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Business

Digitization opens new doors, challenges

Mobile devices and connected TVs spurring shift from analog to digital formats for media content, and vendors need to realign business and formulate standards to tap on new opportunities, industry watchers urge.
Written by Jamie Yap, Contributor on

SINGAPORE--As the momentum of digital media continues and becomes increasingly integral to consumers' everyday life, the industry must prepare for the various aspects of digital content creation, distribution and consumption, and that carries impetus--and implications--for monetization, collaboration, standardization and licensing.

James Kang, assistant chief executive in the government chief information office at Infocomm Development Authority of Singapore (IDA), pointed out that the proliferation of consumer devices such as smartphones, tablets and connected TVs has resulted in continued demand for digital content and services. He was speaking at the fourth annual Digital Marketplace Forum here on Thursday.

With these devices mean increasing media digitization, which brings new challenges as well as opportunities, he noted. Companies, therefore, need to be "open in exploring new business models, collaborative partnerships, and develop new capabilities" to tap on these monetization opportunities, added Kang.

Kerry Brown, commercial director at Nielsen Singapore, who was also a forum speaker, said companies must take heed that digital is not just another entertainment channel for consumers.

"From the consumer's perspective…online is life support for them. They're online a lot [with] high daily usage, several times a week. Digital is a utility," she said.

Brown added that mobility is the game-changer for digital media consumption, as the growing ubiquity of smartphones and tablets has brought about "media multitasking". This, in turn, is making traditional media such as television digitally interactive even when it is not inherently so, she added.

Elaborating, she said the way consumers use their TVs is changing in that even though people are in front of their TV sets, they are also surfing the Internet on their mobile or laptop devices. This is so that they can choose the "most effective screen" for different activities, such as watching videos, playing games or shopping, she stated.

At the same time, there is also a convergence of Internet and TV, which has led to "on-demand content points" that advertisers need to keep pace with in order to drive loyalty, engagement and sales, Brown noted.

Web giants such as Google as well as consumer electronics bigwigs such as Sony and Samsung have already embarked on Internet-enabled TV projects.

Scott Fierstein, senior director of technical engagement at Microsoft, agreed, saying that Internet TV is becoming more accessible and convenient for consumers, meaning it is no longer an alternative pipe to deliver broadcast television content.

The executive, who was another forum speaker, added that with global broadband video usage on the upswing, Internet video will "change TV as we know it".

"TV is moving from broadcast, where there are a finite number of channels, to broadband where there are infinite channels [plus] social media, apps, and search."

Unlocking Web TV's potential
However, in order for Web-enabled media content to scale and create new business opportunities, there needs to be video and Internet standards for devices and services, Fierstein urged.

Citing the example of how sales of TV sets and DVDs boomed in the United States with the introduction of NTSC (National Television System Committee) and DVD format standards in the early 1950s and 2000s, respectively, he pointed to how standardization can enable scale and mass market uptake.

But to arrive at standards from the physical to the digital realm, Fierstein acknowledged there are inhibitors. For instance, there is no content interoperability due to fragmented device and publishing markets.

"You could buy a DVD from Tesco and [it would work] with a DVD player you bought from Wal-Mart. [But with digital], it's totally broken today. You can have 50 variants of the same movie [for different formats and devices]," he explained.

For Internet video to take off, interoperability in digital rights management (DRM), delivery and devices are necessary, Fierstein said. In other words, the goal for industry vendors is to agree on a single encryption format that allows the same files to be download and decoded on all device types, he stated.

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