The Internet enables you to watch television on your computer. This is no longer the dream of a futurist. As Web TV continues to unfold, Internet users will have increasingly worldwide stores of programs accessible at anytime from anyplace. Long-held visions of on demand television might well be realized in the near-term. However, this convergence of the Internet and broadcasting is raising many questions. For example, will social and legal factors constrain or even set back the realization of this technical development? Will the lack of adequate business models undermine the production of quality television? Will this convergence bring regulators to the Internet, and impose broadcasting models on Internet regulation? How can traditional broadcasting regulations, such as designating time periods for children’s programming, be transferred – if at all — to the anytime, on demand world, of the Internet? Will these developments prop up or undermine public service broadcasting?
The OII is organizing an Advisory Board Forum on this topic to be held at our Seminar Room, Oxford Internet Institute, University of Oxford on 16 October 2009, from 4.30-6.30 pm. This workshop will outline possible scenarios for the development of broadcasting, particularly television, as the Internet becomes an increasingly accessible channel for its distribution and consumption. Participants will address the social and technical shaping of these trends, and their potential implications for the broadcasting sector, the Internet industry and society. Based on this discussion, the workshop will also address the role of multidisciplinary research in this area, and how Internet studies, and the OII in particular, should be addressing the many issues surrounding the Internet and the future of broadcasting.
Participants in this workshop will include members of the OII’s international Advisory Board, along with OII faculty, staff and students, and a set of invited experts in broadcasting and the Internet. Participants are invited to send short position papers in advance of the meeting, outlining key issues that should be discussed, as well as suggesting key readings or projects that the workshop should review. The primary aim of the workshop will be to influence the research strategy of the OII, helping its faculty and staff to determine the kinds of research that should be fostered in the near-future.
While this is an invited workshop, anyone who wishes to attend may contact events@oii.ox.ac.uk and their participation will be considered in light of space considerations. In addition, this blog is designed to enable a larger community to inform this meeting. Please post your own views on these issues, and your advice regarding directions for the OII’s research in this area. I am hoping also that many of the participants in the forum will post position papers as comments to this blog. [Please register on this blog in order to comment – we need to know you are a person.]
Posted on behalf of Chris Cauvy:
The television broadcasting industry is in danger.
And once again, this is all the fault of the digital revolution.
On the one hand, it is evident that the advent of broadband access for the general public is disrupting, if not destroying some sectors such as the music industry.
However, one could argue that broadcasted television’s lack of appeal is not just due to the superiority of digital platforms, but also to its intrinsic limits: in an age where computer and mobile screen interfaces can do wonder, watching programmes on a TV set is indeed a frustrating experience.
Take for example the problem of screen sizing. How many times have we ended up watching people on the screen who look wide… simply because the tv set is enlarging the image to the panoramic view? Apparently, there is a “smart” option on TV sets, which automatically re-sizes images. So if TVs have a brain, it is smaller than that of my other media players.
Just like a landline telephone handset compares poorly to a mobile phone, television interfaces and remote controls are inferior to PC and Internet interactivity. As the Duke of Edinburgh elegantly put it this week: “to work out how to operate a TV set, you practically have to make love to the thing. Why can’t you have a handset that people who are not 10 years old can actually read”. No further comments needed!
I concede these considerations may be trivial… So, amongst a long list of more serious issues, I am highlighting two critical topics for our forthcoming debate at the University of Oxford’ Internet Institute on the future of broadcasting:
First, let us talk about QUALITY OF CONTENT.
From chess to foreign affairs through to football, military history, economics or ballroom dancing, our post-modern society provides such a variety of hobbies and passions that television programmers are confronted with the impossible task of addressing the wide interests of the audience. This Sisyphean mission must have frustrated countless TV executives, hence their propensity to aim for a common denominator.
How many evenings per week do we think: “there is nothing interesting tonight on TV… once again”?
Take architecture: I am a fan. Why can’t there be a decent programme on the latest news about buildings and urbanism? We all know that cost is king, especially when the target audience is not massive. But a one-hour programme dedicated to architecture could be in the form of a debate between academics, practicians and amateurs, nothing more. A monthly discussion would be sufficient to satisfy my curiosity and passion. More would be perfect, but I cannot be too demanding.
The same could be said about jazz music, diplomacy, roman noir, philosophy, archaeology, etc.
By catering for the masses, TV cannot compete with platforms such as social media, blogs or video aggregators, where niche topics strive.
If TV channels want to retain their freshness, “live” effect, utility and relevance, they must diversify their offerings. With TV channels such as SciFi, Film 4 or Cartoon Network, they have started to do so years ago. However, rather than solely betting on specialist channels, they should also think about mainstream TV channels that would offer different programmes, that are not just cop dramas, soaps, news and reality shows. There is room for mainstream channels… with a lateral twist.
