The news of Google’s deal to buy YouTube was announced during last week’s Mipcom TV market in Cannes. That evening, the word went round parties and dinners like wildfire.
First people talked about the price – $1.65bn (£887m) in shares. Then they asked why Google was willing to pay so much for the video-sharing site, which has made virtually no money. The consensus in Cannes was twofold: because it could afford to, and because it needs to be number one in all its markets. Google Video, though growing fast, is a long way behind YouTube.
And then people asked about the copyright issue. YouTube’s largely unauthorised use of copyright material – film, sport, music and news – already has global media owners in deep talks with their lawyers. With the cash-flush Google now liable for YouTube’s copyright obligations, some people were rubbing their hands – though others said Google’s software would ensure that most copyright material could be tracked, monetised and shared with rights owners.
The new generation of “new media” – community sites, TV on demand, broadband and mobile – were a hot topic at Mipcom. Everyone from the president of Disney to Britain’s broadcasting minister put in their two-penn’orth.
Three hours before the Google announcement, Disney-ABC Television president Anne Sweeney declared in a keynote speech: “Piracy is a business model. It exists to serve a need in the market – consumers who want TV content on demand. And piracy competes for consumers the same way we do – through quality, price and availability.”
She wasn’t referring directly to YouTube, which deals in short video clips rather than whole programmes – though some of those clips, such as England’s spectacular own goal against Croatia last week, still have a commercial value. Sweeney was talking about mainstream TV series.
The defining moment, she said, came almost two years ago, when ABC was celebrating the first season finale of its huge hit, Desperate Housewives: “Our head of operations and engineering played a DVD of the finale he’d downloaded from the internet the night before, less than 15 minutes after it originally aired. The quality was crystal clear, and the commercials had already been stripped out of it.” So Disney-ABC created a strategy to address the piracy threat: providing easy-to-use ways for viewers to get the content they want, legally.
“The Apple deal to put our content on iTunes was the first step in that strategy,” she said. “We’re now a year into the deal, and we’ve sold more than 12.8 million episodes of Disney-ABC TV shows.”
Then the company tested a broadband internet site, abc.com, with ad-supported video streaming so viewers could watch episodes of ABC shows the day after they aired on the network. “As we suspected,” she said, “the bulk of the online viewing happened in the first 24 hours after the episode aired, which makes the service highly competitive with content pirates serving the same demand.” They realised something else. Despite having ever-cleverer video recorders, viewers miss a lot of episodes of their favourite shows. Far from being a threat to conventional TV, the new media can add to the audience numbers.
This phenomenon was identified years ago in the UK by one of the doyennes of audience research, Sue Stoessl. But now there is a delivery system that can counter it, making it easier for viewers to fill in the gaps and advertisers to reach the extra eyeballs.
Disney-ABC TV’s latest venture is to create content specifically for mobile phones, with a spin-off from Lost. Others have been here – Fox with its hit series 24 and the BBC “tardisodes” for Doctor Who – and the concept is likely to spread.
It was the potential of mobile TV that excited Shaun Woodward in Cannes. The minister for the creative industries (including broadcasting) was there to open the first UK Indies pavilion, put together by the producers’ trade body, PACT.
Woodward is an evangelist for the digital revolution. “There are 1.2 billion televisions in the world and 2 billion mobile phones,” he said, and he believes the real explosion in mobile video will come at the Beijing Olympics in 2008. In principle that sounds right, though the International Olympic Committee may be wary of damaging mainstream TV viewing, which underwrites the entire funding of the games.
By 2012, when the Olympics come to London, the use of mobile TV will certainly be a big issue. The key question is whether sufficient spectrum will be made available for mobile TV to become a major platform in the UK. Mobile TV is already far more advanced in Korea and other European countries than here. For while UK mobile operators are desperately seeking spectrum, so too are the proponents of high-definition television. Freeview, the terrestrial digital platform, doesn’t yet have sufficient bandwidth for HDTV and the whole carve-up of UK spectrum is an issue that will ultimately have to be resolved by Ofcom and the Government. If Google and YouTube haven’t taken over the world by then.