Broadcasters and telcos analyse the technological and operational challenges of the new television

Representatives from Atresmedia, Mediaset, Telefónica and Vodafone will be discussing the challenges posed by the convergence between television and the Internet at the Ericsson Innovation Roadshow 2015.

The Ericsson Innovation Roadshow 2015, which will be held from October 20 to 22 at the Swedish multinational's R+D center in Madrid, has included in its extensive program a round table in which the convergence between television and the Internet has been analyzed.

The Internet and the so-called OTT services and applications are changing the traditional value chain that links content with its audience. In addition, in this new, much more dynamic media ecosystem, new entrants are appearing with their respective agreements, mergers and acquisitions. In the minds of all of them, there is a common goal: to be closer to the audience and to know them better.

The opportunity is present. TV consumption is growing and the consumer has new applications and digital experiences available in what some are already describing as the new golden age of television.

To discuss this, Ericsson has invited Ignacio Fernández-Vega, director of Movistar+ (Telefónica); José Miguel García-Gascó, general director of Atresmedia Publicidad; Ignacio García-Legaz, director of Vodafone Tv; Orlando Gutiérrez, head of the study of new forms of communication at PubliEspaña (Mediaset Spain); and Chema Casaos, Director of Television Solutions and Services at Ericsson Iberia. Antonio Castillo, director of Panorama Audiovisual, has been in charge of moderating this table.

Fernández-Vega began his speech by assuring that Telefónica's objectives since the launch of Imagenio and now with the Movistar+ platform have been "to improve the quality and offer of content. Everything always revolves around something very basic: the content. We are increasingly agnostic to technology, focusing more on offering content in a customer-friendly way."

García-Gascó pointed out that the new panorama is marked "by the appearance on the right and left of new players who until now were our advertising investors, and now they are trying to take away our share. In this context, above all, the product that the viewer wants must be valued. We have to offer not only good content both on and off the TV. The battle is really about television and cannot be limited only to television. We have to seek the viewer's attention. Therefore, it is essential to generate something relevant... that attracts you. Consumption has evolved to a more technological one with recording capabilities, multi-device... and with new agents, but the battle is in the content."

Ignacio García-Legaz recognises that "the consumer, the value chain, technology, windows, rights are changing. and new ways of bringing content to consumers have been enabled. Part of these changes come from the world of the Internet. Our positioning is to be a traditional television operator, to bring the best proposal to the consumer from an integrated experience. We want that throughout the consumption process how they interact with their service provider, whether through the Internet, mobile or television, their satisfaction is very relevant. It is key that your experience is good and that we can offer you engaging content. Our goal at Vodafone Tv is to find the best content on the market and bring it to the user in a simple way".

Orlando Gutiérrez reflected on how audience analysis is changing. "Consumption must always be a whole regardless of whether it is watched on linear, deferred, online streaming, on demand. We find ourselves with a traditional TV market with great coverage, which will persist, at the same time as a new data market emerges, with consumption outside linear television that allows us to know the user, segment advertising. This environment will act as a complement to the conventional television market. Both coexist and need each other," he said.

"The consumption of linear television has not suffered, in September it was the same as last year (three hours and three-quarters a day), even in young people from 16 to 34 years old... We can talk about enriched TV because consumption grows and provides data that traditional TV did not have," he added.

Gutiérrez gave the example of a program such as Mujeres, hombres and vicevera, very popular among millennials, where after the rebound in audience in linear broadcasting, consumption is resumed on a deferred basis with a very steep curve throughout the day. "There are programs whose non-linear audience reaches a weight of between 10-12% of the total," he said.

Chema Casaos has provided the vision of a technology provider such as Ericsson. "Our vision of television is within a connected society. We try to help unite content with audiences. Traditional broadcast platforms allow live quality, but the Internet complements these consumptions although it poses a great technical complexity. That's why our focus is on helping players work in this new environment. We want that consumption to arrive with sufficient quality for the business to function. We complement these platforms with analytics solutions as they want to be closer to the consumer with a better user experience," he stressed.

