Daniel R. Odio from PointAbout was a panelist at the Digital Media Wire’s Digital Media Conference East. You can watch his panel here. You can also view the Table of Contents for all the panels.

Keynote & General Session: 12:15pm – Bill Bradford Keynote Q&A
Bill Bradford, Chief Product Officer, Fox Digital Media

Transcription of Keynote:

All right everyone, we’re going to get started with our next keynote. So please have a seat. OK, as I mentioned, this next presentation is really terrific, particularly for anyone who really is looking for more data and information about what’s going on with contents online in the form of video. Bill Bradford is Chief Product Officer for Fox Digital Media, and he also wears a hat as the Senior Vice President of Content Strategy for Fox Broadcasting. In these roles, he leads the product, design, technology strategy, and implementation for Fox Networks Groups digital media properties. He’s also the SVP Content Strategy for Fox Broadcasting, where he oversees Fox Broadcasting’s online strategy. Before coming to Fox, he was Vice President, Product Management for Yahoo! Studios, where he drove the production of original content of entertainment websites-combining the best proven offline media formats with the best of Internet technology to produce the type of integrated consumer experience. Before that, he was at America Online, and I think everyone in the room would be proud to hear that he’s a GW graduate and West Point graduate, so he’s from the area. So it’s a pleasure to have you here, Bill.

Thank you. I actually moved from the area four years ago, out to LA, and so I haven’t worn a tie in four years. So I hope this is still fashionable. Is it OK, Linda? What I’m going to talk to you about is…there’s a lot of discussion, panels here today, just about what’s happening with online video, is TV dead?, and all this kind of stuff. And I’m going to go into a lot of detail, a lot of slides, I think. I brought 28 slides, and I’ll breeze through them. But I will go into detail just to show you the kind of stuff we look at on a daily basis at Fox that informs our digital strategy.

So what I do about 80% of my time that I work on is the digital and strategy and business for Fox Broadcasting and television network. So that includes Fox.com, our own streaming service–FOX on Demand, our syndication service to Hulu, our show sites like americanidol.com and “24″, “Family Guy”, “Fringe”, and also the digital marketing efforts and trying to run a successful P&O that does all that stuff, so doing both the marketing and the pure business side. It’s an interesting time to be in the business and; hopefully, the inside […] share will be interesting to you, but I think the punch line up front is–you hear a lot about the traditional TV guys sometimes would say, TV’s all there is, and the internet’s this cute little thing. On the other side, conferences like this; you’ll hear some grandiose statements sometimes. You know the Web’s going to kill TV, and you know, game’s over, man; it’s all changing. And I think the truth is somewhere in between with more of a measured approach. Let’s go into some detail that informs that opinion of mine. I got about 20 minutes to talk; and then we’ll get some questions, and I’ll escape out the back if I do a crappy job.

So how does internet deliver television compared to linear TV? There’s no axis on this metro God to protect the innocent; but this is impressions, and this is just for FOX on Demand streaming, you know, just our own site. So just in a year, obviously, the growth curve is pretty significant. If you add in Hulu impression’s on top of that, it’s even more steep. So online consumption of our content is significantly growing. And we don’t see it plateauing; we see it continuing to grow. But TV is growing, too. We don’t see any real evidence that the behavior online in aggregate is actually taking away from television. TV in the home is actually going up a little bit. This is separate from the internet viewing of TV at home, so that puts her up. The person’s using television are actually up, so you know, prima facie, it’s not the new medium has not replaced the old medium. And TV’s still a lot bigger. It’s 99% of video viewing last year was on the television. You say, “OK, that’s great.” Yeah, but you don’t stream Tyra Banks; you don’t stream your morning news show, that’s true, but TV as a medium is still a lot bigger. But in the primetime world that we live in 8-10 hours at Fox Broadcasting programs, it’s about 3-5%, so it’s starting to get to be material. So, looking in the aggregate would do us a disservice. So it is growing; and the question is, what to do about it? And with that growth, it’s becoming mainstream. It’s looking for someone like the person next door; the gender split is pretty even. Do you ever watch TV or movies over the internet caption? Over half said yes. And it’s not all kids. It’s pretty well divided among before you get to 70+, which pretty well divided out among the different demographics. And so, this is not just the millennials that are doing this, though I’ll show you some stats that shows that they’re doing it more than the average viewer, but it’s kind of interesting data. It’s becoming more and more of a mainstream behavior.

