The Future of TV

THE TELEVISION FUTURE

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THE ELECTRONIC PAST

• 1600 William Gilbert publishes “On The Magnet” coining “electrica”• 1660 Otto von Guericke invents static electricity producing machine, first “generator”• 1729 Stephen Gray discovers principle of conduction of electricity• 1733 du Fay discovers “positive” and “negative” forms of electricity• 1824 Joseph Henry invents first battery

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THE BROADCAST PAST• 1831 Joseph Henry conducts first telegraph transmission• 1833 First Mass Produced Penny Press Newspaper• 1844 First National Telegraphy in US • 1866 Translatlantic Telegraph Service begins• 1873 Maxwell theorizes about electromagnetic energy• 1876 Bell patents Telephone• 1878 Edison Invents Phonograph• 1899 First US Vaudeville House

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THE “WIRELESS” PAST

• 1888 Hertz transmits and detects “radio waves” experimentally• 1920 First US broadcasting station

established• 1922 WEAF sells air time for a

“commercial message”

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THE TELEVISION PAST• 1923 NAB founded; Zworkin invents iconoscope • 1926 NBC founded • 1927 Congress passes first legislation specifically dealing with “broadcasting” • 1928 Columbia Broadcast System founded• 1930 NBC establishes nightly radio newscasts • 1933 FDR broadcasts “Fireside Chats”; Armstrong patents FM radio technology• 1934 Congress passes Communications Act; Mutual Broadcasting System founded• 1938 Orson Welles panics nation with Halloween broadcast on CBS• 1939 Edward R. Murrow broadcasts reports from London being bombarded; David Sarnoff demos RCAs TV System at NY World’s Fair

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THE TELEVISION ERA• 1941 US enters WW2; all manufacturing devoted to war effort• 1941 FCC adopts tech standards for B & W TV• 1945 NBC sells Blue Network creating ABC• 1947 Mobile phone base stations used by law enforcement• 1948 FCC places freeze on new TV licenses until 1952• 1953 FCC adopts tech standards for color TV• 1956 Ampex Corp introduces videotape recorder• 1957 Russians launch first satellite• 1961 FCC adopts standards for stereo FM broadcast• 1962 Congress requires all TVs to have VHF/UHF tuners

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THE COMPUTER ERA • Late 1960’s Defense Department’s Advanced Research Projects

Agency develops computer communication network among university-based researchers • 1969 Computerized switch used called Interface Message Processor at UCLA• 1973 First mobile phone call placed in NYC• 1975 Home video recorders come on the market; HBO begin satellite distributed programming• 1976 First Apple Computer invented and introduced• 1981 IBM introduces personal computer; Epson introduces first laptop • 1984 Apple MacIntosh invented, first home computer with mouse

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THE INTERNET ERA• 1986 Fox established as 4th network• 1990 World Wide Web, multimedia branch of Internet introduced• 1993 Mosaic browser, forerunner of Netscape introduced• 1996 FCC mandates conversion to digital broadcast by 2004• 1997 Netflix founded• 1999 Napster launched• 2001 iPod introduced• 2004 Janet Jackson’s “wardrobe malfunction” leads to stiffer indecency enforcement; Facebook launched

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THE WIRELESS PRESENT

• 2005 YouTube launched• 2006 Twitter launched; YouTube bought by Google • 2007 iPhone introduced; Hulu founded• 2009 Conversion from analog to digital broadcasts• 2010 iPad introduced • 2011 Social Media plays role in Arab Spring;

SOPA introduced in Congress • 2012 Mobile TV Apps proliverate; LG OLED screen introduced at CES

