9
Web-casting to the TV, or TV on the PC?
According to Peggy Miles, president of on-line broadcasting specialist Intervox Communications, in mid-1999 there are in excess of 2000 radio stations broadcasting full-time programming on the Internet. There are also, she says, ‘well over 100 television stations doing much the same thing’ and many more broadcasting part-time segments, usually news or current affairs. Miles also admits that the number of new web-streamed networks entering this arena means it is now almost impossible to provide up-to-the-minute figures.
However, anyone who doubts the impact web-casting is having on the Internet has only to dip into the Broadcast.com web site (www.broadcast.com) where in late July 1999 they boasted having 410 live, continuously transmitting, radio stations and 49 television channels, as well as on-demand music from their CD Jukebox with 3000 titles.
Much stock-market action is focused on the book-buying habits of the customers of on-line bookshop Amazon.com, but early in 1999 Broadcast.com saw its Nasdaq-listed stock price rocket 44 per cent in a single day. Even Rupert Murdoch issued a warning, saying that at that time the euphoria accompanying web stocks was overstated.
As many engineers know, and a quick glance at Broadcast.com will prove, it is easy to dismiss the 28.8 Kbps delivery technology as crude and far too clunky to meet any sort of critical acceptance. By any measure, it is not the same product as that available on a television set. The dilemma for conventional broadcasters is coping with Broadcast.com’s ‘hit-rate’, which is claimed to be ‘many millions’ a day, and rising only slightly slower than their stock price.
Stories abound of people viewing and listening to their ‘favourite’ television and radio stations over the web for hours at a time, albeit an easier story to accept in countries which pay little or nothing for local telephone calls. These ‘stations’ have their appeal because they deliver a product that is not available on the living room television.
Whatever happens to Broadcast.com’s stock price, the company will probably go from strength to strength. At a London conference (Broadcasting @ Internet/IBC, 1999) speaker after speaker demonstrated, with some powerful arguments, that web-cast programming is here, is happening and thanks to technology improvements underway, is going to get much more important. In fact the long-awaited multi-channel future may already exist, but on the web. Moreover, web-delivered ‘programming’ has some important advantages over conventional broadcasting.
Marcus Bicknell, once SES/Astra’s commercial director but now (1999) president of CMG Information Services in Europe, says with more homes hooking up to cable and satellite, each with ‘massive bandwidth available h. therefore joint online and TV services are beginning to trigger demand.’ He argues that the era of restricted 28 800 Kbps delivery is over. Bicknell, not for the first time, is right. Cable companies, such as UPC’s impressive ‘chello’ interactive service, show that bandwidth restrictions are a thing of the past.
Perhaps the most high-profile supporters of web-enhanced television is WebTV, the start-up that Bill Gates acquired three years ago for US$425 million. Today WebTV has more than 1 million subscriptions with over 50 per cent of them logging in every day. WebTV uses an ordinary telephone connection running with its own proprietary software to ‘add value’ to conventional television images as well as to access the world wide web.
WebTV’s software converts all on-screen text (normally PC-sized) to a size and format that is specifically designed to be read on a television set, and at an ‘ideal’ viewing distance from the set. The format also lends itself to the ‘lean back’ needs of normal entertainment, as distinct to ‘lean forward’ computer use. WebTV overlays its own user-friendly software with consistent functionality to its web access, but viewers can keep their favourite channel in one portion of the screen, and with certain partner channels, hook up to specially created data specific to that channel’s output.
Critics of this sort of US-inspired functionality are quick to remind WebTV that most Europeans can overlay this sort of data, albeit more crudely, thanks to Teletext-type services. Never the less, WebTV is a major advancement in bringing Internet and broad-cast television together, which might prove to be a useful stepping stone.
Infotainment
However, Janvan Lier, chairman of the Teleweb Project steering board (and standardization manager at Philips Consumer Electronics), says Teleweb is the natural extension of Teletext. ‘Teleweb allows the content provider to deliver interactive “infotainment” to a wide audience or to individually addressed consumers.’ Van Lier says Teleweb brings together programme-related content, advertising and Internet-style information packages. Moreover, he says Teleweb can run on today’s television networks, in parallel to Teletext and other data services.
