The Biggest News From CES 2019

Posted on by Larry

Mark Harrison is the Managing Director of DPP (Digital Production Partnership), a UK-based organization dedicated to helping media producers and organizations understand and handle the onslaught of technological change in our industry. He’s also a former producer at the BBC with more than 20 years industry experience.

Last Friday, as part of an up-coming segment for the Digital Production Buzz, I interviewed Mark. (He was holed up in his hotel room in Las Vegas writing a report on CES for his members.)

I’ve interviewed Mark before and found him to be prescient about trends in our industry. So, to start our conversation, I asked him about CES. His answer was both surprising and deeply troubling.

THE TRANSCRIPT

Larry Jordan: Mark tonight, we’re going to be talking about privacy and security as we move more and more of our media and assets to the cloud. But, before we switch topics, we’re recording this interview on the last day of CES which I know you’ve been attending on behalf of your members. From from a professional media point of view, what are the highlights?

Mark Harrison: You know Larry, I think what’s extraordinary about this year’s show is that we have witnessed an absolutely fundamental change that revolutionizes media and yet nobody seems to have noticed.

What we’ve seen this year has been, for the first time, now widely across a number of display manufacturers, the integration of truly intelligent content search by voice. Most of these are integrations with Google assistant and, as you probably know, Google Assistant is quite good at contextual search. It can have a bit of a chat with you about things and it can go beyond just instructions to switch things on and off. So what we’ve seen demonstrations of this year has been the capability to search for content using voice.

Now why [do] I think that’s so important? The reason is because we’ve been talking for years about the challenges for content providers [to keep] their own brands distinct in a very crowded content context. Once you have search by voice you can actually disintermediate [content providers] altogether. [This means] you’re not searching for “What’s On Netflix” you’re just searching for a particular show.

Larry Jordan: This would be very analogous to Google News where Google News aggregates news from a variety of newspapers or news sources and delivers it in a single distribution format which is a web browser. We’re doing the exact same thing except now we’re searching for media, and it’s delivering the media to us in our web browser.

Mark Harrison: Yeah that’s exactly right. It’s just like that. It’s also very much like what happened in the music industry of course because [today] who knows what record label a particular album is being recorded on? Nobody does. You just search for the title of a particular piece of music or you search for the artist.

Larry Jordan: Well, that had a devastating effect on the music industry and it’s also had a devastating effect on the newspaper industry. Are you expecting the same kind of financial chaos in media?

Mark Harrison: I think there will be. Certainly huge change. Whether it becomes chaotic, whether the commercial models are transformed remains to be seen. It could be that the commercial models really shift because it could in time put the commercial power back into the hands of the creatives because the creatives can now go direct to the consumer. (Although I thought [there might be] some kind of intermediary organizing platform of some kind.)

But you know this is going to take a while. It’s going to take several years. But if there is a Netflix killer on the horizon it could look something like this.

COMMENTARY

If you are a content producer, Mark’s thoughts are great news. It means that you can take your projects direct to consumers more easily than ever; though this also means you bear all the responsibility for marketing and distribution. The gatekeepers that have traditionally funded and controlled distribution no longer block your access to the market.

If, on the other hand, you are a content producer/studio/network with a library of titles you expect to earn revenue on, this is terrible news. It means that your brand name and distribution clout is quickly diminishing in value as consumers search for titles and artists, not distributors.

There’s also a corollary: big budgets – for production, marketing and distribution – are still controlled by the studios. As the power and reach of studios become bypassed, those budgets will also decline. Only “sure-hits” will be likely to see significant financing.

A clear analogy, as Mark mentioned, is the record industry. Do you care what label Beyoncé records on? No. Do you search for music by record label? No. For artists, this is great; but look at how it devastated the record industry over the last ten years. Independent artists can easily reach audiences through social media, but marketing and promotion dollars are only allocated to the biggest stars. Everyone else is scrambling.

You only need to look at the perilous financial state of newspapers, magazines and the record industry to see the potential for significantly disruptive change in our industry.

Mark is seeing the same forces now at play in visual media. If you can search and access Game of Thrones directly from a Smart TV, do you care what network produced it?

