As Prepared for Delivery
IBC Conference Keynote Address
Friday, September 7, 2007
For 75 years, the consumer electronics industry has worked side by side with
broadcasters. This partnership has informed and entertained consumers across the globe
and together we have changed lives and made the world better, safer and smarter. From
music and movies to politics and science, our industries enlighten, challenge, inform and
delight. Let’s take a look: (Video)
This year, IBC celebrates its 40th anniversary. Congratulations! What a terrific event.
CEA also reached its 40th year milestone this year with our event, the International CES.
In 1967, as today, technology enabled broadcasters around the world to create and
distribute content. Forty years ago, when South African surgeon Christian Barnard
performed the world’s first heart transplant, most people learned about it first through
broadcasting on the radio, or TV.
For many years, TV was the #1 source for information and influence. Today, things
have changed. Broadcasters no longer enjoy a monopoly on content delivery. Ears and
eyes once devoted exclusively to broadcasters are now being drawn in by new forms of
content and new methods of delivery. Just two weeks ago IBM shared research that
shows more consumers get information from computers than from television. In the 70s
it was cable. The 80s- satellite, the 90s- Internet. Now it's wireless and fiber. New
channels create new methods for people to consume news and entertainment. This
challenges broadcasters. Viewers now expect the content they want, at the quality they
want, where they want it, when they want it. However, if broadcasters can learn to
anticipate consumer demand, adapt quickly, and take advantage of their assets, there is a
bright future ahead. Today, I will share some specific thoughts on how broadcasters can
prosper in this age of rapidly changing technology.
Devices and content are converging faster than you can say “iPhone.” Evidence of this
new convergence abounds at the International CES, our flagship production and the
world’s largest consumer technology tradeshow. Last year’s keynoters, Disney CEO
Robert Iger and CBS head Les Moonves focused on how they are combining content and
technology. Sony Pictures Television recently announced its plans for a major presence
at the 2008 CES, where it will feature entertainment content along side its parent
company’s electronics offerings. Beyond their core business of producing television
shows for cable and network TV, Sony Pictures Television is looking to CES to exhibit
the range and depth of their capabilities. We also just announced that Brian Roberts,
chairman and CEO of Comcast Corporation, the largest provider of bundled cable,
entertainment and broadband products in the US, will join the lineup of keynoters at the
2008 show. He joins the top executives from consumer electronics giants like Microsoft,
Panasonic, and Intel. And NBC, one of the three major broadcasters in the US, has taken
out exhibit space at CES.
More and more content and home entertainment companies are converging at CES. They
see opportunity. They’ve moved beyond the big screen in the theater and even the small
screen in the home. They see the computer screen, the PDA screen and the wireless
phone screen. Seventy-seven percent of Americans are holding the future in the palm of
their hands in the form of a wireless phone. In Europe, 478 million wireless phones are
in use. That represents 478 million ways to connect with consumers, whether they are on
the train, on their lunch break, or waiting in an airport. The same is true with PDAs,
laptops, and other portable information and entertainment devices.
The shift to multiple sources is next. In growing numbers, consumers are purchasing the
tools they need for anytime, anywhere access to information and entertainment. Twenty-
one percent of US households own a personal digital assistant (PDA). In Western Europe
that figure is ten percent. Eighty-nine percent of US households own at least one portable
device – a truly staggering figure. Seventy-six percent of US households and roughly 55
percent of European households own computers. One recent study says that nearly half of
Europe is regularly watching TV on the Internet. The study also suggests TV users are
starting to embrace other related services that can be accessed through IPTV set top
boxes. For instance, 57 percent of respondents said they want the ability to go online via
the TV set during a live broadcast. Thirty-five percent of viewers want the ability to
pause, fast forward or rewind live broadcast programming. Until now, the ability to shift
that entertainment content in place and time has lagged behind. For broadcasters, this
represents both a challenge and an opportunity for the future.
As president of the Consumer Electronics Association I enjoy unique access to some of
the great innovators and innovations of our time. Every year, at CES, I see a glimpse of
what the future will look like-not only in the products that are introduced, but in the ideas
that are shared and the trends that emerge year after year.
