This Pandemic is an Existential Crisis for Cinema

With not enough cinemas globally open to show the tentpole content, studios are electing to release on their own streaming services. This is precipitating an existential crisis for cinema. [blog.mindrocketnow.com]

During Lockdown i, you might remember that Trolls World Tour made a splash by bypassing theatres and being released on streaming services only. I remember because spending on ads on the side of buses was pretty much frozen, so pictures of those little blighters lingered for a long time. AMC took particular umbrage (possibly not at the bus posters, but at being disintermediated) and black-listed NBCUniversal. 

But Trolls World tour made $95M in 2 weeks, which compares favourably with its $90M production costs. It compares very favourably if you think that NBCU didn’t have to share any of its revenue with the theatre groups (hence AMC’s outrage). Predictably, this strategy has been repeated with other high profile movies.

Disney elected to stream Mulan on Disney+ for £20 premier access - not PPV but a one-off fee to access a premier subscription tier comprising of a single movie. It became Disney’s lowest grossing of its live action remakes to date, and won't recoup its $200M budget (yes, there were mitigating factors in the freezing of China-US relations which made this movie a cultural casualty). 

Christopher Nolan’s Tenet wasn’t released online, only in theatres, made £347M in the box office (against $205M cost). However, that box office will be shared with the theatres so WarnerMedia didn’t recoup its investment; it was also Christopher Nolan’s worst-performing movie to date. 

Mulan will be judged a success and Tenet a failure. The reason is that Mulan drove increased takeup of Disney+ (Disney won’t confirm how many people took up a Disney+ subscription and paid the premium just to watch Mulan). So the cost of the movie can be somewhat offset by a reduced cost of acquisition of the new Disney+ subscribers.

So it’s not surprising to me Wonder Woman 1984 will be released in cinemas and online on HBO Max today (Christmas Day 2020). Not only will WarnerMedia not have to share revenue, but it’ll drive more people to its OTT service (which is fourth in a field of three so really needs to catch up). What is surprising is that WarnerMedia is not intending to charge a premium for it. 

It’s conventional wisdom that even in a recession TV survives household budget cuts. TV subscription is a recurring expense, and going to the cinema is an infrequent treat. Pricing PPV as the latter rather than the former is problematic. Charging a content premium when your market is suffering from increasing unemployment is a hard sell. When the Premier League tried to charge £15 per match, fans revolted. The best riposte to this price gouging was from Newcastle United fans. Instead of paying the broadcaster, they donated the same money to a local food bank, raising over £20k. It’s not necessarily the amount, but the context.

At £20 per view, each movie will have to cost the same as Trolls to break even. The pricing looks much more compelling at £15 with a complementary digital download later, or £20 one-off upgrade to a premium subscription, as long as there’s more than just the one blockbuster. If there isn’t an upgrade fee, if the new title is adding to the value proposition for the service, then the decision is a no-brainer. 

If you’re Disney or WarnerMedia or Amazon or Netflix, the pandemic has served to increase your addressable market for your OTT service. However, it seems clear that this pandemic has hastened the demise of the multiplex. We’re not going back to a tentpole movie filling up every screen in a multiplex on opening night. Indeed, we haven’t had that in a decade. 

Cinema is no longer the premium venue to see premium content - that is now your own home. Instead, I can see chains like Everyman and The Prince Charles Cinema flourishing, spending less on screening rights, and spending more on creating an experience for cinema lovers. 

Merry Christmas everyone, and see you in 2021!

Media Tech Bites: Serving the Niche

Here’s my short take on a piece of media technology. This week I look at how the big broadcasters are ignoring niche at their peril. Do you agree? [blog.mindrocketnow.com]

It’s a curious phenomenon that whilst there’s more content being produced than ever, there’s less choice being exercised. In making a choice, we are a product of our unconscious biases. Default bias will guide us to choose the first in a long list of programmes, the pseudocertainty effect will guide us to choose the most familiar as the most risk-averse, projection bias will overestimate how much we’ll want to actually want to finish the series that we started, and the sunk cost fallacy will make us watch every episode until we get to the end. Because we just don’t want to incur the cognitive pain of choosing something new, we watch another episode of Friends.

The reason that we don’t choose something new, something eye-opening, something horizon-expanding is because content service providers are really bad at providing good options for us to choose from. Netflix is the market leader, so should be really good at this, and yet we ended up watching the latest Adam Sandler halloween movie for our family movie night. I assumed it was going to be bad, IMDB rated it to be bad, and yet we ended up watching it because it was a choice that we all settled on - perhaps it incurred the least amount of cumulative cognitive pain.

