The age of linear TV as a linear, mass experience is over. We are entering a new world, where it will be possible to explore content rather than channels, interacting with friends in real time, on-screen: in short, a total reinterpretation of what TV is, and means, to viewers.
Professor Patrick Barwise would disagree.
Professor Barwise is Emeritus Professor of Management and Marketing at London Business School. His previous publications include books on television, brands, advertising and strategy, as well as numerous papers and articles on marketing, management and media.
His view is that the time spent on linear television viewing has not dramatically changed in forty years, and is not likely to significantly change, any time soon.
The average aggregate duration of linear viewing is around 28 hours per week. Thought leaders in digital and broadcast media have often suggested that this will decline as more social, malleable, and diverse forms of content across a wider range of devices start to make an impact. Barwise is strongly of the view that is fundamentally inaccurate.
“One set of things they said was that media would converge, in that the distinctions between different media would go away. People like me come at it from a consumer perspective. To people like me, the differences between media are quite deep, because they meet different needs. Those needs are not going to go away. It is not a black and white distinction.
Supporting the evolution of the visual experience, is the evolution of how televisual content is delivered. Broadband, rather than over-the-air, helps to create an open market for content, ranging from expensive productions to UGC. However, Barwise sees asynchronous, non-linear viewing such as UGC as having a complimentary, not a competing, need for attention. This complimentary arrangement between live and on-demand TV is evident in the VCR, which turned out to be a marginal part of television viewing; even now, the PVR is still only used in around 15% of homes. “What is going most wrong now, is that large numbers of people, including the previous Government with Digital Britain, have a wildly exaggerated idea of the scale and speed of this transition away from linear television.”
People's willingness to view cheap television is very low.
Professor Patrick Barwise
Viewing has also been historically skewed towards quality of content; it's human nature to appreciate quality productions. This is a real challenge for those making cheaper television, in meeting expectations of quality. “The audience is used to very high production value content, and therefore there is no such thing as good, cheap television, for anything like the 28 hours a week that people watch TV. People's willingness to view cheap television is very low.” Again, this creates something of a paradox for content providers, in terms of finding that sweet spot between value and volume. Value is much harder to crack.
Social and VOD
Barwise is also sceptical about the concept of social TV.
“It comes back to costs, but in general there isn't really a significant consumer benefit to putting it all on the same screen. Viewing has increased in the past few years, with almost all of it on the main set. [Social TV] is such a marginal application, and not something which has enormous resonance with consumers.”
Such a transition from the current model is unlikely to happen anytime soon, claims Barwise, with data suggesting a rapid evolution being “invariably from biased sources, and bad data collected from atypical samples.” The point is made that “proper” data suggests that true Video on Demand is not sufficiently viewed in a way that threatens linear television. According to Barwise, this is due to deep reasons which are unlikely to change anytime soon. VOD vendors will be faced with a hard time extrapolating a sufficient level of revenue from their customer base. Revenue will be a challenge, simply due to what VOD is, according to Barwise: a rather superior replacement for video rental. If the price of renting a video is $1 US, then there will be little margin for bandwidth-hungry applications. VOD is therefore complimentary to standard TV viewing, as the PVR is. Overall, both VOD and the PVR act as useful ways to watch good content when “there's nothing on”.
While future VOD revenue will be a challenge, some existing business models need to be preserved: specifically, that of the BBC.
Barwise expects to see a sustained licence fee, based on a general consumer acceptance of the BBC. He acknowledges that while the BBC makes mistakes, it is generally held in high esteem by the public, particularly once the value of the licence fee is explained. “I am very worried about what the current Secretary of State has said that because it's part of the public sector, the licence fee has to be cut back. That's completely going against the consumer and citizen interest, but it's very popular in some places.”
Economic models to support national initiatives are roundly criticised. “As well as local TV, the other thing that the Minister has got religion about is superfast broadband. I'm enormously hostile to the idea of any significant amount of public money going into superfast broadband. I think that the benefits - insofar as they have been spelt out at all - are pretty much entirely nonsense.”
Advertising in a digital world
TV advertising is, according to Barwise, over-regulated; specifically, the Contract Rights Renewal model supporting ITV advertising is particularly outdated. CRR has become outdated, because the amount of money going into original UK content has been going steadily down, but, overall, the money going into British TV has been going up.
Barwise is bullish in terms of TV advertising, although he also sees a rosy future for digital advertising. Comparing TV to the Internet in advertising terms is academic, as their continuing complimentary nature will be at the expense of other media. The mass-market, rich proposition that television offers, is something which Barwise considers as being an enduring proposition to advertisers. Therefore, the mix of stabilising marketing budgets and sustained investment into digital advertising, means that the Internet will continue to draw revenue from other sources, notably print classified and display.
The Internet will continue to evolve in this area. “With social media, Google and others are determined to make the Internet rather better at display and push... but the great strength of the Internet is that it is the consumer-dominated medium. If you are going to push things into the consumer's face, you had better make them highly relevant and entertaining, very well targeted, and very compelling. TV is very good at that, so there will be a greater emphasis on making TV even more relevant. The issues are with TV addressability.” As a result, revenue from 30-second spots will still be around in 2020.
All of the agencies are fed up with people geting religion about [digital advertising].
and wanting some sort of magic.
Professor Patrick Barwise
Barwise is adamant that digital display is not of massive potential for most brands. “All of the agencies are fed up with people getting religion about it, and wanting some sort of magic”. Mid-sized brands with cheekiness and imagination will reap the rewards, with Will It Blend cited as being a landmark campaign. Supporting this is the ability to harvest an increasingly rich seam of consumer opinion and feedback, with natural language processing used as an example of how marketing technology continues to evolve.
Planet Silicon Valley
In Barwise's view, TV is probably the medium that technologists understand the least. Silicon Valley has driven a blurring of distinctions between TV and the Internet, with the result being that the experience would become highly interactive. This will simply not happen. “Very few people believe that today. That was pretty close to 100% nonsense... they were pretty close to 100% wrong about that.”
While technologists clearly add value in the marketing mix, they do not view product development from a consumer's perspective. “... they believe that what the early majority will do 5 years time [is what] the mass will do in 10 years time, and they are completely wrong. Those of us that start with the consumer believe that there are deep differences between media, and to understand the technology, we need to understand the economics.
George Gilder “was particularly silly and particularly mad, and that was 1990. Negroponte, who is much more serious, talks complete nonsense when he talks about television. He is much more astute with other things, including the fact that HD needs to be done digitally. So, on the technology he is absolutely right, but he has absolutely no idea of real consumers.
“If you ever get a chance to visit the MIT MediaLab, you can immediately see the problem: it's a bunch of mad MIT graduates, and real people just don't come into it. When they test usability, they test it on themselves, and when there's a problem, they do the classic American thing of thinking of a complicated way of solving it using technology, rather than it being a real problem for real people.”
Overall, the dramatic change which some consider to be on the horizon, will, according to Barwise, not work out that way. Linear viewing of quality television has been a popular pastime for decades; it is unlikely to change quickly. The only thing which would speed this evolution up, is the introduction of policies which destroy what we have.