TV: Viewer’s choice and the webification of the medium
When CBS, the second-biggest television network in the world, announced in October that it would offer nearly all of its broadcast content over the Internet, it was tacit acknowledgment by a key player that the Web-ification of TV is at a tipping point.
TV over the Internet has gathered momentum much faster than expected, and is now the biggest disrupter in global media content creation, broadcast and distribution. The market is evolving so rapidly that content producers, broadcasters and advertisers are struggling to keep pace — rules are being rewritten so fast, the rule book itself is becoming redundant.
In Africa, with no cable TV or legacy infrastructure to phase out, the changes could be even more far-reaching. Media players stuck in the old broadcast mind-set will find themselves outmanoeuvred by digitally literate competitors.
Online TV will transform viewing habits and exposure to advertising. With far more precise ways to measure audiences, there are profound consequences for advertising expenditure, consumer behaviour and even public governance.
How ready will SA broadcasters be to meet this challenge? It’s unlikely the country will meet the International Telecommunications Union’s June 2015 deadline for the switchover from the current analogue signal to digital terrestrial television (DTT). DTT means that every TV will need a set-top box (STB) for viewing.
Live sport and live news will continue to find large viewer numbers on terrestrial broadcast in the near future, but as DTT takes effect, replacing the bunny ears with a set-top box will place increasing competitive pressure on broadcasters, particularly with content like movies, drama and comedy series, sit-coms, soapies and documentaries.
The two key technology media for distributing TV over the Internet are Internet protocol television (IPTV) and over the top technology (OTT).
Both deliver content using the Internet instead of terrestrial or satellite broadcasts. The key difference is that IPTV is delivered over the service provider’s own infrastructure, while OTT comes at you over the public Internet.
Zuku in Kenya is a good example of an IPTV network (though it is also moving into OTT). Active in Kenya, Tanzania, Uganda, Malawi and Zambia, Zuku is a "triple play" service offering voice, media and data as a direct-to-home (DTH) service on a dedicated network.
Customers can view premium TV shows via a Zuku decoder, surf the Internet at a blistering 10Mb/s and make phone calls, all on one proprietary package.
If IPTV is the clean-cut college jock of Internet TV, OTT is the new disruptive emo kid on the block.
OTT is not just video over Internet — it occurs in four key forms: messaging, voice, media and cloud.
Facebook Chat, WeChat and Mxit are all messaging OTT apps used extensively in SA, but WhatsApp is the enfant terrible . When Facebook paid US$19bn to buy WhatsApp in February this year, many analysts questioned the price tag, given that Google had paid "only" $1,6bn to buy YouTube. However, research company Ovum recently calculated that mobile phone companies globally lost $32,5bn in texting revenues in 2013 to messaging apps , and that figure is projected to reach $54bn by 2016.
Voice OTT apps are video and voice-over-Internet-Protocol apps (VOIP) such as Skype, Viber, Google Talk, Google Hangouts and recently WhatsApp’s addition of voice to its messaging services. WhatsApp VOIP has led to appeals to telecoms regulator Icasa by Vodacom, MTN and Telkom.
"They are moving into services that are traditionally the services of voice operators," said Vodacom executive Jannie van Zyl.
But it is video OTT apps that are the most exciting in this field. Not only does video OTT fuel the data traffic explosion, but consumer mindshare and future telecom relevance are at stake.
This battle will be fought on many fronts and among adversaries that include telecoms, media companies, OTT players, device and equipment manufacturers, and even artists.
YouTube is a key disrupter in this area. With over 100 hours of video being uploaded each minute, 1bn unique monthly users and 6bn hours of video watched each month, YouTube now dwarfs national radio and TV broadcast stations.
YouTube’s content model replaces the traditional Hollywood system with rag-tag teams of homebrew producers using basic consumer-level equipment.
Video-on-demand supplier Netflix is another key player in this field. Netflix is an American provider of on-demand Internet streaming media (tech-speak for an online video rental outlet), with over 50m subscribers in North and South America, the Caribbean and parts of Europe.
