Project Timeline 2005–2010

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Proof of Concept Phase – Interview A

Categories: Interviews, Proof of Concept Interviews, Support Material
Date: 12 April 2005
Contributors:

Andy Lloyd James: You are, as I said, you are on the team, you’re right up the front end of this. What we’re talking about is Television in 2015. Whatever that is. Wherever it’s going to from here, and as much as anything else, I’m interested in the CONTENT just as much as technology or anything else. So, what do you see as issues over the next 10 years?

Interviewee: I think the number one issue, and whether we solve it now or in 10 years time, hopefully it’s still not the issue in 10 years time, it’s going to be intellectual property. The whole concept of a new pirate television is going to be just as big as pirate radio was in the 50s and 60s. It’s going to be easier to broadcast anything you want over IP. So IP over IP, it’s an Intellectual Property over an Internet Protocol. I think within that protocol, or whether that becomes a new style of protocol, but I… probably Internet Protocol will allow for TV as we see it. You know, whether that be down a co-axial cable, whether it becomes down a more sophisticated wireless network. So, you know, broad area LANs I think might be a replacement for the way that wireless is happening at the moment. From the technology side, all I can see of the technology is allowing for greater content and that all the content in that technology is becoming digital. The issue with that is with digital, it’s very easy to bundle it all up and send it off to somebody else. So, I think that has put a significant challenge for the content owners, and we actually were approached by a company the other day pretending to own the content to 2,000 television stations around the world and that we could now advertise in those 2,000 networks. And then you look through and say, okay what content you have? They had nothing. So they basically had a background for 2,000 TV stations. And it all looks very god and the technology can handle it, but the issue is, they will never get the rights to sell advertising on that. Because the content producers aren’t going to provide them with… you know, I can’t see the CNNs and Time Warners of the world saying, yeah, sure, we publish out our contents. Potentially they could, but I could see them doing that with bigger partners and then somebody that comes up with a new technology. So the issue is not… it’s two-fold, one is, how is the consumer going to consume this? And are they all going to end up being… are we all going to end up being pirates? For example, you know, is it all going to end up on the internet and by default, we’re viewing stuff that we shouldn’t be able to view, but it’s just there so we do it. And we’re not breaking any laws by viewing that, but somebody is by publishing it to that area.

Yeah, sure.

And that… there is already quite a large underground, as I said, Pirate Television Networks, that are out there now. So and so is watching the series of the West Wing, they tape it to DVD, and then they publish it to the Internet. So I say that if you actually know about these networks, you can go and find any program that had actually been out there. So in terms of content…

[xxxxx]

Yeah! So content piracy is well and truly there, we already know it and everybody is focusing on the Kazaa’s of the world from a radio perspective and a music perspective, but digital doesn’t mean anything. It doesn’t matter if it’s audio or video, so… it’s just it’s been a lot easier because the technology has been there with your i-Pods and your machines to copy music, but there is no real reason for… you can watch DVD recorders and those sorts of things at home, it only needs one person in the billions of people in the world to actually record that program and put it over the Internet, and anyone can get it. So I think the number one issue is, how do we deal with that first, these content providers? Now potentially that leads to some very strong opportunities for the content publishers. Not through Pay Television, because obviously that’s not going to be the only channel that [xxxxx] if you open the contents, anyone can get contents from anywhere and my contents grow because I’ve got now the viewership of 2 billion rather than 2 million.

Yes.

That could mean content is king. The opportunity that presents is two-fold, so firstly technology will, I believe, meaning content will distribute everywhere. So, television upon that that we know at, okay, yes, sitting down in my lounge room I will see it, either by a projector or a DVD screen or an LCD screen or this content is going to be everywhere. The issue for that then becomes for us is the big question of advertising.

Yes.

How do I advertise in that environment? Is that only going to be the realm now of global advertisers. Advertisers, you know, so someone is going to bundle up an NP version of the news from CNN and that’s the only news people want. So that would be a pretty abominable world if we will. But a few more more TV programs, like you know will… syndication I think is probably the bigger question, news is always going to be local, there is going to be a global containment, but you really want to know, what’s the weather in my local environment.

Yes.

So, you know, the local content provider is always going to have a role at least in news and weather and current affairs. Whether they actually syndicate it as well is going to be an interesting thing, so you know, is Channel 9 going to be doing it, you know, having 99% of its content coming from sitcoms and dramas out of the US.

Yes.

Will that be superfluous if the audience that wants to get The West Wing, doesn’t have to wait through advertising and watch it at 10.30, they can watch it when they want.

Yes.

And they can download it from somewhere. There is going to be some big questions as to that, and I think consumer demand will drive that even though the media owned demand is going to be right up like that. So, it really will be, well I’ve got the content, do you want to view it, yes, I can, I can’t really protect the IP so how do I… actually how am I going to turn that into revenue, you know.

You see signs of that in the audiences so far and I don’t mean in television but in radio and things like that, you get a sense of which way the audience is starting to move a bit?

Oh, that’s difficult because radio is actually the one thing hasn’t really been digitised and won’t really be digitised.

Yes.

Maybe the signal might get better when they do digital the radio, but I think for all the things that I’ve seen around digital radio, it’s… I see no consumer demand for it so, you know, being able to push a button and getting advertising [xxxxx] off and coming out of your dashboard. I’m not going to install that in my car.

That’s true.

So I can’t see it. Digital radio that allows you to have, you know 5,000 different radio stations, I can actually see that, that’s already happening in the internet, so something like I-tunes and being able to go in and say, I want a list of [xxxxx] music.

Yes.

I don’t know who pays for it, and that’s the big issue.

That’s the big question throughout!

Mm, yeah, so I think radio has probably got a little bit longer to deal with this problem than others. Because most people are going to consume that by their cars, cars have a big rollover in, a big turnover. You have at least a 5 year buying cycle on most cars, on the average car. So I can’t see new technology getting into there, and secondly I can’t see the function, you’re driving along, you want to listen to music so, in it’s main form, I can’t see that being a digital thing. Instead there might be more competition for radio at work or at home, as digital homes catch up and people actually are saying, well I want to listen blah, but again in the penetration, that’s not anywhere near as fast or as furious as digital television and digital content in those areas.

Sorry, I’ve been SIDETRACKING you were just going to talk about how you advertise in those environments, are you…?

Yeah, that’s the question we have, obviously you’ve got in… the big advertisers, global companies, you’ve got some great opportunities for any content, and that’s really probably where you are going to see a lot of the… I guess, the revenue generation coming from content, and getting Pepsi to sponsor it because getting Pepsi to sponsor an artist is quite a unique way for music publishers to get their artists making money.

Yes.

And Pepsi sits there and says, you know, well a million bucks, but a million bucks for a million people that’s quite cost effective for us to actually get them into a program, so a dollar per CD makes sense to us.

Yes.

And certainly on the internet situation. The problem that then leads is what happens to the local advertising content? So, we’ve… if globalisation finally hits mainstream media, not only in the content but the distribution side, 99% of what you see on the TV these days is, 75% [xxxxx] by law, is global content, or US content which is in this country anyway, apart from the ABC, is you’ve come in from outside of this country, but the distribution is like, now if you make the distribution global, what issues does that cause?

