Has BBC iPlayer traffic peaked?

The Guardian reports on BT-owned U.K. ISP PlusNet’s claims that BBC iPlayer traffic may finally have levelled off. Launched last Christmas, the service has been the bête noire of U.K. ISPs, particularly those such as Tiscali which pay higher fees to access BT’s U.K. IP backbone at peak times.

The same report includes a rebuttal from the BBC, claiming iPlayer continues to enjoy steady month-on-month growth. PlusNet only accounts for 220,000 consumer and business customers, so it’ll be interesting to see what figures emerge from other ISPs during the coming weeks.

Sky Anytime rebrands as Sky Player

Proving that imitation is the sincerest form of flattery, U.K. satcaster BSkyB has rebranded its online video service Sky Player, in a nod to the success of the Beeb’s iPlayer. New features include live streaming of its six own-brand TV channels, as well as progressive downloads allowing immediate playback of downloaded content.

The re-vamped service, which launched in 2006 as Sky by Broadband and claims to be the first U.K. mass market TV download service, also gets tweaked navigation and some personalisation.

Sky’s mobile TV service will shortly get the Sky Player makeover too, while its Sky+ push VOD DVR service, available to 2.7 million Sky homes, will retain the Anytime brand.

BBC iPlayer bags a BAFTA

The BBC’s iPlayer catch-up service picked up its first gong last night, beating co-nominees Bebo, Kate Modern and the production team behind U.K. Channel 4’s Big Art Mob to the British Academy of Film & Television Arts Craft Award for best Interactive Innovation - Service / Platform. Congratulations to all involved.

Alvin & Heidi Toffler on the future of media

The seminal futurologists Alvin & Heidi Toffler on “de-massification” and other concepts mass media has been slow to embrace…

 

TV - the end is nigh (well, not quite)

Some interesting stats on more advertiser money moving into online (no brainer), but exaggerations of linear TV’s demise are again exaggerated…

Britain is the most developed online advertising market in the world and spend looks set to overtake that for TV by the end of next year, according to yesterday’s report by the Internet Advertising Bureau (IAB), PricewaterhouseCoopers and the World Advertising Research Centre

Last year’s 38 percent online ad growth was driven by the rising number of people online, the introduction of cheap laptops and the growing popularity of catch-up TV on the Internet through services such as Channel 4’s 4oD [have they never heard of BBC iPlayer??] - commented Reuters.

Guy Phillipson, IAB chief executive, believes a changing web audience helped, with women aged between 25-34 spending more time online than men, together with more over-50s logging on to the internet - added The Guardian.

Teenagers - those great respecters of copyright

It wouldn’t be a Monday without another digital media scare story from the U.K.’s Guardian newspaper: aside from its sister newspaper’s report that video-rich services such as YouTube and the BBC’s iPlayer are melting the internet, today’s shock horror ‘revelation ‘ is that 95% of U.K. teenagers are illegally copying music. Well fancy that.

The article shares findings from a survey commissioned by industry group British Music Rights, quoting the group’s chief executive and one-time popster Feargal Sharkey as the findings painting an ominous picture for the next generation of musicians.

Yet a significant number of those naughty teens polled are sticking to tried-and-tested means of copying, such as borrowing eachothers’ CDs or recording from a radio broadcast. Brits have been doing this for decades at it isn’t the underlying cause of lacklustre performance from the music industry. Has Mr Sharkey never heard of peer-based recommendation? It might, after all, introduce his music to a whole new generation.

Mr Sharkey clearly doesn’t buy the wise words of Glenn Merrill, poached by EMI from Google last week to stop the rot at one of the world’s largest labels: “file sharing is a good thing for artists and not necessarily bad,” said Merrill. “We should do a bunch of experiments to find out what the business model is.”

Joost - what went wrong?

It was heralded as re-inventing the TV paradigm or the end of TV as we know it, yet barely a year after its public launch, online video service Joost appears to be lurching from one crisis into another. The service is planning a major retrenchment, reports the UK’s Sunday Times newspaper, “after failing to attract enough users and top-flight broadcasting rights.”

Joost was the one service guaranteed to get the digerati foaming at the mouth, with the kind of gushing enthusiasm normally reserved for the latest Apple gizmo. The company struck gold early in its history by opportunistically inking a content deal with Viacom - some speculated it was less about Viacom making a serious push into the brave new world of web video and more one-in-the-eye at YouTube, which it is currently suing for alleged copyright infringement.

