MCMS Congress 2016 Report: a topline summary of the panel discussions
The second MCMS congress was held in Barcelona on Wednesday 15th June 2016. Attendees and speakers were welcomed by Isabelle Fournier, Chairwoman of ERA Europe.
The congress included panels on a wide range of interesting topics including FinTech meets Media, The Need for Personal Data Protection, Bridging the Worlds, Growth Strategies, and hosted the eur§reg which included a European Commission Update and took a look at the status of reforming the Audiovisual Media Service Directive. There was also a senior expert panel discussion on EU initiatives to harmonise the relevant legal frameworks and the industry's legal needs., and an update on recent developments in DRTV. Rounding off the congress, Dr. Konrad Hilbers (HSE24), concluded the day with his personal review and executive summary of the event.
FinTech meets Media
The first session was on the subject of FinTech meets Media: Disruptive media monetisation and investment models: Innovation in payment tech is generating new revenues and establishing futureproof business models for media consumption and industries.
IHS Presentation on 'How messaging payments and commerce are driving mobile innovation'
To kick off the topic, Jack Kent, Director Mobile Media, of IHS Technology, gave an excellent presentation on 'How messaging payments and commerce are driving mobile innovation'. He concluded that 1) the mobile apps market will continue to grow, but smartphone maturity means the pace is slowing. 2) Messaging apps need a payment strategy to help monetise their huge audience. 3) Device makers, OS providers and OTT apps use payments to serve different agendas. The global scale is challenging. 4) In-app shopping is growing - there are strong local and regional differences.
Panel 1: Options and Limits
The panel discussed Blockchaine which could potentially have a big effect on banking in the future e.g. micropayment will become possible (Nano payments) - will be possible to pay 1/10th of a cent. Richard Kastelein, a blockchaine expert, believes we are 5-10 years away from seeing blockchaine solutions in the marketplace which will change the market dynamic and cut out the middle man. He thinks it will be Africa that makes the first steps.
Paypal was used as an example - everything under 10€ is not profitable for Paypal but Blockchaine is great e.g. for instantaneous small transactions e.g. 15 cents to read an article or e.g. for diamonds - you can put them into a blockchaine (immutable) which keeps its own records including the value chain from where the diamond was found. Håkan Tranvik emphasised that the central most important thing is the monetisation of content and the necessity of following the customer - payments should be easy and credible and should fit the need of the content owner.
Panel 2: Matching Expectations
This panel, Oliver Mochizuki (Fundsurfer) and Dr. Konrad Hilbers (HSE24) had a very interesting exchange on the way the entire funding landscape is changing. OM believes that although there are a lot of different players getting involved e.g. crowdfunding, there is still room for more traditional ways e.g. angel investment. He recommends for anyone looking to fund a product, crowdfunding is the best way as you can be rewarded by tremendous loyalty.
However, he warns that it is hard work and the average raise is 10,000$. KH shared his Napster funding experience (angel, then venture cap) and pointed out that if anyone wants to set up a new teleshopping idea, they need someone who knows what they are doing - you don't get networking and experience with crowdfunding. OM agrees: Fundsurfer saw this and started to develop mentor matching - the funding is very important but the problem is that you have to be ready for that investment.
Panel 3: The Needs for Personal Data Protection
The panel, Emerald de Leeuw and Stephan Luiten, discussed the risks of non-compliance with the GDPR which has now been officially ratified by the European Parliament. SL: pointed out that apart from the financial risks, the trust of the customer is of paramount importance. EdL: agrees - you can see Data Protection as a risk but maybe it is better to see it as an opportunity e.g. Apple tells their customers - your data is safe with us'. SL: agrees that privacy can be a USP but he warns that you have to be mindful of what you can deliver.
Also, if a customer sees convenience, they will trade off privacy in a heartbeat e.g. who reads privacy info on the phone? No-one, you just click it away. EdL: Data Protection has gone from a 'nice to have' to a 'must have' for any company that handles personal data of EU citizens, a category which includes most eCommerce companies, but even small entrepreneurs could be affected if the data control commissioner come knocking. Emerald then shared her recommendations on 5 steps to implement today.
Broadcast content dominates despite rise of online video and mobile innovations
Jack Kent of IHS Technology once again kicked off the topic with a fascinating presentation entitled 'Broadcast content dominates despite rise of online video and mobile innovations' which was supported with excellent graphics and analysis.
In summary, he concluded that 1) Linear TV is in decline but is not dead - broadcast content dominates. 2) Home entertainment video revenues are transitioning quickly to subscription models. 3) New providers are changing what it means to be a Pay TV platform - but OTT linear faces challenges. 4) Mobile video consumption and innovation is growing, but direct consumer revenues are scarce.
Bridging the Worlds: Panel 1 - Transactional Interactivity
The panel discussed how people are consuming TV differently and how we have to change with it. RB: talked about QVC changing to a multiscreen company ("if there's a screen, we'll be on it") and pointed out that you can't afford to produce different content for every channel - its necessary to repurpose the content to suit the platform but, of course physical stock has to be linked to the video - you make mistakes when you try to automate such a process. RB: "You can't sit there and ignore changing television habits - you don't want to be the guy with the perfect stagecoach and then face the railroad".
