The journey takes in Ang Lee’s new movie, Sir Martin Sorrell on transparency, and the augmented and virtual reality future of broadcast and cinema
Follow the money…
To begin with the money and to understand where the digital disruption begins, one of the first keynotes at this year’s IBC conference came from Sir Martin Sorrell, CEO of global media agency WPP.
In a broad address Sir Martin expanded on his call for transparency from Google and Facebook on their advertising data, performance and effectiveness.
The brands for which Sir Martin’s firm spends billions of pounds on advertising are pressing for ever more data.
According to Campaign WPP group will spend $6bn with Google in 2016 and saw spend with Facebook grow 68% in 2016 to $1.7bn.
That level of spending with big web businesses, and its growth is the one of sharpest examples of how digital is already forcing disruption onto traditional broadcast media businesses.
From Sir Martin and WPP’s perspective Facebook and Google are predominately media companies as they monetise inventory. He has a point – see CBR's list of names of those who block ad blockers
This is important because content follows eyeballs, and advertising revenue follows content that attracts eyeballs.
A technology revolution – playing in the web space
The global broadcast industry is being told that IT and IP represent the future of data transport and it appears to have accepted that this change is inexorable.
Using packet switching to deliver content is the future because of the already established encroaching competition from Over the Top content providers such as NetFlix and Hulu and the many other OTT players to launch which has already shaken the industry.
This was followed by the next wave as the web scale data centre businesses of GAFA – Google, Amazon, Facebook and Apple – expanded into content and serving advertising .
Add changes in the telecoms landscape and the shifting content consumption patterns on mobile and multiple devices – especially among millennials-and it is obvious that television is being revolutionised.
(The first mention of the competition between the internet and TV that I first heard put forward by Larry Ellison, then CEO of Oracle around 1999 when he said the internet was a battle for eyeballs with big TV. The IT industry back then was attempting to make its own content product supply chain right down to new screens. It failed. But the old adage well known in the tech industry that the short term impact of technology is always overestimated while long term changes are always underestimated appears to have struck again in broadcasting.)
Technology disruption is the new normal
The fundamental technology driving this upheaval is Internet Protocol. And it is hard to underestimate the seismic shift being caused. The disruption is accelerating at every level of the sector from creation to management to transport – even down to the creative process. (See Ang Lee, below)
From IP all other disruptions flow – Cloud hosting, data centre flash storage at scale, 1GB, 10GB, 40GB Ethernet switching, software defined networks, content delivery networks, big data analytics, artificial intelligence…the list goes on.
IT must step up on the challenge of streaming media to deliver 4K Ultra High Definition and soon 8K images across IP networks.
The challenges to be overcome include network performance, security, cloud hosting and edge networking.
Business – disruption is the new normal
IP’s capability to deliver a two way relationship with its consumers throws up a whole new set of considerations for providers of traditional linear TV who have operated in a one to many environment.
Traditional broadcasters now understand the business implications for how this changes relationships with audiences – they have seen how Google, Amazon and Facebook do it.
All of the advantages of Social, Mobile, Analytics, Cloud and IOT convergence that IT promises in other B2C industries like banking and retail are equally if not more appilcable to broadcasting.
The industry recognises that deliverables such as customer choice, personalised service on a massive scale, single customer view, ecommerce, omni-channel business models, multi-level engagement and always on communication are acheiveable.
It is also aware of the challenges.
Next Page – The move towards standards – getting from there to here