Yes.

And that’s probably the question that hasn’t been answered for advertisers, is okay fine, do I now need to negotiate with someone in New York, or San Francisco because they control all the content? So big advertisers, that’s fine, they’ve got global ad agencies and they’ve got presence wherever that contents been and a lot of them are doing sponsorship style programs and understanding how to get into it.

Yes.

And the whole reality TV thing is, again pushing more and more of that sort of advertising forward, but what does Bob Jane T-Mart do in that context? And I don’t have any answer for it and I think it is one of the biggest questions we are going to have to answer to those sorts of advertisers.

What does Bob Jane T.Mart do and how does Channel 7, 9 or Ten pay for their local content?

Mm, well it could get like that, I mean if you took the analogy of… we were talking to Ten Regional the other day, or a Seven Affiliate, we were talking to about this exact problem but on the Metro versus Regional question.

Yes [xxxxx].

And it’s the same sort of problem, how do you look after those local advertisers that might only have 5 grand to spend on a TV campaign on WIN or on the like. And it’s an interesting question, that as long as you control the distribution, you can actually use the technology to your advantage. So, for example with digital television coming in there, you could actually have local channels inside the TV stations, so you could actually be building local advertising areas, so… someone might have a 15 second that says, you know you’ve got a great deal down at your local Bob Jane in Tuggerah, for example, hit the red button and go through to more information on the deals today. And that then go through and uses web technology to actually give more content, because they don’t have the money to do the big 60-second, aren’t we wonderful.

Yes.

So, it’s going to be a little bit more cheap and cheerful to get me down to the store and how do I actually close that deal. So we’ve talked to Seven affiliates actually about how we might help them do that.

Yes.

So it is a big question here for us, obviously where we’re heading with advertisers is, well you’re going to have to control your own content a little bit.

Which means what?

Basically putting yourself in a position that, if your customer is going to get more control over contents, so they can say you know what, I want to watch the West Wing now, I do that, I go to the DVD store and pick up, you know, all 15 copies of it, and I watch it back to back… which my wife and I have just actually done, because we don’t want to get up at 10.30 at night to watch it! And we sure as hell don’t want to record it. Because, you know, it’s just easier for us to go, you know, a dollar a CD or whatever it is, and watch the whole series. For poor old advertisers, they get none of that benefit. But I see that is only, you know, video on demand or whatever it might be, is going to end up being more and more like that, so the poor old networks are going to struggle if that’s their model, unless they basically take some of the money from the Video Ezy’s of this world and say, well you know what, we’ll distribute it as well and we’ll take a dollar and maybe we are actually getting more paid content via our networks than we currently are. Poor old free to air, they’re going to struggle. Because they don’t have the infrastructure to actually charge you. So the question then comes down to our clients, whether it be Nestlé or Microsoft or an E-Bay or any of those sorts of clients, well someone looking for that service, how do we make sure that you are at the forefront, and it is really this change, and I know, it’s been bandied around now for many, many years, but the whole change of push versus pull content in advertising and I guess most of our clients are setting themselves up for more of the pull content. So, I‘m looking for a car. Okay, I’m Holden, how do I make sure that I’m in your selection criteria, so? For all the bad things that, I guess, free content in the wider world of internet provides, because it does provide a some challenges for advertisers, it individually gives them that control, and if you know how to use that, Holden can make sure that, okay well I’m big enough to make sure that I’m always in the top 3 of the search category, I’m putting up alliances with these other people, I’m getting enough sales so that I’m going to get more of that person’s eyeballs, and I know that that’s a very effective way to make sure than going through and actually asking for a test run. So that will change they way they move.

How does it work?

How does that work?

Yes, how does [xxxxx] work?

Actually big search engines in marketing is all about relevance. So, it’s about making sure that your website or your web process has… they’re written in such a way that – and this is a quite difficult task for Copy Writers to get their heads around is… it’s got to be written for the relevant customers that are searching for it. So it’s not just about ad speak, so you can’t go out and say, [xxxxx] is better at spree or how might I run off the questions, so it might be, you know, V8 [xxxxx], V8 colour, subtle and the copy needs to be so that that’s specific area of your website is okay for… search engines has come and found that information, that person sits there and says, okay, and it’s also about how many people search that and then click on it, so you know, you’ve got the Googles of this world, that are constantly refining their search on the feedback they get by how effective it’s there and that it’s click through, so if someone is going through and clicking on something, but they’re all actually more relevant, because there was 5 options, they clicked on # 2 therefore # 2 is more relevant than # 1, then we’ll start ranking it up. So it needs a round target to make sure that your content is there. And it’s got a lot more sophisticated than the early era, where it was being defrauded by, you know, gambling and pornography. People that would sit there and say, car, car, car, car, car and take you to a porno site. That just doesn’t happen anymore, you know, the [xxxxx] and the search engines are very, you know, it is all about relevance.

Yes.

So that’s a new paradigm. Having been in the States over the Christmas break, I think you know, search in television is going to be an interesting model so, if for example you know, take the crystal ball 10 years down the way and we’ve worked out the IP issues of delivering someone to their household 20,000 channels from around the world.

Yes.

Is that a bad thing? Is that a good thing? You know, we have a Spanish community in Australia, do they want to watch Australian TV? May be not, may be they want to watch more stuff out of Spain or from Southern America. Just hanging in there with the 50, 60 Channels in the States, knowing what the hell you want to watch is a challenge, so that whole search paradigm of relevance, massive amounts of content doesn’t necessarily mean relevance; it could… your very relevant material is in there somewhere, but how do I get to it? So I think that we are going to need to rethink the way that television is viewed and is sourced, and searched through. T-Bay goes a little bit about along that way with their Amazon, or CRM based technologies, oh, you like this, therefore would you like us to record that whole series, or if you liked that, you’ll probably like these dramas as well!

Yeah.

But everyone’s different, you know just because you like one Arnold Swarzenegger movie doesn’t mean you’re going like all. So these are all interesting issues as to how it actually works. For the advertiser, do you get in there and actually sponsor the tools that allow you to find the program. So that you actually, you know, in a similar way that you might be sponsoring a Yahoo which is the web browser rather than the actual Yahoo the website. You could actually get in there and actually be sponsoring somebody’s T-Bay for example. So all these sort of options and stuff lying out there, I think at the first port of call it’s going to make more sense, certainly the Creative Directors to do in-program style advertising, I think that will be more the format so the 15, 30 and 60 seconds slot, unless they were getting very, very interesting and they’re on demand, so…

Yeah.

The infomercial stuff, yeah I want to do some exercise, so let’s go and have a look at all the programs on exercise equipment. Potentially, they will become channels in their own right, and you’ll go and get them. I don’t think people are going to wake up at 1 o’clock in the morning and sit there and say, nothing is on TV, I’ll just sit through this garbage. I think they’ll get up at 1 o’clock, and go, you know what, I ‘m going to watch the news, and I’ll ask for the news. So I think the whole on demand issue, while not… certainly not practical for advertisers right now – you’re talking 10 years out, that will be… we would say that that will be dealt with in the next 5.

