In Part Two of this three-part interview, Rose comments on Brightcove’s relationship with pay-TV operators and broadcasters.
Q: Between e-commerce and integrating social components, which areas are Brightcove businesses servicing more in Asia?
A: There are numerous catch-up TV and movie portals here in Asia. For instance, a Starhub customer may be a subscriber of CinemaWorld Asia, which is one of our clients. By subscribing, the customer would be able to view the channel on TV. However, there has been a rising trend of customers who prefer to watch movies on their tablet PCs or smart phones. In recognition of this, Brightcove has federated rights to such mobile devices through the form of the HUB ID, which allows customers to view the shows on their preferred channel, be it TV or tablet. Such convenience serves to generate loyal and ‘sticky’ customers as it enhances their viewing experience, and they will thus be more likely to visit the site.
Q: What role does Brightcove play for CinemaWorld?
A: CinemaWorld provides the same videos to both Starhub and Brightcove. Based on these HD copies, we transcode them into renditions to suit the customer’s situation. If they are using slow devices or happen to have poor Wi-Fi connections when viewing a video, the level of the rendition or the bit rate at which it is streamed can be adapted accordingly. For example, the video can be streamed at a lower bit rate prior to the buffering stage. However if the customer begins to receive a stronger connection, streaming will then switch to a higher definition bit rate.
In this sense, Brightcove is responsible for streaming the videos for CinemaWorld. We also run analytics to gain a better understanding of the viewers, as well as what they do with the videos when watching it on a tablet, a smartphone, or any form of device. This would then provide CinemaWorld with insights as to the kind of promotion that would be better geared towards the each consumer type, be it tablet users, PC users or Android phone users, just to name a few.
Some companies who do this also insert cue-points advertising, especially for free movies. In cue-point advertising, a 10-second mid roll is inserted at various points throughout the movie – this way, customers who wish to watch the movie for free will also have to watch the advertisements. This could range from live reel to double-click or free wheel, and even other popular forms such as ad mobs, all of which Brightcove serves to integrate. There also are other companies who build their own ad-servers on open-source mediums such as open-ex, and Brightcove integrates these as well. Another example would be AdMax (which is an ad network located in both Singapore and Malaysia), which has an in-house platform and sends the ads directly to us.
In general, a key characteristic of our clients is the presence of a comprehensive set of advertising services, encompassing areas such as ad search, real-time bidding systems, and ad bidding systems, and many more. As for Brightcove, we can work with ad servers, platforms or networks, with our role focusing on the integration of all these products. To sum it up in a statement, “We’ll handle it for you. We’ll handle your inventory management. Just tell us how many pre-rolls you want, how many mid rolls, what your policies are.”. So as you can see, Brightcove works on all three of these levels.
The reason we do this is because the Brightcove platforms are built with really solid APIs – the application-programming interfaces. We can pull in subtitles, vendor’s products. and integrate recommendation engines to enhance the customer experience. For instance, popular sites like Taboola and The New York Times track all form of activity that occur on their page or browser. Based on such information, they will then serve up recommendations that are catered specifically to each reader’s interests on their next visit. Similarly, Brightcove integrates such recommendation engines and leverages on them to pull relevant recommendations into our playlist in the next player. As such, Brightcove is involved in back-end integration as well.
An important feature of Brightcove is that we work with over 200 companies globally, all of which add and enhance the value of our platform through various ways, such as subtitling, live chats, recommendation engines, app platforms and many more. Think of Brightcove as the building block – equipped with strong APIs that allow lots of things to be plugged into our platform, an extensive customer base, and tight level of integration between Brightcove and all these companies, end users such as CinemaWorld thus no longer have to worry about doing any coding to make it work.
Q: StarHub, for example, has its “TV Anywhere” proposition, and is also trying to position itself as a one-stop shop. Would Brightcove then become a competitor by trying to enter the same space that pay-TV operators are entering as well?
A: You’re right. Everybody is trying to go end-screen and deliver content to people who pay for cable subscriptions – regardless of whether they’re watching TV, or viewing content while on the move via mobile devices such as tablets or phones. We actually do sell to a lot of cable companies. Sky Cable, which is part of ABS-CBN’s family, is a good example of that. Cable companies will use services such as those offered by Brightcove because their DNA, core competency, skill sets and experience are all focused on the aspect of linear programming. In contrast, they lack the relevant experience and skills required for the Internet or non-linear aspects. Rather than to risk wasting their investments in trying to catch up on the learning curve in these areas, cable companies tend to prefer to outsource that piece of their business and focus on linear programming delivery. They do not seem to have the routine to make money at both. In fact, some say you have to be really careful that you don’t cannibalise your linear programme by offering a superior non-linear service.