Second, there is a problem with regards to GEOGRAPHICAL AVAILABILITY.
Evidently, for media broadcasting industries, legal frameworks are of national nature. This is a critical issue in Europe, where a significant proportion of EU citizens do not live in their country of origin. For those “expats”, watching a TV show from their native country is difficult. There are ersatz of TV channels, such as French-speaking state-funded network TV5, which are supposed to select the best of French, Swiss and Canadian programmes. In fact, it is an illogical and confusing amalgamation of disparate programmes. And in addition, you often need to pay for these kinds of un-attractive TV channels!
Because radio needs less bandwidth, or thanks to a more relaxed legal framework (?), it is far easier to listen to foreign radios channels. Coming back to my experience as a French expat, there is a wonderful iPhone application called France Radio, which allows me to listen, live, to all French state-owned radio stations. Believe it or not, this service is provided for free by two Spanish software programmers… Either they are in love with French culture, or they have something against state radios!
With the arrival of Hulu and Boxee in Europe next year, what happened with radio will be repeated with television.
There will still be an issue with advertising and legal restrictions.
For the former, addressable advertising may be the panacea. Germans living in Italy will have their TV show interrupted by an ad for a local Italian retail chain, thus allowing advertising revenue to be maintained (the multiple problems generated by addressable advertising will be discussed in a separate blogpost).
For the latter, the EU must simply come up with a pan-European set of rules that will allow the emergence of a “broadcasting Shengen” agreement. Let TV programmes freely cross our frontiers! Knowing the efficiency of European lawmakers, I presume this undertaking should take a couple of months.
With all these issues around traditional TV broadcasting, the future success of Internet television as a flexible and value-added service will not come as a surprise.
Still, “classical” television broadcasting is not dead… at least for now.
TV is also about feeling a sense of community: we all love to watch, at the same time, something unique, enticing, extra-ordinary. We just enjoy so much the sense of sharing an amazing experience, live, with a few friends, but also with millions of people.
In a world where multi-tasking and “always-on” seem to prevail, and where interacting with friends, strangers and even brands is commonplace, traditional television’s main weakness, that is the passiveness it implies, may be its ultimate strength: What a delight, after a day spent struggling with a continuous flow of emails, SMS, instant messages, tweets and blogposts, to sip a glass of wine and, peacefully, watch a great TV programme.
With no red button to click on… Am I that old school?
Apologies to all for my late response.
Commercial broadcasting as it presently exists in the ‘off-line’ realm is a leading application of the rapidly growing study of so-called “two-sided-markets” (other examples include credit cards, software companies, newspapers, search engines, online auctions etc.). The key realisation of this literature is that many industries are organised around platforms that deal with two distinct groups of agents. In the case of broadcasters these groups are viewers (or, slightly more cynically, consumers), and advertisers. Of interest is the question: “how should such platforms price to the respective groups in order to maximise profits?”
Now, it is typically the case that adding more members to one side of the market increases the value of participation for those on the other. For example, adding more viewers increases the profitability of an advertisement. The common intuition is that the platform should (at least partially) subsidise the group which creates the largest benefit (or ‘externality’) of this kind, so that this benefit can subsequently be extracted from the opposing group by means of a higher price. Again, as an example, television shows are often provided to consumers for free in order to maximise the number of viewers so that the broadcaster is able to charge higher advertisement fees. It strikes me that there is nothing fundamental about such a business model that would render it defunct. Indeed, Google et al. have demonstrated that two-sided-pricing can prove incredibly profitable in the on-line realm.
This notwithstanding, it may be the case that advertiser supported broadcasting proves less feasible in the Internet sphere. In particular, consumer behaviour in response to on-line advertisements may be different to that off-line. An interesting question, then, is how can advertisers and broadcasters get smarter about designing their ad platform. Google’s success seems to have stemmed at least partly from the fact that they have simultaneously made advertisements less obtrusive and more relevant. In an era in which broadcasts become semantically encoded, context sensitive advertisements seem to be a promising direction. We have already seen the beginnings of this trend on YouTube, which provides links to purchase songs used on some of its hosted videos.