Apple TV was one of the first entrants into the field of cloud OTT apps and hardware, quickly followed by Amazon (Fire TV) and Google (Chromecast). All offer a Web-based subscription service that pulls content from the cloud, for viewing on your TV, computer or smartphone. Recently at the Mipcom international TV market in Cannes, France, major TV brands like ESPN, HBO, CBS and Freecasts’ Rabbit TV announced their entry into TV-via-the-Internet, providing subscribers access to prime live-to-air content, plus thousands of current and past shows as video-on-demand.
The move signals a watershed moment for Web-delivered television, where viewers have more options to pay only for the content they want to watch — and to decide how, when and where to watch it.
"Everybody is talking about it," said Leslie Moonves, CEO of CBS Corp, speaking at Mipcom. "It is an important part of our future. Our job is to do the best content we can and let people enjoy it in whatever way they want. The world is heading in that direction."
The push into Web-based offerings by a giant like CBS, which has enjoyed billions of dollars in profit from the traditional broadcast model, highlights how rapidly the TV landscape is shifting.
What impact will this digital revolution in media have in sub-Saharan Africa?
Firstly, in SA, missing the DTT June 2015 deadline will delay access to bandwidth. However, delays notwithstanding, DDT will happen, probably as a "soft" switchover — a phased process running through the latter half of 2015. That being the case, what changes can local broadcasters, advertisers and content creators expect? Other countries in Africa offer useful case studies, particularly Kenya.
Kenya completed the switchover from analogue TV to DTT in June 2014, meaning that analogue signals were switched off after June. Without a set-top box, your analogue TV might as well be used as a doorstop. There are now over 30 new Kenyan channel operators, in addition to existing broadcasters planning their own new channels. By March 2014, combined sales of pay-TV and free-to-air boxes had reached 738312, with 687806 of those being pay-TV boxes — but many of these will have been converted to free-to-air.
In Nigeria and Ghana, OTT broadcaster iROKOtv has a catalogue of over 5000 movies and 500000 subscribers and is watched by the wider diaspora in 178 countries. This global reach is what differentiates Internet TV from terrestrial TV, which is bound to fixed territories.
African Broadcast Network (ABN) is another player in the Nigeria/Ghana area, looking to consolidate its online subscription-based content offering and expand across more territories.
In SA, there’s a battle royal developing between Altech’s Node and Times Media’s Vidi. Node uses 3G, LAN or Wi-Fi to unlock movies, which are then downloaded via satellite — a clever way around the bandwidth issue in Africa. Like Zuku, it also allows subscribers to access the Internet.
Vidi is a competing offering that is very similar to the Netflix model. Vidi is totally platform independent so it will run on virtually any screen, fixed or mobile, and while it offers more value than Node upfront, you could end up spending more on data.
But at R139/month, Vidi is competitively priced and allows viewers a wide range of content options, and may just tempt users to switch off DStv.
Terrestrial broadcaster e.tv has chosen a different road. It is delivering television via satellite on its digital bouquet, OpenView HD (OVHD), with one key difference: OVHD’s content is free. No subscription, ever. Presumably the channels will generate revenues from ad sales.
"You pay once for the dish and the box. After that, everything’s free," says Maxwell Nonge, MD of Platco Digital, the company that operates OVHD.
The availability of cheap or free content by independents will also have considerable social impact in a continent where state control of media has often led to restrictions on freedom of information. As the new digital channels grow, so too will access to information that’s not controlled by the state.
Already, commercial OTT networks in Africa are developing and acquiring content that will inform and educate as well as entertain. ABN, for example, claims it will air content that will "restore hope, rebuild civic responsibility, and equip citizens with appropriate life skills".
It remains to be seen how readily this kind of content will be consumed, but if it works, it’s a tantalising promise of an Africa in which cheap, pervasive access to a wide range of independent content could be the tipping point in driving transformation in democracy, governance and education.
One thing is certain — television as we know it will never be the same again. And in Africa, that could change everything.
Source: Financial Mail 13 November 2014