Why Television Must Turn to Technology to Survive — Foreword
This is the foreword to a series of 5 blog posts on the future of TV by Co-founder Anil Hansjee, who shares insights gleaned from years of experience in the industry.
Traditional linear TV: A resilient industry?
“Audiences will evolve faster than they [studios and networks] will, and they will seek out stories and content providers who give them what they demand: complex, smart stories, available whenever they want, on whatever device they want, wherever they want.”
Remember that passionate “wake up and smell the coffee“ speech from Kevin Spacey at the MacTaggart lecture at the Edinburgh TV Festival in August 2013? Just one month later, I found myself joining the TV industry, becoming chief digital investment officer at Modern Times Group (MTG). It was an interesting time to be joining the industry — and an interesting company: MTG is part of the Kinnevik family of companies, well known for disrupting the media and telecoms industries and for being a major backer of Rocket Internet/Zalando.
Disruption was in the air, all around us: In Netflix’s House of Cards, Spacey and company were changing the rules of content creation. Cord-cutting was the doom-laden phrase of the day, and with increasing consumer and advertiser adoption of YouTube, it was a strange time to be joining traditional TV. Yet Mr Spacey’s single sentence resonated personally with me from my time at Google, where I learnt a key lesson: always focus on the user, and everything else will follow.
The battle cry of focusing on the user has profound implications not only for how TV programmes get made, but also for how they’re funded, distributed and monetized, what user experiences (UX) are deployed and, ultimately, which established market players or upstart companies will be competing for audience time. Since MTG is a leading traditional TV player across multiple geographic markets and covering content production, advertising and pay TV, my new position was actually an ideal vantage point to observe the changes convulsing the industry.
Indeed, the inside view turned out to be very different from the external view, which is shaped largely by the success of YouTube. Many digital-first players are confident that they will “crush the TV industry” and take their “due” share of the global $70bn TV advertising spend — just as their digital predecessors have done in the newspaper and music industries.
Google’s long detour
But even such a powerful disruptor as Google needed several attempts before they actually understood how the TV industry ecosystem worked. Google underestimated the strength of the industry’s long-established workflow and processes. That led to failure when the company attempted to interject itself into the spot TV inventory advertising market. Before the company settled on Chromecast, its attempts to break into the living room took a long detour via various Google TV products. These were built on expensive hardware with a lack of native applications built for them. Google failed to force TVs to comply, and fit into the world of the Web.
The TV industry insider view has been dismissive of these upstart efforts. And why not? On the surface, it seems that even today, disruption is still some way off. Digital video advertising in the US is increasing at an eye-popping rate, but TV advertising spending still outpaced digital video in dollar growth in 2014, according to figures last year from eMarketer. While digital video is showing incredible percentage growth, in absolute terms TV is still adding more new dollars than digital video.
But while the traditional TV industry may have been right to dismiss earlier competitive threats, powerful shifts in the way technology companies and content producers interact are driving fundamental changes in the media landscape. Examining those trends, and the way traditional TV must respond, is the focus of this series of blog posts.
In the next blog post, I will expand on the long resilient hold-out enjoyed by TV, leveraging a continued strong brand and consumer value proposition.
You can read the five blog posts here.
Originally published at www.firestartr.co.