It’s fascinating because again I mean it does… it brings you back the [xxxxx] and it brings us all back [xxxxx] local content for the commercial broadcaster. And in TV, you fund it. If you work for the local broadcast that’s actually go on being required to make dramas and children’s programs and whether they actually, they’re talking about it as I’m sure you know, in the UK they’re leaving their commercials in the public service, responsibilities…

Help paying for them at least.

Yeah, and beefing up the [xxxxx] broadcasts. So…

Yeah, it’s…

Have you seen already alternative forms of viewing eating into the classic television ratings?

Oh certainly, we’re certainly not seeing that at the moment, and we’ve got a fairly broad chart across all the edges and all our companies… and all our visual companies sit under a brand called Ice[xxxxx]. And we have got a chart that was written about 4 or 5 years ago by somebody inside [xxxxx], and it showed that by 2007 we believe 50% of all content will be delivered down a digital channel of some sort. A big growth… the 2 big chunks of growth there are obviously internet explosion and digital television, and digital television is incrementally larger impact on obviously TV, than the internet is. And most of that is all coming at the same time that actual media consumption is going up, so what you’re getting is 80 hours worth of media consumption in a week, which is just nearly double of what we’re doing now.

By 2007?

By 2007, and that sort of media consumption only works where you’ve got more consumption of media. So to answer your questions what we are seeing is [xxxxx] of some use, is certainly the younger, the Gen Wires I guess they are now called, you know, the Generation Xers.

What does that mean these days?

Well, it means we’re all getting older – so that’s the only consistency we have – is that they’re doing multiple things, so they will have potentially radio on while doing their homework or surfing the web with SMS on the same computer, so with chat on the same computer, with television and so they might be doing that in an area that…

Again makes you [xxxxx]…

Yeah, I think something like Gainers which are incredibly immersive, you tend not to… you know something like a chat might come up over the top of your game and you pause it and go and do your chat. Gaming is in its own little right, an interesting area for content.

I bet!

And that is eating into quite significant a television consumption of the under 15’s, under 16’s.

Yes. From what you know of the way an audience is developed across time, would you expect those young people – there are 2 questions, and there is one about demographics, but in the first thing, would you expect those young people to go on wanting that kind of experience with the television screen as they go on line, or do they define them separately?

Interesting, I think what you’ll find is, you know, you are not going to find a 28 year old playing as many games as a 16 year old. Firstly they don’t as much time on their hands, they now work, they’re more mature, do other things to balance, so the demographic profile… we hope the demographic profile of this new group, you know, computer games were around when I was a kid, I played them a lot more then than I do now, so I can only use that as an analogy, now with the more sophisticated games. But I think a 28 year old in 5 years time will play more games than a 28 year old today, let alone a mid 30s person like myself that probably never would have played games in the past. Because they are becoming so much more of an entertainment experience rather than something that fills the time. So I think demographically, we will see a slow change to what people do, but I don’t believe that the 16 year old when they turn 28 will be doing the same things they are doing now.

Yes.

The relationship with the TV screen will be a portal to their life, and if you look at the E-Home, demonstrations of where this is going a lot faster than I thought it would actually go in, it’s quite feasible to do this now, although the penetration is quite low, to be able to be controlling your entire life by that computer, by that TV screen the same way as you used to do it with a computer screen, is interesting, so you can be getting… the Windows Media edition is an interesting thing, this is a… it’s similar to what Tebo does, and you could…

Does that mean you’ve sent it?

Yeah.

Yeah, I can send it.

Yeah, they’ve… oh we’ve got a version on our X-Box, sitting in there but basically it’s giving you control over all the channels, it’s giving you control over your internet connections, it’s giving you control over your computer, because it’s just basically coming up a computer with a TV card. So the idea that big screen is essential is part of the equation I think what you will find is all houses will have multiple devices in them, I’m not sure that the TV screen inside the fridge is going to be necessarily the answer

That’s something [xxxxx]!

But I do think that the TV screens inside the kitchen somewhere, were it be in a panel display of some sort or whatever, will be allowing you to control your life. So you might configure what’s sitting in the kitchen to deliver you important SMS or email from the office, or to be able to turn the security on, or answer the door, or all these sorts of things will become certainly inside 10 years, cheap. At the moment you are talking about 50 to 100,000 dollars to make your house.

To make it work.

And enabled… For 150 bucks we’re seeing wireless devices emulating a lot of these things, which are hard wired, I need to get a technician to come and rewire my whole house, to just plug it in the wall and then plug your device into that and it will handle it for you. Those sorts of, you know, under $1,000 style packages will become the reality, so that you will be able to wheel a computer, high-end computer these days, well under 2 grand.

Yeah.

Possibly it will provide devices, which might be as expensive as a remote control for the device. So for a couple of grand, plus you know… it’s a well [xxxxx] place on your screen that you’re probably going to be buying at the same time, you can make your whole house a lot more… it’s easy for me to control. That’s got another [xxxxx] advertising issue, that’s got a whole user interaction issue, I mean a lot of what our creative guys actually do use user experience. So, it is… well how it this changing, how someone’s just functioning? It’s not something that you will be able to add to the this [xxxxx] remote control that you’ve got, which no one understand already that’s handling the 15 devices you now, from the video recorders to pay television, to the TV screen. It’s going to have to be more intuitive. So it’s going to have to be, you know, well what do I do? Okay, answer the phone button, and I’ve just got to be answer door button, that is going to have to be, you know, email comes up, I’ll read it. It’s very… okay this is letting me control what I want to do.

So it’s the same, is it actually the same issue that you were talking about earlier with the search things, sort of what you guys are having to think about is the questions I’m going to ask or the means that I’ve actually got, it might not be necessarily what the advertiser is thinking we would want to say.

No, and that’s the whole concept of push versus pull; the push was I own 3 stations…

Boom boom!

Boom, boom exactly. I’ll do what I want, and I’ll interrupt you when I want. If you’ve got a problem with that, then you go and buy the advertising. Instead. Okay you‘re not doing that, so you know, shut-up and listen to the free to air advertising I’m doing. The issue around that is as devices do now, it’s the same argument we all have, video recorder’s going to kill television, you know everyone going fast forward throughout the… No one could be bothered. So, until it is more user centric which certainly digital is allowing us to do a lot more than tape bit. The smart people are seeing a market for [xxxxx] wires being able to be managed better, and more [xxxxx] but it’s not so much I don’t have to work out how to record, you know, TEBO is very smart, you’ll sit there and you go, what do you want to watch? West Wing. Okay would you like me to record tonight’s episode or all episodes? All episodes. Okay, I’ll do that for you. And it’s done. All on a little screen that talks to you kind of thing. So, oh… that makes some sense. The… and I think that‘s the difference as we keep saying, the consumer is king, the content is king, well I think the consumer is king, content is now just… you actually haven’t lost that battle.

