Mr Tony McGin: Speed to act is everything if you are in the digital space. It is the currency you have to embrace.

There has been a sea change in the way that video is consumed, and traditional players are learning from the experiences of the music and print industry in order to move fast to survive the transformation. These were some of the main talking points at the Digital Marketplace Forum organised by the Infocomm Development Authority of Singapore (IDA) on 5 December.

“We are not just watching movies in cinemas anymore; we are watching them off VOD (video on demand) servers, we are downloading them from iTunes, watching them from streaming websites,” said Mr Vikas Sharma, Principal Consultant of Frost & Sullivan. “We are not watching television from a television anymore, I'm watching on my mobile now, on my laptop. What we see now is free-to-view video, and pay-to-view video.”

According to the findings of the Google Multi Screen World study in August 2012, about 77 per cent of TV viewers are using another device at the same time on a typical day, and 56 per cent of video watching starts on a smart phone.

“It is a revolution, not an evolution,” said Mr Tony McGinn, Chief Executive Officer of Movideo. And if free-to-air and subscription-based television players and content owners do not engage their audiences fast enough via multiple devices now, these businesses could lose their customers.

Free-to-air television and subscription television operators may need to consider all the platforms and devices available and most importantly, consider new hybrid price-volume matrixes. For example, subscription television operators could unbundle their packaged services and allow more ala carte items which users want. Television operators could work around business models such as advertisement-funded VOD, as well as transcription and subscription VOD, to engage the consumers. And they have to do it fast. “Speed to act is everything if you are in the digital space. It is the currency you have to embrace.”

Some of these lessons were culled from the experiences of the music industry, which was the first to find itself in the trenches when the digital revolution struck. “Where was their point of failure, where they did not see the bus that was about to hit them?”

In Mr McGinn’s view, it was when they could not move on from their existing business model. They were bundling 20 tracks on a single album, and profiting from the sale of discs, he noted. As an industry, they were bundling music for consumers. Videos were being produced at enormous expense to promote singles sales, and singles sales were there to promote the album.

Then the MP3 format came along, with its ability to break music into individual files.  “At that point, the music industry could have planned a completely new business model. They did not.” This proved to be costly because “once the consumer gets hold of the technology, they will reinvent your market”.

The same thing happened in the print industry, where newspapers came bundled with advertisements on everything from jobs to cars and real estate. “There were enormous rivers of gold tied up in that bundle, particularly in the classifieds,” said Mr McGinn. Digital media challenged this on two fronts – pure plays emerged in the classifieds space, taking the dollars out of the newspapers; and Google allowed consumers to search for the news they wanted and consume it in bite-sized chunks. Like the music industry, their point of failure was when they chose not to unbundle.

Mr Jeff Hughes: Just as the music sector was the first to break, it is also fixing itself first, and it is discovering its future in streaming or subscription-based music services.

As for the video business, Mr McGinn observed that the instinct has been to protect and enhance the existing video distribution business models, for example, by augmenting offerings to include interactivity. While that may buy some time, he questioned the sustainability of a value proposition where consumers subscribe to 130 channels and watch 2 per cent of them because they do not have that much time in a day.

Traditional channels, while still the strongest players in the market, need to move very fast to own the market, or someone else will do it for them, he said. “It’s not enough to protect the content distribution market that you have got; you need to scenario plan.”

Here again, the music industry holds some useful lessons. Just as the sector was the first to break, it is also fixing itself first, and it is discovering its future in streaming or subscription-based music services. This was the view of Mr Jeff Hughes, Chief Executive Officer of Omnifone, a business-to-business provider of cloud music services.

“Today, we have music services working on any gaming console, on IOS and Android devices, tablets, personal computers, cars, refrigerators and home stereos. All these things are connected, and once they become connected, they become vehicles for the distribution of content,” he said.

Within this scenario, it will be bundling of a different nature that will drive growth, said Mr Hughes. Increasingly, he sees service providers bundling together different types of services such as games, video and music in an effort to reduce churn. In the future, even cars and new homes could come bundled with music subscriptions, he said. “Bundles will change the music industry, but I think the music industry is ready for it. The rights holders are on the forefront of making this happen. Clearly they have learnt their lessons.”