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Tag: digital era

  • Media companies’ digital revenues will overtake traditional by 2015: Ernst and Young

    Media companies’ digital revenues will overtake traditional by 2015: Ernst and Young

    MUMBAI: The average revenue of media and entertainment (M&E) companies will shortly cross the 50 per cent mark from majority traditional to majority digital, according to a new report, ‘Digital agility now! Creating a high-velocity media and entertainment organisation in the age of transformative technology‘, released by Ernst and Young. It has surveyed more than 550 senior executives from global M&E companies.

    Today, revenue from digital is 47 per cent and survey respondents say that by 2015 it will account for 57 per cent of revenue – thus making digital the new norm and the primary source of revenue for M&E companies.

        Over 550 senior executives from global media and entertainment companies see 57 per cent of their revenue coming from digital by 2015, up from 47 per cent today
        Organisational agility singled-out as a leading success factor in the digital era
        The study indicates that “digital leaders” have embraced smart mobile-social-cloud and big data analytics technologies to achieve agility

    The study goes on to identify the characteristics of M&E ‘digital leaders‘ – companies that are using new technology not only to deliver digital products and services, but to build more agile organisations capable of sensing and responding far faster to shifting customer expectations and marketplace opportunities and risks. The digital leaders are pioneering the path to a higher level of organisational agility as the M&E industry transitions to digital as its new norm.

    Ernst and Young global technology industry leader Pat Hyek said, “Mobile-social-cloud and big data analytics technologies are game-changers for M&E firms. These technologies can help M&E digital leaders who broke ahead of the pack in the early stages of digital to extend their advantages, as well as offer opportunities for those who fell behind to adapt quickly and catch up.”

    According to the report a major differentiator between these digital leaders and other survey respondents is a greater emphasis on mobile-social-cloud and big data analytics technologies for internal collaboration. For example, digital leaders are 60 per cent more likely than all other respondents to emphasise the importance of social media for internal communication among employees: 67 per cent said it was ‘very‘ or ‘extremely‘ important, versus 42 per cent of all others. The study points to the kind of rapid collaboration that is enabled by social networks and characteristic of an agile organisation, where silos are broken down by the ready flow of information.

    The study shows that digital leaders‘ advanced social listening programmes, leading-edge analytics and cloud-based infrastructure enable rapid deployment of new products and resources, and give companies the ability to quickly learn from and fix mistakes. This organisational agility is necessary to meet the demands of rapidly evolving digital consumer behavior.

    Ernst and Young Global Media and Entertainment Leader John Nendick said, “Media and entertainment companies no longer live in a world where everything lives in ‘their‘ world. It‘s a connected eco-system with consumer technology leading the way”.

    Other results from the survey include:

        Technology alliances: Digital leaders emphasise alliances that let them act faster than “going it alone”; 51 per cent rank alliances with technology and other M&E partners among their top three strategic priorities for digital transformation, versus 30 per cent for others.

        Second-generation deployments: Digital leaders were generally more than twice as likely to incorporate lessons learned from initial technology deployments to achieve more advanced functionality. For example, 49 per cent of digital leaders use second-generation mobile technologies to develop products/services versus 16 per cent of all others.

        Smart mobility: Similarly, 32 per cent of digital leaders use second-generation or later techniques in mobility to enhance employee engagement and communication, versus 13 per cent of all others.

        Cloud: Digital leaders emphasise the importance of cloud computing to enhance internal and customer-facing flexibility. For example, 74 per cent of digital leaders say it‘s important to host business tools in the cloud, versus 49 per cent of all others; and 43 per cent of digital leaders use second-generation cloud solutions to speed product/service development vs 12 per cent of all others.

        Big data analytics: Digital leaders are three times more likely than other respondents to use second-generation big data analytics techniques to improve customer engagement (26 per cent versus nine per cent). Among all respondents, 66 per cent rely on in-house resources to get insight into customers yet 41 per cent say they gain no insight from their data, suggesting they don‘t have the right big data analytics tools or skills in place and may be better off partnering to access external resources.

