Project Timeline 2005–2010

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The world of analogue television may be likened to a game of two-dimensional chess. Complex though its rules may be and excepting the presence of time, movement in the game is limited to two dimensions. The world of digital audio-visual content has the same base but is like three-dimensional chess played on multiple levels, giving the players immense flexibility not only to move around but also to move up and down and then around again. More flexibility and opportunity but, of course, more challenge and more uncertainty.

Outside the Box was initiated to explore what influences would come to bear on the current model of Television in Australia between 2005 and 2015 and what the impact of those influences might be in shaping the “new” television of 2015.

At the start of the research it was already clear that significant change would impact the current model over that ten years. There are a range of key change drivers and the project was initiated because two at least were already coming into play: the influence of digitisation and the growing influence of mass connectivity across many platforms. Both augured new ways of contemplating the production, delivery and consumption of audio-visual media.

The methodology chosen was Scenario Planning involving the following stages both at the Seeding phase and in the full project:

Summary

The interview process has now been completed with the very valuable cooperation of over twenty five significant professionals. Each interview was based on the same set of questions but ranged as freely as the interviewee wished. All of the contributors were extremely generous in sharing their thoughts and I am grateful for the time they spent.

The attached outlines of issues represent key elements of that thinking married to research already carried out by the project’s Researchers.

The document research has employed a combination of research reading and Leximancer document analysis. That work is still in progress and will be delivered to the participants as an addendum to this document.

Stage 3: Summary of Initial Findings

To explore this world, the research so far has focussed on the political, economic, sociological, technological and environmental influences which will come to bear. Inevitably in a sector as disparate and rapidly-changing as audio-visual media, these influences interweave. That process, as much as the original influences, is what leads to so many areas of complex uncertainty. As a result, these influences may be captured in a number of different ways.

This paper has selected a range of headings which group issues in a manner which reflects the overall emphasis of the interviews and allows for future potentials.

The issues for each heading are contained in two sheets:

The listings are not exclusive and are intended to stimulate further the thinking of the researchers and the participants. In some instances issues are cross-referenced over a number of headings. It is important to remember that this stage of the research is intended to consolidate the perceived issues, not to try and explore their outcomes.

Illustration 1 is the outline overview issues map and each of the topic areas has its own illustrative map. A fold out-map is included which encapsulates the full list.

Cross-referencing the headings (using the fold-out map) clearly suggests a large number of significant strategic uncertainties some of them of very considerable national importance. They include but are not limited to:

The Summary

Illustration 1: The 13 Main Headings This Map and the Fold-Out should be read clockwise from top right

The Consumer

Listed first because consumer response and reaction to changing technologies and opportunities will inevitably prove to be one of the key uncertainties. That response will be affected by changing demographics and the impact those changes will have on how and where we live. One interviewee in particular has provided invaluable insights into likely sociological shifts over the next ten years. These insights will be expanded at the forums.

The key certainties have been examined through widely published demographic reports, they include the following issues for Australia in ten years time:

Full demographic research will form part of the main project.

The outcome for this stage is to tease out interpretations of what these demographics mean to they Australians will live their daily lives: what uncertainties and issues they will raise. These include:

Needs and wants for youth, working-age adults and the elderly:

As the project explores those issues and begins to build scenarios, Wild Card elements can be drawn in (Health, National Economy, Conflict etc) along with technological potentials.

[Illustration 2]

Marrying Broadband and Broadcast

This heading captures some of the primary technological, regulatory and content issues raised by the potential of bringing the two communications technologies together both in the consumer’s home and in a mobile environment.

There has been much speculation about convergence of technologies in the home and elsewhere. The kinds of issues thrown up in the interviews include:

This heading has numerous cross-references with virtually every other heading, particularly Investment, Connectivity and IP/Content.

[Illustration 3]

FreeTV in an OnDemand World

This incorporates those issues which flow for current free-to-air broadcasting and production as a result of globalisation, digitisation and the consequent growth in the number of delivery platforms/carriers and potential changes to current Government policy.

Many of the issues included here have cross-reference to both Subscription Television and Public Service Broadcasting but each has its own Heading as well to deal with specifics. All of the issues listed here have reference to Commercial Free Television. Overwhelmingly they relate to an end to certainty, a shift from a protected environment to far greater competition. They include:

[Illustration 4]

Future for STV

This presupposes some of the issues contained in FreeTv (above) and adds specifics for the Subscription Television sector.