On the possibility of developing its own content as platforms such as Netflix are doing, which this week lands in Spain, Fernández-Vega does not conceive of a service without its own production. "Although we have a huge catalog that in premium VoD can reach more than 15,000 titles, we lack the complement of our own production. In-house production is a matter of product differentiation. In a still very modest way, we have carried out first experiences with the co-production of films and some series through Telefónica Studios. Soon we hope to have 100% Telefónica productions for both Spain and Latin America. It is one of the challenges that telcos have."

However, for García-Legaz, in-house production is not essential: "the operator can decide to go or not to go. In our case, we are oriented to Spain and it is a small market to address quality productions on this scale. For this reason, we are committed to contracts with majors, production companies and broadcasters to have productions of the highest quality. For telcos, entering into their own production requires a very high level of expertise. We prefer to reach agreements with production specialists to get the best content to the consumer."

Content and technology

In García-Gascó's opinion, "content and technology is the formula for building loyalty and generating a user experience. I am the standard-bearer of television as we know it today. It is curious to see how between 50-60% of the share of a household that has a payment platform is brought together in broadcasts from traditional broadcasters. We need a lot of people in front of the TV to get great coverage... Not only live or sports programs can generate loyalty... but everything that is socially relevant. That ability to generate commercially exploitable events is only available to broadcatsers.

We have to work on improving the experience and getting to know our user better. I give long life to television because it satisfies many audiences..."

On how big data will help improve consumer habits, Orlando Gutiérrez understands that it allows, on the one hand, greater knowledge of the user, and on the other, the automation of sales processes, especially with the famous programmatic sale and Real Time Bidding systems. However, at the same time, Ad Block alternatives are growing that allow you to block the sending of the advertising message... In Gutiérrez's opinion, "premium products improve conversions, CTR... The challenge may be not only to segment but to create added value appropriate to each of the users. That is why it is necessary to know it in depth to avoid an unnecessary bombardment of impacts."

Chema Casaos stressed that this new environment "requires technological and operational challenges. The Consumer Lab study predicts that by 2020 90% of the population will be connected and 70% will have a smartphone. This will increase content consumption. The generalization of broadband, both in fiber and 4G, will help to have more penetration in different forms of consumption. And, of course, the cloud will play a key role."

Based on the concept that 60% of the population, according to the INE, lives in towns with less than 100,000 inhabitants and, of these, 13% reside in municipalities with less than 5,000 residents, and that direct-to-home fibre exceeds one million lines in large cities... what outlook awaits IPTV from the point of view of universalising access to the service?

The director of Movistar+ believes in the "combination of the satellite with the copper pair to have interactivity and complement the offer. We would like to reach 100% with fibre but that is not possible so we have to look for complementary formulas. Either with the 4G or hybrid network with satellite we can offer a suitable solution to the customer so that they receive a simple offer. We cannot transfer our problems to the customers... Our obligation is that they access a range of services as easily as possible".

In line with the analysis of hybrid television, the director of Atresmedia Publicidad recognizes that "hybrid DTT is an area in which to work so that we can send a message and receive information on how it is consumed. We are working to see if HbbTv is a competitive solution or on the contrary it will serve us to enrich content. We'll have more news about hybrid TV in the coming months."

This round table discussion also focused on a key aspect: attendance. "The Internet has many advantages for many things, but the television service has particularities. Attendance at large events is one of them. Making it easier for broadcasters and operators to forget about technology is what we work for at Ericsson. Delivery must be done with quality, taking into account aspects such as competition to guarantee quality to the user at all times," said Casaos.

Finally, experts have analysed the impact of piracy on these new business models.

García-Legaz acknowledges that "piracy affects us all. We have to continue working both at the operational, regulatory, security level... to reduce the impact. There is experience in other markets where with a high rate of piracy, when there are offers of value propositions at a reasonable price and a good experience, piracy is reduced." For his part, Ignacio Fernández-Vega has been categorical: "a drop in price does not mean a decrease in piracy. However, an interesting offer... Yes."