OTTAWA – There can be little doubt that digital platforms and their subscription-based business models are having an impact on traditional television, but a group of Canadian media leaders argued that the future of TV is going to be a mix of digital and conventional, supported by a pure advertising-based model or one that combines advertising and subscriptions.
“The future is not ad-free. From our point of view that’s a key piece of the content monetization puzzle,” said Barbara Williams, president of Shaw Media, and executive VP of broadcasting. “There will be subscription models, there will be some advertising models, there will be some hybrids, but at the end of the day, the subscription model alone will not sustain the industry. When you do the math on that, people cannot afford to pay for all the content if the subscription model were to be the pure model.”
(Pictured in the photo from left are Kaan Yigit, Solutions Research Group; Tracey Pearce, Bell Media, Heather Conway, CBC; Steven Denure, DHX Media; and Barbara Williams, Shaw Media. Photo from John Major Photography courtesy of CMPA.)
Despite all the talk about the potential of digital platforms, the reality is that it isn’t fixing the TV revenue problem. According to Heather Conway, executive VP of English services at CBC/Radio-Canada, content creators, producers and distributors have to get paid and digital has not yet been able to make that happen well.
“If you want to make great content, and great content is expensive, we need to find a way to ensure that we can get paid for that content. You need to find a way to make sure you get paid for that content because there is a point at which it isn’t going to pay,” she said, clearly referencing the producers in the audience. The digital platform, Conway added, has actually made it worse for the content side of the business by creating “a race to the bottom in paying for content.”
Television is just too important of a platform for advertisers to ignore, and the viewing numbers demonstrate that it still has considerable attraction even among millennials who are supposedly turning away from the conventional platform. Even though there is data suggesting millennials are shifting away from TV, that’s simply not the case, noted Tracey Pearce, senior VP of specialty and pay services at Bell Media.
“Millennials continue to watch three times more television than Facebook, Instagram and Twitter combined, seven more times more television than YouTube and 17 times more television than Netflix,” she said. “Now don’t get me wrong, I’m not sitting here today saying the best plan for tomorrow is to hope that today lasts longer, [but] again television continues to be the platform to deliver massive, engaged audiences.”
“Millennials continue to watch three times more television than Facebook, Instagram and Twitter combined, seven more times more television than YouTube and 17 times more television than Netflix.” – Tracey Pearce, Bell Media
Selling Canadian content internationally has often been cited as one solution to improving the economics of homegrown programming. Steven Denure, president and COO of DHX Media, noted financing a TV show entirely from Canada is probably not the model of the future and that’s why his company has been focused on getting Canadian content in international markets on many platforms.
“We’re really looking at what’s going on worldwide, where those opportunities are to create content in Canada and sell it everywhere,” he said, adding that there has been a proliferation of content buyers whereas in the past the number was limited. Denure cited the example of Degrassi which after being canceled in the U.S. was picked up very quickly by Netflix (as well as DHX’s own Family channel).
Even though the panelists don’t see an end to conventional TV anytime soon, they agreed measurement is a serious problem and the way audiences are measured in the digital space – much more granular and more informative – is enticing for advertisers and one of the reasons why more ad dollars are going there. Getting the advertising expenditures to come back to the TV platform will require some new technology to more effectively measure audiences.
“We need to be able to offer that same opportunity to advertisers to be able to target that linear audience in as close to the same way as they can in digital. And maybe we can’t ever get entirely where they are but we can sure get a whole heck of lot closer than we are today,” said Williams.
