6 Observations About Change & Television #olswangconvergence

Arsenal and Manchester United have lost 3 games each in the past 3 weeks. Yet, Arsenal have gone from being potential champions to bottlers, while Manchester United are being lauded for their results. The reality is that neither team has suddenly changed all that much. But often, we (and our media) look for definitive answers when faced with uncertainty and often reach conclusions too early.

I was at the Olswang breakfast for the Convergence Survey, 2011. Surrounded by people and organizations much greater than me and mine, I spoke little and listened more (not my usual modus operandi). And I came away with some observations.

1.       It’s too early for answers. We are at version 1 (perhaps not even that, more like an alpha release as somebody said) of Internet Connected TV. Nothing is really clear yet, and at this stage, predictions (either of change or of constancy) are fraught with ignorance and risk. Sticking to scenarios and having a few different ones to work with is a much better idea.

2.       The Internet is life changing and all pervasive. Looking back, it has completely transformed industry after industry, from consumer facing (WWW) propositions to back end, B2B and supply chain issues, and from governance, to control and knowledge. It’s like pouring water into a container full of things and seeing the water seep into every corner. The Internet is also a phenomenal innovation platform and has dramatically lowered the barriers to entry for a number of content related industries. I have no doubt that the change on Television will be massive but in order to understand what those changes might be, refer to point 1.

3.       It is a question of when and not if. There are those who would argue that the change is more than 5 years away, and others who wonder if it might even happen in 10. (To remind ourselves of what can happen in 5 years, see Twitter and iPhone. Or for 7 years, Facebook. For 10 years, iPod and for 13 years, Google). For disruptive changes to broadcast, rather than predicate it on time, it’s more instructive to look at the triggers, the key one here probably being Bandwidth. With 8-10 meg actual bandwidth being delivered to homes, there would be seismic impact on broadcasting. To understand why, refer point 2.

4.       In some ways UK Broadcasters are actually protected by the inability of BT and the government to find a compelling case for upgrading the broadband quality in the past. Though steps are now being taken, it will be a while before watching a YouTube video will offer the same quality of experience as watching the same footage on TV. But look elsewhere in the world and you’ll see this is happening. In many parts of the US and the Far East, or in parts of Northern Europe, television quality broadband has arrived. This is actually quite a useful situation, as broadcasters in the UK (who anyway operate at a national rather than international level) can study the impact of Internet in these regions and prepare themselves for drastic scenarios should they be imminent. To appreciate the urgency of doing this now, see point 3.

5.       Generational change is often cited as a key driver of behaviour change. But it’s not the only one. Another significant force is globalization of work and people. For somebody like me, born in India, with friends all over the world and living in London, broadcast simply does not deliver all the content I need or want. And anyway, most of us, anywhere in the world, now consume American TV Dramas & sitcoms, quirky British comedy, English and Spanish football, Bollywood movies and news from wherever we are. And again, Broadcast typically delivers only a slice of this and not in the most easy to consume way either.  Globalization and the Internet have become chicken and egg. The Internet enables globalization by creating single markets for trading goods and services and globalization drives the use of the Internet as people can now scour the corners of the world to find familiar or new content, products or services to consume, and our friends can use Facebook to help us find it faster. To understand why UK broadcasters may be temporarily protected from globalization, see point 4.

6.       Just because something hasn’t happened yet, there is no surety that it will not happen in future.  The earliest efforts to fly were apparently in 400 BC, in China. In the 15^th century, Da Vinci created his Ornithopter concept. It took another half a millennium before we finally took to air, a little over 100 years ago. Relatively speaking engaging people in ways other than linear Television is a simpler problem and will probably not take hundreds of years. All the data that currently shows how stable TV viewing is, no defence against it changing in future. To understand why it just takes one good and disruptive idea anywhere in the world, see point 5.

The implication for strategy making, as has been the case in many industries over the past few years, is to build an agile strategy with scenarios, iterations and an ability to include customers/ consumers in the innovation cycle. We don’t know all the answers, nobody knows the answers. There may not be an answer yet. But the best we can do is to make sure we recognize it when some answers come along and retain the ability to act on it.

Arsenal’s fortunes for this season will be revealed over the next 2 months. Broadcast television’s might take a little longer.