In the mid-1980s and early 1990s, I viewed HDTV as inevitable. I urged Europe to start
with HDTV rather than use a two-stage process. I helped oversee the US evaluation lab
and helped create a model HDTV broadcast station. Given European reluctance, I
predicted that the US would lead the world in HDTV. I pushed for a deadline of the 1996
Olympics as the latest possible date for the first HDTV broadcast. I cautioned against
advocates of delay—including broadcasters—because alternative media would more
quickly erode market share from broadcasting. In the US, HDTV was delayed during
testing and design phases, and further delayed by opponents who questioned the
standard. Not surprisingly, alternative media have quickly stolen market share from
broadcasters. And certainly HDTV is a runaway hit with American consumers. One
hundred seventy-one million sets will be sold by the end of 2010. I was right about
HDTV and I remain passionate about it. I met my wife when I overheard her describing
HDTV and I want my tombstone to have the aspect ratio of 16 x 9.
Now, I’d like to share a few more predictions for the future. First, HDTV will continue
to spread to homes throughout the US and Europe. The technology itself will advance
significantly in the next 40 years with even greater picture and sound quality. Right now,
scientists are working to develop ultra high definition technology that has 16 times the
resolution of HDTV. Today’s HDTV will soon be called simply “TV.”
Second, flat screen TVs will be everywhere, literally. In every room of the home, every
classroom, throughout shopping malls and public buildings. Goodbye to wallpaper and
interior paint. Hello to “video walls.” This pervasive media environment will lead to
increased overall consumption of media and entertainment.
Third—homes will become media centers, constantly receiving content from a variety of
different platforms. Television will be interactive, replacing an old, linear system with a
two-way interactive system. In the US, CEA waged a battled to enable consumers choice
in set top boxes to access content. The fruits of our labor will be realized in the future,
when consumers will live an on-demand life and will not perceive the difference between
IPTV and traditional broadcasting. The television experience will also bring together
radio, SMS, 3G, video conferencing, Internet chat rooms and web cams. TV viewers
will embrace a multi-tasking, multi-media view of the world as a matter of course.
Consumers will one day enjoy a seamless, media-rich life. That day is now on the
Fourth—the next Internet will evolve to allow a variety of exciting new applications,
particularly in the mobile space. We’ll see all sorts of products with their own IP
addresses. In fact, IP-ready cars will be standard issue. Consumers won’t just have access
to the Internet from their cars-their cars will have access to the Internet. Always on,
always connected-sending and receiving not only mobile entertainment, but important
safety information, like traffic and weather patterns, and real-time diagnostics on the
car’s internal systems. More developments in sensory devices, opto-electronics, nano-
tecnology and biology will allow phenomenal new devices and uses of the Internet. We
are truly at the dawn of this digital age.
And my fifth and final prediction-information will be much more customized than what
we see now. News, information, entertainment programming, even commercials will be
customized by and targeted for the individual. The traditional concept of “mass” media
may well be replaced by “my” media.
The future may seem like a brand new world and indeed it will be. But there is good
news for broadcasters who are willing to seize the opportunity to turn the digital world in
their favor. And the first step to doing that is to consider your assets:
As broadcasters, you own the highest quality spectrum there is, able to reach almost
every household by geographic region. This enormous bandwidth is more accessible than
any other network owner—including cable, satellite and mobile. None is as ubiquitous as
the broadcast spectrum. For competitors, updating their networks requires an enormous
investment in physical infrastructure, but not for you. So while you may be facing
competition from these new technologies, you have something they will never have. As
such, you must find new and creative ways to take advantage of this scarce resource in
the form of new services to consumers.
No other market has a direct pipeline into people’s homes like broadcasters. Across the
globe radio, then television created intimacy in the home. It’s where people not only
expect to receive their news and entertainment, it’s where they eagerly anticipate the
products of broadcasters like you. There is no ticket to ride or box office fare, no WiFi
access or 5-minute download required. Just a touch of the “ON” button and consumers
are automatically dialed into your offerings, from the comfort of their own homes.
Broadcasters have direct access to people where they live, an advantage that few other
industries can boast.
As human beings, we are invested in understanding and belonging to the culture and
events that surround us. As global citizens, we need to rely on a variety of media to
collect information about the world. However, this innate urge to know intensifies when
we're talking about our own communities. Who better to distribute local news, weather,
and sports than broadcasters? Consumers will always want this type of information, and
broadcasters are uniquely able to make local news and events available for citizens.
Broadcasters provide our connection to community, to government, to local culture and
sports. This connection to the world outside our front doors is perhaps the most
important connection we have as a people. And as long as broadcasting is the most
efficient way of reaching mass audiences with emerging news, live entertainment and
sports, you’ll continue to have a slice of consumers’ appetite for media.
