It is very exciting to be in television in 2022, as the industry seems to have discovered ‘digital’ – again. Every pronouncement from senior management in the PSBs seems to talk about emphasising their ‘digital’ strategy or ‘shifting the focus onto ‘digital’. The problem we have at Decipher is that, whenever we read these pronouncements, we literally have no idea what they are talking about.

It is worth remembering at this point that the PSBs began launching their ‘digital’ channels in 1998. So the shift towards ‘digital’ is twenty years old. The PSBs launched their catch-up apps in 2006, so the shift towards on-demand is also almost twenty years old.  Just how many times must the TV industry go through a ‘shift towards digital’ before they actually get there eludes us.

Part of the problem is that, during this time, senior management haven’t made the shift towards ‘digital’ in their own language or behaviour. They have laboured under the assumption that if they threw money at a group of kids to launch an app, they could get on with their own TV careers without having to think about ‘digital’. This means that have failed to invest in innovation in the core product – broadcast channels – while never clearly being able to define their role in a new mixed economy.

The debate isn’t between ‘television’ and ‘digital’

In fact using a single word ‘digital’ to describe a group of different tech solutions and consumer propositions just indicates a lack of understanding about the options and challenges they face. What is worse is that, after a couple of decades of failing to do this, the prescription of ‘more digital’ we are now hearing makes no sense? What is particularly alarming is that the PSBs seem to be out to damage their core assets – linear channels – in this latest attempt to define a digital strategy.

The key issue facing the PSBs is understanding the shift from an all broadcast world to a mixed viewing economy. But in this shift ‘linear channels’ are a key asset not a legacy problem, because they are the asset that most new entrants don’t have. The ability to build a large an audience, together in one moment in time, dramatically increases the power of a show and is still highly valued by advertisers. This is one function that the new tech-based service providers have been unable to compete with. In response these companies are moving towards including this kind of content in their offer – witness Amazon buying sports rights and Netflix launching a linear, scheduled offering in France (having negotiated EPG slots in various platforms including Virgin).  While this has been happening the PSBs have been shifting brand focus from channel brands to their player brands and now (with the BBC’s recent announcement) they are removing Channel Controllers from management teams. To de-power your key asset in a fight against global giants is to tie one arm before your back in a fight.

This is not to say that linear channels don’t need to adapt and that there won’t be fall-out. But the amount of linear innovation has been minimal (see our thoughts on what should have happened with BBC3 here). Innovations could/should have included better links between linear and catch up within the broadcast stream and EPG, 2nd generation interactivity (like the BBC’s green button trial) and a raft of content innovation designed to drive audiences to live.

The PSBs have also seemed reticent to allow the platforms to innovate around linear on their behalf – even though many of these innovations are better done at platform level. This attitude is wrong but understandable when dealing with Sky and Virgin. But it is just plain wrong when dealing with the platforms that PSBs actually own like Freeview/Freesat and Youview (see thoughts on what the PSBs could achieve through Freeview here). This has actually weakened the PSB-owned platforms in their own battle against Amazon and Google.

‘On-demand’ is not a single concept

One of the challenges for the PSB management is to understand the difference in the role of catch-up TV and stand alone or archive on-demand in the TV consumption mix. They are not the same and should be used differently. There seems to be particular confusion between the role of AVOD and SVOD content and brands.

Not only is this more nuanced strategy not appearing, but there is a worrying trend in the PSBs recent actions to actually disconnect linear and catch-up. Ostensibly this is to allow their ‘digital’ offering the space to thrive. However this strategy assumes no linkage between the linear and catch-up, even though the most thoughtful research has shown that the relationship between linear and catch-up is symbiotic and can be built on to retain audiences. To do this broadcasters have to ensure that their linear and catch-up propositions remain close (both technically and commercially).  Separating them will ensure they both fail.

