Report from the SMPTE Forum 2012:
“Sorry We have No Crystal Ball…”
by Elisabeth Tweedie
Geneva, Switzerland, June 1, 2012-That quote from Peter Ludé, Senior VP at Sony Electronics, Inc. very neatly summed up the SMPTE Forum on Emerging Technologies held in Geneva in May. However at the end of day one a show hands indicated that by an overwhelming majority even if they didn’t know what it was going to look like, the 130 delegates from 23 countries felt that the future was bright!
Although no one knew exactly how things are going to evolve there was general agreement on the main issue facing broadcasters, namely: fragmented audiences caused by multiple viewing modalities and devices.
Ingrid Deltenre, Director General of the European Broadcasting Union (EBU) talked about fragmentation of viewing audiences in the opening presentation when she discussed the opportunities offered by technological advances which had produced a proliferation of viewing devices and at the same time increased competition for linear TV from PPV, Smart TV, YouTube etc. This point was also made by Chuck Dages, Executive VP, Emerging Technologies Warner Brothers who talked about consumers wanting content everywhere, in this case content included not only new content but the 10 Billion DVDs still sitting in consumers’ closets, Warner Brothers is working with retailers to get them into a digital library. Chin Siang Lim from the Media Development Authority in Singapore took things even further by suggesting that in ten years time all content should be available to every consumer in whatever format they wanted 4k, 8K etc and payment would be made at the delivery point according to the format chosen.
A couple of the presenters made the point that the current decision makers were at risk of underestimating the speed of change and innovation because they were out of touch with the next generation. SMPTE attempted to address that issue by putting on a panel of four 16-18 year olds who attend the International School in Geneva. Unfortunately these four youngsters largely failed to convince the rest of the delegates that they were typical of their generation with a comment from one about reading the Wall Street Journal on the flight back from Dubai sealing the issue. That said some interesting points emerged that are likely to be shared by many others in that age group. Namely a distrust of mass media leading to a use of the Internet to find “unbiased news” and the difficulty of focusing on one thing at a time. The latter meaning if linear TV was being viewed on a large screen - which was likely to be a family affair - they would usually be on their iPhone and PC at the same time. At the moment none of them have a TV in their room (nor did most of us at their age) but they all agreed that when they were older and had more time and money they would very likely get a TV. A similar point was made at a panel at NAB in April.
The change in viewing habits is not only confined to teenagers, Robert Amlung, Head of Digital Strategy at ZDF confessed that he’d worked in TV for 20 years and he now only watched on his iPad. This change was further expanded upon by Giles Wilson, CTO of Ericsson Television who talked about the results of Ericsson’s latest survey which covers 80,000 consumers in 40 countries. The importance of social media for both linear and on-demand content was clearly evident. Live content triggers social media, which in turn makes live viewing of sports, reality shows, news etc more compelling. 40% of viewers of all ages are using social media from the sofa while watching TV. Online social interaction appears to be more diverse and compelling than in the real world as there are fewer barriers; no need to tidy the house before inviting friends round, and no disturbing of other family members by talking on the phone. So in effect the conversation that used to take place at the water cooler the next day, now takes place in real time as the show is being transmitted. Conversely on-demand viewing for content with less immediacy, drama, sitcoms etc. is triggered by social media and Ericsson suggest that this could even become a new starting point for shows as opposed to the EPG. The survey also found that quality – which equates to a large screen and HD – is very important for 52% of respondents with 39% thinking that the option to get even better quality is equally as important.
Viewers however do not want to interact on that large screen preferring the tablet or smartphone for that. 50% of respondents watched VoD either streamed or downloaded several times a week, however Tom Morrod of IHS said that in Europe this only accounted for 2% of European consumer spending in contrast to pay TV which accounted for 54% of their expenditure on video.
One of the main challenges facing content producers is delivery. In 2006 Warner Bros. handled 1.3 Billion transactions for its products, by 2011 that number had grown to over 2 Bil. The challenge is to accommodate that growth without a corresponding growth in delivery costs. Christophe Diot, Chief Scientist at Technicolor echoed this issue when he pointed out that a movie is now delivered in 200 different formats. Giles Wilson referred to the Cisco projections that indicate that by 2015 90% of all network traffic will be video and 60% of this will be Internet video. Compression, network efficiency and encoding improvements are all vital in ensuring that this traffic increase won’t bring networks to a grinding halt.
Karl Schubert, CTO Grass Valley asserted that technology would not be the impediment to new business models, pointing out that computing power was doubling every 1.2 years and RAM costs were halving every 1.5 years. Transport speeds were increasing, costs falling and power consumption is no longer prohibitive. The move to 4K is being led by digital cinema and sports and cloud based architecture is a reality leading to more revenue streams. He predicted that the move to IP would take a lot less time than the 20 years it took to transition from analog to digital.
He also shared data from a survey that indicated that over 60% of respondents thought that it would be possible for most of the functionality currently provided by specialist audio and video technology equipment to be provided by generic IT hardware in the next two years. Offline the senior engineers in the room disagreed with this prediction. Others also discussed this shift but didn’t see it as quite so imminent.
There was general consensus that news and sports will always be linear, whereas almost everything else will be delivered on demand via broadband. Several of the presenters also mentioned the additional revenue potential of sports shot in 4K or higher resolution, with secondary packaging of video relating to a particular player or team for special interest groups for example or integrating the content into a game.
Interestingly no one mentioned 3D as something that was going to be significant in the home. Quite a contrast from a couple of years ago when it seemed that every presentation and article on the future had 3D in the home as the next major shift.
More content delivered in more formats to more devices - what does this mean for the satellite industry? Until every playout center is connected to fiber there will be a role for satellite in the content delivery network, but from that point to the consumer in order to remain relevant satellite has to offer more than sports and news. It has to remain an integral part of the IP delivery network, which points very much to Hybrid broadcast broadband Television (HbbTV) as discussed in my article in April of this year.
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Elisabeth Tweedie has over 20 years experience at the cutting edge of new communication and entertainment technologies. She is the founder and President of Definitive Direction a consultancy that focuses on researching and evaluating the long term potential for new ventures, initiating their development and identifying and developing appropriate alliances. During her 10 years at Hughes Electronics she worked on every acquisition and new business that the company considered during her time there. www.definitivedirection.com She can be reached at: etweedie@definitivedirection.com