And the [xxxxx] is highly conscious of that, conscious of that desperately than [xxxxx]?

I, what they say and what they do…

[xxxxx] all this.

Yeah, I think you’d have to say the large emphasis in the last year that the package they’ve put on Nine MSM, certainly says to me, and to pay television.

Yeah.

It certainly says to me that they understand it’s going to hurt their business some time in the future.

Yeah.

I think having whether rightly or wrongly or even correctly quoted the fact that it’s in the press that Unilever is sitting there and saying, do we do TV at all? Based on the rate heights that are going up there, it has got to be spooking free-to-air advertisers. They’re not getting, well they’re trying to, but they’re not going to get incremental growth rates. You’re not going to get incrementally more people watching TV outside the birth rate… watching TV and in fact you are going to see it more, less and less people watching TV whether they’re going from free-to-air to pay, there is going to be less of that happening for the free-to-air guys. So yeah, it is going to be an issue for them, and I think certainly Packer is positioning himself very well for it. We have quite heavy involvement with News Limited as a client, and I can see them pushing quite heavily, obviously with their Fox.

And particularly with media [xxxxx], because it never really [xxxxx] transfixed to do that so it [xxxxx].

I think it is pretty interesting, I’m not [xxxxx] or I’ll certainly position them very [xxxxx] at all well for any of this. They have had four cracks at the interactive side of things, it doesn’t augur well for they’re going to do in Pay Television and those areas, but you know James Logan and the guys are pretty smart, so who knows?

In, by 2015 and I think you probably have already answered both these question, but they’re 2 and [xxxxx], what do you think the best outcome should be by 2015, and what’s the worst? [xxxxx] if you’ve answered them [xxxxx] but I think that [xxxxx] briefly.

Let’s start with the best. I think the best outcome is that we come up with a system that people can get their content quicker and where and when they want it to go, so it’s going to be user centric. The best outcome for advertisers is that they are not left on the sidelines as that process happens. So we need to re-think it. And it can be re-thought. I mean, online advertising have had to deal with that a number of times, you know, ad blockers. So ad blocking technology comes in and basically, you know, you can download it and what with all the technology, let’s find ways around that to put advertising content in a more complementary way than just programming. I think that’s the same kind of thing that is going to have to happen. Both the local and global, so…

Does that mean in part that advertisers may end up in fact, came directly for content; for example, Unilever might actually commission a series of West Wing?

Oh absolutely. I think global clients will absolutely have a go at that, and the Pepsis and Cokes have already tried to do that with the music industry. I can absolutely see that happening.

Domestically?

Domestically, it’s a little bit harder isn’t it, because…

[xxxxx]

Well not, more I think because of this content thing, so if you’re… if you go… basically, if you’re going to CNN or if you’re going to Fox in the US, rather than going to somewhere local to get that content. How do you serve that advertising in there, that’s interesting.

If I were to make my clients do this for the sake, you know, in 10 years time is it conceivable when they move away from the [xxxxx] and retire from all of this?

Possibly, if they see it as a big enough market for them. And I think that’s gong to be the interesting side of thing, you know the producers of these shows may be going direct to advertisers so they can get some budget for it, rather than going to a network to get budget for it. It should be quite an interesting paradigm share.

[xxxxx].

But that would be the best case scenario, and I think advertisers in this industry and advertisers are smart enough to work within those restraints. The global advertisers I think will get the lion share of in-programming because things like content is going to a more global basis. People are still going to want News, still want Current Affairs and hopefully in this country, although it seems to have been a trend, start lining up to have our dramas, again being local. And again it comes down to content, you know, one of the highest rating shows last year was this Dancing with the Stars.

Yes.

It’s pretty local, I don’t think Pauline Hanson had global charm. I think they’ll have to struggle to sell that to the US, although you know Barry Humphries does very well over there.

Does he?

Yes. He’s pretty huge over there. So again, you never know, therefore I’d assume they’d think that Pauline was some relation to…

To Barry?

Yes. Secondly, there’s twofold being, advertisers are going have to re-think things but also loads of local content, which is a big issue if the Australian production companies want to still be relevant, then they are going to have to make it so that the individuals in Australia want to consume that. So I think there’ll still be avenues for that and you’re right, local content might be where local advertisers integrate with, and hopefully the costs of doing that aren’t inflated too much by global companies, coming in and saying, no we’ll take it over so you know [xxxxx] Unilever for example, do they come in and name McLeod’s Daughters so that [xxxxx] current for example, that would be an interesting one, but I think that that’s probably the best scenario is that we can do that. And the precedent has been there both in analogue television and the way it has progressed over the years in content programming, as well as interactive has also progressed. So interactive has remodelled itself a number of times, it used to have, you know when it first started, it was actually very much like television advertising, so there were what they used to call institutions, which was basically a 15 second ad, that got a lot backlash from users, and it morphed to something a bit more like what we see today. I think that will change as well.

Attention span, sorry, slightly proof of what you’re talking about, but it’s obviously central to the advertising, do you… is there a change in people’s attention spans? I mean do people… is the whole digital experience, particularly in the way they’ve been setting it up, drawing people’s attention spans, has it fared well or…?

I would like to say yes, the indications at the moment, the research is saying we’re watching just as much TV as we ever were.

Yep, [xxxxx] that people watch [xxxxx].

Yeah, we’re still happy to sit there for 4 hours a night, and consume away. So, it will be interesting as I guess the early adopters become the main stream with these technologies whether that does change, because we are again crystal balling these, we don’t have internet connectivity into every house in Australia, we don’t have broadband connections that allow you to surf whatever channel you want.

Sure.

And we don’t have pay television. Certainly not digital pay television to enough of the penetration to say, well will this change the way we consume? Certainly the over the last 10 years, the whole research of the channels surfing and things like that, certainly show that while we’re happy to sit in front of the box, we’re not necessarily happy to sit in front of ads. So there’s been a number of studies and that researchers and myself that have comparable data on, oh yeah your advertising is becoming less effective because of the remote control or whatever other distractions they might have. And I think that if we continue to downplay the power of the remote control versus, you know, we talked about video recorders and PVR’s and all these, you know, the biggest damage with TV advertising was the remote control, and that was 20 years ago.

Yeah.

So I think that we are definitely less patient, we want it now, but you know, we want it, we’re not going to get off our bums to do it, sort of thing. So if it’s… maybe… I think the premise of this is, if it’s made easy for the consumer, they will certainly get it… if it’s made difficult and I certainly found myself doing this, I was watching 2 stations in the US. Firstly I was on holidays so I only wanted to catch the news and a bit of what was going on. So I found the 2 stations in the 150 that I wanted to watch.

Was it hard to find?

Those 2 stations? I had to flick through everything, before I worked out, okay I’ll want to watch this.

There was no [xxxxx]…?