On the pay platforms – Sky and Virgin – linear and catch-up have been functionally close since launch because they were both delivered within the platform’s own software.   There is a worrying trend for the PSBs to be dismantling this linkage.  On SkyQ, BBC catch-up content has been delivered via Sky’s on-demand software since 2009.  The amount of innovation that links the two formats using Sky’s software has been limited.  However, the BBC have just launched the iPlayer web app onto the platform and it appears that their catch-up content may be pulled from the platform software, further separating the two content types and silo-ing them in different parts of the EPG.

Conclusions?

What is odd about this debate is that a shift away from linear is not supported by the numbers – at least not a sensible interpretation of them.  After 15 years of the on-demand revolution, the majority of PSB viewing (by people and by hours) is still delivered by their linear channels.  There is a rarely-mentioned stat which shows that viewing of shows recorded off broadcast (via PVRs) is around double that delivered by the PSB apps.

The mistake many people make  is to compare the performance of broadcast apps on their own to Netflix and Prime.  The comparison should always be between a PSB (linear, recorded & catch up) and Netflix.  The difficult truth is that, if you put linear at the core of the analysis, the PSBs are actually doing well in the face of massive competition from new devices, content players and functionality.

Imagine what broadcast channels could do with some innovation and focus.

NEW DATES FOR DECIPHER WORKSHOPS IN Q2 2022 ANNOUNCED

After the success of our new style online workshops this year we have new dates for Q2 2022 and new workshop and education sessions aimed at demystifying the emerging world of media tech and advertising.

As usual, we will be running sessions for broadcasters, TV platforms, content producers and agencies.  These will include our standard ‘open-invite’ workshops as well as bespoke client events. Click here to find out more!

This article first appeared in TVB Europe in June 2020 (here). It makes the case that the UK’s precious free-to-air TV platform landscape is under threat.  Unless it is free to innovate, we will lose a whole sector to Amazon, Google and the other global software giants. It makes the case that the broadcaster shareholders in the free TV platforms are focusing too much time and effort on their own BVoD apps while limiting innovation at platform level.  A platform wide collaboration would deliver much better outcomes for viewers, and enable a strong market response to the global tech giants’ encroachment on the UK television market..

The UK’S ‘subscription-free’ TV platforms – Freeview, Freesat and (the retail version of) YouView make up half the UK TV landscape by household. They are rightly heralded  as one of the key successes of the UK’s TV digitisation programme. They gave UK viewers free access to the other fruits of this digital revolution – the new ‘digital’ channels from the public sector broadcasters (PSBs) and a wide range of new broadcasters, in the face of an explosion in pay-TV boxes and services. 

Free TV platforms were conceived at a time when there was little idea of ‘functionality’ around TV content. The first boxes were simple affairs that just delivered ‘more’ broadcast TV as well as incredibly simple on-screen guides. The assumption was that people would keep their existing TVs and just plug in one of the new set top boxes to enjoy digital TV.  

Since that time there have been a number of significant shifts and the market context for free TV has changed fundamentally. Firstly, the emergence of cheap flat screen TVs has driven waves of upgrades as people traded up to ever larger screens. Because these screens contain digital TV tuners, set top boxes, once the dominant device for accessing free TV, have become increasingly marginal.  

One impact of this shift from boxes to screens has been the diminution of the free TV brands. When the market was box-centric, brands like Freeview and Freesat were the dominant on-screen presence (albeit in a simple, flat menu structure). Now on smart TVs, among the complex app and functionality pages, the free TV brands barely appear. At best they have been relegated to the TV guide page. The rising brands are either screen manufacturers like Samsung or LG, or operating system companies like Android, Roku and Amazon.   

Part of the challenge has been the shift in location of TV design and innovation. Previously, most set top boxes were designed in, and specified for, the UK market. Most TVs are now designed and manufactured in the far east, to meet a universal specification, with the minimal amount of ‘localisation’ for the UK market. The upside of this is that the UK consumer can get a 50” flat screen for £350. The downside is that they are manufactured by people with little interest in protecting cherished idiosyncrasies of the UK market like the prominence of the PSBs in any on-screen menu and presentation.

