The perfect internet storm breaks – TV will never be the same again

4 Nov 2009

Once TV had a captive audience but those days are over as the big screen will have to compete with digital natives’ laptops and mobile devices simultaneously.

Every year, says George Stormeyer, vice-president and head of video for Europe at Cisco, more than 10 million-14 million new households move towards internet TV, and more and more people watch TV and video on their PCs in bed and increasingly on their mobile phones.

Stormeyer was a keynote speaker at yesterday’s ‘Explosion in Digital Content Conference’ held by the IBEC body TIF’s Audiovisual Federation at Enterprise Ireland’s offices at East Point, Dublin.

“(The year) 2010 will see the increasing dominance of internet video, which people will watch either on their PCs or on their TVs. By 2012, 50pc of all internet traffic will be video, requiring a fundamental transformation in existing networks,” Stormeyer said.

Need to evolve

Acknowledging the revolution taking place, Stormeyer warns that traditional internet service providers, and especially TV broadcasters, will have to evolve their services to bring together different sources of content.

“We are predicting the rise of the Medianet – where providers will need to have IP-driven media to the broadcast standard that most users will expect. This will be no minor task and in our homes technologies will evolve to allow us to choose what we want to see on any device, the TV, the PC, or the hand-held device. The problem is telcos, ISPs and broadcasters will struggle to build networks to the quality that consumers will expect,” Stormeyer said.

Pointing to the digital explosion and what it will mean for traditional broadcasters, Stormeyer promised they could expect significant tension where the battle for revenues and profitability will be more vicious than ever.

“New platforms will proliferate, like the BBC’s Project Canvas, for on-demand TV, because there are clear opportunities as internet video moves into the living-room environment – there will be new entrants, companies will fail, and a proliferation of new services.”

High pay-TV services uptake in Ireland

Looking at Ireland, Stormeyer says demand for digital hybrid internet TV products is set to be positive in a country where there’s a historically high uptake of pay-TV services, such as satellite or cable.

However, unless the digital terrestrial TV market develops in time for the 2012 EU deadline for analogue switchoff, there’s a danger important broadband opportunities will also be missed in a country where broadband penetration has been a strategic failure.

In a world where internet users will be spoiled for choice in terms of content and where broadcasters have less revenue to spend on local content, content creators may also struggle.

Director of the Audiovisual Federation Tommy McCabe said: “With 2012 set as the target date for digital switchover, it is critical that Ireland prepares for this fundamental change. The increased takeup of digital TV will mean greater availability of content for consumers across all platforms, with new and evolving technologies such as IPTV, mobile TV and video on demand transforming the traditional model of broadcasting.”

Economic growth driver

Andrew Lowe, managing director of Element Pictures and chair of the Audiovisual Federation, said: “The audiovisual industry is a key sector identified by the Government as a driver of future economic growth. It is valued at €557.3 million and employs 6,905. Ireland must take advantage of this expanding and growing industry by creating more digital content for big screen, TV screen and the smaller screens of new devices, such as mobile phones.”

While the explosion in digital content will transform all markets, it is not a revolution to be afraid of, maintained Ronan Harris, managing director of online sales for EMEA at Google. “From the creation of the Gutenberg Press it took 250 years to get 100 million readers in the world. It took radio 15 years to get this far and the internet took just three years.

“There are 1.6 billion people online today and 48pc of households in the EU have broadband. There will be a big shift in how we engage with media in terms of interactivity and control. Look at the BBC iPlayer, its impact on younger people has been phenomenal, now these people look to the internet first before they turn on their TV.”

“I find it interesting that people still think the online world
and the real world are different things.”

– Charles Joseph McDonnell

Harris explained that in 1999, Google had indexed 30 million pages. This is now well above 300 billion pages. “By our calculation, by 2004, there were five exabytes on our servers – that’s 1 billion gigabytes – by 2008, this had grown to 20 exabytes.” The size of the internet in May 2009 is believed to have reached 500 billion gigabytes – or 500 exabytes. According to the Digital Britain report, 494 exabytes of data was transferred across the globe on 15 June, 2009.

“For broadcasters and internet video makers, it is going to be harder to figure out how you connect with people. Our research in the UK has found that 26pc of people use the internet regularly when watching TV. In terms of internet distribution, 50pc of TV viewers will shift to online in the next five years.

“Already teens don’t see a distinction between online and offline,” Harris said, pointing to the second-largest search engine on the planet, YouTube, which boasts 300 million users globally at any time. “Some 20 hours of video are uploaded a minute – that’s the equivalent of 1,200 TV stations being created every day in terms of content.”

Mobile media trend

The next major trend that Harris has in his sights is the growth of mobile media. “Some 100 million smart phones were sold in the first half of this year. With mobile, media will come of age. At Google, even people well versed in the internet and now have established habits – when they get their first smart phone their habits change dramatically.

“When content starts to shift to be based on geographic location and how people are living their lives, media will become more personal. Sharing and viewing content together is now what the internet is all about.”

Proof of this is can be seen in new technologies, such as analytical tools for seeing what your friends and family watch on the BBC iPlayer, for example, or the fact more and more people are having real-time conversations by text, phone and Twitter during X Factor.

“Where this is going,” said Harris, “is the real-time shaping of content. This could spawn asynchronous efforts, such as movie directors allowing fans to shape the direction of a movie, leading again to the democratisation of production and journalism.”

The hugeness that is YouTube

In terms of YouTube, Harris said the era of once-off hits like skateboarding dogs has been and gone, and now the world is reaching the “torso” between premium content and the long tail. He pointed to the Charlieissocoolike YouTube channel of a 16-year-old that has attracted 6 million views already.

“The young man behind this channel, Charles Joseph McDonnell, has developed a reputation for being an expert on how today’s young generation is consuming content,” Harris said.

He quoted McDonnell: “I find it interesting that people still think the online world and the real world are different things.”

By John Kennedy

Photo: George Stormeyer, vice-president and head of video for Europe at Cisco; Ronan Harris, managing director of online sales for EMEA at Google; and Tommy McCabe, director of the Audiovisual Federation, are among the participants at the ‘Explosion in Digital Content Conference’ in Dublin.

Photo by Gary O’ Neill

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years