Will the Internet Overtake Television in 2010?

Microsoft just published a rather thorough report on the future developments of the internet across Europe.  One of the bold predictions they are making is that it won't be long before Internet actually overtakes (traditional) television in terms of media consumption time.

To be precise, they predict it to happen in June 2010.  Whether the actual month is accurate is not that important.  It does show how far the internet has come from the days I first hooked up my 9.6Kbps modem.  In fact, rather than describing "digital" as a separate category, in a few years we may need to consider "non-digital" to be the odd one out.

Some other interesting predictions include that

• internet use on PC's will drop from 95% today, to 50% in five years
• mobile browsing will grow from 19% in 2008 to 30% in 2013
• 28% of Europeans watch short or full length videos online

Interesting times we're living in.

For the full report, have a look at http://www.scribd.com/doc/14065700/Europe-Logs-On

 

Tip of the hat to Kris for pointing me to this one.

TV Producers Need a Business Model to Go Online

This week, two events caught my attention which are not that significant on their own, yet in combination made me think.  First there was CBS Corp's Chief Exec who complained that his viewers were not 'helping the networks' when it comes to pretending they actually watch the advertisements.

Then, the Lonelygirl crowd launched its new show "Kate Modern".  This time the action is in London and we're looking at multiple characters, outside locations and plot twists and hints which promise to be in line with any British light drama series.  Only as it's backed by bebo.com, there is no TV station in sight.

But in spite of the millions of video-watching consumers online, there are few Lonelygirls who truly stand out.  And when they do, they work on a very tight budget, often linked to the limit on their credit card.

The reason for this is obvious.  Even though online projects attract audiences which can rival mid-range TV shows, they are dispersed across various geographies and demographics while the marketing budgets to support them are still organized by country and segment.  In short, they may get the numbers as a whole, yet these don't square with the way media-buyers make most of their money.

The end result is a world where TV stations are running out of audiences to pay for big productions, while the long tail online makes audiences too fragmented to go beyond bedroom production value.

So I wonder when new business models will emerge that fundamentally change this equation.  When will global brands simply finance high production quality online shows for international markets, series and movies (the last ones I really enjoyed date from 2001/2).   When will fan-financing generate sufficient cash to support real productions (I still dream of bringing back a sequel to Fawlty Towers in which Basil gets to run a Canadian airline)?  When will portals and ISPs start with some "real" production projects?

Especially if you consider that international production costs are considerably lower than those in the US, this should be feasible.  After all, for the price of one sitcom in the US, you can almost produce a series in Europe and half a station's worth of content in India or China.  Also, if you give production teams like the one behind LonelyGirl a million they'd probably give you the moon in return.

The tools, creativity and audiences are there.  All that's needed is a business model that turns the next YouTube into a high production value machine.

I wonder who plays first?

The Consumer Isn't a Moron, She's Your Mum

Why do traditional marketers & media always think that it's the "young" who make up the digital space and the "old" ones who watch TV?  That's why I decided to check for a moment whether the surf, game and PVR behaviour of my parents and in-laws are anomalies or whether they are part of a broader movement.  In this process I found a few interesting bits of information.  They don't constitute "scientific" proof, yet should make you think.

YouTube

Did you know that the most subscribed to channel on YouTube is currently run by a 79 year old gentleman from the UK (thanks Stefan for the tip!)?  So why are most marketers only pointing their consumer generated efforts at twenty-somethings?

Media Switching

Another mind pusher is this graph I found on 20plus30 (which will soon be contributing to the Futurelab blog).  While not as wired as their 16 year old counterparts, about a third of 50+ year olds engage in more than just TV.

Gaming

And finally, when it comes to gaming, have a look at this article from the BBC (also tip of the hat to 20plus30).

Conclusion

All to say that next time you think about that mediaplan for the "older demographic" it's probably worthwhile to think beyond "old media".  Your mum has evolved with the times you know.