There was but it was kind of, well what’s on now, and you say, well, it may actually have been something that I would want to watch for 5 hours, and I can’t be bothered trying to work that out. So it came down to, well what’s the best news channel and what‘s that… you know, what’s on that channel. I think… so that experience was well, it’s great to have all this content but it is still too difficult to find what I want. I’ll just go back to [xxxxx]. So I think that again comes back to issues of experience; if it would make it easier for me, I’ll definitely do that, if I know there is… as I said, brand loyalty, the content is going to be an interesting thing. So if I know the pool of viewers are on the West Wing or whatever else, I’m going to probably have more loyalty towards the program than the station that it’s on . So at the moment, you know, we see a lot of loyalty to Channel 9, because well on the whole, if on Channel 9 something will be on then I’ll watch, I couldn’t be bothered going through the TV guide to work out what I want to watch. And I always know that CSI is on at 8.30 on a Tuesday, so I’ll go there, rather than if it becomes, you know what, who gives me CSI? [xxxxx] like you’re going to end up being able to latch onto those, so that’s going to be an interesting paradigm shift, and I think that’s going to be towards the end of the timeframe that we’re talking about by the time that that reaches every household on heaven and earth.

[xxxxx] significance that comes [xxxxx].

It is. Because it’s going to be the content I want, when I want it. And that’s the biggest issue, and certainly that’s you know something that’s been a reality in the internet and that’s I think the big reason for the internet being so successful is, well I want to do a research project. Now.

Yes.

It’s not I have to wait until the library opens. I’ll do it now. And it’s not because I’m going to the New South Wales State Library, I’m going to every library in the world. Now. And just watching the way kids do homework, is just… it’s mind boggling.

[xxxxx] yeah.

The amount that they do and I think there is a fair degree of truth in saying, you know, are we losing some of the basics, you know, communication skills, maths without a calculator, all that sort of stuff. But are we going to need that in the future? Although I’m pretty sure that they’ll find some pretty strong links between not doing mathematics and Alzheimer’s and Parkinson’s Disease and all those sorts of things, and if we don’t use those skills, parts of our brains will just be chopped.

It’s interesting isn’t it, I was reading something the other day that said that people who regularly speak a second language, have a much lower rate of dementia in old age that people who don’t.

Yep.

That’s acceptable?

Yep, and they say it’s the same thing as cross word puzzles and all that sort of stuff.

Yep.

Which includes certain parts of your brain, which is sort of I’m accessing this part of my brain to… my Mum actually has been diagnosed with Parkinson’s and some of the stuff that they say is, well, things that keep your brain active will mean that you know there is a [xxxxx] to say that symptoms will come on, it’s not going to cure you, but it will at least grow those areas of the brain back, keep the brain active that you need to be having active.

Yes.

But they say that’s a very good thing. Possibly because these are the 2 areas that they think are [xxxxx].

The worst outcome?

I think the worst outcome is [xxxxx] Bardman have pushed content, so the worst outcome would be Minority Report, I’m sure if you’ve seen that movie, there’s been a number of different sections. Basically it’s a particularly horrible stupid movie, and it’s psyched by thriller, Tom Cruise…

Oh yes I’ve read it , that this came out about 3, 4 months ago.

No… on video, it would have come out, yeah, yeah… and it’s basically what would happen if Big Brother went wrong. You know, so anywhere you go they’ve got this gannet that flash in your eyes, so they can work out exactly where you are at all times.

That’s a novel from 1984!

It is. It is. So that when you go past – and it’s not in 1984, but it’s not just Big Brother now watching, it’s the advertisers watching as well. So when you walk past an interactive billboard display, it goes, hi how are you doing? Remember since 1983 Amex had it coming up and for whatever reason, Amex, Lexus, a whole heap of advertisers actually got into this as in-programming and allowed… So it’s actually real advertisers in there, in these displays and you give it as an example of probably not the best advice from their ad agency you know.

A strange [xxxxx].

And it’s just all, and there’s others, there’s other examples and it tends to be consistent through Hollywood’s eyes of what will it be, no longer was the, I think the Fifth Element or whatever it was, the Sixth Element or… with Bruce Willis, so it’s nowhere in sci-fi stuff but his mailbox is a digital mailbox that comes up and before his mailbox comes on and says, you can win, blah, blah, blah, blah, blah, so the real sales promotion hype, interrupting everything. That’s probably the worst case scenario, that’s out there. You know, if we are going to have 80 hours worth of media, that that media is going to be thrown at us in some sort of jumbled mess, with no control, is probably…

(Recording stops in mid sentence)

Interviewee: …you’d be out of control model, so if there’s going to be all this content out there, having it thrown at me with no filter, is probably my worst nightmare. Because you know… our Contents Director, Hugh, used to head up Spike in Japan, and again going to Hollywood popular culture – I can’t remember the movie now with Bill Murray, it came out last year and won a whole heap of Oscars. ‘Lost in Translation’.

Andy Lloyd James: Oh, yes, yeah.

And he said you know, a lot of that was for real, because it was exactly what he went through when he went there. And that he called it “the natural syndrome that Westerners use when they go and [xxxxx] into Tokyo” of you just feel worn out, after your first week, you come in, you’ll be hot and you just feel worn out. And the studies are, it’s of course you’ll be bombarded. Also it’s the [xxxxx] but your brain is constantly being stimulated, so everywhere you go you’ve got big billboard Times Square style sign, everywhere you go there’s people on mobile phones, everywhere you go there’s people. So your entire brain is saying – Aargh!… And people just feel worn out from that. So there’s, you know, I think there’s a physiological issue with this unless it provides us with something else.

Yes.

I prefer to think and coming back to the second question, I prefer to think that technologists will come up with a way for this to provide us with more calm rather than less calm. Our history hasn’t really proven that to be the case unfortunately. We get more junk mail, more ads, more hype…

Yeah.

I’m hoping that the consumers will allow and whether it be the Yoga Society that comes back into balance in the way that we consume these things, hopefully it provides us with the control to say, know what, enough. I want quiet time but the quiet time is shhh everything, you know, that and it’s certainly something that I try to instigate at home but again, my wife’s tough, she veges out to the hype.

Yeah.

Hype going up music, got to diet you know, music and the scotch thanks, and I’m in heaven. But other people, the majority looking at us veg out to hype and noise and I…

Is this what’s leading to this sort of motion on the web of [xxxxx] walled gardens, enclosed environments? That sort of thing. Is that the sort of…?

Not really, I mean the hype, AOL is the biggest Walled Garden in the world, and it’s a horrendous failure outside of the States, and its approach had been led on mainly kids. Don’t let the kiddies see porn, don’t let the … you know…

Oh, I see.

It’s just how they’ve structured it. I do believe that technology will provide Walled Gardens, I don’t want to see this ever again, and you’re seeing it now with things like Spam Block, it’s so… we’ve got Spam software here called Barracuda that will basically go, look, I think you’re [xxxxx] to be on a list somewhere in the world, and I’ll get an email once a day with these messages have been put into a little archive for you, did we get it right? And if I said no, you didn’t get it right, I will never see an email through those people… Sorry, so no you didn’t get it wrong, I’ll never see an email from those people again because it just takes care of it for me.

Yeah.