The online video market has evolved considerably during the last year - most if not all of the big broadcast networks have launched or beefed up their offers: NBC Universal and NewsCorp. have bowed their “YouTube-killer” portal Hulu; the BBC iPlayer eventually made its debut and ‘Project Kangaroo’, the JV between the BBC, ITV and Channel 4 looks set to create a new online video powerhouse later this year.

Meanwhile Joost, requiring users to download and install a desktop application, populated with pedestrian content, is in danger of looking as cutting edge as a parent at a school disco. Moreover, at a time when play now Flash streaming has become the de facto user experience, Joost feels clunky by comparison. True, Apple’s iTunes also requires users to install a desktop app, but it does boast some heavyweights as content partners.

It’s a cruel twist of irony that the ‘revolutionary’ service which looked set to shake up the TV paradigm is in danger of looking so web 1.0 at a time when video is so seamlessly being woven into the fabric of the rest of the web. Joost is retrenching from global markets to focus on the U.S., says The Sunday Times - something it probably should’ve done in the first place.

Moral of the tale #1 is that striking gold very seldom happens more than once in succession - something the entertainent industry understands well. Joost’s founders Niklas Zennström and Janus Friis may have turned the telecoms industry upside down with Skype, but thus far Joost has failed to establish itself as anything more than an over-hyped vanity business.

Moral of the tale #2 is under-estimate the deeply-entrenched business models of media and entertainment incumbents at your peril.

The future for Joost? Renewed focus on the U.S. will likely help the service to leverage its strengths and build a significant niche market. Eventually its founders will tire of it and likely offload it to a media heavyweight. beyondnessofthings predicts Viacom will buy it at fire auction rates.

Update: Joost has rebutted yesterday’s story in The Times, telling paidContent‘s Rafat Ali that it’s not planning any major layoffs, though it is doing a “re-alignment” (not to be interepreted as a sole focus on the U.S. market). beyondnessofthings accepts that Joost may not be refocusing its activity to the extent outlined in the Sunday Times report, but stands by the comments stated above.

Indies embracing the web and new platforms

The growth of new distribution opportunities via the internet has prompted some independent production companies to find additional options for exploiting their content, while others are producing content specifically for the web.

Here’s a round-up of some of the key players so far:

• Miles Beckett and Luke Hyams, the co-creators of LonelyGirl15, are rightly dubbed the kings of social networking drama. The duo have gone on to form LG15 Studios, with backing from Hollywood talent brokers Creative Artists Agency, deepening their relationship with Bebo by producing Kate Modern.
• Veteran U.S. independent Mark Burnett Productions, best known for a slew of reality TV formats, has been actively syndicating derivative programming to web portals for a number of years. Its series Rock Star: INXS was offered via MSN, albeit as an enhancement / spin-off to the linear show. However, the company is getting more active with pure new media plays: last September it launched Gold Rush, an online reality game via AOL.
• Ex-Disney chief Mike Eisner’s Vuguru was founded in March 2007 and rapidly cut through with Prom Queen, a scripted drama comprising 80 x 90-second minisodes, distributed via its own site , YouTube and Veoh (which Eisner is also backing).
• U.K. indie RDF is currently developing Rough Cuts. a comedy portal featuring full-length download-to-own programmes from its own catalogues (RDF is a distributor, as well as a production company), other independents and, it hopes, under license from broadcasters. Last July, the company’s U.S. offshoot inked a licensing deal with Daily Motion.
• Endemol - the company which brought the world Big Brother - was one of the first major indies to license its back catalogue content to U.K. IPTV service BT Vision, as well as to pure web plays, such as Joost and newcomer Next.TV. The company is also producing Gap Year, a web exclusive travelogue for Bebo. At the C21 Future Media conference in London late last year, Endemol’s Peter Cowley, managing director of interactive media, disclosed that its digital division was contributing between 10 to 20% of overall revenues.
• FremantleMedia’s strategy focuses on marrying up excellent creativity, low budgets and profitability. The company - behind linear hits such as American Idol - owned by media conglomerate Bertelsmann subsidiary RTL Group, has a new platforms division overseen by programme syndication veteran Gary Carter. Aside from licensing deals, the company’s key new media property is web and mobile comedy channel Atomic Wedgie, an aggregation of younger-skewing short-form programmes which achieved nearly 3 million views via MySpace during Q4 2007. The company is working on an interactive drama format for syndication to web aggregators during 2008.
• IMG and its television division TWI has established a fearsome reputation for global syndication (the business was built out of sports talent management) and boasts a programme catalogue of 250,000 hours of premier sports events (Wimbledon, the PGA Tournament and U.K. Premier League are among those it represents). The company has been developing content propositions for new platforms - albeit based on wobblier technology than today - as far back as 2003. The company’s Gamer.tv format (which enjoys the dubious distinction of being banned in China) was one of the first made-for-TV shows to be syndicated to web portals, such as MSN.