This is also interesting. It’s widespread, but it’s shallow that internet is a percentage of TV that I showed you before. Well if you look at, it’s still very small across the different age demographics, but that there’s tons of people that are doing it. But because the internet is more about snacking on content, in the aggregate between the user-generate content which is still much bigger than the head content streaming online, you know, it’s still very, very small in monthly hours compared to television hours. But the question’s, you know, when’s that going to start creeping up? So we’re watching it very, very closely. It’s also not necessarily a TV replacement, so the people that are doing the streaming online are doing it through their PC monitors as a rule.

The PCs connected directly to the TV. It’s still not a very widespread behavior; and then, there’s a long tail of different ways to get your head content. But it’s mostly the TV monitor. And actually just a quick little poll: Who here in the audience is actually connected their PC to their television to watch Internet video? It’s about a fifth, and we’re at a digital media conference. So it’s interesting. We talk a little about this stuff, but it’s not a common behavior yet. I find it’s great, but once you do it, but it’s not fully a widespread behavior yet.

So, that’s interesting the colors didn’t come through. There’re supposed to be some color in here. I’ll explain what this says: this enhancing TV distribution is basically up here. So, the question is–does online cannibalize network and broadcast television? Well, the behavior is if I want to watch a rerun or I knew the episode would be online. So I watch something else, but I still want to watch it, but I couldn’t watch two things in the same time slot. That happens or heck, I just missed an episode on TV to play catch-up. That’s a huge amount. There’s another category, but then, more enjoyable on the internet, and more convenient on the internet. The two of those combined for the total are about 20%. So that 20% is cannibalistic, but it actually increases the audience up here. So down here, you’ll see that about 26% of people find it more enjoyable or more convenient on the internet versus down here, it’s not as much. It’s like 5-10% less. So, maybe it’s a generational thing, and the millennials are more apt to do this because they actually find it more convenient and don’t care about the form factor, the big television as much. It seems to be what the data is suggesting right now; but as of right now, it’s actually not cannibalistic. It’s actually additive to our overall audience.

Another stat here is kind of interesting that these same millennials are spending 30% more time each week in online media. Now online media’s about category, but includes basically internet behavior on the internet compared to 10 ½ hours watching TV. So, this […] stuff’s off from 2004-2007. And some new data will be coming out, but the millennials are watching less TV, but they’re using more and more of the net. That’s not a surprise for a lot of us here, but, and this data is getting updated to actually reflect the little growth in TV I talked about. So, TV growth is kind of stagnate to growing, but the millennials are watching less TV and using the net more. So it’s something we need to watch very carefully and make sure that we provide our content where they happen to be, and I’ll talk about how we’re doing that.

And I guess the last thing, within the capabilities section that I would just speak to you real quick, is that AC quality van is by 2012 will be 30% in homes. So most homes that actually have a big fat pipe can watch HD-like version of our show, but it’s going to become more and more mainstream as the pipes get fatter and fatter, the services gets less expensive. So as an industry, what are we doing about this? Just about this growth and how we’re balancing it against the traditional network TV model. So we’ve created network size. We’ve created Hulu. And Fox and NBC got together, now ABC, to provide free streaming of television, but you know with an ad-supported model. And content is starting to get out there on Netflix and Amazon, Xbox. And this is the whole TV- everywhere discussion–cable planning to offer streaming, if you’re a paid subscriber, so that’s another thing that’s going on. This talk isn’t on that, but that’s probably an hour discussion itself. A test appointment of this coming out this year; so the industry is looking at this very carefully, and it’s not a little hobby. It’s actually…we’re thinking about it very intently.

But with all that growth, what about the advertising that’s supposed to support it? Isn’t it a big surprise, but as more and more eyeballs move online, more and more of the advertising will move online. This is a Kagan study, but digital video is the fastest growing segment out of 28% Kagan–based upon their estimate. So over the next 10 years, it’s going to be a significant chunk, much more so than it is today at the overall advertising buying, so we do see some TV dollars migrating and cross-platform packages that are being created that starts to catch your eyeballs. There’s some methodology in measurement stuff that needs to get figured out in order to do that in a normalized way, if it’s a third-party validated, that’s going to start happening because the money will start shifting over there. And is it effective? That’s a whole other talk, but the typical thought is, yes, online video’s quite effective.

