Thursday, January 17, 2008
CES 2008: Content makes a play; Sum of devices not yet
greater than the pieces
By Steve Passwaiter,
VP Business Development
Richard V. Ducey, Ph.D., Chief Strategy
Officer
Content makes a play
The 2008 Consumer Electronics Show is over and we’ll assume that Las Vegas
is returning to normal (if that’s possible). One notable element from this
year’s show revolves around the entrance of the content providers to the CES.
This year both Sony and NBC Universal had large displays on the show floor
of the CES. NBCU brought live content to their various networks and Sony
had a display dedicated to their fine syndication unit amongst the myriad of
digital devices that comprised the larger than life Sony display at CES.
The good news for television is that the buzz of this convention was video
and all of the new places it can be accessed from the 150 inch prototype LCD
screen to the passenger seats in cars/vans and trucks to your mobile phone.
While User Generated video is certainly one of the hot topics of the moment,
there’s no doubt that professionally generated video will continue to
dominate the mobile video marketplace in the digital world. All of the
growth in video venues would seem to provide significant benefit for those
who have produced video content in their markets for the past sixty years.
However, the simple repurposing of existing content will not lead to greater
riches. The content served will have to adapt to the platform upon which it
is viewed and to the viewing tendencies peculiar to that platform of those
who watch it.
It is unlikely, in our view, that anyone will watch thirty minutes of video
on their mobile phone any time soon. But it is likely that a thirty to
ninety second clip of highly desirable content will find an audience of some
measure, and we note that Nielsen is part of the Online Mobile Video
Coalition’s (OMVC) field work this spring. There are really three forces
working against long form programming on the mobile platform:
(1) requires a new consumer behavior on still evolving mobile devices,
(2) battery life is a big challenge for power hungry video screens and
3) negotiating content rights.
It's likely you’ll find some old competitors in this new space including your
local newspapers who are running to embrace video on their websites. It’s
hard to imagine that the newspapers wouldn’t try to extend their reach here
given their current business situation.
There also was some good news on the HD Radio situation as Ford announced it would
begin offering HD Radios in their 2008 models. The lack of automotive take
up of HD Radio has been a significantly limiting factor in the adoption of
digital radio by the public. The news by Ford hopefully opens the door to
other mainstream manufacturers taking a similar decision. There was a new
HD Radio that allows the listener to tag music that can then be purchased at
the iTunes store. There would have to be a revenue split between the
station upon which the music was played and the iTunes store.
The bad news for radio operators is that the car appears to be the new
battleground for digital devices along with entertainment and information
applications and services. The terrestrial radio business has benefited
from its oversized share of attention in the automobile but there are forces
at work that will continue to erode that position. Video screens are
already popular in some vans and SUV’s and are now making their way into
regular cars and trucks. News, weather and traffic is now available not
only from broadcast and satellite radio services but also directly from
Internet services now directly accessible to vehicles via increasingly
broadband mobile connectivity.
The next generation of navigation devices, featuring a number of interactive
services, is already here and will compete with the radio for the attention
of vehicle occupants. These devices offer real time traffic updates and
road conditions (thanks to Clear Channel traffic in large part) and offer a
number of services to any one looking for a service station, restaurant or
golf course anywhere in the United States. These devices don’t just offer
locations and phone numbers but will pull up reviews and other information
to help you decide who gets your business. With all of this functionality
coming to the family sedan, the road won’t be the only crowded venue; the
car is going to get very crowded, too. How does radio compete for
attention in this new digital vehicle?
The CES confirms that the days have passed when you could consider yourself
either a television, radio or print person. Today, the term is content
producer and you need to be prepared to understand that you must be more
nimble than your analog predecessors. These new content plays are just
beginning to emerge and the revenue models are fairly nascent.
However,
these platforms offer growth possibilities in businesses that need it
badly. There are plenty of opportunities to sell your content than ever
before. The good news again is that these new platforms require compelling
local content to work. The people who make them know that and that’s where
today’s content producers need to be spending time and resources. The
single platform player that yearns for the old days will certainly have a
limited upside in this new environment.
While this isn’t a commercial for CES, it’s time the local content producer
had a larger presence at this show. This is where your future revenue
development concepts are being formed and where you need to let your
imagination run headlong into the future.
Sum of devices not yet greater than the pieces
The device manufacturers and the content providers exist in a symbiotic
relationship and they know it and now want us to know it. They simply can’t
exist and thrive without each other. The good news for the local
communications professional is that you produce the type of compelling local
content that can thrive with the numerous consumer devices on the current
market and the drawing boards.
Another sign of the ties between these two sectors was that NAB had an
Executive Board meeting at the CES for the first time and that the Open
Mobile Video Coalition sponsored a well attended reception at the Bellagio
on Tuesday night. The OMVC, a strong collection of both commercial and
non-commercial television operators and their respective trade associations,
is going to begin testing this Spring between two prospective standards for
mobile video and this will open the door to television (and radio stations
who want to play in the video game) operators to monetize their content onto
yet another platform.
Thinking a bit further ahead, we anticipate the day that all these cool
consumer electronics devices seamlessly integrate into an effortless mesh
which will dramatically drive enhanced consumer experience, that day isn’t
here yet. There were plenty of gadgets on display at the CES but precious
little threatening to obsolete the consumer job of being their own Chief
Information Officer. There are numerous technologies and standards such as
Bluetooth, Digital Living Network Alliance, WiFi and a range of other
wireless and wired solutions for tying together all these devices into
something consumers can use easily use.
But even with integration solutions
like Microsoft’s “Sync” available in some Ford and Mercury models, it still
causes many consumers to break a sweat when thinking about making good
purchase decisions and the back end problems that can be caused when trying
to establish info-tainment oases not only in the home entertainment
center but in their studies, cars, and now personal media. Consumers want
content and applications which are smart when it comes to location awareness
(work, home, mobile) and device awareness (scalable across devices.)
The big value add coming out of some future CES show is when
C-E-S stands for “Consumer Enhancement Solutions” not Consumer Electronics
Show. Until then, the parts are still greater than the whole. |