The U.K. VOD market - nascent but growing

Policy wonks, quango officials and broadcast executives met in central London last Thursday to debate the state of the U.K. VOD industry: offering perspectives on incumbent services, those soon to launch, rights management and pending regulatory changes.

Unsurprisingly, the first half dealing with audiences, programming and business models packed them in, while 90 minutes on regulation drove half the audience away, and left the other half in near coma.

Virgin Media’s charismatic Malcolm Wall, CEO of Content, hailed the success of VOD rollout on his platform, proclaiming that “the UK market is coming of age.” The service offers 3,700 of video content, including around 1,000 hours of catch-up TV from broadcasters such as the BBC and Channel 4. Just under half of Virgin customers use the service at least once a month (this compares with around 70% of Comcast subsribers stateside), with around 30% of views to catch-up TV. Some 270 million pieces of content viewed during 2007. His prediction that VOD viewing on the platform would soon outstrip linear viewing of terrestrial channel Five was built on with the further portent that 20% of UK viewing would be non-linear within the next five years. But most striking of all was his disclosure that subscription-based viewing is rapidly replacing pay-per-view.

Both Wall and BBC Future Media Group Controller Erik Huggers used their respective turns to plug the impending launch of a “10 foot” version of BBC iPlayer on the Virgin Media platform, due Q2 2008.

Channel 4’s Sarah Rose, Head of VOD and Channel Development, asserted that partnerships with TV platform partners Virgin, BT Vision and Tiscali TV were “fundamental” and responsible for generating the majority of views to the broadcaster’s 4oD umbrella brand. The biggest mindset change for C4, Rose said was developing approaches for customer relationship management, investing in software functionality and developing new approaches for compliance in an environment where the 9pm watershed is immaterial.

4oD online has an installed base of 1 million users (those who have installed the service software) and unsurprisingly the constituency is 60% male. More striking though was the suggestion that the most active of registered users skews female. Around two-thirds of online users are under 35. No surprises that comedy, drama (about a third of all viewing) and entertainment lead performance, but minority interest programming also does “disproportionately well”. The service is split between around 3,000 hours of (mostly free to view) archive - some of which can “engender loyalty to series” - 60 to 70 hours of new catch-up TV every week and around 300 films.

But there were two star turns at the event: Paddy Barwise, Emeritus Professor of Management and Marketing at the London Business School, and Roger Edmonds, a freelance journalist and one of the key figures behind UKNova, a BitTorrent site which specialises in British TV programmes.

“Calm down dears,” was Paddy Barwise’s opening remark, attempting to balance the boundless enthusiasm of incumbent providers with the reality check that for the overwhelming majority, linear TV rules. Barwise said that while announcements from major players were creating enormous developments on the supply side, but the demand side remained sluggish. Adding: “let’s have a bit of huimility about what will or won’t work, before throwing out too many babies with the bath water.”

John McVay of independent producer trade body Pact chipped in with the challenge that broadcasters may like to consider boosting spend on quality programme-making, before over-investing in technical platforms which were yet to prove themselves with mass audiences.

Roger Edmonds of UKNova threw down the gauntlet to U.K. broadcasters, promising that when they could fully meet the demand for British TV programmes that he sees from his users with a free service, he’d close his site down. With a nod to Project Kangaroo, the soon-to-launch on-demand joint venture between U.K. terrestrial broadcasters, he decried the scarceness of choice from traditional players.

Jeremy Olivier, Head of Convergent Media at regulator Ofcom issued the rallying call which cleared half the room, and devoted his piece to changes ushered in by the European Audiovisual Media Services Directive, which compels member states to move to more robust regulation of the VOD sector, including greater protection from content which may harm or offend vulnerable audiences. Ofcom has pulled together an industry panel to

Really Simple gets really enterprising

The Open Television Network (OTN) launched Wednesday, democratising distribution for content owners seeking a broader audience and more choice for end users who find pre-eminent aggregators too driven by the Pareto principle.