The online viewers, this is a couple of years ago, but they’re 50% more aware than their linear viewers with the same advertisement. It could be because lower [adlibes]. There’s a lot of different factors, but it seems to work. So it’s not like we have to worry about if it’s consumed through an IP channel, it’s going to be less effective. In fact it actually can more, and I think I’ll share that. Because I think digital video provides us, at Fox, increased consumer touch points for our advertisers and for the brands so as opposed to the our brand just living for the 30-or hour-long time slot during the week, we get to engage our consumers and users throughout the week through the different tools that we provide. And it gives marketing life to the brands 24/7, so it’s not just limited to that small period of time during the week; or if you happened to pass a billboard or see a promo on TV. So this is nothing new, but you know obviously, we purpose a lot of ads that with our major advertisers we put them as pre-, mid-, and post-rolls. We have display ads that accompany them.

We provide more interactive advertising within the video environment–things like pause ad and click pause, we can have a brand-of-message coming on, interactive interstitials, clickable video, obviously traditional display media, which for our major advertisers that buy into “American Idol” for example. This provides life to their brands and the online experience because, heck, a lot of people go to americanonline.com to engage with the brand during the week from the social community with the different forms; and the behind-the-scenes content that we provide so it gives life to these brands even if it is the traditional display ads. We also offer sponsor integration, so I think there was a conversation a couple of panels ago about–can Hulu provide integrated sponsorship opportunities? They’re not actual producers of the content. Well that’s what we do, within the network, is working with Sprint to develop an application for “24″ that provides life to their brand during the week for their consumers and also syndications, so we created Hulu, launched a year and three months ago. It’s doing quite well, but that’s another way we make money within the Fox Broadcasting Company through the syndication plan, in fact.

Another thing, and I talk about trying to leverage the power of the individual medium and not talk about an either/or, is really from the marketing perspective–the ability to give life to our brands. And truly, have as an integrated part of the television viewing experience, calling out to americanidol.com from a television promo, where you can get more information about how you try out, where the auditions screen, the behind-the-scene video. We have that opportunity because we have this digital outlet. It’s not just on our own show sites, though, so we’ve embraced Facebook and MySpace. We’ve got about 30 Facebook and MySpace pages for all the different show brands, and some of them are quite significant. So you know, the “Family Guy” Facebook page, I think there’s like 1.9 million people that we can reach out and touch at any time with an update. Same thing with “House,” so you know, it’s a very interesting way for the people that have said, “I’m a fan of that show” for us to be able to engage with them. We don’t scan then on a daily basis. We try to be measured, but it’s amazing the amount of discussion that goes on. We have a Twitter that people follow. It’s interesting for “Lee,” one of our big new shows that we premiered in May. We kind of broke the traditional programming cycle and premiered it right after “American Idol” back in May. And the Twitter feed, just people following it, was incredible. It’s like every 30 seconds, another 500 people were commenting about it. As a network that gives us instant user feedback–how people are enjoying the show, what they would change, who they hate, so it’s quite interesting.

And just a couple more examples how the digital expands our universe, so we did an experiment where we actually engage with some YouTube personalities to organically, within their shows that people subscribe to, to talk about our shows. I don’t know if you guys Sxephil, it’s hilarious. He’s got about a half million people that follow him. For our show, he lied to me; he created this thing called, “Dirty, Dirty Liars”. So he did two truths and a lie. And so you had to basically respond to him and let him know which one is the lie, which one is the truth, and heck a lot of people that rated it, tons of people watched it, and people were creating their own video responses to it; but basically, what did this do? This kept the-lie-to-me out there and the user-community completely separate from our traditional network programming marketing. We did the same thing with “Fringe” with Kevin Nalts, another one of these YouTube stars. And so he talked about “Fringe,” and we can do these things very, very inexpensively compared to the traditional linear programming model. So I guess all those things being said, oh and one more thing, just like, create things like games which give you more insight into–like the science behind “Lie Detection”, if you watch “Lie to Me”. This may not be ROI positive substance game, people come play it. It’s not a big sponsor opportunity, but it’s more of a way for people to continue to engage our shows. So all that being said, I think I would just wrap by saying–streaming is here to stay. It’s gonna grow. It’s not replacing traditional TV. And I give a call on fires; yet, we think that TV is gonna continue to be strong for years to come. I think it’s an additive behavior that’s just based upon what the data says. Now two years from now, who knows, but we’re watching it very closely. But I think one of the key things is that content formats are gonna emerge, that are gonna take advantage of the medium. So it’s not just television on the Web, but you need to really understand and embrace the strengths of each medium to support your programming and your branding and your advertiser goals. So, with that I’m going to wrap and see if there’s any questions.

