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Sidebar: Futureshock?

In the first part of the 20th century, it was the radio. As a source of information and entertainment, it was the broadcast medium for the masses. In the '50s, tv took over and has ruled ever since. But as we move further into the 21st century, is its reign coming to a close? Are we soon going to be making a bowl of popcorn and gathering around a monitor to watch our favorite shows in the latest mass medium: broadband?
March 1, 2006

In the first part of the 20th century, it was the radio. As a source of information and entertainment, it was the broadcast medium for the masses. In the ’50s, TV took over and has ruled ever since. But as we move further into the 21st century, is its reign coming to a close? Are we soon going to be making a bowl of popcorn and gathering around a monitor to watch our favorite shows in the latest mass medium: broadband?

Of late, the press has been full of talk about new online channels. RDF Media launched The Baby Channel at babychanneltv.com, MTV rolled out Overdrive, Scripps Networks unveiled ambitious plans for several broadband channels beginning with HGTV Kitchen Design in January, and even the BBC got in on the act.

Statistics released in December from a study by comScore Networks and StreamingMedia revealed that in the US in August, 2005, more than 100 million users ‘consumed’ online media, that this consumption crossed all demos, and nearly two-thirds of all users streamed content from an audio or video portal.

These impressive numbers notwithstanding, it seems unlikely that the general population is on the verge of abandoning TV. And the available content remains, for the moment, a drop in the vast ocean of video entertainment. Still, Scripps Networks in particular is banking on the fact that there is a place in the market for online channels.

Knoxville, Tennessee-based Scripps Networks is comprised of several lifestyle brands – including HGTV, the Food Network, and Fine Living – which reach over 80 million homes in the us, and are available in 110 countries. They began experimenting with broadband programs last year, airing a ‘webisode’ of the HGTV show My First Place in October, producing a 13-part series called Eat This (see Recipe on pg. 52) which premiered on foodnetwork.com last November, and launching HGTVKitchenDesign.com, which has a library of 200 programs on kitchen design as well as a variety of interactive tools.

The Kitchen Design programs – downloadable mini-episodes that run a few minutes each – are from HGTV’s library. In total, Scripps has a library of more than 25,000 hours. ‘Our strategy today and moving forward is to leverage that library of content,’ says Ron Feinbaum, SVP and GM of Scripps Networks Interactive. ‘But we will also dabble with original programming, though we may just shoot an extra five minutes of footage at the end of a 30-minute show.’

While Feinbaum says the original material they produced taught them a lot about how to create content specifically for the site, he also explains that making it is an expensive proposition, and the financial model doesn’t allow for too much of it. HGTV Kitchen Design isn’t a subscriber site, so it depends on advertiser dollars to make it profitable. And make no mistake: profitability is the plan.

‘The websites as a whole are profitable business, and the broadband sites are mapped out to become profitable very quickly,’ Feinbaum says. So far, advertisers run spots that precede the mini-episodes, but there are also plans for the site to host related infomercials.

Kitchen Design has a number of advantages when it comes to generating advertiser dollars. It has a large, very specific audience that is tuning in for a particular kind of information, and more than 80% of its TV audience has a high-speed internet connection. The site also has the benefit of being immediately trackable for HGTV in a way that TV viewing isn’t. Scripps can immediately tell exactly how many hits it gets, which of the cached programs are most popular, and for how long viewers are ‘tuning in.’ It means advertisers know their dollars are being spent in the most fertile markets. And while Scripps isn’t yet making the numbers for the site public, they will say that their website video view numbers went from a monthly average of 600,000 in 2004 to upwards of six million in 2005.

Feinbaum reports Kitchen Design is on target to become profitable sooner than expected. ‘We look at this business as the future. In three to five years it will be a substantial part of our revenue,’ he says. ‘Right now, it’s a small part of our revenue picture and our reach, but over the next 18 months or so we’ll get a better picture of how it will grow in the next five years. It can’t grow at the same rate forever, and as you see the merger of TV and Internet, it will change even more.’

Of course, the for-profit, advertiser-funded, open-access, on-demand format is just one model. Subscription sites, dedicated sites that aren’t an offshoot of an existing station, and sites that simulcast TV programming are alternative models that will have their own marketing and revenue challenges.

The BBC announced plans to phase in a broadband version of BBC2 this year, along with further trials of MyBBC Player, which allows the downloading of BBC programs. ‘Whatever the broadband revolution means for audiences and channels in the future, we intend to be there,’ BBC2 controller Roly Keating has stated. The online BBC2 will mix access to archived programming with simulcast from the pubnet.

Simulcast can create a problem for cable channels – why pay for a cable subscription when you can see the same programming over the net? – so in the current landscape, it may be the least common incarnation of the broadband channel. Still, Feinbaum says it’s not out of the realm of possibility for Scripps stations. ‘We don’t want to hurt our relationship with our msos,’ he confirms, but adds that they may work towards a limited simulcast in the next 12 months. ‘It’s something we’d like to try.’

The first steps into a new realm are tentative, and no one can be sure where the industry is headed or how fast it will get there – as Keating made clear – but Feinbaum is optimistic.

And so is Scripps. In the coming year it has plans to launch at least three more broadband channels on bath design, woodworking and food. It’s still a far cry from Desperate Housewives, munchies and must-see TV, but it’s a start.

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