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THE FUTURE NOW:FOUR SCREENS ARE BETTER THAN ONE

STREAMING VS. BROADCASTSMART VS. DUMB TVS

CHANNELS VS. PLATFORMSCHANNELS VS. THE BACKCHANNEL

VIEWING VS. COVIEWINGFREE BROADCAST VS. SUBSCRIPTION

VOD VS. DAYPART SCHEDULING

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FUTURE NOW 2

PROMOS VS. INTERACTIVITYTV GUIDE VS. SEARCH

SCHEDULED PROGRAMMING VS. SOCIAL RECOMMENDATION

STUDIO PRODUCTION VS. UGCLONG-FORM VS. SHORTFORM

COMMERCIAL PODS VS. TRUEVIEWVIDEO VIEWS VS. WATCH TIME

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“GOOGLE’S FOLLY”

• 2ND LARGEST GLOBAL SEARCH ENGINE• FEB 2009 1 BILLION VIEWS EVERY 1-2 MONTHS• TODAY 1 BILLION VIEWS DAILY• 800 MILLION VISITORS MONTHLY• 72 HOURS NEW VIDEO UPLOADED PER MIN• $29 BILLION GROSS REVENUES 2012• 1K YT “PRODUCERS” EARNING AT LEAST $100K PER YEAR

FROM ADS• 1M YT USERS EARNING $ FROM VIDEOS—GREATER NUMBER

THAN ARE EMPLOYED IN US TELEVISION INDUSTRY

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“BROADCAST YOURSELF”

• JAMAL EDWARDS SB.TV 144M CHANNEL VIEWS £200K IN REVENUES 2012

• CHARLIE MCDONNEL 265M CHANNEL VIEWS 1.6 MILLION SUBS

• ALEX DAY 500K PAID DOWNLOADS• TANYA BURR 54M VIEWS SIGNED BY YT TALENT

AGENCY• TOM RIDGEWELL 55M VIEWS £3500-7000/MO• LUKE HOOD UKF BASS CULTURE 250K ALBUMS SOLD

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THE YOUTUBE ANTI-MODEL

• AT FIRST, NOT PEGGED TO BIZ MODEL: NO CHARGE, FINANCIAL REWARD FOR CONTENT CREATION• LACK OF BARRIERS TO PARTICIPATION,

VIEWING• YIELDED DISCOVERY OF NEW PATTERNS OF

ATTENTION AMONG AUDIENCE BEHAVIOR RATHER THAN BUSINESS POLICY

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PLATFORM VS. CHANNEL

• TV DOMINANT MONOPOLY ON ATTENTION IN LIVING ROOM MADE IT HARD FOR PEOPLE IN INDUSTRY TO THINK AUDIENCES WANTED TO CONSUME CONTENT IN A DIFFERENT WAY

• PLATFORM DOES NOT MAKE ANY ASSUMPTIONS ABOUT HOW PEOPLE ARE GOING TO USE IT

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ENTER GOOGLE

• PURCHASED FOR $1.65 BILLION IN 2006• WIRED: “YOU’D BE FORGIVEN FOR

WONDERING HOW CLEARLY GOOGLE THOUGHT THIS THING THROUGH.”

• GLOBALIZED PLATFORM• MEANT THAT NICHE TOPICS WHICH COULD

NEVER JUSTIFY CHANNEL IN SINGLE DOMESTIC MARKET NOW COULD HAVE GLOBAL REACH

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THE WEB EFFECT

THE INTERNET HAS PERMANENTLY CHANGED USER BEHAVIOR AND CONSUMER EXPECTATIONS:• PERSONALIZATION• INTERACTIVITY• IMMEDIACY• COMMUNITY

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THE INTERACTIVE MODEL

• ABILITY TO INTERACT WITH AUDIENCES KEY TO YT’S SUCCESS

• INITIAL MODEL: BUILDING AUDIENCES AROUND NICHES WHETHER DUBSTEP OR MAKEUP

• THE AUDIENCE TURNS INTO USERS• USERS TURNED INTO CREATORS

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THE YT SOCIAL NETWORK

• NO HARSH LINE BETWEEN CREATOR AND CONSUMER• POWERFUL NETWORK AROUND YT CREATORS• MANY CHANNELS HELPING EACH OTHER TO GET OFF

