Decipher’s Themes for 2022

Covid lockdown over the last two years had a momentous influence on TV.  The TV industry played a significant role in making lockdown, and our emergence from it, bearable for so many people.   The impact of new tech, new players and new commercial models has been relentless through the period.  Unlike many industries, TV is generally good at riding the storm and turning the ‘new’ to its advantage.  New entrants get rapidly absorbed and become ‘old hands’ incredibly quickly, and our definition of ‘traditional TV’ expands with every new format or distribution method. We have continued to do that through the year.

2022 has continued in this vein. We think that its already possible to identify those issues that will be challenging us all, and we are putting in place workstreams to address them.  So this year we are expecting to focus our thinking into five areas and over the next few weeks we will expand on each of them. For now we thought we would share an outline of them with you for comment:

Changing of the Guard? – The last 12 months have been great for platform and device launches in the TV industry as we had a major new launches from the established players like Sky (with Sky Glass) and Virgin (with the new Virgin ‘Stream’ all-IP platform box) and Freeview Play (the AndroidTV PVR), as well as new services and devices from new players like Google, Roku and Amazon.

Recent developments have been notable for the way that the big tech companies began to use the power of their operating systems to shift from powering simple media players (like Chromecast) into other areas of TV distribution. Google had long ago expanded the remit of the Android TV OS into Smart TVs and this year took it back into set top boxes with Freeview Play and a range of platform boxes across Europe. This year we saw Smart TVs built by Amazon (using their FireOS software), in the UK for the first time (following last year’s launch in the US) and also SmartTVs from Roku (using their RokuOS9 software).
So far, the unit sales of these new OS devices aren’t significant so we don’t know their likely impact on users of traditional TV platforms or the likely impact on the current distribution share between them in the UK. This seems to us to be a fundamental question in UK television.

So, as well as assessing the potential impact of Virgin’s new platform on its market share, monitoring and assessing the shift of distribution share to a new cohort of players will be a key focus for Decipher in 2021. In particular, we will be watching how the regulators deal with the growth of TV platforms with interfaces that fall outside the ‘Prominence’ regulations, but have a growing offering of ‘live’ TV.

 

Continued Convergence – from a device perspective, the convergence of the TV industry with the phone and computing industry was a done deal a few years ago. Lockdown showed us that this convergence process is still continuing but with a new range of devices and industries. Recently, new devices like virtual assistants and audio systems, which had appeared in 2019, became mainstream in their integration with the TV industry and its device landscape. What was once a set of luxury integrations (eg ‘audio’ and ‘voice’) for high end devices ( became hygiene factor for any platform or device.
This poses two key questions for the next 12 months: firstly, how far can these existing integrations go to deliver new services and functionality. Voice control, in particular, feels like its only beginning to deliver its potential. The TV industry’s use of voice is still limited (some systems still won’t let you use voice to turn on the TV for instance). Secondly, there is a wider ‘smart home’ question of what new devices, services or industries can get pulled into TV’s orbit. New screen based innovations like Amazon’s Echo Show and Facebook’s Portal, flag up that there are still screen-based devices being invented for specific uses around our home. Services like video conferencing, utility management and CCTV are increasingly using the same devices and network connections to TV.

How these could all fit together, and whether the TV industry is a driver or passenger in the integration will become clear in 2022.

 

The Social Shift – After a few abortive attempts at building apps for the big screen, 2021 indicated that some of the social giants had begun to learn the lesson of what it took to succeed on TV. The apps of key social-video players like YouTube, Vevo and Twitch had already migrated up onto the big screen via Smart TVs and set top boxes. This year it has felt like content strategies were being developed to exploit this – with a growing focus on live events, sports and music being delivered on a big screen, but through a social app. If you are a gamer in particular, the arrival on TV of the massive live gaming events previously only popular in the Far East, meant your interests were represented properly on TV for the first time. As this happens we are seeing a shift in viewing share towards these social players, but also a change in the way we define them.

Last year we began to understand Netflix as a broadcast competitor not a platform.  In 2022 we will be watching the social video apps make the same journey and we will be monitoring the viewing going to social apps on big screen and trying to understand the implications for traditional broadcasters.  This will challenge our definition of what a ‘broadcaster’ is in 2022 – and in particular the question of how they are regulated.  The PSBs are in effect now competing head to head with Netflix, Prime, Youtube and Vevo.

In 2022 we will be trying to define what a broadcaster looks like for the ‘Twenties’ and how the market and regulators should respond.