    Agility Index:

    The report concludes with an agility index that ranks the relative organisational agility of different M&E segments as well as enabling technology and digital leaders. The average score of all respondents is indexed to 100. A score of 110 denotes performance 10 per cent above average; 90 is 10 per cent below average.

  • Kids broadcasters gear up to play in India’s digital era

    Kids broadcasters gear up to play in India’s digital era

    Grappling with an under-indexed ad market and audience fragmentation due to entry of new players, kids TV broadcasters found hope in cable TV digitisation towards the end of 2012. Particularly encouraging was the launch of preschool channels, a segment that existed only as programming blocks and was looked upon as commercially unviable in India.

    Out of the four channel launches, two were in the preschool segment. The launch of Disney Junior and Nick Jr, in fact, marked the beginning of segmentation in the hyper-competitive kids TV genre.

    The other two launches were equally significant as it marked the entry of both Discovery and Zee. Zee Entertainment Enterprises Ltd (Zeel) plans to invest Rs 1 billion in the edutainment channel, ZeeQ, over a period of five years.

    For Discovery Kids, ZeeQ and the other two new channels, subscription is going to be the main business model. The existing kids channels, in contrast, are heavily dependent on ad sales where subscription revenue is still very small and licensing and merchandising negligible.

    Of the four, three excluding Discovery Kids have been launched only for digital platforms. The launch of ZeeQ, which has been positioned as an edutainment channel, has completed Zeel’s bouquet that virtually covers every genre.

    Digitisation is expected to bring down carriage fees that has been a bane for a lot of broadcasters and bring in the much needed transparency of the subscriber base declared by the cable TV operators. Broadcasters expect their affiliate revenues to jump in the medium-to-long term.

    “Digitisation will allow us to try focussed segmentation which we could not have done in analogue cable TV environment. Today in digital, we can segment as much as we can. Carriage payouts will no longer be a deterrent and pay revenues can only grow. So we are all riding the wave of digital right now and hoping that while we cater to need gaps, we also make business sense,” Viacom18 EVP & business head – Kids Cluster Nina Elavia Jaipuria had told Indiantelevision.com in an earlier interview.

    Agrees Disney UTV executive director and Disney kid’s network business head Vijay Subramaniam, “The timing (of Disney Junior’s launch) was an important consideration as digitisation is a very effective way to bring such a high-quality channel to be made available in market to the consumers.”

    Subramaniam feels that with digitisation segmentation will only become clearer as it already existed in different forms. “If you look at the landscape segmentation already exists with digitisation it will become clearer and quality of reception will become a constant,” he explains.

    Despite the right noises made about digitisation and the possible benefits that it would bring for the industry, British pubcaster BBC surprisingly shut its kids channel Cbeebies.

    In an interview to Indiantelevision.com, BBC Worldwide Channels, Asia senior VP, GM, Mark Whitehead had cited “the uniquely challenging pay TV market in India and the delays to digitisation” as the prime reasons for shutting Cbeebies along with BBC Entertainment.

    Whitehead had also confessed that running an ad free channel like Cbeebies is unviable as advertising is currently a major source of revenue for pay TV channels in India.

    The difficulty faced by BBC in running an ad-free channel is not lost on Indian kids broadcasters. Though ad-free in the initial stage, both Disney Junior and Nick Jr. will have ads going forward. They will, however, be selective about the ads that they carry on their respective channels.

    “We may consider hybrid sponsorship model in stage two from 12-24 months from now,” avers Subramaniam.

    Even ZeeQ, which is a bi-lingual channel targeted at 4-14 kids, has a strict ad policy to avoid ads that promote unhealthy lifestyle.

    This will mean that broadcasters will not be at the mercy of ad revenue, which is currently the mainstay for most children channels. With the kind of pester power that these channels enjoy, the broadcasters sense an opportunity to exploit in a digital era when brand loyalty will come into play.