Ultimately, consumers are the final decision-makers. We saw this during the Olympics where a lot of people never switched on the TV, and turned to YouTube instead. This was a wake-up call for some cable companies, who decided then that they needed to “have a solution whether people are watching on TVs, smart TVs, or others”. Television New Zealand was among the first in the ANZ region to do that, and they did so by making their products available on all platforms. This allows them to retain the viewers who started with them on their linear programmes side. They then explored further revenue opportunities through more advertising. Following that, the next step for many of these companies is to take a tablet application with content and enrich it even further by granting users with the capability to express themselves.
There are products like Filemobile that exist on the market. They plug in to our platform, so you can take an application and have it near your TV content. For example, when using Airplay from Apple, I can hit Airplay on my iPad and mirror the screen onto the television set. The second screen app will then wrap around that and allow people to chat on the left side of the screen. Then, Filemobile plugs in and allows users to play games during a show, so they can actually engage the viewer in real-time, perform individual and group results on their friends (I really don’t understand this part?), or even collate total audience results.
Q: Between going to a broadcaster directly or working with a pay-TV company, which has proven to be more challenging?
A: Cable companies for sure. We attend APOS and build relationships there. Some cable companies in markets around the world are not yet at the point where they see room for a business model encompassing both linear and non-linear aspects.
I think there’s a grand fallacy for the last several years where people thought it was an “either / or” proposition – “You’re either going to watch my TV on cable TV or I’m going to lose you to the internet.” Now, I think, some of the cable companies are advancing by refining their business models that encompass not just a linear pay-TV subscriber scenario, but also build on the fact that viewers are watching content on as many devices as one can possibly get. People tend to use the PCs during the day, but switch to watching content on tablets upon reaching home at night. In between the morning and evening commute – hopefully not when they’re driving – they watch it on a Smartphone (at least 90% on the train do every morning). People will consume content in as many ways as they can, and I think the smarter pay-TV operators are moving towards making that more available. I do think that what CinemaWorld Asia and StarHub did was really innovative – they took a newer channel and whatever content that CinemaWorld Asia thought was going to be viewed not just on TV but on mobile devices as well, and they were absolutely right.
Q: One question on many of the clients’ minds would definitely be, “If I engage Brightcove for these services, am I going to reach my audiences as promised? How do I monetise that investment?” How do you then convince them that this is worth the venture, and what guarantees are there?
A: Well, there are no guarantees. I think what most broadcasters have realised is that if they don’t make the content or the programming available across multiple screens, viewers will go look at something else. I think some them are getting to the point where they realise they HAVE to do this. How will they make money of it? There’s been a number of different approaches. So in the case of StarHub and Sky Cable, if you’re already paying me to subscribe to my cable content, then I’m going to give you the ability to watch it on whichever device of your choice
What they’re concerned about like every pay-TV operator is the churn rate. They don’t want to lose the customers, and I think there is enough evidence suggesting that people are going to go watch it somewhere, whether it’s comScore’s or Nielsen’s reports. If they can’t find your content, they’ll find somebody else’s, or find it illegally. As such, I think cable operators are coming to realize that they have to make the content available across all platforms in order to retain their customers. Companies have tried to do this in a variety of ways – some just do so as an extension of the monthly cable fee that people are paying, while others have tried making some content available for free. There also is the method of using premium content. How this works is that they’ll give you last year’s episodes for free on devices such as tablets, PCs and connected TV,, but this season’s episodes will remain available only through the app that they have. It’s not available through a browser-based experience, and you pay a one-time free or a small monthly free in exchange for being to watch it. It’s a hybrid of an asphalt model, with the key difference being that you’re not paying for the videos. Instead, you’re paying for the app that serves as the gateway to the videos.
With that, some have also, integrated advertising within the app. Advertising within a phone app doesn’t work very well because of the form factor, but it works for tablet applications (which has shown signs of acceptance by some users) – especially if they’re getting the content on that device at no extra charge. Such users are willing to tolerate either every 10 or 15 seconds pre-roll or on the main screen, as well as a skin app or some sort of banner advertising around the playlist or scheduling.
Q: Based on what has been said, is it accurate to say that a lot of pay-TV operators recognise that some of these services will not monetise itself, but may translate into some form of loyalty in return? Is the retaining of existing subscribers perhaps the motivating factor to go ahead with this?
A: It is exactly what some of them are thinking. They’re not looking at it as a revenue generator – instead, they’re looking at it as a churn reducer,or perhaps a way to collect more information about viewers, which will allow them to better market other products and services to them. This is especially so for diversified entertainment companies like ABS-CBN. They are a TV broadcaster that owns a record company, film studio and many magazines through their publishing arm. By taking that data and registering once for free, you can now get the magazine division to sell you either e-magazines or fashion magazines.