For analogue television, the Teleweb data can be transmitted via independent Teletext data lines (IDLs). He says that while the Teleweb pages are unlimited in size and their greater graphical content needs more channel capacity than Teletext’s usual VBI delivery, this problem is easily solved by using otherwise wasted Teletext transmission capacity. Van Lier also suggests using overnight ‘down time’ to feed data to TVs in stand-by mode. Teleweb, he says, is a natural for DVB-compliant and other digital delivery systems including DAB, with a cost of around US$25 to integrate into TV sets.
Teleweb has the look and feel of Internet, tailor-made to the television screen. Viewers can browse with the TV remote control, and the technology, says the Teleweb steering group, can give interactive television with instant access as well as integrating Teletext and EPG-type information. Teleweb project members include Philips, Grundig, Sony, Seimens and others, while on the content side the German Axel Springer Verlag group, ProSeiben, TDF and others.
No more channels, every programme is a portal
Gary Arlen, president of Arlen Communications, of Bethesda, Maryland has for 20 years predicted greater convergence between television and computer industries. He says we are all well on the way to becoming ‘viewsers’ and suggests the needs of the consumer now go beyond the usual clich'es of couch potatoes and are no longer age or gender-related. He quotes MTV research (July 1998) which claims ‘heavy usage of one medium begets heavy usage of new media’. He adds that we are in the middle of a blending process, where Internet and broadcast television are seen as overlapping, with ‘video portals’ creating an evolutionary process for the Internet, with significant risks for conventional broadcasters.
Barclay Dutson, of Vision Research, a UK consultancy, also warns broadcasters that they ignore the Internet at their peril. In research published in 1999, his organization states that, despite the growth of digital television in Europe (almost 3 million subscribers at December 1998), Internet usage is higher, and forecasts ‘consistently higher growth for Internet than for digital television.’ He warns that digital television is ‘launching into a much more Internet-aware and Internet-trained audience than broad-casters thought when first commissioning set-top boxes.’
There’s also a new satellite kid on the block, in terms of Ka-band. Operating near the more commonly used Ku-band frequencies, Ka-band has been earmarked for two-way traffic directly between the satellite and home or business-based dish, and back to the satellite.
Dutson also suggests that the exploitation of satellite-delivered Ka-Band means ‘You ain’t seen nothing yet!’ in terms of band-width available to broadcast Internet applications. Vision’s forecast is that satellite Internet will have between 14.1 m and 37.1 m users by 2010, out of a total of between 240 and 400 million global Internet users. In other words, 62-9.5 per cent of the world Internet population will get their signals from satellite. These ‘viewsers’ will not be limited by 28.8 baud clunky delivery; they will be unfettered by any sort of bandwidth restrictions.
Advantages
There are some recognized advantages to web-casting and one obvious type of channel to benefit profit-wise is one not recognized by most conventional broadcasters: pornography. Whether we like it or not, it is a fact that live (or ‘as live’) pornographic images via the web are commonplace. Moreover, neither the ITC or other Euro-regulators can or seem to want to do much about this unsavoury content.
Julian McGougan is ITC (the UK broadcasting regulator) policy advisor, responsible for developing regulatory policy in relation to convergence and interactive broadcasting. In a 1999 paper he says ‘Because of its limitations as a delivery medium for audiovisual services and low Internet penetration, it is unlikely that the unregulated nature of such services h. will be a major cause of concern.’ He describes the ITC’s ‘hands off’ approach as ‘pragmatic’ and suggests that if any regulation is required over Internet-delivered audiovisual service, the ITC will start ‘with a light touch’ and become heavier later ‘if audience research suggests that it is required’.
There are a host of other ‘advantages’ to web-cast television: gambling and betting, unlimited advertising, product placement, unrestricted price control, zero ‘windows’ or territorial limitations and no compliance culture, absence of controls over bias or balance and unfettered access to home shopping.
