CBC Reporting on Today’s Entertainment Trends Drew Wilson | September 9, 2006 The CBC (Canadian Broadcasting Corporation) is one of Canada’s leading television networks, and has offered content for many years. Thus, the network has seen a lot of trends come and go. Note: This is an article I wrote that was published elsewhere first. It has been republished here for archival purposes The internet seemed to differentiate from just being ‘another trend,’ so the CBC chose to try and adapt to the new environment – a digital environment. Unlike CTV, a Canadian broadcasting competitor, CBC has offered free streaming of some of its programming like ‘The Rick Mercer Report’ and The Royal Canadian Air Farce. Now the CBC has made a submission (PDF) to the CRTC (Canadian Radio-television and Telecommunications Commission) on the state of consumer entertainment. The report in itself is a rather lengthy piece, so in the interest of keeping the article to the point as much as possible, Slyck will try and pick out a few points. After discussing High Definition content, the CBC writes, “…a second type of technological innovation permits the consumer to access audio or video on a totally new broadcasting platform such as […] Internet downloading and streaming. These types of innovations expand the consumers’ broadcasting universe by providing them the opportunity to access audio or video content in ways or at times that were previously not possible. These innovations have the potential to be extremely disruptive in their long term effects on pre-existing platforms and technologies. It is important to recognize that there are costs and benefits to […] these types of technological innovation[s].” Clearly, the world of entertainment of today would be drastically different if the Internet never existed. One may argue that if the Internet never existed, no services such as file-sharing or iTunes would exist today. It certainly leads to some interesting questions: Would the market be more or less saturated with entertainment without the internet as a whole? Would strategies for getting entertainment to consumers change so much without the internet? Would delivery of content be so quickly changed if the internet never existed? The CBC continues, “The marketplace response to a new innovation will depend on quality, content, convenience and pricing, among other things. While these factors imply a high level of uncertainty and flux, it is still reasonable to assume that recent innovations in broadcasting will eventually result in some technologies being eclipsed by newer, more efficient approaches.” It is an interesting point being made and a topic that has been debated for some time. Do new technologies completely overtake their older predecessors or do they merely encapsulate them? There is evidence to suggest that it may likely be the latter, examples being that vinyl records still exist and are still in use, much like books and radio. On the other hand, very few people still use scrolls or chisel messages into stone tablets. It may be reasonable to presume that several generations of transmitting information stay around even when newer and seemingly more efficient methods exist today. It might be very reasonable to presume that the CBC sees that without adaptation to the changing environment, where it is possible to obtain content through more than one medium, may come as a large blow to them. The CBC writes, “Canadians now have a dramatically expanded universe of programming choices in both audio and video worlds and all indications are that ‘eyeballs and ears’ will continue to migrate to new platforms, some of which will likely take forms completely different from those that dominate the industry now. […] To remain relevant, broadcasters will need to keep pace with this innovation, embrace the expanding broadcasting universe and bring high quality video and audio programming to Canadians through every platform possible. […] the revenue model of conventional broadcasters is under stress.” Further down, the CBC contemplates age demographics of viewership of content. It’s noted, “…another possibility is that today’s youth and younger adults will not emulate the behaviour of their cohorts or previous generations and watch more traditional television as they age […] young adults are already in the forefront when it comes to consuming video across platforms.” In a later section, the CBC says, “Technological advancements over the past ten years have given rise to a variety of new platforms for consumers to receive and view video programming, including mobile wireless, video-on-demand (VOD), personal video recorders (PVRs), Internet streaming and Internet downloading. […]with exception of some forms of Internet streaming, [these new platforms] can be characterized as on-demand services which free viewers from the rigidity of program schedules.” More specifically though, later on, there is mention of the internet again: “Broadband Internet adoption continues to grow rapidly in Canada. […] (More than one in two Canadians are connected to the Internet via a Broadband connection) As broadband penetration increases, Internet