Another significant change has been in the pervasive spread of pay-TV.  When Decipher first started researching TV there was a clear distinction between free-TV homes and pay-TV homes. During research people would proudly declare ‘we don’t pay for TV’ and show us their Freeview or Freesat boxes. Over time, it became clear that many of these people had started getting Netflix and other pay apps. Now, most ‘free’ TV screens come with all the pay SVoD apps, already loaded and prominent in the on-screen menus. Most of the UK’s PSB apps aren’t even loaded when TVs are shipped. Decipher research shows that 68 per cent of homes with a ‘free’ TV device as the main TV screen also have at least one pay SVoD account.  

It has become apparent that UK television viewers are now happy to pay, log-in and exchange data in return for access to great content and functionality. Initially, this willingness was just exploited by the new SVoD apps like Netflix and Amazon. Now, there is a new generation of TV platforms doing the same as the media streamer companies move into full TV platform mode. The arrival of Amazon branded TV screens and TV boxes brings competition for the free TV platforms from companies fully equipped to capture log-in data, build profiles and use AI to deliver functionality and other benefits.  

This revolution has passed the free platforms by as they are held back by their broadcaster shareholders from driving this kind of innovation. The broadcasters are prioritising innovation at app level, rather than at platform level. They are all individually trying to build data capture, recommendations, personalisation into in their individual apps, while denying the platforms the chance to build it at platform level.

There are two related problems with this strategy. Firstly, it doesn’t work. Speak to any media agency and they will tell you that broadcaster app data is viewed as limited and unreliable. Broadcaster apps just don’t have the content volumes or viewing time to build up anything like useful data required by the ad market. Once a log-in is set up, the broadcaster apps have only limited ability to build data or maintain its accuracy. This problem is compounded by the fact that broadcasters can’t measure or attribute use of their core product – their broadcast channels – on any of the free TV platforms.

Secondly, this strategy leaves the free TV platforms fighting a competitive battle against companies like Amazon and Google, with one arm tied behind their back. The launch of Amazon branded TV screens should have set alarm bells ringing in all the shareholder board rooms. The response to this has to be at platform level.

This failure to organise is most keenly felt in the advertising industry who are looking to the television platforms to create a data-rich environment for TV advertising that can support greater addressability and targeting. Outside of Sky and Virgin, no UK TV platform is able to capture the kind of information required for addressability or to deliver data-enriched advertising. Do you think an Amazon TV will fail to do that on their newly launched TV platforms?

If the free TV platforms are allowed to build log-ins, account profiles, and capture data required for future advertising models, they would also be able to offer new generations of functionality like personalised recommendations, network PVR, and mobile device integration. These functions are increasingly viewed as ‘hygiene factor’ functionality in the TV industry. More importantly, they could build a free TV version of Sky’s AdSmart platform, that would deliver addressable ad capability into the 50 per cent of the UK market where it is currently impossible.

The UK’s free TV platforms have the skills and capability required to build the new wave of TV services required to compete against Amazon and Google. Moreover they have trusted brands that have great salience among key segments of the UK audience. They need to be allowed to build platform level data and services infrastructure. If we want the free platforms to have relevance in the emerging TV landscape we have to set them free to innovate.

“I invented the Web not the Internet!” Tim Berners-Lee

Many people in our industry still confuse the ‘internet’ with the ‘web’.   This distinction doesn’t matter to the ordinary user, but it is hugely significant in the world of media, particularly advertising, so its worth picking apart the difference.

Firstly, its important to recognise the hierarchy between the two terms, as they are not equivalent. The ‘web’ is very much a sub-set of the activity that happens on the ‘internet’. So we will explain ‘internet’ first.

The Internet, short for ‘inter-connected networks’, refers to physical infrastructure – cables, servers, routers, switches etc.  Created via hundreds of separate inventions and innovations that started in the late 60s, the ‘Internet’ is now a collective term for a huge number of separately owned and managed systems, that all work to the same, agreed set of rules and tech standards – what are known as ‘protocols’ (hence Internet Protocol, or ‘IP’).  

It is loosely managed and, if you follow the rules and tech standards, you can connect your infrastructure to the internet without having to get permission from any organisation.  However, on its own, the Internet doesn’t do anything or contain anything interesting.  Its only when you put content onto your servers, and exchange it across the network that it gets interesting.