OL: "You have to be where the customers are...mobiles are shopping channels we take with us everywhere...shopping anywhere". IB: Teleshoppers are older age group but aren't mobile users younger? RB: quotes research on 50+ demographic - 50% will sit there with another device on their knee while watching QVC - mobile is the fastest growing order mechanism. IB: What are the key success factors for brands to address thoses platforms? DF: Investing in data analytics is a big driver to allow more segmentation which allows more efficiency in getting customers to buy our services.
The discussion continued on topics such as mass personalisation (mobiles are very personal), adblocking technology, ways to optimise high churn user journeys, etc. DF: warns about the fine line between personalisation and invasive advertising. RB: commented personalisation = relevancy - its less intrusive but it keeps your interest. IB: stresses 'make the ad valuable for the customer'. OL: leverage artificial intelligence e.g. virtual chef Wendy will remember that your wife is a vegetarian next time you order. RB: make the difference between shopping and buying by helping do the selection - QVC want the customer to trust them - they don't just look at the transaction, they look at the relationship. The panel also discussed the importance of page search/Google/meta data and how its used for search.
Bridging the Worlds - Panel 2: One Screen
The panel discussed how not everything has to be live today - there is a whole set of customers moving away from being somewhere at a special time - short on-demand content. A James Bond film was always great for the ad afterwards but this won't happen in the future - won't be able to reach enough people to finance this.
OB: we need to analyse today in order to be able to foresee what will happen tomorrow. Social/behaviour/technology evolution influences the future. People go online because it saves time. 2 clicks is 1 click too many - reduce the delay. SO: we are being challenged by new financial models.
The minute you have a better option, you aren't going to accept the low quality version. Content will remain king but in the new fragmented world we will need to be creative. SO: there has been an earthshaking shift - TV channels are no longer the gatekeepers for the audience - they don't decide who is watching what. 1990+ group are only listening to their people e.g. bloggers. OB: "you can't fake innovation, you need to be part of it".
Growth Strategies: Russia and Satellite Distribution
OV (Shop and Show): Russia has 140 million people but not every area has satellite distribution, people don't have metros or big stores near them and there are no shopping malls outside of Moscow. Shop & Show, a TV and ecommerce company, is growing x5/year. 60-70 million people have technical reach. His customers are 55+. OV emphasises the importance of knowing your audience: he knows from his website what his customers are buying which allows audience segmentation.
The Russian economy has had less of an impact than some imagine as the spike in prices is spread over 12 months. If you observe customer demand and you have local vendors, its important to get them to produce the goods quickly. He sees his competition more as Shopping Live and Studio Moderna than Amazon.
CL (Eutelsat): Satellite has the image of being outdated, so the question is what are they going to do to adapt to the changes in consuming content? One TV screen was the classical satellite business model and this is still the case in emerging markets and will remain so for the next 20 years. But we will see different customers e.g. Google, Samsung who will be important players in the satellite market. DB: how can you increase your reach? CL: One way: IP satellite model - then you cover the whole country.
The Audiovisual Media Services Directive (AVMSD) is a minimum directive on the European level that sets key rules but you don't have to comply with all 28 countries - the directive takes the pragmatic approach. KS works for the European Commission and gave an update on progress with the directive e.g. changes in commercial communications and product placement, also the rule of 12 minutes will become more flexible, the rule of interruption will be relaxed.
Also there will be more protection for children e.g. with alcohol advertising. TS: made clear that the commercial broadcasters can live with the directive as it is but he expressed concern that this draft will go to the European parliament and will be watered down - "if you bring a rocket it will end up as sand". KS: restates that the directive is a minimum harmonisation - if the member states introduce stricter rules thats up to them - KS can't prevent this - every member state can bring in aspects that are maybe culturally important for them.
TS: One of the core reasons for the success of e.g. RTL is only to have to fulfil the regulations of one nation. It was commented that it is urgently needed that the industry has a clear voice to say what we need - it is necessary to talk to different member states and all parliamentarians to explain why we need the liberalisation.
The panel of Tobias Schmid and Krisztina Stump was extended to include Kristina Ehle (Mofo), Spartacus Olsson (Mediakraft), Peter Matzneller (Die Medienanstalter), and Julian Oberndoerfer, (ERA Europe, Brussels).
The panel discussed that the consumer is getting smarter every day and that there is a lot of self-regulation going on out there. Its not just about fulfilling the regulatory aspect, but also about respecting the customer as broadcasters. PM: German regulators are on the side of the industry - the industry tends to shift advertising into the content - a very important core value is to have the separation of advertising and content.
We must avoid the customer being confused by something that looks like content but is advertising. KE: for TV broadcasters its not perfect but for on demand providers its much more of a challenge. The panel went on to discuss the influence on small businesses, obligations on host providers, the difficulty of categorisation e.g. facebook, twitter and instagram have a mix of videos, texts and blogs - (in the future we will have to have hybrids), protection against hate speech, online gaming with moving images, etc. KS: convinced they are taking a balanced approach with the directive.
TS: emphasises that it is the minimum we need - must not go below that minimum otherwise it won't be enough - the next chance will come up only in the next 7-8 years.
DRTV Trends in the European markets
The European DRTV market is very dynamic with lots of new products every month. Wondercore Smart is the top product but is now starting to decrease in France and Germany (but was good for 1,5 years). The juicer war was won by Nutribullet except in France due to regulation. There is more differentiated marketing visible between markets. In Europe you can observe more variety of format (3,7, or 15 minutes). Only 10% of the U.S. top products were successful in Europe. The shopping experience is the DRTV secret weapon vs. Amazon!