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It was clear from day one at NextMedia that Canadian broadcasters are committed to digital strategies. But what’s a little cloudier is how digital plays into their core businesses and how they’re to generate consistent profit from it.
At the Broadcasters Talk Digital session on Monday in Toronto, panellists from The Big Four TV companies shared their attempts at bringing digital into daily operations. For Shaw Media VP, digital media Paul Burns, the challenge has been in rounding the company into a digital force without cannibalizing the overall business.
Scott Dyer, Corus Entertainment’s EVP, chief technology officer and head of shared services, said: “We’ve tried everything,” saying it had a centralized new media department which eventually were siloed off, but now integrating the department changed its focus. CTV Digital Media’s senior director of content Jon Taylor says his digital teams have been integrated for a while.
But Jason Tafler, Rogers Media Inc’s chief digital officer, feels that having siloed digital departments working on their own isn’t necessarily a bad thing. “It’s my belief that if you want to grow and disrupt, you have to set that up as a separate team,” he said firmly. “It’s a combination of some centralization, some integration and some stand-alone growth.”
Talk of growth naturally led to questions about finding the dollars in digital, which yielded some vague responses from the panellists. Still, they remain positive about digital’s potential future value to its core business, all qualifying digital revenue predictions with forward-looking statements and noting that they were small, but significant.
“New media revenues are small in comparison, but we believe these revenues will grow,” said Dyer.
“We’ve had tremendous growth on digital side,” said Tafler.
“We’re definitely seeing meaningful contribution to bottom line that can’t be ignored,” said Taylor.
Like his fellow panellists, Burns didn’t divulge specific numbers, but echoed their statements by admitting that “digital is still representing a small piece of the core revenue dollars from the core media business” and the real challenge is in managing that growth and using it to sustain that core. That said, “it’s still relatively insignificant when you look at the big picture,” he said.
Despite the slivers of revenue that digital has been generating, it’s clear that broadcasters see the growth potential in this sector, particularly with mobile and connected devices: Burns notes that a third of Global TV’s video views have come from the channel’s iPad app, a number that “astounded him” and he admitted “we didn’t anticipate that.”
Shaw’s strategy is to deliver content on every possible connected device, not necessarily just mobile and that also includes the growing number of connected TVs as well as connected screens in vehicles, which represents an untapped playground for content consumption for broadcasters.
Corus’s Dyer is less caught up in defining mobile and more focused on what consumers think it means. “They set the trends, they’ll tell us what they need and ultimately they’ll tell us what they choose,” he said. “That’s the nature of the biz we’re in. It’s consumer behaviour that drives success."
CTV’s Taylor, on the other hand, said he is less concerned with specific devices and platforms and more focused on the future of mobile in secondary or tertiary engagement devices. While he hopes to harness the existing public conversation with the content and its fans, Taylor is also aware of negatively disrupting that discourse with marketing lines.
But according to the latest study from KPMG, such fears may be a thing of the past. According to its Consumer and Convergence Report 2011, half of consumers are willing to let advertisers track their online usage in exchange for cheaper or free content.
That was one of the study’s big surprises for KPMG’s national IT advisor Yvon Audette. “I’m seeing a shift of people being more comfortable in security and privacy,” he tells Cartt.ca. “Canadians are conservative in nature and they’re willing to give up more info for free.
The report also found that consumers are 15% more likely to accept ads on their PCs or laptops than on their mobile devices, while younger consumers are twice as likely to be willing to receive ads compared to consumers 65 years old and up. Such willingness on their part certainly opens up the potential for new revenue streams, as trusted companies which have access to their consumers’ personal information can monetize trends gleaned from that data.
With so many Canadian consumers making this trade, it’s not surprising that even fewer of them aren’t willing to pay for online content. KPMG found that only 2% of Canadian consumers are willing to pony up for full web site access, dropping from 16% in 2010. A whopping 82% of Canadian consumers who responded to the study don’t currently pay for the content they access and when faced with a paywall, less than half the consumers said they’d be willing to open their wallets for continued access to video, as well as books and music.
Audette implies that consumers are content with the functionality and accessibility of free content. “If you have an iPad or iPhone, are you going to use the free version of the Globe & Mail or pay for a subscription? You have to put up a bit of advertising for free versions, but it’s clear that some users are willing to put up with that.”
Of the 79% of the study’s Canadian respondents who reported downloading an app to their mobile, 61% of them didn’t pay for any of them, compared to 41% globally. Moreover, 24% in Canada paid for around one in four of their downloads.
Audette is quick to point out that free content doesn’t necessarily mean bad content, but that these new findings open up possibilities for advertisers and content providers. “You can infer a number of scenarios,” said Audette. “Now they have to start thinking, ‘How can I gain revenue streams based on what the consumer is willing to give up?”
Source: Cartt | December 6, 2011
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