Can hybrid television redefine Australian TV? – Piracy, digital rights and the ad experience

Screen Shot 2014-09-02 at 8.04.34 amAhead of tonight’s launch of Freeview Plus, Mumbrella’s Nic Christensen looks at what the new HbbTV service will mean for broadcast rights, piracy, and the way advertisers serve up their content.    

It’s not every day that you get a TV sales boss like Nine’s Peter Wiltshire admitting the weaknesses of television as a medium.

“It was one of the great achilles heels of broadcast television that it was one-to-many,” says Wiltshire who is group sales and marketing director for Nine.

“For years we’ve been talking about how do you build a one to one platform in broadcast television. That channel was going to be the remote control, then the telephone, now it’s a smartphone and we are reaching a point where the back channel becomes the TV itself.”

Like many in the TV industry Wiltshire is spruiking the potential transformative changes today’s Freeview Plus launch could offer in the long term. For advertisers it means new data and product integration opportunities which have been out of reach until now.

Television as a one to one medium

The new data possibilities of HbbTV potentially make the old “scattergun” approach to television buying less relevant.

Instead of clients buying an audience of say a million viewers in the hope a certain percentage are their target market, data analytics and the opportunity for integration and new brand content targeted to the specific viewer, with the opportunity to buy now, via the Freeview Plus red button come into play.

“The red button on each channel will have a myriad of commercial opportunities,” says Liz Ross, general manager of Freeview. “That is where you will have commercial apps, for example, in Germany we have seen BMW sponsor a commercial application when they launched a new car.

“We’ve also seen a big fashion retailer launch a dedicated fashion button before a big sale.”

These opportunities have all the major commercial networks salivating at the advertising opportunities, with some like Seven and Ten already in talks with clients.

But it is the potential to deliver tailored advertising, for example a luxury car manufacturer might buy television based on things like the postcode and the household’s demographics and wealth profile, that really has the free-to-air networks excited.

“The data allows you to become a lot more personable about who you are talking to and talk to them and that is exactly what hybrid TV will give us,” says Kurt Burnette, chief revenue officer for Seven West Media.

“It is a huge opportunity for our consumers and our advertisers and it allows us to get analytics around that viewing behaviour that we have never had before through the broadcast signal.”

Former Myspace Australia boss and now Network Ten digital supremo Rebekah Horne agrees: “What you are talking about is if you are BMW and you have an ad on the television that you can have an integrated component in that ad – it might be hit a button to book a test drive or what have you.

“It then means we are able to deliver audiences more contextually relevant experiences whether that’s around content or advertising.”

Tailoring integration 

Media buyers say they are optimistic about the potential of the technology  improving the consumer experience of advertising too. Former US TV production house executive, and now head of business development at media agency MEC, Tim Flattery argues these changes will be good for advertiser and viewer alike.

“Relevance, timing and accuracy are all things which increase the science behind TV buying and is good not only for the buyer but for the viewer,” says Flattery, who in his previous role with Grainey Pictures, created content for cable and online TV networks.

“One of the things I found being a Hulu customer for a year and a half in the United States was that I loved the way the system learnt my tastes and preferences and started serving me ads that were perfectly suited.”

Some of the German advertiser microsites on Prosieben

Some of the German advertiser microsites on Prosieben Click to enlarge.

Freeview’s Ross goes one step further arguing that HbbTV offers advertiser integration opportunities far greater than traditional broadcast has had.

“In Germany they have four multichannels and then 15 IPTV channels, but from a commercial point of view Paypal had sponsored one of those IPTV channels – so you have have a commercial advertiser who initiates a content opportunity.”

ZenithOptimedia boss Ian Perrin says such integrations are already available in Australia and there are potential risks for clients.

“Integration is a huge opportunity but the reality is that you can already do that with say the Telstra set top box, but not many people are,” says Perrin. “Access to (the channels) will be fantastic but we need to make sure our clients have the right content strategies. We don’t want to be producing a channel which no one will watch and that there is some genuinely interesting content there that people will go to.”

