Leyden jar, Morse alphabet and other innovations
1. Historical overture
It so happened that at the moment I am in Holland, in the city of Leyden, famous first of all, for its university, secondly, for its canals (not TV), and thirdly for the invention which has turned over the life of mankind. It is here that in 1745 Pieter van Musschenbroek invented the famous Leyden jar.
Leyden jar is the simplest electrical condenser. A glass cylinder is taken, pasted over with foil, covered with a lid, and a wire is stuck on top. It can be charged. If it were not for the Leyden jar, we (I mean the telecommunication branch) would probably not exist either.
But the mankind needed 99 years to embody theoretical knowledge of the electricity nature in a really working gadget (Morse telegraph which appeared in 1844 should be considered as such).
Technical possibility to make something else does not mean commercial value yet. For a long time, electricity was laboratory work or circus entertainment. Introduction of electricity into the mass operation was connected not with the names of Volta and Faraday, but with the names of Morse, Siemens and Edison — practical people who managed to combine scientific knowledge with the business grasp.
The question it not how to make an innovation product, but the question is how to make an innovation product the mass one. Introduction of modern innovations, including in the area of digital telecasting, in this sense does not differ from the ability to sell electricity or railway to people. For instance, there will always be people who say: «Why do we need electricity? We can light the house with the help of candles well enough» or «No, we do not need a railway, we have horses». Never listen to such people, because such people are the minority.
2. Subscriber’s portrait in the interior
Marketer’s work is, first of all, understanding of the demand and supply ratio. Demand depends on the technical base and infrastructure. It makes no sense to offer a person to buy a mobile phone, if there is no cell tower in his/her district. It makes no sense to launch a new TV format into commercial operation, if there is no TV set or receiver supporting this format on sale.
I will give a concrete example — HDTV. Before 2012 there were only several hundreds of thousands of users of high definition television in Russia. Starting from the middle of 2012, the sweeping growth began. Only Tricolor TV which launched the first HD multiplex on 24 July, gained a million of HD subscribers within six months. The reason of success is that the market «has matured» up to such commercial offer, the wide-screen TV sets supporting HDTV became available for the majority of consumers, receiving equipment with necessary functions appeared, etc.
One should trust statistics: facts, reports on the quantity of sold TV sets/receivers and the quantity of paying subscribers, and the more detailed such statistics is, the better. What has changed in the television market during the last 2-3 years? New standards appeared (e.g. UHDTV) or new technologies (HEVC/H.265 codec), — you would say. Yes, and this too, and ultra high definition television will also become the mass one in time. But this is not the main thing, the point is that during the last 2-3 years, the TV viewer himself/herself has changed. The structure of TV viewing has changed, Earlier there was one screen for a family, now there are many screens: as a rule, an average statistical family has two TV sets; and, besides, majority of Russians are familiar with smartphones and tablets. And the market of mobile devices in Russia is growing very quickly, and it especially concerns the reasonably priced Android-based tablets; the market growth in this segment is 134%.
A modern subscriber not simply uses TV content, he/she also uses additional information via the «second screen», simultaneously discusses the viewed content in social networks, etc. And again, according to statistics, one fourth to one third of all consumers watch TV with a tablet/telephone in/at hand (depending on the purposes of the research and questions). And it is this, that must become the stimulus for TV channels and operators to satisfy these expanded needs, to create services and mobile applications which, e.g. simplify search of information or simply give the possibility of viewing from a mobile screen (let me remind you that such possibility exists for subscribes of Tricolor TV since 19 November of the last year).
3. Market landscape
To this effect, it is always useful to compare Russian experience with the foreign one. Big western operators (e.g. DirecTV or BSkyB) have been giving the possibility of multiscreen viewing for a long time already: a TV set, a tablet, a telephone, — it is not important which screen you watch, the thing is that you watch (and go on paying the subscription fee); western operators do everything for the subscriber not to go to competitors. The reason of this is simple — American and British markets have already formed long ago, if any operator is growing, it is only due to takeover of other companies (the typical example is Liberty Global or the same Sky).
The Pay TV market in Russia, for the most part, has not completely formed yet. About one fourth of Russians are still satisfied with the old analog broadcasting; the penetration of digital telecasting on the whole is only about 40%.
In fact, such «not-fullness» of the market is even good, because it allows the operators to develop in breadth without competing in open struggle. However, this will not last forever. If forecasts of analysts are true, by 2018 penetration of Pay TV in Russia will reach 83%, and then not only football battles will wait for us, but also serious competition of operators and channels for the right of TV broadcasts and TV premieres. The bigger the competition, the better the content offer is. The better the content offer, the better it is for the TV viewer.
4. Mobile front
Besides the content constituent, it is the service possibilities of operators that will come (and have already come) to the first place in the competitive struggle. Services of Contact Center, Helpdesk, additional services, maybe some entertainment materials, the possibility to scroll an extra reel or trailer, even the function of remote control of a TV set — all this is already now accumulated in the mobile device in your hand. The more you «load» the mobile device with necessary applications, the more new consumers of the main product you will acquire and the higher the loyalty of your constant TV viewers will be.
This value of the mobile gadget (and the possibility of TV viewing management via such gadget) in Russia is not taken seriously yet. We have the high level of program and engineering thought, but we lack market experience of introduction of such technologies. One should not confuse a laboratory test with a mass-consumption product. It looks very attractive at an exhibition: technical possibilities are demonstrated, beautiful presentation, «biscuits», but in practice such things turn out to be inoperative. That is why one thing is to invent the Leyden jar and quite a different thing is to understand how to use the electricity force in commercial interests, to create a really working product. It is not the inventors that are needed here, but marketers; not Musschenbroek, but Morse.
The Russian market of commercial television needs to be gradually accustomed to the fact that TV viewing on 2-3 screens (and desirably in HD format) is right, modern and quite affordable for an ordinary consumer.
5. Mechanism of introduction
The market values are mainly formed by «heavy-weights», major players. The objective is not the technology itself, but promotion of a product. It can be done only by a federal operator having a big subscribers’ base, provided that the marketing strategy has been selected correctly and there are technological possibilities.
If a subscriber is already a user of Pay TV, he/she does not have to go through the full way from selection and acquisition of equipment till selection of and payment for the services. Actually, the subscribers are already users of Pay TV. And to expand their TV viewing and to get to a new level, it is sufficient for them to make a little step. HDTV is the same television, but more high-quality and modern as compared with SD, and multiscreen TV viewing is more pleasant and functional than the single-screen one, it supplements the viewing, makes it really mobile.
But the subscriber must not perceive the new service in isolation from the main service. The new service either deepens the service or widens it, but not replaces it. The subscriber will not purchase expanded TV viewing unless a clear picture forms in his/her head why the new TV viewing is better than the former one, what new possibilities will become available and how much transfer to the new model will cost.
Hence there are three more important rules, significantly simplifying and accelerating introduction of any innovations:
- a subscriber must have access to the most modern equipment;
- tariffing must be simple, understandable and transparent;
- a subscriber must have free access to new services, e.g. your mobile applications.
Transfer from the simplest Leyden jars to fully operating telegraph and then to telephone, radio, television — this is the change of not only technologies, but also marketing paradigms. By the highest standards, the case in point is the well-known mechanism of evolutionary adaptation, and here everything is simple: either you as an operator of Pay TV adopt yourself to the new conditions of the game, or you leave it.
Are you ready to remain a provider of the old television or your goal is satisfaction of consumer abilities of «the new TV viewer» and formation of a principally new, innovative, multi-screen, mobile high definition television?