THE GROUND• “WHEN ME AND CHARLIE STARTED, WE WEREN’T

DOING IT FOR THE MONEY”• “IT’S ONE PERSON IN FRONT OF A CAMERA, MAKING

A REALLY HONEST CONNECTION”• NOW THE LARGEST AUDIO VISUAL CHANNEL IN

HISTORY

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RESULTS OF FOLLY• $200M REVENUES IN 2008• SPENT $700M• GREATEST HITS: “BABY MONKEY (GOING BACKWARDS ON A PIG)” • USERS DIDN’T LIKE CLICKING ON ADS• ROLLS OUT TRUEVIEW IN 201O BASED ON SUPER BOWL AD

REPLAYS• NOW 65% YT ADS SKIPPABLE• CPM OFTEN MORE THAN $15 WHICH IS 2-3X STANDARD RATE

FOR NON-SKIPPABLE• YT’S HEAD OF GLOBAL CONTENT SAYS THAT YT ADS NOW MAKE

MORE REVENUE PER HOUR THAN US CABLE TV

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YOUTUBE TRENDS

• CHANNELFLIP AGGREGATES 136 CHANNELS• 1.4 BILLION VIEWS• BASE79 LARGEST YT NETWORK IN EU VALUED

AT $30M • GLEAM DIGITAL TALENT AGENCY FOR SOCIAL

MEDIA STARS “TV AGENTS WOULD LAUGH, BUT IN TWO YEARS’ TIME IT’S GOING TO BE A DIFFERENT LANDSCAPE. YT TALENT WILL BE WAY MORE INFLUENTIAL”

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MEET THE NEW BOSS?

• THE CREATOR’S SPACE OPENED IN 2011• FIRST OF ITS KIND IN THE WORLD: EDITING SUITES, STAGE

WITH CAMERARIGS, LIGHTING, VO BOOTHS, GREEN ROOM FOR SPECIAL EFFECTS

• NEXT LAB DEVELOPS NEW TALENT• ORIGINAL CHANNELS ANNOUNCED IN 2011 WITH $100M

INVESTMENT IN 100 NEW CHANNELS (MADONNA, JAY-Z)• EXPANDED IN EUROPE 2012 WITH ANOTHER 60 CHANNELS• IN ADDITION TO GLEAM & CHANNELFLIP NOW BBC

WORLDWIDE, ITN PRODUCTIONS

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THE THIRD WAVE OF TV

• BBC WORLDWIDE’S DIGITAL REVENUE NOW ACCOUNTS FOR 10% OVERALL TURNOVER

• NEWSCORP SHINE BUYS CHANNEL FLIP FOR £415M

• CHANNELIZATION• SUBSCRIPTION MODEL OR PPV?• STREAMING• SEARCH AND SOCIAL CURATION• TV EVERYWHERE: THE FOUR SCREENS

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THE FUTURE NOW

• THOUSANDS OF CHANNELS ABLE TO FIND THEIR AUDIENCE AND BUILD CONTENT SPECIFICALLY FOR THAT AUDIENCE

• CABLE ON AFTERBURNER/STEROIDS?• PROJECT HITCHHIKER YT REDESIGN EMPHASIS

ON CHANNELS• VIDEO RANKING/ALGORITHMS CHANGED TO

REWARD VIEWING NOT CLICKS

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THE 800 TON GORRILLA

• E!• Style• G4• NBC Sports• NBC• Syfy• USA• Bravo• CNBC• MSNBC

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800 TON MEDIA GORILLA 2

• Adult Swim• Boomerang• Cartoon Network• truTV• TBS• TNT• TCM• CNN• HLN• HBO• Cinemax

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TV OR NOT TV

• AVG US TV CONSUMPTION 5-7HRS DAILY• NIELSEN REPORTS TV VIEWING DOWN LAST 4

YEARS• YT VIDEO VIEWS DECLINED 28% IN 2012• AT SAME TIME, USERS SPENT 61 BILLION

MINUTES VIEWING VIDEOS INCREASE 57%• ONLINE TV VIEWING HAS GROWN• 40% VIEWERS NOW USE MOBILE/CO-VIEWING

AT SAME TIME

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“REALITY” TV

• $100M YT INVESTMENT IN CHANNELS = 40 HOURS ORIGINAL PROGRAMMING IN TRADITIONAL TV

• NETFLIX “HOUSE OF CARDS” $100M + BUDGET• NETFLIX, HULU PLUS, AMAZON PRIME = $7.99• HOW MANY SERIES CAN BE PRODUCED ON AN