 

‘Addressable’ To ‘Advanced’ TV Advertising –  In 2021 there was a significant focus, in advertising circles, on the growth of ‘AddressableTV’ and ‘CTV’ ad formats and buying systems. This is a natural outcome of the convergence trends discussed earlier, but Decipher like to think that this is part of a wider shift hitting TV advertising at the moment. We are now looking at the cumulative impact of a group of parallel but linked initiatives that are creating what could be described as an ‘advanced’ TV advertising culture. These initiatives include:
• The shift to addressability as data becomes further embedded in targeting and buying systems, and the potential for integrating 1st and 3rd party data more simply into delivery systems
• The acceleration of the process of automation of TV buying and the shift towards greater self-serve in these systems, prompted by the success of the systems built by the social video giants.
• The beginning of the trend for the sales of linear ads, VOD ads and ads in recorded programmes as a single TV advertising product eg Sky’s recently launched OneCampaign.
• The push to include TV measurement in new combined ‘all media’ measurement and evaluation (eg Dovetail, CFlight, Origin).

In 2022 Decipher has been reviewing the separate initiatives in these areas, but more importantly charting the cumulative impact of all the trends driving the industry towards a new ‘advanced’ state.  There is a regulatory question around these shifts as well, as we increasingly question how TV advertising on social platforms needs to meet the regulatory standards required of broadcast advertising.

 

Commercial to e-Commerce – the last 12 months have seen an explosion in the launch of ad-free content apps from major broadcast groups, along with their integration into mainstream TV platforms. The amount of ad-free TV by available volume and number of suppliers continues to grow along with un-attributable viewing hours that need to be accounted for.
The TV industry has undergone commercial ‘shocks’ before. When BT gave away the crown jewels, rewarding broadband customers with free football and movies, it turned our notion of value in the industry on its head. When Netflix showed that it was possible to build a commercially successful content business without ads it similarly changed our perception of the industry.
However, there is a third wave of change that is arriving with the integration of Amazon into parts of the platform market. As well as ad-free and subscription content, Amazon is bringing the impact of its vast e-commerce infrastructure to the table. Unlike many TV start ups, Amazon arrived in the TV market with a fully-fledged and large scale advertising capability. It started off in the market in a place of technical maturity that has taken some platforms a decade to get to. More importantly, its ability to use free TV to reward e-commerce activity through its Prime subscription base gives it the ability to monetise investments in content through a much greater variation in revenue streams than broadcast competitor.

In the next 12 months Decipher will be exploring the changing commercial base for television in the UK and examining the impact of non-TV revenues on the industry.

We look forward to debating these issues with you over the next few weeks and we would like to hear your thoughts on whether we have missed anything you think is important.

Is RTL Having A ‘Friends Reunited’ Moment With The SpotXchange Deal?

August 8 2014

RTLs recent acquisition of a majority stake in SpotXchange gave Decipher a nervous moment of deja vu last week, reminding us of a previous broadcaster’s dramatic foray into emerging digital media.

In 2005, ITV under a previous management regime, paid £175M for the British social media site FriendsReunited. The deal delivered £30M to the founders, Steve and Julie Pankhurst. At the time this was charitably viewed as an ‘unusual’ deal – what Sir Humphrey would have called ‘brave’- although Friends Reunited was one of the most visited UK web sites of its day. But the reality for ITV was this was a deal made in desperation by a management team who didn’t understand the new market that was unfolding in front of them. They needed a ‘digital’ play and didn’t know how to deliver it. more “Is RTL Having A ‘Friends Reunited’ Moment With The SpotXchange Deal?”

Anything New on the Horizon? – Updates to the UPC’s Cable Box

Horizon Main Menu

Not many people had heard of the UPC Horizon service until the UPC parent, Liberty Global, bought Virgin Television earlier in the year.  With the Virgin acquisition UPC got its hands on Tivo, and became a European cable giant running TWO different next-gen TV platforms, and the comparisons began. Would Horizon ever replace Tivo or vice-versa? more “Anything New on the Horizon? – Updates to the UPC’s Cable Box”

Twitter and TV – A Pause For Reflection!

Nigel Walley – 2nd April

Sept 2011 - New NW BW crop for social mediaI have finally recovered after AdWeek.  I went to four conferences and followed two more on Twitter, which was over-kill.  As I sat in the final conference, my over-riding thought was how those of us in new media have yet to make the case for a central role for the web and social media in marketing budgets.  It was like 2003 all over again. There were some truly dreadful presentations from new media types, but the area that bothered me most was the perpetual over-claiming for the role of Twitter around TV.

I am a massive Twitter fan and probably count as a ‘super-user’. I am also a massive fan of broadcast TV.  I like the story that they are somehow mutually beneficial, however it appears to have spun out of control.  It has leapt from an observation of concurrent use, to an implication of symbiotic dependence, to the point where now Twitter are peddling the line that not only do they influence TV audiences, but that a brand advertiser can  get material benefits from co-ordinating Twitter campaigns with TV ad spots. The only problem is that there is no data to back any of this up. Or if anything, the data disproves it.

more “Twitter and TV – A Pause For Reflection!”