Perrin also warns the networks not to over-promise on the technology aspect.

“We have been made a lot of promises in the past around the future of television,” he says. “Obviously this technology is fantastic but it also involves the consumers catching up and using the technology. That will take a bit longer than we would all like.”

Nine’s Wiltshire argues that all the free-to-air networks are being realistic in their expectations.

“There is a significant amount of interest in that it is a new technology and a new opportunity for advertisers,” he says before adding: “At the same I think everybody has their reality cap on and that says the numbers in the early stages will be extremely small and we would prefer to have a clean model in the early stages until we establish the technology from a consumer experience point of view.”

A German example of a supercorner with the movie Thor. Click to enlarge.

A German example of a supercorner with the movie Thor. Click to enlarge.

One of the other elements the networks are pushing is the ability to serve ads within the catch up function of the HbbTV. In Germany the networks already have a number of options available to advertisers, including super corners, which cover the right hand corner of the screen as viewers scroll a catch up service.

TV sales veteran Wiltshire argues the larger screen real estate offered on new HbbTV television sets will indeed be monetisable.

“The fact is if we can serve them the right technology and the right opportunity in content connected experiences and advertisers can find compelling reasons for advertisers to hit the red button on their remote, then everyone wins out of that.

“There is increased screen real estate as people upgrade and the next phase of televisions is in the 70-80 inch category and that screen real estate is enormous,” he says. “For $6,000-$7,000 you can pick up something in the 70 inch range that is a very big panel and is a good enabler for a good connected HbbTV experience.”

Piracy and the digital rights challenges  

A major factor behind the free-to-air network push has been the rise of piracy and the general consumer trend towards time shifting shows and catch up TV options.

At last week’s investor briefing Nine CEO David Gyngell warned the network was already seeing audiences decline after 8.30pm. 

“You already see it in viewing habits past 8.30-9pm at night when people are doing all their catch up,” said Gyngell. “They can’t find anything they’d like to watch and they’re doing their watching of stuff they recorded over the weekend. That’s when they start watching and what we are trying to be is a full service TV business.”

The challenge here is traditionally networks have not always been thorough in ensuring they had the catch up TV rights to everything they broadcast.

“The major problem with catch up services generally is that they foster an expectation that everything is available,” says Chris Irvine commercial director at production house Essential Media and Entertainment.

“The problem is that the rights needed to feed that service are pretty complex and sometimes they can’t be cleared and you have tolerate gaps in that catch up schedule… when you have an HbbTV service it is a game changer because viewers are going to go looking for anything that they have missed, and they will notice almost immediately if the functionality is compromised when the catch up rights aren’t available.”

Irvine argues this is one thing the networks have been lacking. “People want to keep carving up TV rights the way they have always done and the money and effort goes into handcuffing the technology and forcing it to adhere to this old fashioned criteria,” he says.

“The way the networks have sometimes been responding is to say ‘look this is all too hard, leave it out of the catch up offering’. I’m just not sure with HbbTV that they are going to be able to do that.”

Seven general manager of group technical services Trevor Bird says they are aware of the problem: “We are concentrating on ensuring we do have the rights to as much content as possible so that there aren’t any gaps in our reverse electronic program guide.

“We want to ensure that if people see it on broadcast television then they can see it on catch up.”

Likewise Nine says it will be exploiting the rights windows (often around 28 days post broadcast) to their full potential. “Every show has different rights windows and we will exploit that rights window to its full capability, but they are all different,” says Rebecca Haagsma, director, Jumpin and digital operations at Nine Entertainment.

“The great thing about HbbTV is that you can target catch up by area so as soon as broadcasts happen in Perth, Melbourne or Brisbane we will be able to run the catch up straight after that within the rights window.”

For media buyers such as Flattery, enabling such choice will be important to the success of the platform. “It gives people choice over their schedules and timings,” he says.

“The power of choice is what we want as human beings. It feeds to that positive media experience that we (as advertisers and consumers) have been looking for.”

To read yesterday’s feature on the impact of HbbTV on the consumer experience click here. 


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