John Ensor, a partner at London-based media law firm Olswang, shrewdly suggests that this absence of control is one of the appeals of the web. However, he also warns that even within this highly anarchic model, there should be the normal controls over credit-card purchasing of products and services, common-sense rules over data protection and consumer protection should be enacted and copyright protection should be provided for.
That viewsers will gravitate towards ‘quality’ content is not doubted, and is already proved. The most popular web sites come from those who have most experience in broadcasting, whether CNN.com, msNBC or newspapers with a high degree of commitment towards web-created material. Today’s 28.8 k baud rates will soon be replaced by greater bandwidth, however, and while many of us will continue to seek our entertainment via the television, there is now little doubt that the PC or Internet-connected television might soon be providing Broadcast.com’s output to us. And zip will go another one or two per cent per annum of network television’s audience.
Earlier in this book I have quoted from interviews conducted with some key leaders in the industry, each prophets in their sectors. One such individual is Jim Beveridge, Microsoft’s business development manager (Europe) for their WebTV Networks. Asked specifically whether web-streaming was going to be important, Beveridge answered: ‘Absolutely. There is no stopping it. In fact there’s something quite nice about it. It reminds me of the evolution of radio and the early days when people had to use a Crystal Set to start off with, then it got better and better. It’s junk today and one would have to be pretty keen to sit and watch or listen at these wonderful little 2 in windows, but in time.h.’
Beveridge continued: ‘Clearly there are bandwidth restrictions on the Internet and I see the Internet almost like a sea of technology and services. What people will do is take elements of that which is offered and build into their own networks what they believe is worth including. So you are going to see live streamed media across from Australia to California then it is not going to be a great experience. But if you have servers where the material has been cached locally and in addition have access to cellular bandwidth then you will be able to receive the video without problem at all.’
He also saw an increase in business-to-business web-streaming, and intra-business possibilities: ‘I think we are the model. for example, whenever someone gives a presentation within Microsoft, and I am not just talking about Bill [Gates] here, the presentation, it might be on the potential for video-streaming, is recorded and people can then go into the file-server at any time and view the presentation or elements of it when it suits them. It is almost like training on the job, and this could be used by any company. We believe in this because we are the best user of our products. But I think most people would love to have this sort of stuff. It’s wonderful.’
But Beveridge also issued a warning as to how broadcasters would see their roles by 20032-4.
They are all going to have to re-think their business plans. You are going to get a huge cross-over between those who say they are just programme-providers, and those who say they are transmission specialists. And everything in between. It comes down to the basic argument of who controls the distribution channel, and the big boys like to have it all. Look at Rupert [Murdoch], where Fox makes the movies, NDS encrypts the material, and Sky shows the stuff on boxes Sky has given away. It’s perfect. It works. And no-one knows better than Murdoch how to squeeze value out of every link in the chain. On the other hand there are broadcasters who seem to want to back away from technology, they just want to stay in their niche as programme providers.
The suggestion of every channel being a portal and every programme a sub-portal is a smart way of looking at it. Everyone is getting hung up on the portal, one gateway that everybody has to delve through to get the stuff. In reality anything you are watching could become a portal in its own right and give access to stuff from that. One problem is that a lot of people in the programme-making arena do not understand what is going on [in technology]. And a lot of people in the technology areas don’t know a thing about programme-making!
Another acknowledged expert is Steve Billinger, who was until the end of 1999 BSkyB’s director of interactivity. He too has some clear ideas about the role of web-casting. In his opinion all the major digital platforms now transmitting will continue and have a viable future.
Every future platform will be digital and interactive as matter of course. It doesn’t matter where or what it is. I am including digital radio, all forms of wireless, all forms of broadband. In my view television will continue to be used to build the primary compelling brand position, and that all of those platforms will deliver slices of the content pie. I use the term ‘content continuum’. A perfect example: somebody who thinks of family entertainment thinks of Disney 3- we may think of the BBC here but in the USA it’s Disney 3- when they want to experience family entertainment they need to be able to find a Disney-branded product, and I think they will be able to find that brand and product on every available platform. There’ll be times when they are on the radio, and the Theme Park, and on Broadway, and the hockey team in the park on a Saturday night. Each will continue as viable-share businesses, they will be the first choice for building that primary brand value. They will almost certainly be the starting off point. However, all of these platforms must be seamlessly integrated to present a kind of content continuum.