So yeah I think there is a degree of where those Walled Gardens come, if you’re going to be… you know, you’ll end up with a network, if it be that you’ll end up paying Foxtel in the future. I think a fundamental issue with Foxtel, or missed opportunity with Foxtel, has been the way that they’ve rolled out digital. I don’t know whether it was a legislative issue, I haven’t got to the bottom of it but they had a fantastic opportunity and the Government really got behind this as well, but they had it presented to them to smarten up the Australian population. So, you know, Foxtel’s doing a great job of getting those boxes into houses and you could grow that option later for all sorts of stuff. But now they’re making them digital, they’re putting a specific phone line in the back of the thing, and giving it to you as part of the description of the quote, it’s a closed garden approach.

Yeah.

I agree with the closed garden approach, but why didn’t they put a high speed connection on the back of the thing? Because they’re Fox and it’s the same cable, because it, you know…

Why use a phone line?

Why use a phone line? It’s the same cable that you’re getting your broadband connection off, guys! How to [xxxxx] lifting up another 20 bucks a month, rather than 50 bucks a month.

Was that [xxxxx]?

But they’re doing it at the full right handle it, and then with the hardware and software that you put in the box allows some of this control, this is what T.O. did in the States, except for the connection. Allow the people from that to say, walled gardens build a profile on me that I’d built for myself, get rid of the rest.

Did [xxxxx] both [xxxxx] giving that one for the IT guys for this year or… whatever…

IT will struggle in this market, I really think that they are going to be pretty late to market, you’ve got Microsoft, they’re competing with them pretty heavily in the same space that you’ve already got personal video recorders that again, if those personal video recorders are then linked to the internet in some way, all that programming intelligence that TEBO brings will just be there for free. I’m not sure how far the hip pocket will extend, the way things are going, you know what I’ve done, I don’t need another device!

Yeah.

So I do think that you‘re going to end up with more devices, in the home but I think the ones that will win will be the ones that handle multiple devices.

[xxxxx] what you’re talking about will actually make it easier for me as a user to control the whole lot…?

Now Windows Medias, it does that, I don’t think it does it that well, but in terms of price point for what it provides, it’s extremely good. I thought that Microsoft [xxxxx], but I think financial pressures because Microsoft had been a client, isn’t anymore, but was a client for so many years. We got some interesting presentations given to us up in Redman. And it would have been 3 years now, so 3 years ago I watched Steve Borman, the head of Microsoft present X-Box. Wonderful, outstanding technology use, and we’re going to go and take on PlayStation, and a big light went off in my head because I’d also gone up and seen their E-home demonstration and at that stage the E-home was a software package like Medias, and it was just Microsoft kids having fun in the house. And I was [xxxxx] into the X-Box, you evil bastard, you know, and at that stage he was showing it with this big hard drive in it, with an internet connection but it’s just a gaming console, because we’re going to be able to network all these games and then we can all play. But that basically was a very sophisticated computer, but again with consoles built on the top with your TV and I though, great, you know, I like where you’re going, it’s very smart, and at the same time they were demonstrating inside the same technology, these little headsets that as a game you can actually talk to somebody else you’re gaming with, anywhere in the world. So I thought, oooh, all right I could see what Microsoft’s doing here. Firstly they’re trialling whether they can come become a Telco, because in Microsoft, everything in the States you can actually buy the internet connection for them as well. So you buy your internet connection, they’ve got voice-over IP, they’ve got this box that handles everything in your house, plus a gaming console, all for 250 bucks, isn’t that fantastic? And you sort of say, well why is Gates doing this, and why is Borman doing this? It’s to control the lounge room the same way it controls the workplace in the last 20 years. And what they… I think a stumbling block for them, probably 18 months ago was – I would almost stake my life on –there was a conversation with HP, Dell and a couple of other major manufacturers of hardware coming to Microsoft and saying, if you want to damage your workplace ownership, there are options over Windows now that are quite good, there are options over Office that are quite good.

Yes.

They’re cheaper, we’ll stop shipping with your product if you are going to come into the hardware industry, which then very quickly led to Windows Media Centre being a software that could only be happening with HP, Dell, all the big manufacturers of hardware. I would almost guarantee that’s what happened to Microsoft, so they said, okay the only hardware that we actually provide is X-Box,

X-Box 2.

X-Box now shifts to a lower spectrum than it did when it first started, so it doesn’t have the big hard drive it used to have in it, it doesn’t have any other sort of stuff in it. So now you think, the X-Box is just part of the media centre, in their positioning. So, specifically we’d say, well no we’re going for global domination, got close and went no, no, we weren’t trying to do that, and probably had a few distractions along the way, you know, with trust and issues as well, so. And I think that could help, because I certainly don’t want Microsoft dominating my entire life.

So the worst [xxxxx] is just a complete invasion of content and [xxxxx]?

Bombarded I think is the word, is what we don’t want.

Yeah.

If all this content continues, it could be pushed at us and no one understands it all or want use, even if I could tell you one thing and then you let that stop the way I do things. That’s got to be the way of the future.

If you could do it, what would you do, what would you do first, what needs to be done, this is the last two questions, what needs to be done first and if you had complete control of, which is [xxxxx]. Just do it, the sky’s the limit.

I would love to run Foxtel.

You what?

I’d love to run Foxtel. I think they’re in the ideal position, you‘ve got the back up from Fox, so you’ve got global content providers sitting in there, with pretty good local content, not great but good content, but I mean coming from a TV perspective, not great local content, some great local content from a news and journalists perspective, over the odds, etc.

But you’ve also got Nine there, which must mean at least in capacity, in local content…

Yeah but Nine’s issue is distribution, so Nine’s big distribution channel is free-to-air, and the problem with free-to-air is technology, so that the technology of free-to-air, and you know digital down a wireless broadcaster, is pretty limited as to what it can acquire in advertising, so…

Go back to what you said, you’d like to own Foxtel?

Yeah. I think Foxtel has got the technology there, I think you know, I would go back two years to when they decided to roll out digital boxes and just change the specification of those boxes slightly.

To what?

The internet. Connection, so if you bundle the whole lot because that would then allow Foxtel phasedly, should they work quite heavily with Telstra to make sure that the infrastructure issues and Telstra will sort it out. That’s if you could move an average 1 megabyte per second to more like 5 megabytes a second, down the co-axel cable, it’s that far off being possible, with something [xxxxx], a fairly a large expenditure on the part of government. You can then move into things like video on demand, and programs on demand, so rather than having to have the big TEBO, PVR or computer sitting underneath, you can actually source it whenever you want because, hey, that’s how the content providers source of it. Now pay TV are in a much position to realise the value of that because they have got a subscription model with you.

Yes.

They’re also in that format… again, Pay Television could have a lot broader content with secondary channels, in fact when you’re a secondary channel you can have a billion channels in the back end, because there would be real integration between internet content and television content. Obviously this is coming down a different screen and it’s leaning back rather than forward, so the smart advertisers wouldn’t make something if you have to be in front of a keyboard for, so they’d make it very simple like one of the examples from B Strike B in the States.