Hi! Mike McNair again, does sponse have some of its job […] to make the […] on Twitter and how does legal counsel […] heartburn?

You know, the legal counsel would have more heartburn if we did it in the character, like if we had Homer Simpson twittering, and I spell it a little bit different, but as the network, we can twitter all we want about our shows; and sure enough, I have a community development team that’s all they do…Facebook, MySpace, Twitter, YouTube syndication, all that kind of stuff. Yeah, that team didn’t really exist until about a year and a half ago and we created it for that purpose.

[…] We show rating presentations, some numbers show, quarter by quarter, increases in TV viewership. I’m wondering if you’re expecting that number to actually decrease after the recession passes a bit?

I don’t have a crystal ball. I’m not really sure. You could probably make an argument for both sides of it. I think it’s a little bit too superficial to say, “hey, all these unemployed people are staying home, they’re watching TV”. I think people are multifaceted than that, so I’m not really sure. And I think ultimately, TV’s about great story-telling and great content; and if the content’s great, people will come. And I think, like I said before, it’s our job to make sure that the content is where the consumers are; and so that’s why we have these digital experiences, but I don’t see the need for great story-telling to go away, so let’s put it that way.

There’s a paradox of online video. Most users agree to this that the online experience to be about interactivity, personal vision, but video, ours is the largest flat […] so the paradox is about getting your video itself […] the video itself to be more what the user expects it to be interacting, and to be personal. What are your goals and efforts to make that happen? Do you not see that as a barrier to live without that?

It’s a good question. It depends what you mean by online video. So like those examples I gave you, you know, with the YouTube stars creating this more interactive experience talking about our shows. Of course, that embraces what the online medium’s really good at, and it’s that interaction as video responses and commenting and people debating back and forth. I’m not convinced that users expect to be able to take an episode of “24″ and cut it up. In fact, the different experiences and the different experiments with the mash-ups for head content have been pretty limited and very marginal community of people that actually want to take the time to do that. Hey, let’s get all the “Dammit Mr. President,” parts to “24″ and let people mash him up. We decided against doing it because we saw other mash-ups. It really did not seem to really engage from a broad-user perspective that can really mix them.

How much do you integrate, do you have to integrate, or do you want to integrate with other news corporate […] properties, including the Wall Street Journal, MySpace, anything that’s in your […]?

From a product’s and technology design perspective, we integrate quite a bit. That’s a part of my role. For example, about streaming service on FX was built right off the backbone of Fox.com; and so while the core technologies, a lot of the core plumbing, it doesn’t make sense for them to have their own large groups to try to figure out all the stuff out, so we do share a lot of lessons learned and even down to the technology level.

Way back in the back.

Be kind. I think this is the last one. […]

[…] American Idol, it’s in its ninth season. Yup. Of course, it’s on Fox.com, it’s on Hulu.com. How does the online community of that episode during the summer…how does that fit into determining whether or not […] online during the summer will be a success for the show and […]?

We decided to keep it off on Fox.com and on Hulu throughout the summer for that specific reason to give people the opportunity to see it because not everybody’s seen it. So hopefully, through word-of-mouth to allow people as we do more and more promotion of the show throughout the summer to be able to go catch the pilot episode, and we’ll re-air the pilot episode as well. But it’s part of the overall integrated marketing campaign, which is kind of going to get the word out there more and more about “Glee”, but yeah, for that reason, we decided to leave it up.

Bill, thank you for an excellent presentation. A couple of notes, we’re a third hour down for just a few minutes.

24:50