Broadcasters play catch up in converting “old media” into online formats

“Will the broadcaster portal survive?” This was the last question at the last session of the Interactive Exchange conference held earlier this month in Toronto. And while nobody yet knows the answer, broadcasters admit the learning curve is steep and difficult. “The business of television is still unfolding,” Stephen Argent, VP of CTV Digital Media told delegates. “As the business grows, we have to properly experiment with our partners. We are all in this together. We can’t do it on our own.” CTVglobemedia, for example, is partnering with Microsoft and Akamai Technologies on a beta test site (http://hdbeta.ctv.ca/) that features HD streaming of the series Corner Gas and Flashpoint as well as Malawi's Song, CTV's first-ever, made-for-digital production. Launched earlier this month, the site is providing CTV and its partners with the opportunity to experiment with online HD technology, while soliciting feedback from users that may be used in the development of the player. The HD player will run on a new streaming video innovation called Akamai AdaptiveEdge Streaming for Microsoft Silverlight. The technology adapts stream quality based on a user's connection speed. Consumers with varying bandwidth connections can experience HD quality streaming with instant start-up times and no buffering. According to a CTV press release, this is the first time the technology is being used in Canada. However, Argent admitted CTV, like many traditional broadcasters, are playing catch-up. Online video consumption and the ability to watch most programs on-demand from anywhere your laptop takes you is siphoning both eyeballs and advertisers away from traditional broadcasters. “YouTube gets five to six times more time with consumers than the major networks do online. If you look at the percentage of our revenue that’s derived online, it’s small,” Claude Galipeau, senior VP digital media at Rogers Media, said at the conference. “Internet video is big, but it’s not the main thing,” he added. “Breaking news is more important, for say radio (websites) and in sports (such as Rogers’ www.sportsnet.ca) you need more than that. you need statistics and fantasy leagues.” CBC’s executive VP of English services, Richard Stursberg, echoed Argent, saying their website contributes about 5% of CBC’s revenue. And while Sturgsberg was eager to point out that 75,000 users downloaded or streamed video of George W. Bush’s Calgary visit from www.cbc.ca, he was equally swift in defending traditional media – noting there are no daily newspapers which appear solely online (the Christian Science Monitor, which ended its daily printing last week as it moved to an online edition, will continue to print as a weekly). “If old media collapses, it’ll take down new media content with it,” Stursberg argued. Keep experimenting, says Google Canada head Of course, any predictions at this stage are still highly speculative. New media and online platforms continue to evolve faster than any other medium with a proven revenue model still alluding most companies. “There are lots of advertising models around and we are always experimenting with different models,” explained Jonathan Lister, managing director and head of Google Canada. “The spoils go to those who experiment.” Ottawa-based Fuel Industries Inc. is hoping to capture some of those spoils with its latest venture: a social media gaming site aimed at tween girls – www.allgirlsarcade.com. The site, which launched in open beta last December, has more than 100,000 registered users, with an 80% return rate. “We’re seeing about 45 minutes of use per visit,” CEO Mike Burns told the conference. Come May, visitors can expect a more comprehensive entertainment experience as they roll out webisodes of All Girl Game Squad, an animated, made-for-web series. “It’ll be a motion comic book,” Burns tells Tech Media Reports. “It’ll have very simple animations, but full voiceovers and scripts and so on. It’s not a 30 frame per second, fully animated cartoon, but the quality is certainly there.” Fuel anticipates it will cost $15,000-$20,000 to produce each episode in-house. A trailer can be viewed online at: www.allgirlarcade.com/videos/. Fuel’s revenue model centres on brand-integration and will eventually enable visitors to purchase credits which can be used in the site’s virtual mall. Jakks Pacific Inc., the manufacturers of Easy Bake Ovens, has already signed on with a virtual store where users can bake cupcakes using their product. “You look at the time the girls spend in the store, baking cupcakes and you have to think about the number of 30-second spots that Jakks would have to produce to have the same level of interaction,” CCO Warren Tomlin tells Tech Media Reports. In the first few days the store opened, more than 25,000 cupcakes were made. “That kind of brand interaction is priceless. Jakks is really happy with the product.” The webisodes, which initially won’t include brand integration, “won’t be released until we have the microtransactions ready to go,” explains Burns. “Our monetization system goes into beta at the end of the month, but it will be open to the public in May.” The duo, who have completed projects for Fox, HBO and MSNBC.com, explain that online content and consumption should not be viewed as “new” – particularly when geared towards those under 25 years. “This is not a digital shift for them. They are digital natives. We’re in their space,” Burns told the audience. And, for Fuel, the approach seems to be working. The company plans to hire 30 new people over the next year, a 30% increase, and expand its offices in Colorado and Los Angeles. It is also projecting a 40% increase in revenues this year.

Broadcasters play catch up in converting “old media” into online formats

Broadcast | March 30, 2009

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