There was a bit of a light bulb moment for me at one of the lecture halls here at the RAI Exhibition Centre in Amsterdam yesterday. It went like this.
One of the presenters asked the packed hall, “How many of you watch TV?” Most people raised a hand.
He then asked: “How many of you watch the commercials?” Three people raised a hand.
He then asked: “How many of you watch Game of Thrones?” Almost everyone raised a hand.
He followed with: “How many of you are subscribers to HBO?” Almost no one raised a hand.
But I'm getting ahead of myself. Let me give you the background first. I am at the International Broadcasting Convention (although no one calls it that anymore).
IBC2013 is an annual event for everyone who makes a living from the creation, management, and delivery of entertainment and news.
It was 100 years ago on 3 May 1913 that Dadasheb Phalke’s film ‘Raja Harishchandra’ was released. Today, India's movie industry is the largest in the world. IBC is marking the centenary with the theme “100 Years of Indian Cinema: Creative Evolution and Global Markets”.
Amitabh Bachchan delivered the keynote speech opening the exhibition last Thursday.
I am one of more than 50 000 attendees from more than 160 countries. It’s the place to see state of the art electronic media technology before it comes to market and there are more than 1 400 suppliers exhibiting here this year.
But the interesting part for me is the conference sessions and the insight those provide into audience behaviour. For example, the session title “Smart Viewers, Dumb Screens” is self-explanatory.
Which brings me back to the where I started, talking about Game of Thrones. HBO is the US cable TV network which produces the TV series for its subscribers.
In theory, the only way in which one is able to watch Game of Thrones is to be a subscriber to HBO, or to one of the few networks that have been able to licence it for re-broadcast, such as MNet.
In practice, people around the world get to watch the series illegally – episodes are digitally captured and then distributed over the internet.
HBO still makes a huge amount of money from the series from its subscriber base, but that’s an audience that is growing old. Generation Y has no incentive to become a pay TV subscriber when the content eventually gets to be freely available.
How do we get money out of people who do not want to watch advertisements and do not want to pay for content?
For cinema owners, it’s all about expanding the experience to incentivise the audience to keep coming to the cinema instead of watching at home. That's why we have surround sound, Dolby Digital 5.1, Dolby Digital 7.2, 3D, HFR, Imax – all of which is designed to get you and your family into the cinema to sell you popcorn.
(Yes, the cinemas make more money from popcorn sales than from sales of cinema tickets.)
But the cinema owners have an enemy. It’s the equipment manufacturers; for whom profitability means increasing the quality and lowering the price of home equipment to beat the cinema experience. (There are large screen TV sets here that cost more than my house does.)
Nollywood, as the Nigerian film industry has come to be known, has a unique approach to the problem. Films rely on well-known actors and populist storytelling rather than production values and expensive studio time.
A new film gets released on DVD via street sales and the film owners have to make as much money as they possibly can from sales within the first week. In the week after that, pirates will have already duplicated enough disks to cut into legitimate sales.
For my part, running a radio station means that my revenue stream is guaranteed until a couple of things change.
One: if our government gets off their butts and gives us world class urban public transport infrastructure, a lot of people will stop listening to radio in their cars, my radio station’s listenership will drop, and there goes my job.
Two: if Google turns self-drive cars into reality, people will stop listening to radio in their cars and watch television instead. Once again, there goes my job.
But let me leave you with this thought: one of the really fabulous pieces of technology on show here is the AlturaV2 which touts itself as the world’s first Live High Definition unmanned aerial broadcast system.
Yes, it's a drone helicopter with a camera rig. Very soon, a group of us will be able to pool our money, buy one of these rigs, and send it flying over the compound walls at Nkandla to see exactly what it is that Mac Maharaj is trying to hide.