High Hurdles for Broadband-to-TV Jump, Conference Told

Viewing TV content on the Web has fewer hurdles, with consumers paradoxically used to poorer quality as technology advances, Girard said -- dropped calls with cellphones would never be tolerated on landlines. Only a few hands rose when Girard asked the audience who set his or her DVR to record at its highest bitrate, which takes up more space. Consumers are prioritizing accessibility for now, but video quality is improving online anyway, said Josh Freeman, executive vice president of digital media for Discovery Communications. Ashwin Navin, president of BitTorrent, said browsability and portability are also concerns for consumers, which is why the BitTorrent application will ship in 5 million consumer electronics devices this year.

“The economics are too compelling on cable” for programmers like HBO to put much online, said Robert Quicksilver, chief content officer of TidalTV, a broadband video startup in beta. HBO was the first to break iTunes’ $2 ceiling on episode downloads in a recent deal (CD May 14 p15). But some shows’ only hope may be online, Quicksilver said, pointing to his time at Fox running Arrested Development, cancelled after 3 seasons but among the most streamed and downloaded. “You can monetize 2 million” online, unlike on broadcast, he said. “Time is of the essence” for HBO to make any money online, as its content is frequently swapped, Navin said.

Discovery is struggling with “fragmentation” between linear simulcast, “custom mobile,” WAP and other video platforms, finding it “operationally cost-prohibitive” to sell advertising across them all, Freeman said. It can repurpose some short-form content from properties such as Animal Planet to non-TV platforms, he said. It’s better to conceive of making programming for “infinite screens,” even if the technology is years off to do that, Girard said, as TVs and mobile devices have a “combinatorial nightmare” of viewing sizes.

‘A Purpose-Built IP Box is Dead in the Water’

Trying to incorporate the interactive nature of the Web in TV is probably a waste for all but the most social programming, such as American Idol, and for targeting advertising, Girard said. “Television itself is a lean-back experience,” Quicksilver said. The CW’s Gossip Girl, whose online episodes were yanked after the network determined it was cannibalizing broadcast viewers, draws an audience that chats online while they watch, so it would be pointless to build a chat function into its broadcast, Freeman said. “There’s no substitution happening for things that are working really well on your laptop,” Navin said. “The TV Guide of the Web is going to be word of mouth, not search,” Girard said.

The set-top box is so entrenched in U.S. homes that “a purpose-built IP box is dead in the water,” Navin said. While closed platforms Xbox and TiVo had made it popular to watch broadband content on TVs, TV makers aren’t likely to fare as well and have shown no interest in open broadband connection standards, Freeman said. Even if TiVo is the “Trojan horse” for broadband on TV, as Girard says, it’s only found in 5 million homes, Navin said.

Asked about net neutrality’s effect on video online, Girard said there’s no other choice but for consumers to chip in for the bandwidth they use, possibly through a pay-per-gigabyte model being tested by some ISPs. “The answer is not to somehow limit the amount of bandwidth people can consume,” but to charge them more, which BitTorrent users would happily accept, Navin said. -- Greg Piper

Digital Media Conference Notebook…

The digital media industry is an advertising free-for- all, with no model dominating, Ron Berryman, general manager of the Fox Stations Group at Fox Interactive Media, said in a keynote. “We're about to embark on what I see as a revolution” after a lengthy evolution, he said. Data show consumers spending an hour longer online each day than a year ago, but three in four viewers don’t want to pay for TV programming online, the same ratio that find in-stream ads “intrusive,” he said. A 26-cent gap per ad shown to a viewer between broadcast and broadband platforms shows the need for more creative use of ads, Berryman said. Berryman showed FIM’s use of ads in on-demand streaming: Sponsorship through the entire program, metadata using program content to serve contextual ads at the top of the player, interstitial ad displays any time a viewer pauses a program and a branded frame around the player. FIM’s video search site, which uses a flippable-pages format for search results, wraps contextual ads around content by search query and metadata, he showed. Video bitrates are getting high enough to provide TV-like quality while providing much more targeted advertising, Berryman said. As an example, he showed an NBC.com live feed of the Today Show with multiple ad formats around the player. When he resized the window, the bitrate went from 1400 to 2400 kbps, a relatively new wrinkle useful in full-screen viewing, Berryman said. FIM’s efforts have paid off, bringing profits through 2007 with nearly $1 billion in revenue and sales growth of 100 percent over 2006, he said. It also broke off its ad network into a separate group, now serving 1.5 billion ads per day, he said.