video is becoming more common. Approximately 15 per cent of Canadians report that they stream video and 10 per cent download video.” It seems that perhaps Canadians are more likely to watch TV on the Internet than Americans as reported earlier. According to the report on American entertainment consumption, “Ipsos’ research [indicated that] only 3% of Americans participate in this activity.” Going along with the trends on both sides of the border, both the CBC report and the Ispos’ report state that the 18-34 demographic (CBC) or the 12-34 age demographic (Ispos) state that downloading or streaming is popular in the general age demographic. Is the CBC convinced the internet is the way to go – especially in terms of quality? No. “To the extent that these experiments are successful from a technical perspective, they would suggest that a global marketplace for Internet video is unlikely to become a reality.” Why? The answer may come to a surprise for some as it indirectly points to the network neutrality issue: “The business case analysis for Internet video is complicated by the fact that suppliers of broadband connections may also have incentives to control the bandwidth available for internet video. Canadian cable companies engage in “bandwidth shaping” which allocates different levels of transmission capacity to different services according to the operational preferences of the cable company. It can also ensure that Internet video by third parties does not become a threat to the business of the cable company, whether it be the delivery of traditional television programming to cable subscribers, VOD, or the distribution of cable company-owned Internet video services. In light of this complex mix of issues, it remains unclear whether Internet video will become a primary means of distributing video content on a commercial basis.” This point was of particular interest to Michael Geist who notes, “This is network neutrality in action. Canada’s national public broadcaster recognizes the benefits of Internet distribution, yet expresses concern that broadband providers will intentionally interfere with its Internet video transmission for their own economic benefit. This position suggests that the network neutrality concern is already having an impact as the mere threat may lead broadcasters to view the opportunities presented by the Internet as too risky.” The CBC notes that in the 18-25 year old demographic, 26% of those have streamed video in the past month. 25% also said that they downloaded video in the past month. Again, these are higher numbers then the Ispos statistics on American citizens in roughly the same age group. It appears as though the issue of network neutrality and locally available limited quality internet services has prevented the network from moving ahead with more advanced internet services despite the seemingly high numbers. CBC continues, “Over the past decade, numerous new ways of accessing audio content have become available in Canada, including digital radio, pay audio, satellite radio, mobile wireless, Internet streaming, podcasting and internet downloading of music. […] these new audio platforms provide consumers with increased choice in terms of where and how audio services can be received.” When one expands on different devices, there’s an even greater chance of more diverse content being played at different times. This is especially true when internet streaming content services are available to the consumer since the average streaming service offers a directory of content and the consumer clicks on what content he or she wants to view. Interestingly enough, the Internet is discussed separately: “There are three ways of accessing audio content over the Internet: Internet streaming and two forms of downloading – podcasting and music downloads. […] All three of these approaches have gained increased flexibility in terms of accessibility in multiple locations and via multiple services. That being said, the characteristics of the different Internet services are sufficiently distinct as to warrant a separate discussion.” First, there’s discussion on streaming: “As with video streaming, audio streaming can take two forms: streaming of scheduled audio program and streaming of stored content. […]many conventional radio broadcasters have established an Internet presence by streaming one or more of their over-the-air radio stations. […]The business model for these Internet-only services is somewhat insecure as they generally operate on a membership or donation basis. Nonetheless, there appears to be the potential for an ongoing presence in these Internet-only services as evidenced by their innovative approach to copyright issues.” Services that can be comparable to Pandora is then discussed. “CBC/Radio-Canada has developed Internet-specific services aimed at youth: Radio 3 and Bandeapart. As a result of its early entry into Internet streaming, CBC/Radio-Canada has become a prominent player in this form of audio delivery. Research indicates that around one in five Canadians listen to audio streamed over the Internet, with the percentage for youth and young adults being