Wednesday, 7 November 2007

Why are we so in love with (linear) TV Channels?

Recently Sky announced that it was now was calling a halt to new channel launches on its platform as older digiboxes wouldn’t be able to handle the extra EPG info.

What really surprised me was just quite how many channels were on the ‘stack’ to launch – 2 a week for as far ahead as the eye could see.

My first reaction was who are all these people launching channels – and how do they expect to make any money?

Having been involved in many a channel launch in the UK and in multiple other countries I’m well aware of the cost bases, and the kind of money one can expect to make. Now I’ve touched on this subject several months ago when I questioned whether the ‘Great Channel Shake-out’ was coming. It seems that shake out time is coming.

So my point today is, why do so many new players try and launch channels on Sky with the aim of making money (as opposed to be a marketing cost of a wider business)– and my answer is these are often ill thought out vanity products with no chance of cutting through and little chance of even breaking even. The old maxim was ‘the best marketing for your channel is the EPG’, but that just doesn’t cut it why an EPG, which with radio stations, has about a thousand channels names on it. Many of these players are ‘squatters’ hoping not to lose too much money before they sell their one escalating asset – the EPG slot.

Only the big boys and legacy channels can seriously expect to make any money from ‘subs’ (money the platforms pay the channels to have quality content on their platform, that they then can charge customers for a ‘package’). There is still money to be made from advertising, but that’s getting increasingly hard even if you do make a blip on the frankly Dickensian rating’s system that is BARB. Personalised advertising from the likes of Google will shake up the market no doubt, but I don’t see it bringing masses of new money into the general marketplace. The other money is direct revenues via phone lines, shopping and premium services.

Niche business owners need to work out what they want to achieve with their business, work out who they want to reach, how to market to them, how to build a market presence and then work out if being on the Sky platform is worth it – or if even being a linear channel is worth it. My view is concept, revenue streams and brand first- then work out if you’re a linear channel (either now, later, or ever) and what markets you can and should work in; new ‘TV ’businesses will flourish, but what constitutes a TV business has changed. There’s a multiple of platforms out there – but the real crux of the matter isn’t the platform, it’s how you go about gaining and keeping an audience which you can monetise. The platform of choice should flow from that question first. That's why wiser players like Simply Media, and others like London TV have moved off the platform and onto the web -it's right for their business.

Sky obviously think (and I agree) that there is too much ‘junk’ cluttering up the finite EPG resources as they up the amount of original content needed to maintain an EPG slot, dissuading those who block up the EPG with channels existing on a few hours of looped lo-res content shot in a suburban living room.

I do believe a TV platform like Sky and linear channels have a future in the medium to long term. I’m intrigued to see how FreeSat (Freeview equivalent on satellite) will affect the market. However, what I’m most intrigued about are new forms of EPG which are more than channel guides, but include programme search facilities, especially ones based on tagged content.

What I’d really like to see are ‘open source’ digiboxes where I could chose to download new, perhaps even personalised forms of EPGs, together with widgets and robots that turn my TV into a more connected experience - and that allow (linear) channels to exist in harmony with limited content niche brands.

If the platforms don’t do it, someone else will as TV’s move towards being another monitor on a household network as people decide they want to combine their Sky with their Joost , Babelgum and/or (video) iTunes

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