    Apart from the business model correction that is expected to happen with digitisation, the kids channels will also get enough headroom to experiment with content by trying their hands at new genres. Developing locally relevant content will be foremost on the minds of most broadcasters.

    Viewership and ad scenario

    While the genre grew at 4 per cent to reach 616 GRPs till week 40 of 2012, it still bettered the previous year’s performance of two per cent growth. In 2010, the genre grew at a whopping 13 per cent which remains the best year for kids broadcasters over a five-year period since 2008.

    The ad market for the genre is Rs 2.5 billion and has room for fast growth as the market is under-indexed. It is expected to grow at 10 per cent year-on-year as new advertisers make efforts to reach out to kids.

    “While the kids genre contributes 8 per cent viewership share of the CS4+, it accounts for a mere 2 per cent ad revenue share. Hence there is a huge potential for growth and this has to get corrected over a period of time through rate revisions and non FCT partnerships,” avers Jaipuria.

    Localisation push and movie airings

    Kids broadcasters continued their push towards localisation with Nick taking the rights of Reliance Animation’s animated show Shaktimaan while Pogo continued to build its favourite property Chhota Bheem.

    In continuation of its strategy to push local live action series, Disney aired new seasons of Best of Luck Nikki and The Suite Life of Karan and Kabir. The channel is betting big on live action notwithstanding the skepticism surrounding it.

    Discovery Kids launched its first local production, Mystery Hunters India, as part of its localisation strategy for the channel.

    ZeeQ, whose content is being looked after by Zee Learn, has several local shows under its belt including Teenovation, Wordmatch, and Brain Café. Additionally, it had also acquired the rights for 26 episodes of Amar Chitra Katha (ACK) from Ideas Box Entertainment.

    The year saw the theatrical debut of Nick India’s local character Keymon with Keymon Ache & Nani in Space Adventure movie.

    Disney Channel premiered its first made-for-television live action film Luck Luck Ki Baat and is planning to air more such made-for-tv films in future.

    Pogo continued to treat its viewers with Chhota Bheem movies like Chhota Bheem aur Hanuman, Chhota Bheem: Dholakpur to Kathmandu, Chhota Bheem & the Curse of Damyaan, Chhota Bheem: Master of Shaolin and Chhota Bheem: Mayanagri.

    The channel also premiered its first live action movie Bhootraja Aur Ronnie followed by another one called ‘Chatpat Jhatpat’.

    “Earlier, kids used to consume five or six shows. Kids viewing habit has changed now as they are consuming one, two or three shows on a channel. Across channels you will find that two-three shows are driving viewership,” says Turner International India South Asia Director-Content Krishna Desai.

    According to Desai, kids also prefer humour content as opposed to action and adventure. “The thing with live action is that you are competing with 100 other channels which may not be targeted at kids but they still get watched. So if it’s a good live action show, they will watch it for a few times. But since they are kids channels, they thrive on repeats also,” Desai says.

  • Content monetisation opportunities for MSOs in digital era

    Content monetisation opportunities for MSOs in digital era

    MUMBAI: Multi-system operators (MSOs) can line up several content monetisation avenues in a digitised cable TV environment.

    The probability of commercial exploitation is more in the areas of niche, idle and local content.

    According to IndusInd Media and Communications Ltd (IMCL) SVP Subhashish Mazumdar, the taps can be opened immediately with MSOs sourcing archival content from broadcasters and movies that do not find their way to release on theatres. MSOs can also launch server-based channels.

    Cable operators will also gain more revenue from a digital economy by augmenting their channel carriage capacity. Citing HBO‘s decision to launch two ad free channels as a good model, Mazumdar said this is what is needed. "This is good for the pay TV market. You monetise the audience in a segmented manner."

    Mazumdar also spoke of broadband as being a further step to unlock revenue. "The operator will be in a position to charge more for advanced technology. Cable operators and MSOs can generate revenue in a step wise manner," he said.

