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I've Seen the Future And It's Digital

Clive Bull pays a visit to the Cannes TV Festival and discusses digital monetisation.

By Clive Bull

7 Oct 2011, 17:59

I’ve just spent a week in Cannes. Home of course of the famous Film Festival, but home as well to MIPCOM, the international TV market. I gazed in awe at the biggest yachts I’ve ever seen and walked on past some of the most expensive restaurants. The champagne really was flowing and there were few outward signs of economic strife. As I arrived I was greeted by a giant poster of the Downton Abbey cast. We tend to think of a show like that as homegrown and just for us, but no, there was NBC attempting to get even more international broadcasters to pick it up - it’s already seen in over a hundred countries.

While the buying and selling goes on in the background the TV execs have been putting on a confident face as they consider the state of their industry - an industry that is changing so rapidly you can almost see them looking over their shoulders trying to see what’s coming. The music business had to be dragged into a digital era and was saved, thanks mainly to iTunes. The TV world doesn’t want to make the same mistake. Everywhere I went this week people were talking up the digital future. Box sets were in decline. Apps were on the up. I had the sense that they were talking the talk, but not too sure they really wanted to let go of the traditional box in the corner we know and love. Are some households really watching more YouTube than TV now? Will we honestly be viewing films on our smartphones on a regular basis? Would we prefer to store our films in a cloud rather than on a shelf?

You can tell from the buzzwords tossed into the keynotes and sales pitches what’s really on their mind - or at least what they feel people want to hear. “Digital locker” kept popping up - have you got yours yet? This is the idea that you can throw away that tower of DVDs you’ve been collecting over the years, and replace it with a notional collection of TV shows and films that are stored in a digital cloud for you to access whenever you want. I won’t name names, but one apparent advocate of the digital locker admitted to me that they’d much rather go to the cinema any day, and had never downloaded a film in their life. One of the problems with the digital download is that there’s more than one system. It could be Betamax all over again. Your digital content might play on one gadget but not on another. And how do you get to see it on your nice big TV rather than on a laptop?

“Monetisation” was another favourite. As with all things online, the dilemma is how to do it and make money out of it. The newspaper industry is the best example of this. They know that people are going online for their news and slowly shunning the traditional paper, but there are few working examples of news websites or apps making a profit. Mike Lang, the CEO of Miramax, presides over a fantastic library of great movies. He notes that no less than 50 million Facebook users have mentioned a Miramax film in their profiles. People like to identify themselves through the movies they love - even more so than music. The task Lang faces is how to turn that online enthusiasm into a profit for his business. The company has recently signed deals with Netflix and Hulu to make several hundred of the studios movies available online. Viacom’s Bob Bakish came up with some astounding figures. He told us his various shows had a total of 250 million Facebook fans and 8 million Twitter followers.  All very impressive, but again monetisation is the challenge.

Naturally the great enemy for the TV companies is piracy. Why buy a product when you can download illegally for free? Well, actually, people will pay - if they get something more for their money. Fiddling around on your PC with a file sharing system like BitTorrent is more cumbersome than ordering something with one click direct to your TV. Netflix’s Ted Sarandos told us for example that his company overtook BitTorrent in Canada when they launched there and are now the No.1 supplier of online TV and films. But businesses need to get their act together is where piracy offers a better deal. When questioned, viewers have said that they would pay for a show but find it is often not available. A programme shown in America can be pirated straight away, but cannot be bought and paid for in other countries. “I couldn’t even buy it if I wanted to” is a common complaint.

As the market was drawing to a close, the news of the death of Steve Jobs, served to underline how significant Apple has been in this digital revolution. Apple is the company that has provided the model. They have proved it can work. The digital locker, for example, is a reality for users of iTunes. I noticed several speakers bemoaning the lack of genuine competitors for Apple and talking of the need for more big players to enter the market. Mike Lang of Miramax went as far as to say that Apple’s domination of digital media was a bigger threat to the movie companies than piracy. The audience appeared to be nodding in agreement as they typed their notes into their iPads and iPhones.

So behind the cool shades, compulsory in Cannes, the eyes of the big bosses are twitching a little. They’re trying really hard to work out what the next generation will be watching and, perhaps more importantly, how they will be watching it.