OTTAWA – The massive shift in advertising dollars from television to digital, the growing impact of over the top (OTT) and spectrum rights were among the big issues highlighted by the opening panel of the Canadian chapter of the International Institute of Communications’ (IIC Canada) annual conference which kicked off Tuesday morning in Ottawa.
The impact of YouTube and the migration of the advertising spend from TV to digital were two big developments affecting the sector, according to Asha Daniere, executive VP of business and legal affairs at Blue Ant Media. The growing significance of YouTube, she said, forced the company to invest in a multi-channel network. This has helped access talent, expanded its content marketing and enabled the company to establish a U.S. footprint.
To provide some context, Daniere noted that YouTube had revenue of about $3.5 billion last year, or $1.5 billion after payouts to partners. There are even Canadian YouTube stars generating huge international viewership per video the same as the number of Canadians tuning into the Amazing Race Canada (although for nowhere near the amount of time as ARC).
“So what’s that meant for Blue Ant? It’s meant that we had to try to figure out how we can access that world,” said Daniere.
The Blue Ant executive also spoke about how the shift in ad dollars is having an impact on the traditional TV market, but Cathy Hetzel, corporate president at Rentrak Corp., disputed suggestions that there is a big shift from TV to digital. She acknowledged that some of the advertising spend moved away from television in the first part of this year, but said it’s too early to suggest this will be a lasting trend.
“The third quarter is already seeing a rise and we expect the fourth quarter to be a very big television advertising area.” – Cathy Hetzel, Rentrak
“We still expect growth in overall television advertising dollars this year. And we believe that … the agencies and the advertisers have held back their money to really participate in what’s called the scatter market,” she said. “The third quarter is already seeing a rise and we expect the fourth quarter to be a very big television advertising area.”
On the viewing side, Greg O’Brien, editor and publisher of Cartt.ca, noted that the rise in binge viewing is, in his view, a game changer for the communications sector. He pointed to the results of a Solutions Research Group survey which showed a considerable number of online Canadians are binging on two or more episodes in a single sitting. According to the numbers, 45% of survey respondents are watching two or more episodes in a row. The number is even higher among a younger demographic with 64% of the 20 to 29 age category watching two or more at a time. A quarter of this cohort sitting down to watch five or more episodes.
The number one reason cited by survey respondents is that there aren’t any cliff hangers and commercials, he said.
Hetzel took issue with the binge viewing survey results, noting that according to the data mined by Rentrak, the number of people binge viewing on a regular basis is still pretty small. She acknowledged that there are considerable numbers of TV viewers watching shows on demand and through PVRs with 51% having watched two episodes in the same day and 21% having binge viewed three episodes.
“But when you really break that down only 4% of those who watched [two or more episodes] did so on a weekly basis,” she said, adding that “only 1% of those who binge watch three episodes do so on a weekly basis.”
“So you have to question whether or not this is an actual trend,” she argued.
The panel also pointed to some significant changes in the wireless arena as game changers.
Bryan Tramont, managing partner at U.S. law firm Wilkinson Barker Knauer LLP (and chief of staff for former FCC chairman Michael Powell), said software defined radio (SDR) and its ability to enable the temporary use of licensed spectrum could have a big impact in the future.
SDR “can allow you to hop into that spectrum and use it while they’re not using and when they need it again, you hop back off,“ he said. “It could be paradigm shifting and certainly [affects] the nature of spectrum rights.”
O’Brien highlighted the change in the way wireless carriers are selling their services. Voice and text could become just free add-ons to data buckets, he argued. Another related element is the falling price of smartphones. Soon, O’Brien suggested , $25 smartphones could hit the global market and that could change wireless sector dynamics considerably.
The question of the rising cost of sports rights was also raised during the sessions. All of the panelists agreed that it’s still not clear how this will shake out in the future. O’Brien noted that at one time sports was considered the anchor of the cable TV bundle, but now they may in fact be the element that blows it apart.
Daniere wondered where the tipping point is before buying sports rights become unviable. If broadcasters can no longer afford to bid on sports rights, will the price come down, she asked. Or will another disruptor come to the market? And at what point does it make sense for the NHL to go direct to consumers? she asked.
IIC Canada’s Vision 20/20: What’s Next for Canada’s Communications Industries continues tomorrow.