    The other revenue streams are video-on-demand, gaming and e-learning VOIP is a revenue stream that MSOs needed to open up, though there is a limited possibility now as regulations do not allow for a national level voice communication, Mazumdar added.

    MSOs will have to focus on branding as the digitisation wave deepens. "There is low level branding now," admits Mazumdar.. "But top-of-the-mind branding will be needed at some stage," he added.

    HSBC Securities and Capital Markets associate director telecom and media Rajiv Sharma emphasised on the need of the MSOs to convince their local cable operators (LCOs) to push for broadband so that they can make money beyond just television. "MSOs will have to invest in network infrastructure. Broadband, no doubt, will require capex investments but the margins can be higher than the video services," he said.

    Consumer-facing two-way cable networks will have a better ability to raise funds, Sharma added. Strategic and private equity investors will also look at scalable models.

    Speaking at the Broadcast Digitisation Summit organised by Telecom Lead, Assocham national council chairperson on media and entertainment Sujata Dev stressed on the need to develop digital content. "Producing content in digital will grow. Rural india will also lead the digital push," she said.

    Dev noted that for money earners in the family and for the youth, the television set is just one device to consume content. Which is why broadcasters are trying to see how their content can travel across devices.

    "That is why producing content in digital is important. It is also important to note that the consumer expectations will rise and they will be demanding as they pay for the channels they subscribe to watch," Dev said.

  • NBC Universal in restructuring mode for the digital era

    NBC Universal in restructuring mode for the digital era

    MUMBAI: US media conglomerate NBC Universal has announced NBCU 2.0. This is a wide-ranging strategic initiative to assure future growth, streamline and strengthen operations, and exploit opportunities created by the rapidly evolving digital and global marketplace.

     
    NBCU 2.0 will seek to maximise the potential of the entire NBC Universal portfolio, including broadcast, cable, film, and theme parks, by creating operating efficiencies and reallocating resources to invest in new growth areas. The initiative the firm says continues the evolution of NBC Universal, marked in recent years by significant investments such as Vivendi Universal Entertainment, Telemundo and iVillage. NBCU 2.0 will enhance ongoing efforts to redirect traditional analogue resources toward high-growth digital areas and international expansion.

    NBC Universal has struggled with weak ad sales and profits. The structuring plan will reduce annual expenses by $750 million. This will be partly done by cutting 700 jobs. The moves, which have been in the works for more than a year, were announced by General Electric vice chairman and NBCU chairman/CEO Bob Wright. NBC U profit dropped 10 per cent during ththird quarter, pulled down by lower ratings at NBC which has struggled after the departure of high profile shows like Friends.

    NBC is said to be looking to ease off of scripted dramas, that can cost several millions of dollars per episode, in the 8 pm time slot in favour of less expensive game shows and other fare. The advertiser interest is not enough to justify the expense of scripted shows indicate reports. To give a cost comparison to readers the game show Deal or No Deal costs $1.1 million an episode, while the drama Friday Night Lights costs more than double at $2.6 million an episode. So in the first hour of primetime there will be more of game shows rather than dramas.

    Wright says, “Success in this business means quickly adjusting to and anticipating change. This initiative is designed to help us exploit technology and focus our resources, as we continue our transformation into a digital media company for the 21st century”.

    In many cases, the company says that savings will be reinvested in higher-growth areas. The focus is going to be on tapping into the digital arena. Digital revenues are expected to exceed $1 billion by 2009. Recent growth has been driven by initiatives such as the partnership between Yahoo and Telemundo to develop the leading Hispanic Internet destination; the launch of NBC WeatherPlus, nbbc, nbcsports.com, cnbc.com, and dotcomedy.com; the creation of several other original broadband channels; the development of interactive television and digital cinema applications; and the delivery of a 360-degree content experience via online and wireless platforms.

     
    NBCU Television Group: As part of NBCU 2.0, the business models in News and Entertainment will be further adapted to exploit the opportunities of the changing media landscape.