To do this, you have to follow more rules about how content is created and stored, and how services are organised.  This is where confusion sometimes starts as each type of content or service has to follow its own rules and protocols.  Also, the content needs dedicated servers and the user needs a bit of specific software to run it:

The Early Stuff

File Transfer – One of the earliest things the boffins did was work out an agreed set of rules (a protocol) to manage transfering a block of data, or a ‘file’, from one computer to another. They invented the ‘file transfer protocol’ or ‘FTP’. If you have used WeTransfer or similar FTP services then you will have used this (we’ll explain why you went to a website to do it in a minute).  

Email – transferring simple messages between computers was solved by creating a ‘simple message transfer protocol’ or SMTP . This is the main protocol that runs behind all email systems like iMail and Outlook. (Again, we’ll explain why you can do email through a web page like Hotmail in a minute).

The Web, –  also referred formally as World Wide Web (www) – this was invented by Tim Berners-Lee as a way to make interactive links between content on different servers. It was meant to help researchers make connections between research content in different places. So some content about ‘France’ could link automatically to content about ‘Paris’ on a different server, by clicking on a link.  He called content containing these links ‘hypertext’ and wrote a ‘Hypertext Transfer Protocol’ – what is now referred to as HTTP. (If you can see a web address with http, you know you are on Tim Berners-Lee’s great invention).

How Did Hotmail Fit Into This Again?

The web has become the most popular of all the content types and often a web page is used instead of software to deliver the other internet services. So if you want to use email without messy software like iMail or Outlook, you can use a web page (like Hotmail) to access some mail software sitting on a service providers computer instead of yours. (Tech summary – you are using HTTP to access an SMTP service on a mail server somewhere).

But What About Telly??

Video – when Tim Berners-Lee first invented Hypertext, he wasn’t thinking about people watching telly over the web.  It was a protocol designed for text. So the early video pioneers avoided the web altogether and created Internet protocols specifically for video.  There were various versions of these protocols, but they tend to get lumped together under the phrase ‘Internet Protocol Television’ – IPTV.

Most TV platforms that wanted to use the Internet to deliver TV or video wrote their own, proprietary Internet TV protocols.  Some of these (like the one used for Sky+HD’s on-demand service) are still in use today.  For a long time, using the web to run video was painful (and needed plug-ins like Flash and Silverlight in your browser). However, in recent years there have been significant software breakthroughs that have allowed companies to use web code, web servers and web browsers, to distribute video painlessly. Some TV platforms (like BT Television) have changed from a private IPTV system to using a more open web-based platform (in BT’s case, Youview).

This means that in the UK we have TV platforms that use IPTV (like Sky+HD), some which use web content and protocols (like Youview) and some which use a combination (like SkyQ)

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Why Does This Matter?

This distinction doesn’t necessarily matter to the end viewer – although the IPTV based players make a case that their systems perform better and offer a more consistent interface compared to Web systems). For the advertising industry, this distinction is crucial. It is somewhere between ‘very hard’ and ‘downright impossible’ to integrate most of the current generation of open market advertising technology (ad-tech) into proprietary IPTV television systems.

This explains why there is very limited advertising in on-demand TV on Sky and Virgin. Any advertising innovation on those platforms (like SkyAdSmart) is built on proprietary ad technology. Unfortunately, Sky and Virgin account for over half the homes in the UK and about 65% of the TV content viewing (by hours). If you buy an ad campaign on a broadcaster’s web player (eg ITV Hub), the ad campaign won’t run on Sky or Virgin unless you do a seperate deal with them, and build a seperate campaign (content and data) to support this.

Therefore, if we want significant innovation around TV advertising on any of the platforms still running IPTV systems, they are going to have to solve how to integrate web technology, or change their content systems to more web friendly protocols. This is significant and the agency/client world needs to be putting pressure on the TV platforms to do this.

