2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 1 Technological Drivers of Change in the Media Environment

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 2 Principal Drivers of Change Computer processing power continues to double every 18 months at no increase in price. (Moores Law) The cost of digital storage is dropping by 50% every 10 months. e.g. 200 GB hard drive - $89 (Staples this week) Advances in audio/video compression continue, squeezing increasing amounts of information down same-sized channels or pipes, increasing choice

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 3 Principal Drivers of Change conversion from analog to digital cable results in 8-fold increase in channel choices in same cable bandwidth conversion from analog to digital broadcast TV results in 4-fold increase in number of standard definition program streams Satellite distribution of audio, video and data provides increasing number of channel choices (e.g. DirecTV, DishTV, Sirius Radio, XM Radio)

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 4 Principal Drivers of Change Digital file formats facilitate cross-platform exchanges manipulation of content for reception, storage, display, playout on various devices from cell phones to large-screen HDTV displays convergence of functions e.g. cell phones and handheld devices which do everything Shift to Internet Protocol provides interoperable language for voice, audio and video

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 5 Principal Drivers of Change Bandwidth to homes, schools, businesses continues to increase high speed broadband now in more than 40% of US homes, emerging as audio and video distribution platform side-by-side with broadcast, satellite and cable fiber to the home supplementing hybrid fiber/coax and copper for video, telephone, broadband service

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 6 Principal Drivers of Change Verizons (and other Baby Bells) fiber to the premises now being deployed in Verizon and ATT/SBC territories nominal capacities fiber-optic cable 400,000 mbps hybrid fiber/coax 850 mbps copper twisted pair 10 mpbs

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 7 Principal Drivers of Change Shift from wired to wireless technology omnipresent wireless connectivity with cell phones, WiFi, WiMax, PDAs as universal handheld multimedia devices for data, audio, video, telephony cities deploying universally-available wireless high-speed Internet access now being seen as a principal driver of economic development, educational access

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 8 Principal Drivers of Change proliferation of GPS-equipped receivers/display devices facilitates delivery of location-specific content and services

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 9 Principal Drivers of Change increasingly sophisticated database management and data mining capabilities enable personalization/ customization to match consumers, users with content in which they are interested assisted by collaborative filtering, recommender systems, relationships engines (others who ordered this book also ordered..)

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 10 Principal Drivers of Change increasingly sophisticated search tools applying category schemes and sampling to narrow search results Google and Yahoo audio/video search services, soon Microsoft check out (in beta)

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 11 Principal Drivers of Change miniaturization, wearables, incorporate ever- smaller computer devices into everyday objects, including clothing likely emerging use of nanotechnology, RFIDs in retail, media applications

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 12 Consequences

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 13 Consequences Consumers becoming used to accessing whatever content they want, when they want it, and whatever display device is most convenient Shift from real-time to non-real time use of content using DVRs/PVRs, video on demand Broadband facilitates on-demand distribution, emerges as real time/non-real time audio/video/interactive distribution platform

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 14 Consequences Increasing capacity of packaged media (e.g. HD-DVDs) Proliferation of iPods, MP3 players, podcasting, video iPods Videogames emerging as content platforms for education and training, as well as for entertainment, storytelling, on-line connectivity

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 15 Consequences evolution of home media servers for storing, serving digital assets (movies, music, family photos, etc.) TiVo, DVRs, cable and satellite set-top boxes battling for position

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 16 Consequences Technologies which ignore geography (e.g. Internet, satellite, wireless) erode geographic market boundaries exacerbate battles between wholesalers and retailers over who delivers services directly to consumers local becomes global, e.g. audio/video streaming on line

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 17 Consequences Once content is in digital form, there is no technical reason why any content ever needs to go out of print (The Long Tail phenomenon)

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 18 Consequences Slingbox ($199) relays any TV programs you can receive in your home (from broadcast, cable, or satellite) to an Internet-connected PC anywhere in the world provides full control of your home TV or DVR from any distant location (even if someone else is watching at home) extending the battle for control of the remote well beyond the family room couch

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 19 Consequences for media producers and distributors, accelerating audience segmentation/ fragmentation erosion of effectiveness of interruption marketing, e.g. commercial advertising, traditional on-air fundraising; ubiquitous use of product placement in commercial media

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 20 Consequences Google advertising model uses consumers search preferences to identify areas of interest, provides sponsored links to content and service providers who may have related products facilitates self-selection of communities of interest organized around specific interests

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 21 Consequences Google Advertising Model turns the traditional advertising model on its head John Wanamaker (founded first US department store in mid-1800s): "I know half the money I spend on advertising is wasted, but I can never find out which half. If he were alive today, he would be closer to knowing.

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 22 Consequences Lowered threshold to entry for content creators, distributors e.g. cell phone camera video in news programs Equipment cost to achieve high technical quality also declining High Def pro-sumer cameras available for less than $5,000; desktop HD editing for $300.

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 23 Consequences technology facilitates interaction between content/service providers and their audiences audiences no longer necessarily anonymous to communicators or to each other facilitates interactivity, not just two-way but peer-to- peer Markets are conversations -

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 24 Consequences critical need for content and service providers to understand viewers and listeners increasingly- complex media use behaviors

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 25 Consequences decreasing ability of legacy audience measurement tools to track increasingly-complex media use behaviors Nielsen having difficulty tracking use of DVRs, VoD, broadband, let alone tracking viewing of hundreds of conventional video choices, multi- tasking with Internet use sample-based measurement being replaced with proprietary direct measurement technologies enabled by two-way connections between distributors and consumers (e.g. cable set-top boxes, TiVo)

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 26 THE audience research question: Whats the job theyre hiring us to do?

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 27

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 28 NPS RESEARCH PTV shows the types of programs that I cant find anywhere else The diversity of PBS programs is personally appealing to me PBS programs allow me to see the topics they cover from many different points of view

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 29 NPS RESEARCH Compared w/ programs on other types of stations, I really pay attention to PBS programs PBS provides programs that appeal to a wide range of interests Watching PBS programs makes me feel better about myself.

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 30 Technological Drivers of Change in the Media Environment

2006 PBS BRAND MASTERS SEMINAR MAY 20, 2006 DAVID B. LIROFF, VP / CTO WGBH BOSTON 31