We can’t reverse technological trends, nor their impact on the market. But, we can reflect on them and think about where we are vulnerable and where we can benefit. Consider Mark’s comments a warning that, as usual, change is coming.

EXTRA CREDIT

Mark’s report on CES, which includes more details on his observations, will be published early next week and available to members of the DPP. He gave me permission to share this sneak peek with you here.

Anyone can become a member of DPP. Learn more here: www.digitalproductionpartnership.co.uk.

And, you’ll hear Mark’s full interview on the Digital Production Buzz show for Jan. 17, 2019.


6 Responses to The Biggest News From CES 2019

  1. Its the Jack Kilby model all over again! But instead of chips or Shannon’s communication theory disrupting traditional technology or communication frameworks, home studios (with the help of cheap DAWs & NLEs systems) will allow the artist to reach their audience directly via content – cutting our the middle player. Good or bad, that train has arrived for media prod/dist/marketing.

    • Jim McQuaid says:

      While some of these changes may be revolutionary, the question of how you become known so that people will even search for you remains the biggest challenge. Anonymity is a bigger problem than piracy in other words.

      Even if I’m not searching for “what’s on Netflix” I’m still seeing a lot of Netflix advertising informing me about things I might want to search for wherever they are. That is a little bit beyond my ad budget.

  2. Clayton Moore says:

    “intermediary organizing platform of some kind”

    Apple !?

    Kinda sorta like Apple TV search content by Siri voice and Apple News (instead of google)?

  3. This is vitally important. It’s a horrible term to remember and to discuss in a verbal conversation. Disintermediation. Untangle my tongue! It needs something as catchy as “cutting the cord.” But it is so important. Clearly, you’re right to call it the biggest news. Thank you, Larry, for pointing it out, and your analysis of what it means to us all feels very accurate.

  4. There is a elephant in the room here. To watch Game Of Thrones, you need to subscribe to HBO. If don’t subscribe to HBO, I don’t get to watch regardless of search unless I subscribe to everything or everything is a la carte or free. It is not right now. I have many times have searched on my Apple TV for a movie to find out it is on a service I don’t subscribe to. So I don’t watch and watch something else.

  5. Clayton Moore says:

    Disintermediation and cord cutting are related.

    To put it bluntly although they are not necessarily conscious of it as a concept, people are pissed off at intermediation. Not only does it feel inefficient as a distribution medium but it feels financially inefficient and greedy.

    Having said that, viewers feel that cord cutting should mean lower cost by only paying for what you want. But will it turn out that way?

    Some networks offer current TV shows streaming for free, one or two want you to pay a monthly fee for that either directly or via a HULU add on fee.

    So you have:
    HULU
    Amazon
    NETFLIX
    Youtube (Google)
    Apple (free with Apple TV or other device)

    The question is by the time you add it all up are you still paying the same or more for OTT TV then for cable? But thats just a question of cost, what about the actual compelling nature or the content itself. The original content you don’t get to see anywhere else.

    CBS wants you to pay THEM separately in order to access their broadcast content via OTT.
    The other question perhaps for the broadcasters who want your money for their content apart from traditional cable is, “What makes your content more compelling that way then via a digital TV subscription? Will young cord cutters who don’t watch your TV now, all of the sudden find the same content Must see OTT TV for which they will have to pay you more ??”

    I think Apple could use their market to become even more embedded in the intermediary process by leveraging their ecosystem………if they chose.

    The question is, will the preference of the new viewers in terms of how they prefer to get their content drive the mechanism for distribution or will providers try and drive the bus. If you think about it, multiple screens (larger screens and small mobile screens) running at the same time may be part of what drives how content is developed and formatted. Its an attention span thing like it or not.

    Between attention spans and general lack of patience, and the speed at which people will move as time goes on, there is no way that “voice” wont take over as the way to look for, and discover content. Providers will have to know how to leverage peoples use of all devices to push out there message.

    How will people who have products and services to sell reach their market is also a very important question. A question that has to be addressed to keep us all solvent and help us
    discover cool new stuff we never knew existed before.

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