Russia 3rd Largest Internet Country in Europe?

At a conference in Paris last week, I was talking with a friend from Moscow about the state of the Russian internet market.  Over the week-end this lead me to do some research and I was amazed at what I found.  This to the point of adding Russia to my list of "places to watch" on the online scene.

While at first sight the percentages of 7-22% internet penetration don’t appear that impressive, things get slightly more interesting when looking at the large cities.  Moscow, St-Petersburg and Ekaterinburg have 29% of the population go online once or twice a week in which 15% of the internet users use Wi-Fi to do so.

Where my attention peaked was when I translated these numbers into “people”.  Remembering that Russia with its 143,000,000 inhabitants isn’t really a small country, this essentially means we’re looking at 31.5 million people online.  Being hospitable in adding Russia to the “European hitparade”, this gives us:

1. Germany: 48.8 million
2. UK: 37.8 million
3. Russia: 31.5 million
4. Italy: 28.9 million
5. France: 26.2 million

In other words, today, in number of users, Russia is already the third internet market in Europe and considering its semi-vertical growth rates and potential, has a chance to become number one in the next 2-3 years. 

As the percentage numbers remind me of our “Western” situation about 3 years ago, I’d say in 2007-2008 the fun is really about to begin. 

From TV Broadcaster to Multi-Channel-Caster

There’s a perfect storm brewing in television land. Changing media consumption patterns mean people watch less TV.  Advertisers shift money away from the screen to other media.  And to make things really interesting, both Googlewood and the cable companies are gearing up to disintermediate the broadcasters.  Time to pack up?  I don't think so.

TV stations who pro-actively embrace the new media consumption patterns can still outrun the new kids on the block in Tinseltown.  Below I’ve outlined three ways in which broadcasters can leverage their currently dominant position in the living room to secure tomorrow’s business.  Conceptually they’re not that difficult, yet they do require a (very) different mindset.

Think Customer Centric rather than Media Centric Content.  The majority of TV shows today still get produced, well ... as TV shows.  Only when they hit the screen and become successful the web, mobile and other machinery starts working.  This often leads to some innovative work like CSI's interactive game yet even these are still a side show to the main event taking place on TV.

As consumers spend more time online than in front of the tube, broadcasters must push producers to come up with cross-media concepts that compete for a share of total media-time, rather than just win the TV ratings.  Connecting to the more high-impact media will allow stations to demonstrate ROI on advertising and thus reclaim the budgets that are drifting away.

Negotiate multi-channel exclusives and put your weight behind them.  Even though no one really knows how it will look, TV viewing in the future will be IP-based and new entrants like iTunes, Google Video, Yahoo and AOL are playing this card all out.   

To compete tomorrow, TV stations need to become the consumers 360° media reference for their favourite content (be it online, in print, IRL or on their mobile phone).  In this they can – still - use their bargaining power with major content suppliers to make “multi-channel exclusive” deals, which cut short online competitors before they can truly emerge (if Jobs can convince Hollywood to give him Desperate Housewives, TV stations should be able to do so to).

Think outside of the branded entertainment box.  While I love the idea that in 24 “the good guys use Apple”, I wonder how that generates cash for the stations that air the show.  Broadcasters need to reclaim the branded entertainment arena by remembering the roots of commercial television.  Think back to the days of the soap when shows were produced together with advertisers, yet done in a way that people really want to watch.

Thanks to the infinite channel environment of today, it is even conceivable to leverage existing know-how in programming and production into new business opportunities by helping brands to become media in their own right.  Audi in the UK already has its own TV station, courtesy of Sky Digital, so why shouldn’t Hasbro have it’s own Children channel or Amazon it's own Book TV.  

In the digital media landscape, the game is far from over for TV stations, yet to win it may help to get onto the pitch in a more aggressive way.

As usual, if I've missed (part of) the point, or we are at risk of being in violent agreement, don't hesitate to comment ...