ALL YOU CAN EAT SUB MODEL?• WHAT IF ESPN (WHICH COSTS CABLE PROVIDER

$4.69 MONTH) BECOMES A CHANNEL?• CONSUMERS ALREADY DEMAND A LA CARTE

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THE NETFLIX FACTOR

• 30M SUBS IN 40 COUNTRIES• GROWN FROM 1K TITLES ON LAUNCH IN 2007 TO 2OOK • WITH 45K THAT CAN STREAM ON MORE THAN 700 DEVICES• REPLACED ITUNES AS TOP US ONLINE SELLER OF MOVIES/TV

SHOWS WITH 44% OF TOTAL ONLINE FILM BIZ TO APPLE’S 32%

• SUBSCRIBERS ACCOUNT FOR 35% EVENING INTERNET BANDWIDTH—LARGEST SOURCE OF OVERALL WEB TRAFFIC

• YT 25% BITTORRENT 30%• US POSTAL SERVICE’S LARGEST CUSTOMER

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TV’S LAWN• ONLINE BEHAVIORAL SHIFT FROM PC & LAPTOPS TO IPADS,

MOBILE DEVICES AND THE LIVING ROOM• SHIFTS TO INCLUDE ORGANIC SEARCH OR SOCIAL

RECOMMENDATIONS• APPLE TV COMING, AMAZON FOCUS ON CONTENT DELIVERY

SYSTEMS• XBOX IN 60M HOMES• WORLDWIDE BROADBAND PASSING 50%• WHEN YOU SWITCH ON YOUR TV AND SEE YOUR SUBSCRIPTIONS

TO CHANNELS OR A SEARCH BOX OR WHAT FRIENDS ARE WATCHING—THE 3 WAYS PEOPLE NOW USE YOUTUBE

• WHAT WILL BE THE IMPACT ON POSITION OF TRADITIONAL BROADCASTERS?

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NEW TV TOYS

• TRANSPARENT, FOLDABLE SCREENS (LG OLED 55”)• MAGIC REMOTES WITH VOICE/GESTURE RECOGNITION• HIPPO• ZEEBOX• ROKU • TV PLUS• BOXEE• HBOGO• ABC APP• VIGGLE

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LINKS• WHAT IS SOCIAL?• http://tribalmedia.blogspot.com/2011/03/what-is-social.html• TRUTH IN ADVERTISING AND TV’S “MAD MEN”:• http://tribalmedia.blogspot.com/2010/10/mad-mens-don-draper-nowhere-man-in.html• CURATION AND THE FUTURE OF SEARCH:• http://tribalmedia.blogspot.com/2010/09/death-by-data.html• KEY TRANSFORMATIONS IN CONSUMER BEHAVIOR:• http://tribalmedia.blogspot.com/2010/02/what-has-changed-key-transformers-in.html• GENERATION SLANG:• http://tribalmedia.blogspot.com/2009/06/its-like-truly-awesome-dude.html• CHANGES IN MUSIC DISCOVERY:• http://tribalmedia.blogspot.com/2009/05/my-first-record.html• THE SHORT-FORM VIDEO REVOLUTION:• http://tribalmedia.blogspot.com/2009/03/its-short-form-video-world-after-all.html• THE SOCIAL MEDIA EFFECT:• http://tribalmedia.blogspot.com/2009/02/social-media-small-and-big.html• PERSONALIZATION: PRO AND CON:• http://tribalmedia.blogspot.com/2009/02/is-personalization-really-personal.html• HOW THE WEB TRANFORMS TIME:• http://tribalmedia.blogspot.com/2009/02/why-web-is-time-machine.html