The service is based on RSS feeds: an end user subscribes to a feed based on a subject, topic or provider of interest. This serves up lists of available content, then each time the user clicks on an item to download it, using a popular client like iTunes or Miro, their OTN account gets debited.

Any content producer can upload material, from which OTN takes a 15% commission per use.

The state of digital media in 2008

While mainstream media devotes most of its column inches to wrap-ups of the year that was, it falls to Kara Swisher to provide perhaps the most insightful piece, in this interview with former NewsCorp. new media deal-marker Ross Levinsohn, the man credited with getting Murdoch to buy MySpace.

Politics: the great online video turn-off

Market researchers Harris Interactive reveal the less-than-earth-shattering news that only a third of online video users favour political content.

Online video P&L watch

beyondnessofthings will update this post as figures emerge. Meanwhile some companion reading at Silicon Valley Insider:

Economics of Online Video 1: One Tough Business

Economics of Online Video 2: Unit Cost Structure

Estimating Financial Impact of iTunes/NBC: Small, For Now, But We Still Expect Reconciliation

NBC Universal / iTunes: NBCU may have pulled its shows off iTunes, but last year’s profits, representing 40% of all TV content on iTunes, were US $15 million [source: CNN Money , 7 Feb 07]

BBC iPlayer to launch Christmas Day

The BBC is to fully launch its iPlayer TV downloads service on 25 December, according to this report. Not mentioned by Broadband TV News, but covered in an earlier BBC announcement, the iPlayer will also offer streaming video before the end of the year, promising access to 400 hours of TV shows from the last seven days.

Gimme more online video, just don’t make me pay

U.K. law firm Olswang has published its annual Convergence Report, tracking British consumer attitudes to online and on-demand services. This year’s study reveals that almost a third of broadband users are regular consumers of online TV or movies - but they don’t want to have to pay for the content.

When the ‘Kangaroo’ JV between the BBC, ITV and Channel 4 launches next year, it’ll be interesting to see what mix of business models are offered.

In a related development, BT is experimenting with ad-funded VoD on its Vision IPTV service. A sign that PPV is RIP?

Knocka TV: yet another online video identity crisis

Roi Carthy reveals that user-generated video portal Knocka TV [might need a rebrand for U.K. users :)] is to launch later today, following four months in beta.

The Israeli start-up is backed by the founders of instant messaging service ICQ, sold to AOL in 1998 for US $408 million.

Testing the limits of contradictory language, the service bills itself as “a user generated professional television network” [so which is it?] Reading on in the blurb, it’s clear that Knocka is attempting to position itself alongside Sony’s Crackle, as a stage for contributors with some modicum of creative prowess, as oppose to the Jackass-a-likey videos clogging up YouTube.

Unlike similar moves by Sony’s Crackle and News Corp.’s MySpace to beef up professionally-produced uploads, Knocka appears to lack the scale of the others’ parent companies, which are able to offer incentives such as development deals with other divisions, such as TV networks.

Knocka’s declared launch proposition is a confusing mix of social networking and online video buzz jargon — doubtless there so that its backers can swiftly offload it on to some hapless investment consortium. Promised are ‘channels’ offering “viewers’ creations”, “hip indie music” and an endless stream of scantily-clad babes masquerading as a “fashion” channel. An extreme sports ‘channel’ is also claimed to be in development.

Quick take: at first sight seems like a cynical attempt to connect with young males, claim a record user base and then flog it off to idiot investors at a time when the market is about to nosedive (again). $408m may not buy you common sense, for everything else there’s a black AmEx…

Netflix v. Blockbuster: round 1 to Netflix

Ryan Carrigg, posting on Compete.com, demonstrates how the divergent online strategies being used by Netflix and Blockbuster are paying dividends for the former. Sometimes a picture can tell the story more powerfully than any words can:

2008: the big online video shakeout

Against a predicted backdrop of wider market turmoil as we enter 2008, Reuters ran a great piece last week on the likely impact of broader market declines on a sector which remains a major buzz with industry and consumers alike [even though, privately, I suspect alot of ramping from investors when it comes to the former, and a slow, but gradual paradigm shift among the latter].

