Note: This column represents the opinions
of the writer and as such, is not purported as fact
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I read interesting article
on the MSN website this morning.
It discusses the potential demise of free-to-air (FTA) television broadcasting
in the USA -- and I think it raises some very valid points that are just
as relevant to New Zealand.
Although we're a few years behind the USA in our use of digital recorders
like the Tivo, it's only a matter of time before these devices become
a standard part of the average household's entertainment gear.
The PVR threatens the very lifeblood of the FTA TV industry because it enables
viewers to instantly skip past all the ads with the single press of a button.
The Aardvark PC-Based Digital
Entertainment Centre Project
Yes, at last, this feature
has been updated again! (31 Mar 2003)
So where will FTA broadcasters get their revenues if everyone is armed with
a PVR?
Well I have a terrible feeling that changes made by TV3 recently offer a
worrying glimpse of the future -- and that future relies on
what I call "streamed advertising".
Regular viewers will, of late, have noticed two striking new elements
of TV3's broadcasts.
Firstly, they've taken to promoting upcoming programmes by overlaying a banner
across the bottom of the screen -- right smack in the middle of other
programmes.
Secondly, they've made a significant change to the size of their onscreen watermark --
the logo which appears whenever programmes are being broadcast but which vanishes
during the ad breaks. That watermark is now *huge*.
I think the signs are obvious.
If FTA broadcasters are to survive, they're going to have to start showing
ads concurrent with the programmes themselves.
I would not be surprised if that TV3 watermark soon turns into, or is
supplemented by the appearance of other logos promoting advertisers'
products or services.
Likewise, those banners touting upcoming programmes will most likely
become messages advertising anything from Coca Cola to dishwash liquid.
However, the question that TV3 and other FTA broadcasters have to ask
themselves is "will people put up with this level of intrusion?"
If
this online discussion
is representative of wider public opinion, the use of such intrusive
strategies might well backfire badly, driving viewers to channels
(probably via Pay-TV) that offer freedom from such distractions.
I wonder however, whether the FTA broadcasters have considered offering an
ad-free subscription version of their broadcasts?
Sure, the FTA channels are already available on SkyTV but these are simply
a straight rebroadcast of the FTA signal -- adds, watermarks and intrusive
banners intact.
Would you be prepared to pay (say) $5 per channel per month to view the current
FTA channels with no ads, intrusive banners, or watermarks at all?
One thing's for sure, FTA television as we know it is nearing the end of its
economic lifespan, whether the broadcasters are prepared to acknowledge it
or not.
The use of intrusive "streamed advertising" may well boost FTA revenues for a
short time, but the imminent arrival of
a low-cost competitor
to Sky could see a rapid plunge in viewer numbers shortly afterwards.
It would seem that new technology is increasingly challenging the business
models used by not only the music and movie industries, but also broadcasters.
Will they adapt or die?
And of course if any Aardvark readers have an opinion on today's column or
want to add something you're also invited to chip in and
have your say.
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