Technology should be enabling more choice. The incremental cost of distributing another VOD asset is negligible. The incremental cost of another broadcast channel is low enough that a “pop-up” broadcast over satellite is eminently economically viable. And costs will inevitably be driven down as broadcasters take advantage of economies of scale of the cloud. But the opposite is happening. 

Wouldn’t it be great if technology could take on some of the cognitive load. Rather than relying on sifting through irrelevant recommendations presented to me, wouldn’t it be better if there were some sort of artificial precognition that could be applied to content catalogues to find something to watch. The distinction between these two approaches is important.

We don’t need more big companies to suck more data about us so that they can better market their content to us, and sell our digital soul to everyone else. We need to take control of our choice, and we need tools to help us do so. I’m looking forward to the day when I can apply my emulated thought process, on technology that only I can access, to pre-sift the increasing tide of dross for me, so that I can spend my time watching the gems.

Media Tech Bites: Is DVB now Irrelevant?

Here’s my short take on a piece of media technology. This week I look at a mature overripe technology, DVB. Do you agree? [blog.mindrocketnow.com]

20 years ago, when I first started out in this business, I learnt the DVB standards. This gave me a competitive advantage as a consultant; being confident with the detail down to the specification of the tables meant that I could confidently integrate broadcast systems. My last role was deeply technical as well, but the knowledge that was prized was how to use API wrappers in C++ code. Not once did I need to cast my memory back to DVB standards. For me personally, my hard-won DVB experience is now irrelevant.

DVB (and its family of standards) are still critical to broadcasters. It has fulfilled its promise of lower cost through interoperability. It’s been an objective success, and reaches millions of people daily. It’s not DVB that’s the problem, but broadcast. 

It’s becoming increasingly obvious that the future of broadcast is to be delivered over the internet. Yes, satellite has much larger footprint, yes terrestrial has fine-grained reach, but when I read the tech press, most of the arguments come from a place of wanting to continue to sweat assets that we spent so much time and effort building. None of that matters to people who consume these services. As I’ve often commented, people just want to watch TV without needing to worry about how they’re watching it.

So as broadcast becomes just another service over the internet, the skills needed to push this forward are the same as software delivery in any other industry. Just like all those pylons holding up TV transmitters around the country, my memorisation of DVB standards is now just another sunk cost.

Media Tech Bites: Blockchain’s Potential

Here’s my short take on a piece of media technology. This week I look at an immature maturing technology, blockchain. Do you agree? [blog.mindrocketnow.com]

As I’m sure you know, a blockchain is a way of recording information in a way that is (almost) impossible to cheat. It’s trivial to check, no one body (like a bank) guarantees any chain, so it’s eminently suited to industries that suffer from multiple intermediaries and opaque authorities, like finance. Or broadcast?

Blockchain is unparalleled in establishing trust across domains of ownership. Broadcast is all about passing assets across domains of ownership. If each media asset was accompanied by an immutable history, we’d know who contributed, how much, and therefore where royalties should be shared. We could see a technical history of all the corrections and transcoding over the workflow, and maybe change TV settings to compensate.

But it strikes me that blockchain isn’t the answer, because broadcast has already optimised the secured distribution of content. I don’t mean that content security is perfect because it’s far from. It’s optimised because the leakage of revenue isn’t significant enough to merit ripping out and replacing all the technology, legal and consumer investments that we’ve made.

So for broadcast, and for the time being, blockchain is still a solution looking for a problem.

The Problem with Data Driven Decisions

This week I look at the pitfalls of being data-driven. It seems simple, and logical, so why do we end up falling back on our gut feel? [blog.mindrocketnow.com]

Should I make my next investment decision based on objective data or taking a punt based on how I feel? Seems a straightforward answer, doesn’t it - who would want to be responsible for a significant financial decision that was made on a whim? (Kinda depends if it worked out…) But making a good data-driven decision is a lot harder than just intending to do so.

What are you measuring? This simple question unravels a chain of questions that turn out to each require careful thought. Let’s pretend we’re trying to figure out whether to spend money on a cool new app feature:

• What are the business (or strategic) outcomes you’re trying to influence?

• How does the app contribute to that outcome?

• How does the feature improve the ability of the app to contribute to that outcome?

• What metric can we put on that improvement?

• How can we measure those metrics? 

• Are those measurements allowed in our privacy guidelines?

• What would be the impact on those quantities if we didn’t build the app?

• Is there anything else we could do, at less cost, that would improve that metric, even in part?

• Is there anything else we could do, at same cost, that would improve an alternative, more important metric?