Another existing idea from industrial organisation that seems to be of relevance here is the so-called double-marginalisation problem. When broadcasters show programmes produced by a third, both the content creator and the broadcaster must extract some profit from the process. This implies that prices are distorted away from their individually profit maximising levels and distorted twice away from their socially optimal level. The common solution to this problem is vertical integration viz. having the content produced and broadcast by the same firm. In the off-line world, this role has naturally fallen to the broadcasters, who are responsible for much of the high-quality programme output, since entry into the broadcast industry by content creators is costly and likely subject to regulation. The on-line world, though, provides a new opportunity for content creators to ‘broadcast’ their programmes independently, and thus “cut-out the middleman”. This kind of vertical integration on the content producer’s side may produce mass unbundling and a proliferation of independent specialist programme outlets. It seems entirely conceivable that the highest quality members of this collection of small outlets may favour a subscription or pay-as-you go model analogous to those used by satellite television and pay-per-view broadcasters for premium content. The Internet certainly provides a new range of opportunities for such pricing models.
One of the things that I think is relevant is that broadcasters still generate content that users want access to because they can create programming that is technically of very high quality, and often also has high quality content (although, not always, of course). While there is the occasional oft-forwarded video on YouTube, there is not generally video content able to sustain long-term engagement with audiences over a period of time in the same way that professionally created television has done.
I agree with Yorick’s point that the revenue stream for internet television is a difficult issue, because just as with online newspapers, most content online is currently available for free and efforts to charge have been met with limited success. In the newspaper realm, only papers with extremely valuable and uncommon content, such as the Financial Times or the Wall Street Journal, have been able to make subscription models work. For most newspapers, all of them are printing similar stories as all the other free papers on the web, so what would be the incentive for me as a reader to subscribe to any individual paper? Broadcast television, however, is slightly different than most newspapers, and somewhat more like the FT and WSJ in that much of the highest quality content on television is generated by a few central sources, such as the BBC or ITV in the UK, and the major networks in the US. Unlike newspapers, many of which evolved as local institutions that shared some content in the form of wire services, television started life as centralized institutions that franchised content out to local broadcasters. As a result, there is some chance that broadcast TV might be able to avoid some of the problems faced by newspapers competing for online attention and revenue. The BBC controls the release of its programmes (with the obvious exception of pirated copies posted to YouTube or a torrent site), and if it is able to provide a way for potential users to subscribe to a package of programming that includes the BBC for a set monthly price, there is a chance that this could be a successful model similar to cable TV subscriptions. Unlike most cable TV which is not competitive locally due to monopolistic control of the infrastructure, however, competition could theoretically spring up in this model as different aggregators offer competing bundles of programming for competitive rates, delivered via net neutral ISPs (who probably will need to get their share of the cut as well to prevent them throttling high-bandwidth content).
But what of small independent producers of content in this model? As someone who strongly supports the idea that the Internet can and should allow for the flowering of creativity, a model that strongly favoured a few big players who were able to negotiate their share of the subscription package offered to consumers would be less than ideal. Certainly, those who want to give away their content can continue to do so via free video sharing sites. But what of the small producer who wants to make some money from their creations? One possible idea is to have a corner of this subscription bundle set aside for the internet equivalent of public access broadcasting, but with the added advantage for the producers that content that proves to be popular could earn them a small portion of the subscription revenue. This could be done in a similar fashion to the proposed Google Book settlement, which provides for revenue from sales of formerly orphaned works located in the long tail to earn small amounts of revenue for their rights holders in proportion to demand.
I’m sure there would be myriad issues to resolve, but as a thought experiment, I’d be interested in whether others at the workshop think that a hybrid of regulation and free market competition along these lines would have a chance of success.
Within the European Union the emergence of Web TV has already caught the attention of regulators, who seem to be trying to force the issues raised by the new phenomenon into the same box as traditional TV broadcasting. This is giving rise to concerns over the feasibility of regulating “internet broadcasting” by reference to traditional rules.
The Audio Visual Media Services Directive (AVMS), which is required to be transposed into the national law of member states by the end of 2009, extends broadcasting regulation to the internet. With a new definition of “audiovisual media services”, it applies both to linear programming with a programme schedule (either TV or internet) or on-demand services (either catch up TV or VOD internet) and regulates in particular:
1. advertising, including sponsorship and product placement;
2. the promotion of European works; and
3. the protection of children from adult content.
There are several reasons for concern:
• Restrictions on internet broadcasting in the EU may drive innovative Web TV companies to other jurisdictions, from where they can still reach an EU audience on the internet.
• The ease by which Europeans can access internet content from outside the EU undermines the policy of regulating content broadcast from within the EU.
• The definition of “audiovisual media services” is imprecise. The extent to which it applies to mobile services or to websites with incidental video offerings is unclear. This is likely to produce different meanings in the national laws of different member states.
• The justification for imposing restrictions on advertising, which is clearly a competitive industry, is unclear. Precise restrictions on product placement are left to member states, which inevitably will produce a confusing patchwork of differing laws.