significantly higher.” There is certainly a significance in age groups as there always appeared to be a generation gap between those who generally know a fair bit about computing technology and those who generally are less likely to understand it. Of course, this isn’t an absolute idea by any means. Podcasting is then discussed, “In 2004 and 2005 significant media attention was paid to “podcasting” which is a form of on-demand audio delivery involving the downloading of audio programs to a computer or personal audio device for subsequent listening. These audio files can range from quick news clips to whole radio programs complete with songs and comment. […] a common way top receive them is to subscribe to a feed that automatically notifies customers when a new file in a series is available. […]Podcasting began as an amateur activity, much like blogging, but has since been picked up by traditional broadcasters as well as celebrities, businesses, and organizations wanting to make audio content available in a simple and convenient way. Though mainstream bands dominate the most popular podcasts, thousands more exist, many compiled by individuals to cater to niche tastes and demand. CBC/Radio-Canada is a leader in the area of podcasting and makes significant amounts of audio programming available to the public as a complementary service via its web sites. Podcasting, which was virtually unknown two years ago, has a low penetration rate but is increasing in popularity, especially among younger Canadians. It provides a broadcaster such as CBC/Radio-Canada with a means of reaching a new, younger audience, its future generation of listeners. Podcasts are generally available free of charge, although some podcasters have begun to charge for access.” It is true that many people have begun podcasting. One of the most well-known examples of celebrities taking up podcasting is the celebrities from Tech TV. Tech TV gained a following of people who were into technology, but was then shut down and replaced by G4 which was initially a television station dedicated entirely to video games. However, celebrities like Kevin Rose, Leo Laporte and Amber MacArthur started their own podcasts or vidcasts and their audiences quickly followed them onto the Internet – consequently boosting the popularity for podcasts. Another point this section brought up was the fact that podcasts are generally free. In fact, a lot of podcasters have chosen to release under Creative commons licenses so their content can possibly be spread over the internet more widely, thus gaining a larger audience – though this is not always the case. One example of a podcaster charging for their program is Photoshop TV. Initially, they gave their content away for free (Copyrighted) but then they charged for episodes older than the newest one which is only free if a user paid to be a member to NAPP (National Association for Photoshop Professionals.) Otherwise it costs users $1.99 per older episode. CBC wrote, “After piloting programs in Spring 2005, podcasts of CBC Radio were launched in June 2005, and of Radio de Radio-Canada in September 2005. In the last six months of the fiscal year, CBC Radio and Radio de Radio-Canada had more than four million downloads of music, information, science, and entertainment programs, primarily by listeners in the 18-34 year old age group. […]podcasting can be viewed as being indirectly competitive with traditional broadcasting. However, given the limited commercial element to podcasting, it is perhaps better viewed as a complementary service which can be used to raise the profile of a broadcaster’s other audio services.” CBC on Internet downloads: The other way of accessing audio content over the Internet is the downloading of music to computers or personal audio devices, generally for a fee. […]Internet downloading does represent a significant new source of audio content and, as such, competes for listening time with both conventional radio and other audio platforms.” (Audio downloading is most popular among young adults aged 18 to 34 in Canada, with almost four in 10 having downloaded audio in the past month.) It is then noted that in the 18-26 year old demographic, 50% owned MP3’s, 35% streamed audio in the past month, 52% downloaded audio in the past month, 10% downloaded a podcast in the past month, and, in total, 72% had new ways to access audio content. All in all, the CBC clearly sees these changes and acknowledges that there are many challenges as well as many opportunities with this era of change in content distribution. While there is interest to move ahead quickly, there are drawbacks to the currently available technology in Canada to bring that content to consumers. The lengthy report goes into detail of every aspect of new emerging technologies which includes the Internet with its various possible forms of content distribution. It questions how long technology will take to catch up to the models that appear to be the way of the future. It seems as though television networks are ready, but maybe Internet Service Providers in Canada might not be there yet. Drew Wilson on Twitter: @icecube85 and Google+.