Most of the time, we don’t have a good answer to all of those questions, oftentimes because to do so thoroughly will take a lot of effort, more than the effort to ship the feature itself. So we end up making a best guess - aka taking a punt.

I’m really attracted to the concept of lean development, which codified learning by doing. The idea is to ship features as frequently as possible, measure impact upon metrics, and improve or discard depending on whether it’s a positive or negative impact. By keeping this feedback loop really short, we risk less wasted development effort. As a side-effect, we maintain focus on the metrics that matter to us, and maintain a cadence of shipping features.

As before, it depends upon the metric. If we optimise to a vanity metric (one that doesn’t align with a business objective) or a proxy metric (one that doesn’t align well with a business objective), then we might miss the business objective. We might optimise for a very fast playback start but miss the fact that consumers are much more worried about not finding programmes that they like.

After all that, you might be thinking that I advise avoiding making gut feel decisions. You’d be right - gut feel is basically your thought heuristics kicking in, reinforcing all your unconscious biases. Taking a moment to consider rather than react is a good rule. But that doesn’t mean you shouldn’t use your feelings. I’m also a strong believer in eating your own cooking. 

We should be building apps for people, and we need to understand people in detail if the app is going to make a difference to them. The person you get to see the most is yourself, so you should be able to analyse your own reactions to your app in the best detail.

Be data driven but guided by context. The best context is you.

Media Tech Bites: Importance of Metadata

Here’s my short take on a piece of media technology. This week I look at why metadata is the most important part of media tech. Do you agree? [blog.mindrocketnow.com]

Broadcast is in the middle of a technology revolution. 20 years ago, I was cabling routers to encoders, making sure that the labels were correct. Now I’m working with engineers to ensure the virtual routing through our AWS services is working as it should, and feeding iOS and Android apps properly.

Not everything is changing. Then and now, we use metadata to describe the services being delivered. In the world of DVB then, the metadata was in the main the System Information tables that told the Set Top Boxes where to find the broadcast services in the frequency spectrum. Now, as then, the metadata drives content search and discovery. However now, unlike then, metadata drives a far richer discovery experience; we can see trailers where we used to see thumbnails, we can link to IMDB articles where before we had a character-limited synopsis, and we can select the next programme based on what we’ve just watched or even what mood we’re in.

More fundamentally, metadata is starting to drive how the services are created. The cabling and labels are abstracted from the creation of services by software drivers. Middleware orchestrates those drivers into services. Those services can be orchestrated together in very visual “low code” ways. They can be defined in terms of metadata alone. This means UI and UX designers can put together interesting app experiences without needing to know Kotlin or Swift. It will mean that experiences can be put together programmatically, such as a UI that is reactive to the content that you’re watching, or the context that you’re watching it in.

If this all seems familiar, it’s because the enterprise IT sector went through this change last decade. It’s experience is that metadata drives the creation of the service, the consumption of the service, and the quality assurance of the service. To stay relevant, it’ll be necessary for all of us to be metadata-literate.

History of Media Supply Chain Workflows

Over the course of my career, I’ve changed the way I look at media technologies, as the industry itself has changed the way it implements technology. In this blog I look at the major changes of the last couple of decades. [blog.mindrocketnow.com]

When I started out in this industry, as analogue was being replaced by digital, each broadcaster had its highly secure data centre consisting of racks of highly specialised opaque boxes, all connected to each other with thick braids of cables. The role of the broadcast architect was to understand all the configuration possibilities of each of those boxes, and how to connect them into chains that represented the workflow you were trying to implement. 

The first revolution was to replace all of the highly specialised opaque boxes with general purpose computers. These were more occluded boxes, because whilst the hardware was general purpose, the software became even more configurable and required new programming skills to chain into workflows. Fundamentally, those workflows were the same, and built into the same racks, just cheaper to buy.

The second revolution is well underway, and was born of a desire to stop capital spend on new boxes every year, and to prefer annual operational spend on someone else to do that for us. So those broadcaster data centres are now all shuttered and workflows are now in the cloud. Creating the chain now only requires mastery of one or two programming languages, but also of the myriad of APIs for all the software components. And because those APIs can be improved at a much faster rate, the possibilities to do interesting things in those workflows has increased at a much faster rate also.

At its simplest level, the workflows have remained the same throughout all of these three revolutions. For the purposes of this post, I’m going to focus on VOD for TV, and the playback workflows within that. (I’m not going to get into associated and important workflows like marketing, revenue assurance, operations.) Let’s get into it!

