@Napte Mobile++: Content Models For The Digital Media Age

The Trendsetting Digital Media Initiatives panel had some good views on the industry… it was moderated by Raja Khanna, Founder & COO of QuickPlay Media and included Scott Mills, CFO & President of BET Digital Media; Blair Westlake, Corporate Vice President of the Media, Content & Partner Strategy Group at Microsoft; and David Poltrack, Chief Research Officer at CBS Corporation.
Poltrack thinks that the penetration of mobile video/TV will increase as the number of capable handsets increases, and it’s doing a big jump since mid-2006. The good news is that a lot of people have capable phones, the bad news is that only a small percentage (he quoted 10 percent) actually use it, so consumers need to become comfortable using handsets for watching video, and for that “they need highly engaging content produced in a cost effective way”. Most of the panelists seemed to think that short-form content is what consumers want. Westlake said that the model of one-off purchases has limitations and subscriptions are the way to go, and this includes all platforms. If consumers have paid for something on cable they don’t want to pay again to get it on a mobile device.
Other panelists disagreed that price is an issue. Mills said that “price is key, but we think the single biggest impediment to mobile video adoption is product”. He said that BET testing and research had shown that the uptake of digital media is not impeded by prices, and there is a learning curve around putting product out there in a way that engages people. Khanna Agreed, saying that price has no bearing on whether there is uptake. Poltrack pointed out the important issue, which is revenue (rather than reach). “When you look at the subscription prices that people are getting, a limited penetration of a subscription service can generate a lot more money than an (ad supported service with broad penetration),” he said. This is exacerbated by the limited amount of advertising space available on a phone, although he said some ad-supported (or at least free) content is required to get people to use the service. Westlake insisted you can’t overlook the ad model, because mobile’s small ad inventory is compensated by its ability to offer targeted ads. In question time Poltrack pointed out that the targeting ability will have to come with a trade-off with the customer — they’ll need something to release their private information. Also, the business model does make a difference — Khanna noted that when Quickplay Media switched from pay-per-download to a subscription model the most popular channels changed from niche products like “babes” to general products like news and weather.
The new platforms are also changing the way in which shows are licensed — but the way that changes is currently in negotiations, and it’s too early to tell which industry will prevail to get the model they want. According to Mills, historically a distributor would pay a producer for the right to sell the content on a particular platform, whereas now they’re looking for the right to sell the content to a particular subscriber (which could avoid the problem of paying twice for the same content on different platforms). However, the model for the content producers is to get revenue from all the platforms. Poltrack emphasized this: “The fact is that if you’re a content provider the more touchpoints you have the better. We’re finding virtually no cannabalization (with internet, mobile etc) with the primary product. We’re finding a level of engagement with the brand that is enhancing the over all experience,” he said. Many people see shows on the internet before they watch them on TV, and he claimed more than 50 percent of these become regular viewers. Mills said that the focus of BET is not to have their brand on every platform, but rather to understand how its customers use every platform and to have a way for them to engage with the shows on those platforms.
The panel was asked about the opportunities for new content providers in the mobile video industry, and Mills replied that there is a huge opportunity, if the product is of good quality. He recounted an anecdote of BET going to the carriers with recent survey results which showed two main audiences for mobile video — hardcore technology geeks and African Americans. The carriers replied that they already knew this but didn’t want to pay BET what it was asking for its programs, so they were searching amongst the smaller producers for cheaper content. He said they couldn’t get it so they came back to BET, but he is with the company…He also gave a very pertinent perspective of the role of broadcasters with big brands in the digital world: “What the brand is able to do is become a beacon to people in an environment that has imperfect navigation today, to indicate … where they can find content.”