• There is no consensus, even among traditional TV broadcasters who now offer catch up TV, on how to protect children from unsuitable content since the “watershed” approach cannot work for broadcasts on demand at any time.
• The AVMS represents only a minimal regulatory framework. Although member states may not adopt more lenient rules, they can impose stricter ones. Some may do so, to the further detriment of a consistent EU market.
When it introduced the AVMS directive, the European Commission claimed it would foster growth and jobs in media industries., saying “The Commission has committed itself to creating a consistent internal market framework for information society services and media services by modernising the legal framework for audiovisual services … The goal of the [Directive] will in principle be achieved by allowing industries to grow with only the necessary regulation, as well as allowing small start-up businesses, which are the wealth and job creators of the future, to flourish, innovate and create employment in a free market.”
There are several questions that might be asked in relation to this:
1. To what extent is the aim for a “consistent internal market framework” undermined by imprecise legal definitions in the AVMS and likely different interpretations in individual member states?
2. How can this intervention be seen as “only the necessary regulation” when it includes a protectionist bias towards the promotion of European content?
3. How can “small start-up businesses … flourish in a free market” when EU-based, WebTV players face restrictions on their primary source of revenue (advertising) which don’t apply to businesses based outside the EU?
4. Have the EU lawmakers set off in the wrong direction by seeking to apply the same or similar concepts from traditional TV broadcasting to the wholly different market of WebTV and the multitude of internet spin-offs offering video on demand?
There is no reason to believe television broadcasting can be exempt from the Internet migration that has changed so many forms of dissemination:
• the whole UK daily press (except the FT) is available free in limited form and is under extreme threat, both from the free access itself and the loss of associated advertising to the web (car sales, obituaries, personals etc.)
• increasingly novelists, musicians etc. release their own works directly to the Internet.
• Internet radio over a wide spectrum is easier to reach than land-based signals
• Even the porn industry (magazines and videos) is said to have been largely wiped out by free Internet porn.
• Traditional mail is being absorbed not only by email but by Facebook, Twitter etc., and this is accelerated by the death throes of the mail delivery monopoly. Writing a postcard is now pleasantly archaic.
• Skype began the wholesale migration of the phone system to the Internet.
The list is much longer than this, of course, and since the BBC iPlayer and other similar facilities, television has begun to merge with the Internet. This is not as new as some might think—it was actually available in the very earliest internet days. At Stanford AI laboratory in 1972 researchers could watch TV on their office monitors while they typed over it, but there were two disadvantages: all screen were green, which some found tiresome, and, more importantly, the computer screens could not display sudden movement, so that any rapid action in the TV programme was reduced to a screen blur. But the principle was established and there has been reasonable quality TV reception on PCs through special software since the 90s, but, crucially, via special aerials not the internet itself.
I suggest there are two key issues both touched on in Bill Dutton’s blog above, first what can the revenue stream be for internet television, and the second is the loss of all central control specifically for TV.
As to the first, the issue is not different from the problem faced by the print media: free internet access threatens the future of paid distribution. Rupert Murdoch recommends a return to paid subscriptions (a la FT) which is perfectly practical though there is huge resistance. There is also the sort of argument in the NYRB article http://www.nybooks.com/articles/22960
Namely that the blogpress is sui generis and not simply parasitic on “real journalism” as Murdoch claims. It is usual to cite the Daily Beast or Huffington Post at this point, which have produced high quality alternatives to the established press with their own advertising revenue streams.
Perhaps television is will evolve in one or both of these ways: high cost drama, say, could possibly retrieve its production costs and profit via subscription or, perhaps on the model of Stephen King’s internet novel releases, free access but you must pay for the last chapter/ten-minutes? One possible variant is the PBS model in the US where the content is free and without advertising but supported by a mix of voluntary subscriptions and government subsidy. The second route would involve, like the Beast, programmes that are free on the internet but recover their costs through advertising just like commercial TV now. All these are possibilities that are already deployed or could be without any great difficulty by TV adopting dissemination methods already used by the press, novels, or US TV.
The more interesting issue is loss of control regimes specifically for television, rather than falling under any general regulations, present or future, of internet content. YouTube has pioneered the total democratisation of TV production and distribution: the problems being the low quality, both of content and sound/video, and of search in so large a space.
This development was foreshadowed by the glorious period in Italy some decades ago when the state monopoly RAI inadvertently let its broadcasting monopoly lapse and Italians found that they could all, for a small hardware investment, make and broadcast amateur television from the garages. This period, though brief, had a profound effect on Italian TV, even though we can now all do the same from our desks.
Clearly regulators worry about this, just as they do about the internet in general, and that issue simply passes over to the general issue of internet regulation: should we have any and if so, how much and imposed by whom?