Lack of funding, complex rights system, technical issues hampering online, wireless video

TORONTO—The delivery of video over broadband and wireless is growing exponentially in Canada but is being hampered by technical issues, a complex rights system and a lack of funding, a panel of broadcast and technology experts said at the nextMedia conference in Toronto Tuesday. The panel, titled “Harnessing the Value of Video and Content on New Platforms,” focused on the benefits and drawbacks of viewing video on a variety of different formats. The spread of new distribution channels means content providers face challenges getting their products on different platforms, said John Barrack, chief operating officer at the Canadian Media Production Association (CMPA). “You have to look at content from two perspectives,” he said. “There’s repurposing or redirecting or even creating sub-versions of what is television content; then you’re looking at content created expressly for these platforms.” Pointing to NBC’s recent decision to pull content from the online streaming service Hulu because of lacklustre ad revenues, Barrack said “the challenge is whether or not you are cannibalizing your own market.” But Steve Billinger, former general manager of digital programming and business development at CBC, disagreed. “None of our experience showed that any platform cannibalized any other platform, unless there were two competing offers on the same platform. We found that the on-air figures were enhanced," he said. Blair Miller, vice-president of content at Telus Corp., said the need to deliver content across a variety of devices and channels raises its own economic challenges. “As you get into multiple platforms of consumption, the cost for reformatting is not immaterial in terms of the cost for distributing,” Miller said. It was a point echoed by David Neale, vice-president for special projects at Research in Motion Ltd. “If you get into a situation where you’re distributing inventory in three or four different formats, it’s actually much more expensive than you’d think,” he said. Neale said this is why there hasn’t been a very aggressive pursuit of the distribution of television content via mobile. He added, however, that the solution is partly a technological one. Pulling out the yet-unreleased Blackberry Playbook from his pocket, he said, “This runs 1080p .” He added that the same content can be used on multiple devices without the need for reformatting it for each one. Scheduled to launch next year, RIM is touting the tablet device for its ability to display video content now unavailable on the Apple iPad. “That changes things because it gives us better tools for doing this,” he said. Despite technological innovation, the panel agreed that gaining content distribution rights remains a challenge. Barrack said that although there are many new platforms for getting content to consumers, producers have too little sway in the system. “The difficulty you’re seeing now is that you have broadcasters who want to take as many rights as they can possibly take without content creators seeing a whole lot of extra money,” he said. Barrack suggested there is a disconnect between the entrepreneurial spirit of new media production and the existing rights structure. “Your skill-set to monetize your content may be greater than the broadcaster, but it will simply be parked on the shelf,” Barrack said. Billinger disagreed. “I’m not a big fan of individual content owners holding onto their rights,” he said. “You have to have some critical mass of rights ownership in order to have leverage to talk to distributors, and I don’t mean just Telus and Rogers, but Google and Apple too.” Neale said an option to increase exposure is to look beyond the Canadian market. That, however, presents its own difficulties. “Blackberry sells internationally, so we would end up finding that ... we would have 40 international partners to launch one piece of content,” he said. “So the complexity is massive.” Neale added, however, that solutions are necessary, and invoked a contrast between traditional and mobile phones subscriptions. “Telephones went from being attached to a premise to an individual,” he said. “You have to recognize now that, whether it’s cable or IPTV , it’s the individual who has the subscription, not the premise.” He added: “Why, when I leave Canada, should I be blocked from accessing my own subscription?” Miller and Neale said that although a vast majority of consumers continue to watch video on their TVs, the younger the demographic, the more likely consumers are to seek out on-demand web video content. “There are clients that are clamouring for that today, and if they don’t get it, they’ll go elsewhere,” Miller said. But Barrack pointed out that it is difficult to finance content for new viewing habits on new platforms. “The vast majority of funding mechanisms are still very much geared toward television, and if you’re making content in Canada, that broadcast trigger is still very important if you’re trying to get money,” he said. “The concentration of funding in Canada is ridiculous,” Billinger added. “It sits in about three funds and is tiny.” Adding to the situation is the increasing influence of platforms offered by companies like Apple and Netflix. Some companies and observers say that the CRTC’s proceeding on vertical integration should look at the role of so-called over-the-top TV providers like Netflix, Google, and Apple. “If you still have the desire to produce quality Canadian content, there will have to be a look at those players and their contribution to the system,” Barrack noted at the conference. Miller added that “content is available piecemeal or a la carte on these platforms, and they don’t give back to the Canadian broadcast system.” But trying to balance the system through regulation may be difficult, Billinger said. “I think Canada is a mess, frankly,” he said. “I think regulation is broken and can only do two things: control overall levels of ownership or maybe put Canadian content quotas in. Any other form of regulation is dead.” news@thewirereport.ca

Lack of funding, complex rights system, technical issues hampering online, wireless video

Broadcast | December 1, 2010

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