Codicil About Blockchain

If you were wondering what the hell ‘blockchain’ or ‘bitcoin’ is, then the above explanation about internet protocols should help. Blockchain is just the newest of the Internet Protocols. It runs over the internet but, as with every other content type described above, requires a very specific type of server, and very specific types of software to access it. It shares some characteristics with the web (every server gets a copy of every ID), but has some significant differences (you can’t copy or delete anything, and every record you add is connected to the previous one – hence block ‘chain’).

Bitcoin is a consumer service that has been built to exploit the unique characteristics of blockchain – particularly the fact you can’t copy or delete records – allowing the system to behave like a currency.

Nigel Walley

Its that time of year again – CES. A hundred thousand people descend on Las Vegas to revel in new consumer technology, try and make sense of hundreds of corporate announcements and rack up our first expenses for the year. For the TV industry a show like CES is a mixed bag. Large parts of the show are irrelevant to our day to day. As well as TV, it covers health tech, car tech, drone tech, ed tech, sex tech and various other ‘tech’ areas where you might not have anticipated a tech intervention.

For the TV industry the show splits between device innovation and commercial announcements. Some companies even manage both. But before experiencing a single piece of tech you become aware of the politics of this kind of show just walking around Las Vegas looking at the billboards and the sponsorships. Apple never turn up, preferring to do their own announcements in their own venue. Even so, this year they managed to be present on various stands and even took a poster site outside the main venue with a sarcastic message targeted at other phone users. In the sections of the show dedicated to Smart Home tech, there were also multiple ‘works with Apple HomeKit’ labels attached to stands. They were on the TVs as well, in a more limited way as they announced partnerships and distribution deals with TV manufacturers.

Two years ago, with the launch of the Alexa, Amazon managed to pull the same trick – putting their devices and logos onto 500 stands without actually having their own presence. This year, Amazon took a small exhibition hall in the Venetian to explain the breadth of their tech and services offering. In response Google took over the whole town.

As with last year, 2020 felt like every major digital poster and sponsorship opportunity in Las Vegas had been taken over by Google, including the inside and outside of the monorail – even the recorded announcements on the monorail started with a ‘hey Google’ message. Outside the convention centre Google built their own pavilion with demonstration kitchens, theatres, car ports and a ‘Google Experience’ ride. Inside the convention centre they flooded the floor with Google clones dressed in Google boiler suits and woolly hats. 1800 stands had some form of Google presence on them, with 200 of them having Google manned demo rooms bolted onto the main stands. The message was that Google are coming for every part of your home.

What is clear is that the tech industry is trying to make sure our homes are ready to accept them. A consistent theme around the show this year was screens built into the most unlikely places. Before PCs and smart phones, TVs were our only screen. Now they are ubiquitous. CES showed us that any flat surface – fridges, cooker hoods, mirrors etc can be made into a screen that can run telly. Netflix on a mirror next to your bath? Amazon Prime on your shower screen? Clearly TV has a role in the smart home of the future but there isn’t much we need to do to play in this world. In Smart Homes it feels TV is a passenger on someone else’s journey.

Where we are on more familiar ground is on the TVs themselves. The mantra this year from the TV manufacturers was the same as it is every year – bigger, thinner, smarter, sharper. The signature gateway into the show is always the LG TV wall – 200 flat screen TVs linked together into an overwhelming waterfall of 8K content that you have to walk through and under to enter the show. It is a perennial demonstration of why TV always provides the figurative ‘sex’ at CES and why so many devices and innovations want our content on them.

Beyond the LG stand, most manufacturers demonstrated gorgeous 4K and 8K screens of increasing size and refinement. However, these were often coupled with utterly pointless ‘features’ to try and stand out from the crowd. We saw bendable, foldable and rollable TVs – all promoted as ‘benefits’ but really just attempts to mitigate the awkward fact that TVs are getting too big to fit into an average home. They also haven’t shed the nasty habit of including Netflix, and now Amazon Prime, buttons on their remote controls, demonstrating how the tech giants are trying to buy their way to dominance through tech deals.