Simplified broadcaster workflow

The role of a broadcaster is to market their catalogue as widely as possible. To do this they focus on making programmes applicable to the market:

• Choosing titles that will be popular, then putting the corresponding master assets into the workflow

• Making sure they conform to technical quality standards

• Making sure that they conform to legislative taste and decency standards

• Enriching with metadata (enrichment assets) that makes the asset more attractive, such as creatively written synopses, artfully composed imagery, dubbing in local language by local talent, creatively written subtitles

• They also look at enrichment in a broader sense, such as marketing titles locally in cooperation with service providers

• Insert ads

• Finally, the asset is exported in a form that can be imported by service providers, at negotiated cost, at an agreed schedule

Simplified service provider workflow

Service providers are sometimes the same broadcaster that provided the VOD asset, other times they are MVPD (multichannel video programming distributors), or perhaps content aggregators. All have a similar role to broadcasters, to market their (aggregated) catalogue (to consumers) as widely as possible, with the addition of implementing an attractive business model:

• Making partnerships with broadcasters that are popular

• Making sure the VOD assets that are provided conform to technical quality standards, and are timely

• Further conform the VOD assets to conform to platform technical standards, e.g. different bit rates, packaging

• Insert/ replace ads

• Enrich the metadata to reflect the business model, including: DRM method, tagging for revenue accounting

• As each consuming device might have a different preference for how it consumes the asset, the asset is exported once more

• Ingest the associated metadata (enrichment assets) into a catalogue and making it discoverable

• Promote the title both technically e.g. on the home screen of the app, and also non-technically e.g. in marketing literature

Simplified consumer device workflow

In many respects, the end consumer holds the power in the value chain. They determine the value of assets by asserting their choice of what to watch. They also provide one of the two sources of money in the value chain by buying stuff. To do this, their workflow consists of:

• Discovering content to watch, which is usually done by viewing associated assets, e.g. the next programme in the programme guide, “watch next” recommendations, marketing literature, ads

• Buying the content (even free content goes through the same authentication/ authorisation/ accounting process)

• Playing the content (which encompasses the technical processes of unpacking, decrypting and presenting images)

• And I’ll separate out viewing as oftentimes the viewing is on a different device to the playback, which can also insert/ replace ads i.e. smart TVs

• Watch the ads, watch the content

What next?

This business has changed dramatically over the last couple of decades, unsurprisingly as technology as a whole has changed dramatically. Broadcast generally follows, not leads, and at a comfortable distance, in order to sweat every last drop of amortisation from investments. So it’s relatively easy to make predictions - just look at what’s going on elsewhere. Here are a few of the trends happening in other industries which will wind their way into broadcast at some point.

Intelligence at the edge

A relatively new website architecture pattern is the Jamstack (JavaScript + APIs + Markup). The idea is that the website application itself is static, and as much intelligence as needed is associated with the content. That means the website can be distributed over a CDN and doesn’t need to be built for each visitor individually.

For media workflows, as some of the intelligence can only be implemented when you know the target, it means pushing out some of the conform/ enrich/ export steps from the central cloud to the network edge. This becomes possible as CDN providers implement cloud processing features at cloud prices.

Dumb apps

Putting intelligence at the edge means being able to deploy dumb apps. Maintaining apps fast becomes a profusion problem. The Now TV app is available on Apple, Android, Xbox, Roku, Samsung smart TV, LG smart TV, Amazon Fire TV as well as its own range of hardware. Each of thes hardware platforms comes with their own app store, and each app store has its own foibles. Each release can take 2 weeks to approve, so many companies employ release managers to handle the negotiations with the app stores to assure that they will pass first time. Even so, it takes a lot of resource to manage 8x approvals in parallel.

It’s very attractive to only need to deploy a new release once a year, to reduce the app store submission headache. This requires finding clever ways of making the app dumb. Web browsers are very complicated pieces of software that are almost invisible to surfing, and this is the direction that video apps need to go.

Intelligent content

As the app gets dumber, the content will need to get cleverer. Entire features of the app will need to be delivered as content. Content will self-aggregate as web pages with hyperlinks can, so that enrichment assets can be viewed at consumption time. And content will change after publishing, no longer remaining static. Just like the recent Cats movie, you’ll be able to see version 2.0 of your favourite movie as it reacts to real audience reaction.

What do you think of my predictions? Let me know in the comments!

Slowing pace of technology

My gadgets are lasting longer. But their value for money is actually increasing over time. blog.mindrocketnow.com

Last month, my iPhone 6 plus became 3 generations old, but I don’t yet feel the need to upgrade it. It’s only when it becomes 4 generations old with the release of the iPhone X that I’ll be tempted to upgrade. Rather than this being an example of catastrophically bad product management (who in their right minds makes their latest 8^th gen product irrelevant in a matter of months?), I think this actually demonstrates impressive technological longevity.