Sure it makes for good copy fodder at a time when the pain is spreading through to consumer, as well as institutional investors [just a foretaste of things to come, IMO]. But the Reuters piece has a point: both large media corporations and, crucially, the advertisers, which in most cases support them, will have difficulty in justifying unproven activity amid a climate of investment conservatism.

You need only look to what some would call a landgrab, others pure speculation, which has been the key characteristic of the new media landscape during 2007.

Fast forward to 2008:

• Mass media is broadly spent when it comes to genuinely new ideas or connecting with the ways in which consumers will likely connect with them, thus… 
• Those propositions which can demonstrate consumer uptake, if only on a micro level, will likely attract the acquistion interest of the majors. This will come at a time when second or third round financing is non-existent; nowhere else to turn.
• The valuations placed against those in the vendors’ market will be attractive to the potential purchasers [a parallel with real estate and company valuations, in general, anyone?]
• Advertisers will wake up to this landscape beyond the hyperbole of press releases — not least a result of both clents and their agency handlers haemoraging revenue against the splattergun accountability which is linear, vs. an emerging landscape of robust [did anyone say actual?] metrics which non-linear promises. I can relate from first hand experience, that the majority of blue-chip agencies do not have a clue about what they’re doing or propose to do in this space.

The winners:

Sorry, you won’t like the answer: big media corporations

The losers:

Emergent ideas which just might’ve turned into something genuinely different, had they been in the right place, at the right time.

Tighten you’re belts everyone, 2008 ain’t gonna be pretty… [and i didn't even mention the 'R' word once...]

The U.K.: greenhouse for new media ideas?

It’s a badly kept industry secret that Rupert Murdoch’s BSkyB satellite TV platform saw the introduction of both interactivity and its Sky+ DVR in the U.K. as a test-bed for rolling the services out in other key territories.

Now it looks as if others are learning from both the Murdoch approach to digital product innovation and the potential of the U.K. as a greenhouse for emerging ideas and propositions which may capture the imagination of customers in other territories.

Last week, Casey Harwood, SVP of Turner Broadcasting System Europe [which operates movie channel franchise TCM, as well as a slew of kids' channels such as Boomerang] told guests at the Broadcasting Press Guild that the mix of digital platforms in the U.K. makes it the ideal springboard for launching new media initiatives.

So what is it about the U.K. digital market which makes it unique and ripe for such experimentation?

Firstly, the U.K. enjoys an ultra-competitive multichannel market, which sees IPTV newcomers like BT Vision and Tiscali TV jostling for position alongside maturing incumbents such as Freeview and pay TV delivered by Sky and Virgin Media.

It’s fair to say that the new arrivals have yet to establish themselves with any sizeable customer base, facing not only the formidable marketing might of the incumbents, but also the challenge of trying to pithily explain the benefits of what, to many, is an entirely new way of consuming traditional TV services.

But it’s this very competitiveness which makes the U.K. such a lively market in which to pilot new services and ideas, albeit for players with relatively deep pockets.

Turner’s move reflects comparatively lower costs for market entry: trialling a new service via the web carries with it only the developments costs of the content proposition itself and any associated marketing. Contrast this with the cost of agreeing a carriage deal: whether linear or non-linear + marketing and the econmics easily stack up.

Turner aren’t the only ones watching the U.K. either: in a post earlier today, thebeyondnessofthings observed how Disney sees Blighty as a key market in determining its prospects beyond a largely North American customer base.

But a warning from history to the fearless: TiVo, the company which can be credited for attempting to make the DVR product category its own, attempted to use the U.K. as a test-bed for a pan-European rollout back in the late nineties. Through a co-marketing deal with Sky it managed to accumulate a customer base of ~ 50K subscribers, only to humiliatingly retreat from actively selling its product into the market when the very company it chose to get into bed with unashamedly learnt from its mistakes and moved in to pick up the spoils.

Disney’s Club Penguin: update

Following Disney’s up to US $700 million acquisition of kids’ social network Club Penguin back in August, the company sees the U.K. as a key European market, following news that it is readying plans for a Brit flavour of the service by the middle of 2008.

“Club Penguin has already attracted a significant audience in the UK with its North American service, but we believe there is a real demand in this market for a safe online community destination for children that has local relevance,” Walt Disney Internet Group, EMEA, senior VP and MD Cindy Rose told C21.