A second major theme was TV software integration with the virtual assistants. Last year we were told that TVs could ‘talk to Alexa’ with a software patch. This year we were told that Alexa had been built-in to their core software. Most TVs now include a microphone and have software from Amazon, Google and in a few cases Apple, to ensure integration with the emerging voice landscape.

Clearly these deals include the requirement to have their logos on exhibition stands, not just remote controls, and many TV stands trumpeted their tech partners with stickers from each of the major ones. Samsung TVs went further than just assistant integration and included Apple AirPlay software, alongside its native casting software. As a result, Samsung were the furthest down the road to the ‘any content on any device’ vision.

A consistent theme throughout the show was the increased co-operation between the major players. Samsung demonstrated this by showing an iTunes app integration on their Smart TVs. This sat alongside the existing apps from Netflix, Amazon Prime, Hulu etc and showed that we are all on a journey towards every app on every device. The fact that Apple have felt the need to join in highlights the weakness in their TV device and service strategy to date. We were teased with an impending Apple SVOD service announcement, but the app didn’t appear at the show. We can only assume it will follow iTunes onto Samsung TVs before spreading out onto every other major brand. This will be as meaningful as Netflix arriving on Sky, but with global importance.

The TVs were interesting from a content presentation point of view. Samsung and LG are still pursuing their own operating systems and so were showing off menu designs that have borrowed heavily from the graphically rich Netflix approach. Some of the many Chinese manufacturers had bought their way into the market by adopting other software. TCS were showing their Roku TVs. However, the dominant software in TVs was Google’s android TV. This has become the default TV software for any company without its own software strategy, and gives Google an increasingly powerful gateway role for TV. Your app and content now need to be Android compatible or you aren’t in the game. It also puts TV at the heart of Google’s wider smart home strategy as all these TVs come ready to talk to Google Home and Nest.

One of those companies pursuing its own TV strategy was Amazon. With Prime now ubuiquitous on other devices, Amazon were showing off their own TV kit. Having shown they can build screen devices with their Kindle strategy they now targeting the big screen. In the US they have been trialling their own TV’s, made by companies like Toshiba, and running the FireTV software that runs in their sticks and mini-boxes. Their vision is an Amazon TV in the main room of your house and a stick plugged into every old TV in the other rooms. All plugged into Alexa and your ecommerce account.

They also demonstrated their new FireTV PVR. This is quite a shocking departure for a company that is so integral to the rise of on-demand TV. It has pioneered VOD through its own Prime service, and by hosting so many other VOD services on its own AWS platform. So to launch a broadcast recorder is really interesting statement about the TV market. It shows a pragmatic understanding that over-the-air broadcast is not going away anytime soon. It also shows an understanding of the power of local storage of recordings – particularly given the patchy quality of broadband in key markets like the US and the UK. Expect an Amazon Home Media server with integral PVR capability this year.

Stepping back from the details of the devices and the deals, the message CES gave the world is that TV is still at the heart of the tech revolution but new players are beginning to drive it. Pragmatism is breaking out between these tech players meaning content, apps and tech is increasingly shared and interoperable. The TVs that a consumer will buy in the shops will be increasingly competitive with the set top box based services from the pay platforms but are increasingly plugged into a global network of smart home, artificial intelligence and e-commerce software. For the consumer this is a fantastic outcome, but the global scale of these deals puts pressure on UK-only players.

Decipher are very pleased to announce that 2020 will be the 10^th consecutive year that we are running Mediabug.  Decipher’s  Media Bug has been our main online media research tool since 2015. It has been used by clients as varied as OFCOM, who include it in the annual MediaNations Report, and by a wide variety of media companies and agencies.

The key to the success of Media Bug has been Decipher’s understanding of devices and services which has let us structure our questionnaire to get under the skin of service and device adoption in the UK.  In particular, our ability to identify the correlation between platform use and device ownership.   In 2015 we were the first to identify that 65% of pay TV users were also using smart TV apps on the same screen – leading to many pay TV operators changing their approach to including apps on their platforms.

For 2020 new devices have been added including the ‘Nvidia Shield’ Android TV device as well as voice assistants like Amazon Echo and GoogleHome Assistant.