Network DVRs vs Home Media Servers – what will win?

Damien Read – February 2013

damien clone smallOver the last ten years digital video recorders (DVRs) have revolutionised TV watching, providing the most loved features for consumers; live pause and one-touch recording/series recordings.

However, there are two competing models for the evolution of these DVRs which are about to get into the ring with one another; cloud based network DVR (your recordings are saved in the network) and terabyte sized home ‘media servers’ that can stream live channels, recorded content and VOD around a home with full DVR functionality.

The central difference between the two is simple  – the location where the hard disks are located when the recordings or the paused TV is saved. Network DVRs store recordings and even live ‘pause’ centrally in the network whereas the ‘media server’ DVR stores them in the home. This subtle difference actually has little implication for the consumer recording experience, but a big impact on what kit is in consumers’ homes, the quality of the broadband needed to deliver content to the home, and content rights structures.

more “Network DVRs vs Home Media Servers – what will win?”

Not Comparing Freesat and YouView (part 2)

So Freesat have launched a TV campaign to promote their new <freetime> service (see the ad here on YouTube). This prompted us to continue our analysis of the differences between Freesat <freetime> and YouView. In our previous blog post about this (see Comparing Freesat to Youview) we pointed out that the two products have very different target markets so weren’t really competitive and shouldn’t be compared directly.

However, it was interesting to explore their different approaches to some complex market issues.   The launch of the ad campaign highlights two more areas where they have taken a fundamentally different approach: branding and relations with Sky.

more “Not Comparing Freesat and YouView (part 2)”

This Duck Still Won’t Quack…

Back in 2009 – when BBC catch up content first arrived on Virgin cable we wrote the following:

‘There is a rule in life that if something walks like a duck and talks like a duck it must be a duck.  It is a good rule, but we have been struggling this week with a slight variation to it.  How about if someone really big and important repeatedly tells you something is a duck, and has gone to the trouble of painting the thing to look like a duck, but every time you look at it,  it still doesn’t walk or talk like a duck?

The duck in question is the TV version of iPlayer that is available on Virgin cable.  The BBC and Virgin have made a great fuss over the fact that ‘iPlayer is now available on Virgin’.  But however much we have tried, we can’t make it quack or waddle.‘   (See the blog: ‘iPlayer Looks Like a Duck’). more “This Duck Still Won’t Quack…”

YouView Boxes Are Like London Buses..

You wait years for one, then three arrive at once….

Nigel Walley – August 2012.   So YouView has finally launched, and having waited for years for our first box, there are now three different ones to play with down at iBurbia Studios.  We have a plain old vanilla one, bought in John Lewis; a BT Vision one; and a TalkTalk one.  This allows us to finally get our hands on the things and to ask some of the pressing questions. Namely, is it any good, is it important, and will it succeed?

more “YouView Boxes Are Like London Buses..”

What The Hell Is Google TV?

By Nigel Walley – Augst 2010

So Google and Sony have jointly announced the launch of Google TV – a range of set top boxes running a version of Google’s Android software. Google have also announced a range of other box launches in the US before Xmas.  You may have seen the press notices about this, and we would like to offer an explanation and opinion on its importance.

First thing is to understand the background landscape.  Broadly, there are three types of competitor in the TV market at the moment: the pay operators (like Sky and Virgin) who make their own boxes and software; the set top box manufacturers who are making Freeview and Freesat boxes with all sorts of fun stuff added over-the- top of broadcast  (sometimes called the ‘over the top’  or OTT  boxes); and the device manufacturers, like Sony,  who are desperately trying to grab ownership of the TV experience in the home with a device centric strategy.  Google TV has relevance for both the OTT and device manufacturers.

more “What The Hell Is Google TV?”

Why do I still watch broadcast TV?

Adrian Stroud – June 2009

I recently challenged myself to work-out why I still watch so much ‘live’ TV. I don’t mean news or sport because I can rationalise those genres quite easily. I mean bread and butter programming.
The challenge came about because I was debating just how much more damage all the VOD services and PVRs will do to live TV viewing figures in the long-run. This is important because it is those live viewing figures that contribute the vast bulk of advertising impacts. VOD currently delivers far, fewer impacts per hour of viewing than live TV, so the ‘end game’ for advertising funded TV programming is defined by this question. My guess was that live TV won’t drop more than perhaps 25%, no matter how many VOD and time shifting gadgets like Sky+ launch, but I could not say why. I suspect I’m making the mistake of confusing the technology with the benefits.
VOD and the PVR are the rational way to consume all but the livest of live TV events. So, when VOD has all the content you want and it is available on every screen in the house, why would you want to watch ordinary old broadcast TV at all?

more “Why do I still watch broadcast TV?”