That’s right, you can do it.

What we are seeing still, although I can… watching the guys over at MCN improve this, is an understanding that, well, I‘ve just spent, our major specs say I’ve just spent a hundred billion dollars worldwide, it might be, I’m getting all my data together, so you know all my systems and data and everything else is in a pretty good open framework environment, highly secure but I can access it when I want, including marketing databases. Having the Walled Garden and Foxtel coming and saying, well, give me your database and we’ll do something really cool with it, is wrong, you know, because at an ad agency I would be certainly suggesting HSPC get into that, because the issues of privacy and… just I guess market security, I wouldn’t be giving that information across to the Packers and to the Murdochs, if I was HSPC. I’d want to control it myself.

What’s the issue here? Are they in [xxxxx]… ?

I don’t know whether it would make is easier or…

But I don’t see that as HSPC…

Oh, their big issues would be, well they’re our customers, we don’t want them to be your customers, so if I go and do an advertising campaign on Foxtel, I want… I will have an optional [xxxxx], let’s just say, you’ve got a home improvement show, that’s fantastic, great, we’ll advertise our home on it, in that area and we’ll have an HSPC area that comes off that sponsorship and pushes them into our… Now that back end that pushes them into something should be HSPC’s and there is no reason we’re going to rebuild that to Foxtel’s way of doing things in that direction. Or you should be, what you should be able to do is link that into Foxtel and just have a Foxtel interface that is designed for Foxtel, therefore an ad agency can get on to doing what they’re good which is interface, and companies can be still comfortable, but well the data security is all there, I’m very happy, you know, it’s a one way stream into our database, it’s secure and no one is going to hack us, all those sorts of areas which are big issues, So, that would be what I would have loved to see happen, and it hasn’t happened anywhere in the world and obviously the reality is to competition and the likes, that means that that‘s probably a distant wish.

Do you still [xxxxx] that you felt subscription television here getting much [xxxxx]?

I think again, it comes down to content, doesn’t it?

Yeah.

If they can get…

If I can ask you a question, would it be… I mean you were really interesting earlier on when you were talking about loyalty to the content rather than loyalty to the provider, and presumably some [xxxxx] television has cut it half way down that path. I assume people subscribe, like me to Foxtel because they actually want these specific channels faster.

Yeah.

I want to see those.

The interesting thing is that Fairfax as I know have tried a long time ago, Fairfax is [xxxxx] but not as far as it’s very useful for them and they’re obviously [xxxxx]…

Not very good at making money, the old ABC. Not really in their mantrum. So everything that you do with the ABC is probably very journalistically, helps everyone feel very good about themselves, but probably doesn’t make [xxxxx] so great to the shareholders, so…

It’s pretty much a feel good phase!

Is it? Unfortunately in these commercial times, it probably doesn’t award you the bonus that you’re hoping to get.

Yeah.

No, its just not structured that way, maybe it will be in the future, who knows, you may find that people have to start paying for content in those areas as well.

Yeah.

Who knows. It would a very big change for Auntie if it did go that way. Yeah so, I think I’ve answered the question on the highest priority of the actions to lead forward is again… I think in the industry we need to pull our heads out of the sand a little bit. I think you’ve got to have a little bit more strategic thinking, and hopefully some of that comes out of what you produce. As to how we roll some of these thing out?

Yeah.

I think rolling.. the roll out of digital television for example, has been very muddy, very ugly.

It has.

Now we’re entering into interactive TV, and everyone thought digital was interactive TV, the first version of digital that we had demonstrated to us maybe 5 years ago, I think Ten was pushing it pretty heavily because most homes, it’s a 16 by 9 format, that’s great but probably more relevant to Panasonic in the production of TV screens than to me as a media buyer.

Yes.

I think hopefully, if the ad industry gets it right we’ll be more involved in those sorts of areas, so that we can actually put our 2 cents in and say, look, great, this is fantastic, we’re getting… if it is Foxtel, for example and they’ve come up with some great ideas for them to use some of their less frequented channels via their internet presence to actually get more interest as a whole to News Limited properties. If it is that, well okay, let people see the content I’ve got, make it easy for them to access that content, and hopefully make some money as the producer of that content along the way, I think as advertisers, all we can hope to have is 1 or 2 seats around the table to say, right, that’s great, but you’ve just killed an entire 40 year industry.

Yeah.

Because we’re all geared to this 6 digit bank, you know, biggest revolution has been going for 15 seconder, now to top and tail 15 seconds has been the biggest thing in our industry in the last 20 years. This outstrips it at about 100 to 1 in terms of, you know, I am going to have to retrain my staff, I’m going to have to retrain my clients, I’m going to have to work out how to make this effective.

Yeah.

So I think that we’ve got to have the right people around those tables to be saying, great, let’s get some brains in the room and work out how the advertising models are going to work rather than going, oh great, we just changed the entire universe, oh sorry we forgot about that, and oh hang on a minute, you‘re how we make money.

Well that’s it, you are the cash, I mean I don’t to say anything personal but you are!

No, clients with the cash, yeah.

And if you’re not at the [xxxxx] – and this is very much what this project is about, and the reason I think they have decided to [xxxxx] with UTS was because UTS is an independent University, and lots of people have been put through university in a way that [xxxxx] some people in the industry.

Absolutely.

So yes, I hope it does work like that for you. but you can’t change what [xxxxx] advertising in the [xxxxx] someone’s product.

Mm, hmm yeah and it is. A number of lessons can be learned from content, publishers online. There are a number of very large companies, I can’t remember if it was the Financial Times, one of the finance, it was either Financial Times, which I think it is, or the Wall Street Journal, have racked up significant losses as a business in the last 5 years. And these are institutions for information, but they’re not making any money and a lot of the areas they’ve lost their money in has been put down to revolution in interactive and the way that they’re distributing that content. And I think this was, oh who is the Editor of the AFR?

Australian Financial Review?

Mmm.

Um, I don’t know.

Spencer Guild? Is his name Guild, I think it is. I’ve only met him once. Was speaking about exactly this, and saying it’s a really big challenge for them, not to follow in the footsteps of the AFR, I would love to sit there and say, right, you know, all of our content is free online.

Yeah.

But the advertising model there isn’t, making up the shortfall in what it’s costing them to actually serve that content and what it’s costing them to generate those websites, so it’s a very tough period in time for a number of these content producers to commercialise what is still very good journalistic content, right through to entertainment content, and I think that’s a really big issue for them and if they don’t get that right… So going back to your point, yeah, if we’re not included in that or the advertisers aren’t included in that, we don’t get that right, or they’re probably going to come up with a great way to lose money, the customers are all pretty happy, but they won’t be in the long term, they’ll probably…

The web looks after itself…

Because we will all be…

[xxxxx]

We’ll all be watching CNN. You know, and wouldn’t that be a horrific thing to happen in the Tsunami Disaster would be turned into, it could happen to us if a volcano falls into the sea 10,000 kilometres off the east coast of the States, we should get exactly the way they actually reported it in the States.

They said [xxxxx].

