "Lost" and "Alias" for free over the Internet in the next two months, as the company tries to jump-start a new revenue stream for its content.

Disney said that episodes of "Desperate Housewives," "Lost," "Commander In Chief" and the entire current season of "Alias" will be available at its Web site for free during May and June, as part of what it called an "experiment."
This is the first time a broadcast network has made such programming available for free.
The shows will be streamed in a 16-by-9 widescreen format in Flash 8, which Disney says offers the "best video quality." The streams will be compatible with both the PC and Mac platforms.
The programs, which will be available the morning after they air on ABC stations, can be rewound, fast-forwarded and paused, but will include commercials that cannot be skipped.

It will be interesting to see what the quality is like.

Saturday, February 25, 2006

Billions and billions served (soon)

U.S. teen showered with gifts for downloading billionth song from iTunes - Yahoo! News

A billion songs! Who'da thunk it!

Thursday, February 16, 2006

On blogging

So what is blogging really? Is it an irrelevant self-absorbed form of expressionism – akin to the common diary – but with an exhibitionistic aspect to it? Look!, we say. Here are my (possibly censored) inner-most thoughts on life, religion, society or why the Leafs suck this year? Or is it more than that? The answer probably exists on two levels – on the first, blogging has the potential to be a permanent, immutable representation of the thoughts of an individual or a generation or a society as a whole. Blogs may have the permanence of a hummingbird’s wing-beat or the lasting impact of a trilobite fossil. Who knows? On the second level – blogging is an almost-mass-media way of publishing the worst possible mindless crap to a vast potential audience. Is this such crap? Perhaps -- you get to be the judge of that. Are the instant messaging conversations of teenagers, like, you know, any better or worse, or more or less deserving of a place in the vast permanent digital record than my contemporaneous thoughts?