Over sixty years of delivering daily news, sports and culture means that broadcasters own
the footage to our collective history. Events like the World Cup in Switzerland in 1954—
the first ever to be televised—or the fall of the Berlin Wall in 1989, create what amounts
to a treasure trove of archival content for broadcasters. By converting this content from
analog to digital and then indexing, cataloging and tagging these materials to make them
easily searchable, broadcasters can create commercial value in their assets. Footage that
may have been long forgotten can now be available in a variety of formats-small screen
for use on a handheld device, full resolution for HDTV or small clips for use in
documentaries, science programs and investigative reports.
High quality broadcast spectrum. A pipeline into homes. Citizens’ need for local news
and information. A database of historical footage of important moments throughout
history. These are all significant assets that belong almost exclusively to legacy
broadcasters. But let’s be honest: the broadcast industry, both US and abroad, is
challenged. In the last 5 years, technology has fundamentally changed how content is
delivered. Consumer behaviors have rapidly evolved, and other markets are starting to
eye the broadcast spectrum that has traditionally been yours. The current environment
may have you questioning-what is the future of broadcasting? As the title of this session
suggests, will you survive the challenge or embrace the opportunity?
Harvard Business Professor and best-selling business author Clayton Christianson
describes the “Innovator’s Dilemma,” where incumbents lack incentive to create a new
business model because it creates opportunity for competitors. Similarly, the noted
economist Joseph Schumpeter has theorized about “creative destruction,” wherein
innovation will destroy the market for your own product. The temptation is strong for the
incumbent, having long enjoyed a monopoly, to rest on old technology. In the case of
broadcasting, a failure to innovate will lead to the death of your company, or worse--
your entire industry.
Innovate or die—a catchy slogan, but how can this be accomplished? How can you
predict what the market or probability of success will be for emerging technologies? That
may be impossible. But the key to the future of the content creation, management and
delivery industry is to understand consumer trends. Adapt to what consumers want.
Here’s an example: Millions of people will attend the famed championship matches of
the World Cup this year. And yet billions more around the world will tune in through the
media-radio, television and the Internet. In 2006, the official website for FIFA (Fee-fah)
experienced a tremendous spike in user traffic during the tournament—4.2 billion page
views—as fans went online to find real time information on scores, statistics, player
information and a wealth of other content. This consumer demand for information
beyond what is offered in a traditional broadcast is a terrific opportunity for broadcasters
to develop services that keep viewers on your network.
Mobile technology is another opportunity to keep people from leaving your network.
Some 500 million Europeans use wireless phones, many of which already include the
ability to stream video. Recent developments in Mobile TV allow viewers to receive live
digital TV broadcasts on handheld receivers as they travel through many European cities,
with many more coming online all the time. Technology to enable mobile broadcasting is
ramping up at a phenomenal rate in Japan, and ATSC in the US has an aggressive project
to develop mobile/handheld capability, both of which make use of spectrum already used
by broadcasters. By developing compelling content in a variety of formats, broadcasters
can position themselves to take advantage of consumer demand for anytime, anywhere
information and entertainment. Same content, same spectrum - more applications and
Even better—digital delivery systems can give you a much clearer view of the actual
market potential for your content. New capabilities can store and analyze the data
consumption of your audience. That’s information that can be cultivated and used to
target customers more successfully. The consumer electronics industry long ago learned
the value and benefits of a global market– with digital capability, broadcasters can do the
Broadcasters also possess the ability to make anyone well-known. Today’s reality and
“star” contests reflect such use of this asset, synched in with viewer voting done
wirelessly and by computer. Another opportunity is to break the mold of 30-minute
programming. Why do all news shows use the same timing formula? Does it really work
that well? Broadcasters should also encourage consumers to record, use, timeshift and
placeshift programming. See new consumer technologies like the Slingbox and Tivo as
friends that will draw more eyeballs to your programming. This allows viewers to watch
what they want, when and where they want it.
A celebrated philosopher once posited that “the bravest are surely those who have the
clearest vision of what is before them, glory and danger alike, and yet notwithstanding go
out to meet it.” Broadcasters may never again enjoy the media monopoly of 40 years
ago. But the winners in the next 40 years will be those who have the clearest vision--they
are able to identify potentially disruptive new channels, recognize consumer trends and
yet, go out to meet the challenge. They’re willing to invest both time and money to take
advantage of their existing assets, develop new content and seek distribution partners to
quickly deliver what consumers want. There is indeed a bright future for the broadcasting
industry for the next 40 years. And today, as in 1967, the consumer electronics industry
stands ready to help broadcasters create and distribute the information and entertainment
that shapes our world. I appreciate the opportunity to be here today to share my thoughts
for the future. I look forward to the opportunity in another 40 years to check in on the
accuracy of my predictions.