Yeah. I was appalled by their coverage of it.

It’s such an inside country. [xxxxx]…

Yeah, I mean the educated people in the States are saying about our world mirror, and I say yeah I know, absolutely, but you know it’s what Middle America wants. It’s like saying [xxxxx] because I think they would [xxxxx] going back to your, I think your third question, the worst outcome I can also see, is a bombardment of the US comes in, I think we’ve lost a lot of our local…

That’s why I keep coming back to local content, and what’s going to pay you for it because [xxxxx] I disagree with you. That’s sad. Walking into a nightmare, whether it’s CNN or [xxxxx], if it isn’t, I mean the television has cut the mediating channels, not just salaries, the audio visual media has such a potential to go on working the sort of nation building thing which [xxxxx] and it has to have a locally made, locally produced content.

That makes sense, I mean if you look at the ABC for example, the Triple J Network, and all the related websites that are around that are a tremendous asset to the users of public country.

Absolutely.

It’s free content. It’s not TV but various, you know a large amount of… that’s just great, so I do think that the content will still stay local, what I hope doesn’t happen is that we lose too much of that local content, through a phase of globalisation that then leads to a rebellion but during that globalisation phase, we lose some of the sophisticated producers and then we sort of get to the stage that we go, oh okay, we’ll 90% of our content crap, it’s all over from the US, and then we go, well what do we have to do now? Well now we have to rebuild the industry you destroyed 5 years ago. Oh okay, let’s take a look, so hopefully we don’t lose that support for local content, local ideas.

And the problem is we’re coming off a slightly lower basis than a lot of people [xxxxx] we’re regulating to 55% local content and I think the ABC is between 55 & 60 hopefully, whereas in Europe, the United States certainly, but Europe and the UK, you’re probably talking 90% local content. And a much more sophisticated viewer report than [xxxxx] so I think you’re right, I think the potential to lose that infrastructure is a really big potential.

It is and you know, I keep coming back to the West Wing side of things because it’s a few years, I mean I would… programming is an interesting thing in this country and good quality drama like that doesn’t come along every day. It astounds us how they get very late at night, because it’s one of the most… more intellectual programs that’s actually in the drama space rather than you know, preferably Home and Away, but you look at ratings of Home and Away and you think okay, and it’s to this [xxxxx] you’ve got local content but that’s actually… well you might… I’m a little bit [xxxxx]… that rates well and keeps people employed, which is great so it serves its purpose. I mean you’ve got great local content, what I hope doesn’t happen is we lose our good local content, and we have seen that in the last couple of years. We’ve… with the world document issues, with reality television and the struggling drama, you known sophisticated drama, in Australian scene.

Sophisticated drama I think it’s just a question of [xxxxx], I think what’s happened is a massive loss of courage, in all the broadcasters, most notably the ABC which is trying to use its drama for big audio stuff where it should actually be using its drama to open up new ground.

Yep.

I produced Wild Side and – which is my last sort of the drama venture – and it was a huge [xxxxx] success, it wasn’t particularly audience success at all, it didn’t sell it overseas and the people who then [xxxxx] the ABC to [xxxxx] message and we’ll just wondering around the [xxxxx] SBS I don’t think has got the funds to get there, commercials it’s not their business [xxxxx] that much, [xxxxx] it is [xxxxx]?

I think that the interesting thing there is again from the… free-to-air is going to struggle because of this, you‘ve got 24 hours of content on one channel with a back channel, it’s as far as digital TV can take it, whereas Pay Television it’s coming into the [xxxxx], the cable which feasibly means that we can have a lot more channels with better content or more niche content, which means you should be able to produce a good local drama and if, you know 10,000 people watch it, that’s great.

And that’s one of the real signals that’s coming from [xxxxx], which is a model for the content and technology [xxxxx].

It’s revenue.

It’s revenue, so if it’s not going to contribute revenue today, when is it going to contribute your revenue, is more and more where the people are understanding brands to go. The sophistication in digital modelling and some of the very pointy headed brains behind marketing and certainly the stage where we’re seeing that happening more and more here with some modelling companies, is that we will be able to with a fair degree of confidence, certainly giving 2 years worth of data, to be able to say, well if you do this, you’ll get this, and there might even be a minor spew, but it might have a massive impact on your bottom line over advertising.

Are there modelling companies here doing this?

We’ve got one inside [xxxxx] called SPO, which came out of the States, out of Japan actually. And we also own a company in the states called MMA which is one of the larger companies [xxxxx] this, much bigger in the US than it is here, it’s starting to come in here but I… on seeing all the signals coming from advertisers is then it’s got to be a big market, not an area we’re going to go into, but it is certainly an area we would be pushing our clients towards because we’re going to see them spending a lot more in our areas than they would in their traditional fields. Simple analytics that we are seeing, that we might run a simple regression that will show it in issue return models, online, and we’re seeing that across the board, which is just saying that we’re not even close to getting to the end of spending that we need to be too sophisticated at the moment. Across the board, you don’t see anything diminishing returns from adding interactive style communications as you see with your traditional advertising, so we’re not removing it, just complementing.

Yep.

You’re not seeing any diminishing returns until about 10% of your budget. So there is very few advertisers in the country giving this 1% that’s being spent on interactive. Very few advertisers spend enough to even work out the sophistication of how is affecting my interactive spend, most of them are saying, oh I’ll spend it until I see less sales, and then work out the models. Which is very unsophisticated, but when you actually run a model and it’s just saying well, you added the 10% along the line to your budget and you saw sales increase 20%, you sort of go, well we’re not talking percentage point here, we’re talking big revolutionary change. That’s a message that’s only sinking through to some. That makes agencies like ourselves, agencies like [xxxxx] and you end up starting to see main stream agencies whether it be a chemistry or whether it be a counter interactive coming in and actually understanding that. It’s getting to come on like HSPC and Aussie Home Loans in there and saying, I’m going to spend 20% of my money online. Because they’re seeing this massive increases to they’re bottom line coming out of it. What will happen there is once, if we get digital TV you know, that will be just as well to take that money from online and actually put it where [xxxxx] and I think that will be more powerful than anything we would have thought of. You know I would love to see proper advertising coming in from the Holdens and those sorts of guys where they actually allowed you to say, yes I am interested, and then via geography or whatever else, a Holden dealership rings you and says, well Sir, you said you’d like to come in on Saturday, I’ll have a car here ready with your specs for you, are you still coming? I think the fallacy would be that the car would be delivered to your house to test drive it, again [xxxxx].

Sure.

But just go that extra yard, a Holden’s sitting there, that you just met, you’ve increased the amount of people that test drive your cars by 25%. And you know the model is 1 in 4 will buy. So you’ve just increased your sales by 25%. It’s a very simple equation.

It’s interesting, [xxxxx] in another hat, that’s what I’ve been talking with Foxtel management and they have [xxxxx], he said, it’s more of an educational [xxxxx]…

That’s good. Excellent.

But seriously, thank you, that was great, I’m sorry I’ve taken much more time than I…

(walking whilst recording)

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