technological drivers of change in the media environment

2006 PBS BRAND MASTERS SEMINARMAY 20, 2006

DAVID B. LIROFF, VP / CTO WGBH BOSTON 1

Technological Drivers of Change

in the Media Environment



Principal Drivers of Change

Computer processing power continues to double every 18 months at no increase in price. (Moore’s Law)

The cost of digital storage is dropping by 50% every 10 months.

e.g. 200 GB hard drive - $89 (Staples this week)

Advances in audio/video compression continue, squeezing increasing amounts of information down same-sized channels or ”pipes”, increasing choice




conversion from analog to digital cable results in 8-fold increase in channel choices in same cable bandwidth

conversion from analog to digital broadcast TV results in 4-fold increase in number of standard definition program streams

Satellite distribution of audio, video and data provides

increasing number of channel choices (e.g. DirecTV,

DishTV, Sirius Radio, XM Radio)




Digital file formats facilitate cross-platform exchanges

manipulation of content for reception, storage, display, playout on various devices from cell phones to large-screen HDTV displays

convergence of functions e.g. cell phones and handheld devices which “do everything”

Shift to Internet Protocol provides “interoperable language” for voice, audio and video




Bandwidth to homes, schools, businesses continues to increase

high speed broadband now in more than 40% of US homes, emerging as audio and video distribution platform side-by-side with broadcast, satellite and cable

fiber to the home supplementing hybrid fiber/coax and copper for video, telephone, broadband service




Verizon’s (and other Baby Bell’s) “fiber to the premises” now being deployed in Verizon and ATT/SBC territories

nominal capacities fiber-optic cable 400,000 mbps hybrid fiber/coax 850 mbps copper twisted pair 10 mpbs




Shift from wired to wireless technology omnipresent wireless connectivity with cell phones,

WiFi, WiMax, PDAs as universal handheld multimedia devices for data, audio, video, telephony

cities deploying universally-available wireless high-speed Internet access now being seen as a

principal driver of economic development, educational access




proliferation of GPS-equipped receivers/display

devices facilitates delivery of location-specific content

and services




increasingly sophisticated database management and data mining capabilities enable personalization/ customization to match consumers, users with content in which they are interested

assisted by collaborative filtering, recommender systems, relationships engines (“others who ordered this book also ordered . .”)




increasingly sophisticated search tools applying category schemes and sampling to narrow

search results Google and Yahoo audio/video search services, soon

Microsoft check out < http://video.google.com/ > (in beta)




miniaturization, wearables, incorporate ever-

smaller computer devices into everyday objects,

including clothing

likely emerging use of nanotechnology, RFIDs in

retail, media applications



Consequences



Consequences

Consumers becoming used to accessing whatever content they want, when they want it, and whatever display device is most convenient

Shift from real-time to non-real time use of content using DVRs/PVRs, video on demand

Broadband facilitates on-demand distribution, emerges as real time/non-real time audio/video/interactive distribution platform



Consequences

Increasing capacity of packaged media (e.g. HD-DVDs) Proliferation of iPods, MP3 players, podcasting, video

iPods Videogames emerging as content platforms for

education and training, as well as for entertainment, storytelling, on-line connectivity



Consequences

evolution of home media servers for storing, serving digital assets (movies, music, family photos, etc.)

TiVo, DVRs, cable and satellite set-top boxes battling for position



Consequences

Technologies which ignore geography (e.g. Internet, satellite, wireless) erode geographic market boundaries

exacerbate battles between wholesalers and retailers over who delivers services directly to consumers

local becomes global, e.g. audio/video streaming on line



Consequences

Once content is in digital form, there is no technical reason why any content ever needs to go “out of print”

(The “Long Tail” phenomenon)



Consequences

“Slingbox” ($199) relays any TV programs you can receive in your home (from broadcast, cable, or satellite) to an Internet-connected PC anywhere in the world

provides full control of your home TV or DVR from any distant location (even if someone else is watching at home) extending the battle for control of the remote well beyond the family room couch



Consequences

for media producers and distributors, accelerating audience segmentation/ fragmentation

erosion of effectiveness of interruption marketing, e.g. commercial advertising, traditional on-air fundraising; ubiquitous use of product placement in commercial media



Consequences

“Google advertising model” uses consumers’ search preferences to identify areas of interest, provides “sponsored links” to content and service providers who may have related products

facilitates self-selection of communities of interest organized around specific interests



Consequences

“Google Advertising Model” turns the traditional advertising model on its head

John Wanamaker (founded first US department store in mid-1800’s):

"I know half the money I spend on advertising is wasted, but I can never find out which half.”

If he were alive today, he would be closer to knowing.



Consequences

Lowered threshold to entry for content creators, distributors

e.g. cell phone camera video in news programs Equipment cost to achieve high technical quality also

declining High Def “pro-sumer” cameras available for less

than $5,000; desktop HD editing for $300.



Consequences

technology facilitates interaction between content/service providers and their audiences

audiences no longer necessarily anonymous to communicators or to each other

facilitates interactivity, not just two-way but peer-to-peer

“Markets are conversations” -< www.cluetrain.com >



Consequences

critical need for content and service providers to

understand viewers’ and listeners’ increasingly-

complex media use behaviors



Consequences

decreasing ability of legacy audience measurement tools to track increasingly-complex media use behaviors

Nielsen having difficulty tracking use of DVRs, VoD, broadband, let alone tracking viewing of hundreds of conventional video choices, multi-tasking with Internet use

sample-based measurement being replaced with proprietary direct measurement technologies enabled by two-way connections between distributors and consumers (e.g. cable set-top boxes, TiVo)



THE audience research question:

“ What’s the job they’re hiring us to do?



NPS RESEARCH

PTV shows the types of programs that I can’t find

anywhere else

The diversity of PBS programs is personally appealing

to me

PBS programs allow me to see the topics they cover

from many different points of view



NPS RESEARCH

• Compared w/ programs on other types of stations, I

really pay attention to PBS programs

PBS provides programs that appeal to a wide range of

interests

Watching PBS programs makes me feel better about

myself.



Technological Drivers of Change

in the Media Environment

technological drivers of change in the media environment

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