    NBC Universal Television Group CEO Jeff Zucker says, “NBC Universal 2.0 will prepare us for future growth from a position of strength. With new momentum in prime time at NBC, continued leadership from NBC News, real growth at Telemundo, and solid performances in virtually every other division of our Television Group, there is no better time to re-engineer the company for the revolutionary changes to come. We have to recognize that the changes of the next five years will dwarf the changes of the last fifty.”

    News: Newsgathering operations will be further modernised to improve efficiencies. As part of the redesign, NBC Universal’s 24-hour cable news channel, MSNBC, will move its operations to the company’s production facilities at 30 Rockefeller Plaza, New York, and Englewood Cliffs, New Jersey. The move will streamline newsgathering operations and result in better utilisation of both state-of-the-art facilities.

    In addition, in an extension of the successful centralisation strategy developed by the NBC Universal TV Stations Group in recent years, the company is creating consolidated news facilities in Burbank. The facility will support a number of news and information operations, including the NBC and Telemundo networks, KNBC, KVEA, KWHY. The new configuration the company says will increase productivity and improve communication, coordination and resource-sharing among newsgathering units. Reviews are also under way at NBC News bureaus and facilities around the world.

    New digital distribution opportunities and synergies will be created by improvements in how information is gathered, shared and distributed across multiple news and information platforms. These changes will be implemented at the NBC network and stations levels, as well as at the Telemundo stations, where new emphasis will be placed on regionalised news programming with local content in some smaller markets.

    Entertainment: On the entertainment side, the TV Group will maximise its ability to generate revenues across all platforms – including new digital distribution outlets – through a business strategy that reduces NBCU’s dependence on traditional content distribution methods and advertising models. This includes bringing content to consumers sooner on a variety of platforms, creating new windows or opportunities in the traditional syndication market, and developing alternative advertising metrics.

    NBCU 2.0 will also continue to make the growing Hispanic market a priority, as highlighted by the significant recent investments in Telemundo’s prime-time production, a new studio and news bureau in Mexico, and the acquisition of three TV stations in the last 18 months.

    Universal Studios : The initiative will focus on the recent developments in technology and media that are transforming the film industry, with the goal of competitively positioning the Studio for continued growth and success.

    Universal Studios president and COO Ron Meyer says, “As a business we are continually looking to be smarter about how we develop, distribute, and market our films around the world . “We plan to realign our operations to maximize growth opportunities in an increasingly competitive and evolving industry. Making these changes now will reinforce our position as an industry leader.”

    The strategic realignment of domestic theatrical, home entertainment and television marketing and distribution divisions will realize cost savings through consolidating positions and maximizing efficiencies across all aspects of the business units. Savings will also be realised though consolidating locations, support functions and marketing activities at Universal Pictures International, Universal Pictures International Entertainment and NBC Universal International Television Distribution.

    Universal Parks and Resorts Group will continue to look for strategic growth opportunities and cost reductions at their properties in Los Angeles and Orlando.

  • British government asks BBC to adapt to digital era

    British government asks BBC to adapt to digital era

    MUMBAI: The British government has granted the BBC its license fee for the next 10 years, but also asked the broadcaster to adapt those principles to the digital era and that it needs to return to its roots of “informing, educating and entertaining”.

    Suggesting that the corporation should put entertainment at the heart of its mission, these recommendations came in the form of a White Paper on the future of the BBC.

    It also called for the BBC to avoid copycat programming and expensive foreign acquisitions, and confirmed new regulations designed to prevent the BBC from bullying commercial competitors.

    Both the charter renewal, valid until 2016, and the White Paper come just two years after the devastating Hutton Report, which found that the BBC had engaged in irresponsible journalism.

    The paper did lay out some new goals for the BBC. One of them is that the broadcaster should convert to full digital transmission by 2012. Another is that the BBC’s programs and websites should be of high quality and engaging.

    According to media reports, the report also commends the announced goal of BBC director general Mark Thompson to cut 4,000 jobs and re-invest the resulting £355 million a year in savings back into programming.