It’s not just Apple being generous with my wallet; other companies are following the same model. I play games on my Xbox One, even though as of last month it was 3 generations old.

Whilst the rate of technology progress has not slowed, the rate of obsolescence has slowed, at least for these two devices. My phone runs iOS 11, and therefore continues to run all the apps (just don’t get me started on catastrophic battery performance). My Xbox One will run all the games that are released for Xbox One X, thanks to Microsoft’s Play Anywhere programme.

Hardware continues to follow Moore’s Law and improve, but I no longer need to buy new hardware to benefit from improvements. All my apps continue to be updated, and new functionality added, almost always for free. Longevity is assured by software. The rate of compelling improvements has not slowed, yet the cost has become cheaper.

This has always been a characteristic of other industries, such as TV. Every so often, there are jumps in technology with backwards incompatibility, such as the conversion from analogue to digital. But for the main part, traditional broadcasters are very much preoccupied with ensuring that no viewer is left behind.

This accounts for the slow pace of change in the industry. If you look at any EPG listing on any service, the number of SD channels far outnumber the HD channels. You can see repeats of 4:3 programming with ugly black bars on either side. Change is evolutionary because there is such a large consumer base to keep happy. Change is evolutionary because there are technology and content assets that need to be “sweated”. Value for money must be maintained for longer.

This is a lesson being learned and improved upon by Apple and Microsoft. Just as I’m not being forced to upgrade to a 4k TV otherwise my viewing will be cut off, I’m not being forced to upgrade to an iPhone X nor an Xbox One X. But if I do upgrade both X-devices, I can be confident that the devices will last longer, and due to better software, do more, as time progresses. Value for money will increase over time.  My wallet thanks you.

Justification for the EPG grid.

No-one watches linear TV any more, so why have an EPG? This post looks at why they still exist in an on-demand world. blog.mindrocketnow.com

I hate Electronic Programme Guides. The spreadsheet representation is more suited to accountants than to people wanting to be entertained. Understanding one requires too much learning to be useful. You have to know which channel your programme is on, and when, before you can find it. And if you don’t know what you want to watch, you have to scroll around aimlessly until happy coincidence highlights a programme of interest. So I’m starting a campaign to get rid of them. Except I might be wrong.

The EPG only exists because the broadcast schedule exists. So to do away with the former, we need to look more closely at the latter. A recent presentation at the DTG Summit gave me a perspective of why the broadcast schedule is still important.

The assertion made by Adam MacDonald, Director of Sky 1, was that broadcast schedule (and by extension the EPG) gives context and therefore meaning to on-demand content. His analogy was: you only know you’re going off road, if there’s a road in the first place. To illustrate his point, let’s look more closely at how the schedule is influences and is influenced by viewing behaviours for on-demand.

The majority of pre-peak viewing is live. It may well be true that the post-peak viewers are the most valuable, but there’s still a sizeable audience for whom the EPG is the most relevant content discovery point.

Even for the most heavily non-linearly-viewed content on Sky 1, significant numbers still view non-linearly in relation to the schedule. In other words, they will watch the programme on demand, after its transmission date. Is this because the transmission is the expiry of the spoiler embargo? This seems to be the case for reviewers and social media.

There is an emerging content consumption behaviour of the mini binge, especially relevant for content not available in box sets. Viewers wait 3 transmission weeks, store up 3-4 episodes, then watch them all in one go. This too is only made possible by the broadcast schedule.

In acknowledgement of these insights, Sky 1 now markets to the mini binge, and schedules a “gap” on Saturday evenings – because this is peak on-demand viewing time. The schedule shapes behaviour which shapes the schedule.

I’m not convinced by all this. It strikes me that the broadcast schedule is an organisation paradigm that sits very comfortably with the current generation of bill-paying viewers. I’ve lived with schedules and EPGs for so long that I can work around their limitations. I also accept that behaviours like mini binges and spoiler-free water cooler moments only exist because of the context of the schedule. However, I think these behaviours are short-lived, and won’t be the behaviours of the future bill-paying viewer. The schedule isn’t relevant my children.

The EPG is simply the most efficient way of presenting left-to-right schedule information. Nonetheless, a spreadsheet is not the most efficient way of discovering content, nor even making judgement about content. The poster image is still the best signal for a content watching judgement.

So let’s do away with the broadcast schedule, and the EPG – but perhaps after I’ve set my series recordings.