Clearly the fundamental issues for STV centre around its capacity to achieve a level of audience penetration which will allow for a sustainable business model. As and when alternative delivery systems (including FreeTV) expand, will STV have missed the its window of greatest opportunity?

Issues include:

[Illustration 5]

PSB

This also presupposes the two earlier headings. The fundamental questions for Public Service Broadcasting are, first, what role it should have in a multichannel/multiplatform environment. Second, whether its place in Government thinking will allow it to play any such role. PSB is a construct of the analogue system, a central element in delivering national cultural development along with the content regulations of FreeTv and a range of Government funded support agencies. Just as the FreeTv operators face change, so too does PSB though of a more complex order, particularly in the light of their funding which amounts to about a fifth of the revenues of FreeTV and for which ABC and SBS also run considerable Radio and OnLine services. Key uncertainties include:

[Illustration 6]

Advertising

Is singled out because of its central importance in funding FreeTV. As new means of accessing audio-visual content consumers expand, advertisers will have a range of new opportunities to reach those consumers. The major uncertainty is whether any fragmentation will flatten and/or diminish the scale of FreeTV revenues or whether the whole pie will grow. The key question here is the future of Australian content on FreeTV and the consequent viability of the Independent Production sector. Key issues include:

[Illustration 7]

The Australian Production/Distribution Sector

This sector has consistently been the focus of Government policy and regulation as the health of this sector is vital both for the national economy and for cultural, access and equity reasons. Television content production takes place in-house at the broadcasters and also out-of-house in the Independent Production sector. Market fragmentation has different implications for both as do the many other issues listed. There is no doubt, however that the fundamental uncertainty is the viability of the Independent Production sector as a whole. That of course includes the future of feature film. The question is what impact any change to the revenues of FreeTv and the PSBs may have and what opportunities exist to develop and implement business plans for new content on emerging platforms. Key issues include:

[Illustration 8]

Government

This heading is intended to include State and Federal Parliaments, including non-Government parties.

As indicated under other headings, Federal Government continues to play a dominant role in the development of television broadcasting in Australia through policy, legislation and regulation. Many issues regarding Government have been raised during this phase of research but there is no doubt that the most significant issue raised by the great majority of participants was the absence of an open national discussion on the future of broadcasting in a multi-platform world. Many contributors pointed to the nature of discussion in the UK and elsewhere, allowing for broad understanding of the issues involved. Further key issues included:

[Illustration 9]

Investment

This is included in the main headings because its fundamental importance to the development of both technology and content. Though it was not the focus of particular attention, the general issue of investment arose enough times for it to be worth extracting. The most commonly raised investment issue was the uncertainty surrounding the development of new business models for new content in a risk-averse market.
Other issues included:

[Illustration 10]

Intellectual Property/Content

This heading covers the least discussed but absolutely vital issue of the ownership and management of content rights. Almost all of the contributors included the question but without necessarily exploring precise issues. However IP and Digital Rights Management are key drivers in virtually every business model for the audio-visual world. The key uncertainty is that content rights are proving very hard to protect in an environment in which copying files is very simple and piracy is rife. In this context, one contributor described the current environment as “the convergence virus”, all-pervasive and unstoppable. Issues include:

[Illustration 11]

Connectivity

This heading covers the structural groupings and issues which will influence the expansion of Television into new delivery systems. The key uncertainty here centred around the comparative future strengths/weaknesses of Telcos/ISPs and new players in the carriage and connectivity business. Key issues include:

[Illustration 12]

New Media/Technology

This heading covers a range (certainly not exclusive) of audio-visual applications which will exploit connectivity. It is included as an indicator of the breadth of new opportunities that the current broadcasters and new content aggregators will need to explore (though not necessarily include) if they are to maximise their strategic advantages. Key elements include:

[Illustration 13]

Wild Cards

This heading represents the most profound set of complex uncertainties: those that will come from outside the current tactical scope of industry practitioners and commentators but that will become critical to their strategic scope.

Again the list is far from exclusive and one of the major challenges to the project will be to expand the list so that it provides a real challenge to the scenarios. Issues include:

[Illustration 14]