Friday, March 26, 2010

postheadericon Future of Internet TV bright, bleak for traditional TV says Ziln Internet TV Network

Internet users surpass TV Viewers in Canada

Canadian research firm Ipsos reported this week that “for the first time ever in their tracking research, the weekly Internet usage of Canadians has moved ahead of the number of hours spent watching television”. The report says that Internet usage by Canadians is now 18 hours a week, up from 14.9 hours last year and that at the same time, the number of hours watching television has increased from 15.8 to 16.9 hours a week in the last year. 

This development will no doubt be of interest to businesses  that operate online, regardless of where in the world there are. It’s not a defining moment yet, but many will be hoping that this is beginning of a global trend.

In New Zealand, Internet TV Network Ziln, which launched in September 2009 will no doubt be monitoring Internet usage trends in New Zealand as this directly relates to the growth of their business. The network offers a number of Television channels including Aljazeera, Archives New Zealand, Bloomberg, Russia Today, Stratos and many more.

Internet TV to surpass traditional TV in 3 to 5 years
In a statement reminiscent of  Bill Gates' 2007 prediction of a radical change of TV within 5 years , the Director of  Broadcasting at Ziln, Mr Paul Brennan told us that Internet TV will surpass traditional Television in 3 to 5 years. This will mark the “reinvention of TV”, he says.

“What will affect  traditional TV a lot more will be the lack of advertising. In the last year alone, there has been $272 million less advertising in New Zealand

Asked how Internet TV could tackle an established ‘mass communication’ medium like traditional TV which has a wider reach, Paul Brennan said that niche Internet television like Ziln can target audiences, something that traditional TV formats struggle with.

“Niche environments like ours offer a number of niche channels which cumulatively offer a wider reach. Internet TV makes it easier for us to dice and slice markets and target  specific audiences. The “nicheability” of online channels and media like Ziln make it attractive for advertisers to target their audiences All this at a lower cost for the advertiser. And this is already happening”

Ziln Internet TV follows a global trend of new Internet TV formats being set up by new upstarts and some by traditional Television media. Most   traditional Televisions  have set up their own online Video on Demand  (VOD) service and offer replays of previously broadcast programs.

Internet TV vs traditional TV –widely contested issue
However, the notion that Internet TV is a threat to  traditional TV is widely contested. A body of research in the public domain which analyses Internet TV and traditional TV gives interesting insights. While there are many good things about Internet TV, there are still  a few teething problems most of which relate to poor user experience of watching TV on the Internet. This is mainly due to poor Broadband speeds and inferior quality hardware.  We didn’t discuss this with Paul Brennan, admittedly because we didn’t ask him; our main focus was why traditional TV dismiss Internet TV:

“They will dismiss it because they’re  shit scared. Their business models are under threat due to the incredible cost of transmission or setting up channels and the cost of maintaining channels.

Elaborating, Paul Brennan  adds :

“Legacy transmission costs for Traditional TV  are unsustainable. At Ziln we sell an Internet TV channel  for between $30  and $100 thousand. This is cheaper by a factor of  40 times or more compared to traditional TV. The quantum reduction in broadcasting costs will reduce  costs of advertising. And this is already happening”

On the recent development in Canada where Internet users have surpassed TV viewers, Paul Brennan believes this is part of a growing trend of Internet use which will also see Internet TV surpass Legacy TV in a few years. Improved availability and speed of  Broadband will drive this change, he says. He explained the several Broadband initiatives currently underway in New Zealand, including the Rural Broadband Initiative and the New Zealand Government Broadband Initiative  and the Pacific Fibre project and says this will change the future of  Broadband and ultimately online experiences like Internet Television.

What’s going well with Internet TV
Since Ziln’s launch last September, it’s been quite a smooth process and everything has gone well, according to Paul Brennan, who put that down to the well developed  knowledge and skills that “we had from the beginning”.

“The growth is great for an industry or format that had no precedent here in New Zealand….Ziln is  still on track to be the dominant TV provider in terms of overall content supply”

Paul Brennan also believes that the growth of Ziln will create a  brighter future for the Post Production Industry in New Zealand due to increased Internet TV channels which all require content.

“An overall effect on local production industry is that this creates more opportunity. More productions will be made. The architecture of Internet TV gives it huge amounts of space. Video on Demand has 12 times the amount of content than 12 times more content than realtime broadcast TV. This represents a lot of content. The upshot of this is that there’ll be a lot of demand for multi skilled content creators, creating a lot of work”


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this is Vincent Murwira's blog, part of his research site Skype: theopennewsroom Twitter: @theopennewsroom
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" In the real world, the right thing never happens in the right place and the
right time. It is the job of journalists and historians to make it appear that
it has." Mark Twain