The topic was supposed to be “The Future of Television” at a panel at the Variety Entertainment Matters conference on Thursday, but if this discussion is any indication, the future of TV is all about the second screen.
“The fundamental revenue model of television is broken,” said Thomas Engdahl, CEO of MagicRuby, a second-screen app company that’s part of Technicolor. “We’re trying to do more of the same thing over and over.” Banner ads and the like aren’t working, he said, and “it’s not the DVR taking people away, it’s people switching to two programs.”
While not everyone on the panel agreed with Engdahl’s gloomy assessment of television, the entire group is looking for ways to build engagement and interaction, and that means the second screen.
Univision president of distribution sales and marketing Tonia O’Connor said, “Unless we’re providing the right level of engagement for the viewer, especially the younger viewer, we’re dead. We need to be doing more with that as an industry.”
Even Time Warner Cable is finding value in the data it gets from sending its programming — already paid for by the subscriber — to a second screen. “Taking our current channels to other screens is giving us insight to see what other channels should be included in the package,” said TW Cable exec VP and TW Cable Media prexy Joan Gillman.
From her point of view, said Gillman, a channel is an app. “Your decision to engage with a brand, that happens to be packaged as a little icon, how is that different from CNN?” she said. “Every night at 8, 400 channels are competing for the consumer’s attention. For 20 minutes, 10 minutes, 12 minutes of a consumer’s time. The challenge of an app is as great as the challenge of a channel to get the consumer to stay with you.”
One challenge for the TV biz is to simplify the second-screen experience. Ross Honey, general manager of entertainment and advertising for Xbox Live, said, “Right now, it’s a very fragmented second-screen experience. You have channel apps, show apps, nesting and nesting of apps.” Microsoft has created a single second-screen app, SmartGlass, to address that and provide second-screen experiences for games, music and video. “It’s early days, but we’ve gotten some really nice traction,” Honey said. ConnecTV CEO Ian Aaron reported success with a different kind of centralized second-screen app, Water Cooler.
T-commerce, a perpetual buzzword, seems to be a real and emerging trend on the second screen; MagicRuby’s “Sons of Anarchy” app has sold a considerable number of $50 hoodies and $300 rings, available only through the app or the show’s website, Engdahl said. But Gillman observed that second screen isn’t new. “Second screen used to mean go to PC,” he said. “I think what’s interesting about tablets and smartphones is you’re just eliminating barriers, you’re making easier to engage. What that should do is automatically raise the level of engagement, of interaction with the show, and reduce the cost. It’s the whole commerce ecosystem that’s changing to catch up.”
Aaron also pointed out that Amazon, QVC and other shopping sites are functioning as social networks for viewers who want to do T-commerce: “Probably nobody has better data than Amazon on ‘If you bought this DVD, you’ll probably like this DVD,'” he said.
Digital big leagues
Meanwhile, at the “Digital Content Big Leagues” panel, much of the conversation centered on the differences between digital platforms and TV as sources of programming. Vivi Zigler, president of digital at Shine America, noted the stark contrast in their production processes.
“We’re lucky in digital media to have instantaneous feedback,” she said, noting how that allows for fine-tuning that takes place after the release of content. “The TV way is to full bake it until it is perfect.”
Jeff Berman, who recently left his post as head of the NFL’s digital division to become president of prodco BermanBraun, noted the huge gap in production costs. “The network spend on an average pilot could run $3 million-$4 million,” he noted. “A digital pilot could be $5,000. It’s a pretty big difference.”
Keyvan Peymani, who leads the digital strategy division at ICM, emphasized that programming today often coexists in both digital and TV in a way that brings the best out of both. “You have to have some kind of idea of franchise management,” he said.