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

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

He 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 programming 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 unites content with its audience. Furthermore, 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 objective: to be closer to the audience and know them better.

The opportunity is present. TV consumption is growing and consumers have new applications and digital experiences available in what some are already calling 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 Advertising; Ignacio García-Legaz, director of Vodafone TV; Orlando Gutiérrez, leading the study of new forms of communication at PubliEspaña (Mediaset España); 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 intervention by ensuring that Telefónica's objectives since the launch of Imagenio and now with the Movistar+ platform have been to "improve the quality and supply of content. Everything always pivots on something very basic: the content. We are increasingly agnostic to technology, putting more focus on offering content in a friendly way to customers."

García-Gascó has pointed out that the new panorama is marked "by the appearance on the right and on the 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 we have to value the product that the viewer wants. We have to offer not only good content both on the television and outside of it. The battle really is for television and cannot be limited only to the television. We have to seek the viewer's attention. Therefore, it is essential to generate something relevant... that attracts them. The consumption to a more technological one with recording capabilities, multi-device... and with new agents, but the battle is in the content."

Ignacio García-Legaz recognizes that "the consumer, the value chain, the technology, the windows, the 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, bringing 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 their experience is good. and we can offer you attractive content. Our objective at Vodafone TV is to find the best content on the market and bring it to the user in a simple way.”

Orlando Gutiérrez has reflected on how audience analysis is changing. "Consumption must always be a whole regardless of whether it is seen on linear, delayed, 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 of 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 pointed out.

"Linear television consumption has not suffered, in September it was the same as last year (three and three quarter hours a day), even among young people aged 16 to 34... We can talk about enriched TV because consumption is growing and provides data that traditional TV did not have," he added.

Gutiérrez has given the example of a program like Mujeres, hombres y vicevera, very popular among millennials, where after the rebound in audience in the linear broadcast, consumption resumes on a delayed basis with a very steep curve throughout the entire day. “There are programs whose non-linear audience reaches a weight of between 10-12% of the total,” he assured.

Chema Casaos has provided the vision of a technology provider like 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 this consumption although it poses great technical complexity. That is why our approach is to help players work in this new environment. We want this consumption to arrive with sufficient quality for the business to work. We complement these platforms with analytics solutions since they want to be closer to the consumer with a better user experience," he stressed.

Regarding 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 15,00 titles, we lack the complement of our own production. Our own production is a matter of product differentiation. In a still very modest way we have carried out our 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, own production is not essential: "the operator can decide to go or not go. In our case, we are oriented to Spain and it is a small market to tackle quality productions on this scale. Therefore, we opt for contracts with majors, production companies and broadcasters to have productions of the highest quality. For telcos to enter into own production requires very high expertise. We prefer to reach agreements with production specialists to bring the best content to the consumer."

Content and technology

In García-Gascó's opinion, "content and technology is the formula to build loyalty and generate a user experience. I am a champion of television as we know it today. It is curious to see how between 50-60% of the share of a home that has a payment platform is brought together in broadcasts from traditional broadcasters. We need to have many people in front of the television to achieve great coverage... not only live or sports programs can generate loyalty... but everything that is socially relevant. That capacity of only broadcatsers have the ability to generate commercially exploitable events.

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

Regarding 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 sales and Real Time Biding systems. However, at the same time, Ad Block alternatives are growing that allow blocking 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 has highlighted that this new environment "requires technological and operational challenges. The Consumer Lab study predicts that in 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 achieve greater penetration in different forms of consumption. And, of course, the cloud will play a key role."

Starting from the concept that 60% of the population, according to the INE, lives in towns of less than 100,000 inhabitants and, of them, 13% reside in municipalities with less than 5,000 neighbors, and that direct fiber to the home exceeds one million lines in large cities... what outlook awaits IPTV from the point of view of universal 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 fiber but that is not possible so we have to look for complementary formulas. Either with the 4G network or hybrid with satellite we can offer an adequate solution to the client so that they receive a simple offer. We cannot transfer our problems to the clients... Our obligation is for them to access a service offer in the simplest way 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 verify if HbbTv is a competitive solution or on the contrary it will serve us to enrich content. We will have more news about hybrid television in the coming months."

This debate table has also focused on a key aspect: attendance. "The Internet presents 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 attendance to guarantee quality to the user at all times," commented Casaos.

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

García-Legaz recognizes that "piracy affects us all. We have to continue working at an operational, regulatory, security level... to reduce the impact. There is experience in other markets in which 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 blunt: "a drop in price does not mean a decrease in piracy. However, an interesting offer... yes."