Elsewhere in this book I have stated the oft-repeated phrase that ‘content is king’. Billinger does not agree:
I don’t necessarily believe content will be king. My view is that the blur between content and technology, or content and utility, is going to be so fuzzy that it will be difficult to differentiate what is what. For example, in any interactive space, what is e-mail? I call it non-category specific content. It isn’t news, sports or entertainment, but it’s a critical part of the customer offering, and this is the main thing that so-called new media guys don’t get. Because increasingly the technology is king, they are both kings.
I asked him how, if content allied to the brand is important, and the brand and its content was what viewers sought, how could a new content provider break in to the market?
Look at the three most recognized brands that have emerged recently, none of which are in the ‘content’ business that you and I would recognize: Amazon, e-Bay and Yahoo!. All three represent utility, and utility has become content in that environment, and that has built their brand value. We all thought that ‘content was king’ meant CNN and the like. My view is that these are now irrelevant and that customers in an interactive technology-based market, which is what every future platform will be, cannot tell the difference [between CNN and Yahoo!]. One way to do it is to supply better features, better technology, than anyone else or package those utilities, features or technologies better than anyone else, which is what the portal-play is all about, or create platform-specific via the usual types of media structures. To that end it is more like [web site] Intertainer, which is a broadband player in the USA distributed on the RoadRunner platform in the USA. It doesn’t represent anything I have ever seen before but is specifically targeted at the broadband platform.
Billinger took his argument further, saying that the Yahoo! and Netscape-type portals would be the expected route to our traditional video content: ‘You have only to look at Yahoo!’s strategy in acquiring Broadcast.com and rumours that they also want @Home/Excite. I have absolutely no doubt in five years, but pick a date, it doesn’t matter but sooner than you and I think, AOL and Yahoo! will be competing head-on in the network business against Fox and everybody else. There’s no doubt about that. Some people say they have no content, and that’s rubbish. They are inundated with content, and utility and most importantly, with audience.
(Perhaps Billinger was perceptive, but as the world now knows, in January 2000 America Online bought Time Warner in a US$135 billion deal, the world’s largest-ever combination in the media industry. AOL now have content.)
Are new services emerging?
Some of them. People park their brains when they face new media. How often have you heard that shopping is the new theatre, or something similar. This is a utility that is perceived as content, and things like this, which we would never have thought of as content, i.e. e-commerce or shopping are content. QVC for example. The notions of what content is are going to change. There will be new content brands that will be an amalgam of technology features or utilities. MSN.com is a very good example.
Billinger described how set-top boxes are far more than dumb, passive terminals.
Our service, the Sky Interactive service, has no need for a modem link whatsoever. Yet it is an entirely interactive experience. It’s totally in the box. It’s the same with TiVo and Replay, where you have all this interactivity but no back-channel at all. It’s a complex series of equations that have to be figured out and there’s frankly a lot of [hype] in the market right now, and you have to constantly ask yourself who benefits from what is said. The cable industry benefits by saying the back-channel is critical because journalists say they are the natural home of interactivity. It seems to me that a satellite broadcaster with a TiVo-type interactive box is in a pretty interesting space.
On the question of web-streamed audio and video content, Billinger has few doubts:
It is definitely going to have mass-market appeal. I see this happening once broadband has decent penetration. If you are asking whether the mass-market sees it as desirable, I’d also say yes because I do not see it as a nurdish, anorak-type niche, or even a high-end user niche. But it will remain a niche until the platforms get their bandwidth together.
Steve Billinger left Sky towards the end of 1999, but his comments are valid as pointers to the way digital television will change our lives. In the next chapter, we examine more specifically the prospects for digital television, where that over-used word ‘convergence’ fits in, and the ‘blue sky/jam tomorrow’ hopes and aspirations of some of these specialists.