Internet, connected TV, cinema: the new audiovisual landscapes
In 2018, video will account for 80% of Internet traffic in France*. Proliferation of content, series, movies, etc. The Internet has revolutionized media consumption. What will the impact be on usage? Who are the new emerging operators? How will traditional media, such as television and cinema in particular, be affected? Two experts show us the new face of audiovisual broadcasting.
Joint interview with Véronique Morali, Chair of the Webedia Board of Directors, and David Kessler, CEO of Orange Studio, former CEO of the CSA (The French Audiovisual Council), and the CNC (The French National Cinematography Center).
How have technological and digital advances in recent years transformed the audiovisual media landscape?
David Kessler: In the last 30 years, the range of audiovisual media has exploded. In France, we have moved from a closed world of 5-7 TV channels sharing 90% of the market in the 1980s, to a massive proliferation in the range of audiovisual media. On your TV screen, you can now access the so-called traditional TV channels, all DTTV channels, cable and satellite channels, and a considerable number of programs in a non-linear fashion, replays, VoD, SVoD ... Not to mention the proliferation of screens and connected TV that has come of age!
Véronique Morali: This new offering transforms our relationship with the media. Media consumption is now free of the flow of traditional programs and is governed by demand at any time, and on one or more screens. Usage has evolved to become more flexible and more versatile.
How do the media adapt in this new context of supply and demand?
VM: Far from disappearing, so-called traditional media outlets are reinventing themselves to remain attractive. Digital technology allows them to enrich their service offering and to meet the expectations of wider audiences. Certain media outlets, such as television, are shifting more easily to digital technology than other forms of media. It is harder for print media groups for which this transformation often requires acquisition and diversification strategies.
DK: Operators in all media without exception are now thinking about how to reinvent their model. We have seen a lot of experimentation in the written press with everything-for-free and nothing-for-free formulas, and finally so-called "freemium" models which combine the two. For TV channels, the formula is also complicated to find. We are clearly in a period of change, and not a period in which we are seeing the demise of traditional media.
VM: Content is at the heart of this reinvention. Consumers now want to have permanent access to original content. Should media or can media offer premium content? And what content? This is a very important part of the economic equation and attractiveness of all media today.
DK: This is indeed a major issue for everyone, including broadcasters, operators, distributors ... particularly as the price of content increases. This is especially apparent in regard to sports rights, but also in regard to series. An episode from a good American series now costs 4 to 5 million dollars, as much as it costs to produce many French films. Rights and exclusivity issues are at the heart of strategic issues facing the media today.
Economic models and the rules of the games are also redefined by the emergence of new players. Who are they?
DK: Netflix is the new player par excellence and is able to compete with the traditional protagonists. Netflix, which started out as a distributor of series, has become a major and attractive content producer. It revolutionizes usage, particularly by acquiring films that will not be shown in cinemas but only on its network. This ability to finance productions upfront and then to distribute them almost worldwide upsets the balance of the audiovisual landscape. The emergence of such a giant destabilizes other operators in the industry, particularly smaller European companies operating in more fragmented markets.
VM: Influencers on YouTube also play a part in reshuffling the cards of the audiovisual landscape. These young talents, who started out by publishing simple videos, have managed to meet public expectations and now run their own TV channels. They enjoy a huge reputation with nearly 10 million subscribers for the most well-known broadcasters, such as Norman and Cyprien. This size of audience is a dream for any media outlet and accounts for considerable clout.
Competition between series, illegal downloading ... People had been predicting the demise of the cinema. How is it doing?
DK: The “cinema crisis" is a disaster they have always been predicting! Once again, we have seen that this is not the case. Cinema has taken advantage of technological advances – digitization of cinemas, improvements in the quality of sound and image, a creative palette produced by special effects – to offer enriched entertainment. The inventiveness is always there, and the audience too. The cinema remains a very unusual media, enjoying an aura of mythical proportion.
VM: Digital technology and innovation contribute to the attractiveness of cinema at all levels. Thanks to the technical features of digital technology, we can enrich the cinema experience, for example by introducing e-ticket systems, numbered seats, VIP rooms, advanced reservation of drinks, etc. Moreover, thanks to data and precision marketing, it is possible to offer personalized content based on the preferences of online users and to move from supply to demand-driven economics.
What new developments do you expect to see in the world of media?
VM: It is very difficult to envisage. We live in a time where the cards are being reshuffled very quickly. Whether it is from a supply or a demand-side perspective, or from the perspective of usage or business models, the audiovisual landscape is marked by constant challenges, new developments, innovation, and creativity. But it is also shaped by unchanging factors, constants such as the strength of media brands, and, in some cases, the attractiveness of traditional media: morning radio shows, big live event on television. We are juggling between conflicting trends. What is certain is that this world cannot stand still!
* Study “Visual Networking Index 2013-2018,” CISCO, June 2014