When the cauldron lights up at Sochi’s Olympic Stadium next month it will mark not only the start of the Games but also a 17-day experiment testing new ways to engage TV audiences.Modern Times Group, or MTG, the Swedish broadcaster with operations in 35 countries, is broadcasting the Games for the first time in its 27-year-history. For them, like many broadcasters, the event is a laboratory for ideas on how digital can transform viewing experiences. MTG has added layers of social media, interactive games and digital-only content to its coverage. “It’s an opportunity to really push the limits of what can be done,” says Rikard Steiber, MTG’s chief digital officer and CEO of MTGx, the group’s digital accelerator arm
.Disrupting the way audiences engage has been Steiber’s mandate since he joined MTG a year ago after six years at Google, where was global marketing director for the mobile and social advertising business and before that, director of product marketing for Europe, the Middle East and Africa. He is one of a number of ex-Google executives, known as “Xooglers,” who are shaping the future of TV.
MTG has a history of disruption. It broke state broadcasters’ monopoly in 1987 in Scandinavia by broadcasting via satellite from London; it disrupted the newspaper industry with its free Metro newspaper; and it was the first to produce the TV show Survivor, kick-starting the staged reality show format.
“If you look at what the digital age has done for all the other media, you think, ‘All content models have really evolved. Why is there one glaring exception: Television?’” says Anil Hansjee, Chief Investment Officer for MTGx. He formerly ran Google’s mergers and acquisitions in Europe, the Middle East and Africa and helped establish London’s Google Campus for tech start-ups.
“In most of the media industry, we can now consume media how and when we want, in the format that we want,” Hansjee says. “But that’s just not the case, or hasn’t been a universal way, with television … Television is on that cusp of change.”
The rise in digital video advertising is one indicator that a shift is happening. Online video advertising rose 50.7% in Europe in 2012 with seven markets showing triple-digit growth from a year earlier, according to the Interactive Advertising Bureau of Europe’s latest AdEx Benchmark report.
As MTG tries to ride that wave, Steiber holds on to the lesson he learned at Google: that if you focus on the user, all else will follow. That idea underpins his vision of how we will consume TV content in the future.
“You will carry your TV subscription, or TV capabilities with you,” Steiber says. “It doesn’t matter if you are at your house or your friend’s or on your mobile phone or your iPad, or whatever screen you might have. It knows what you like and knows what you follow and you get recommendations not just from the smart engine, but also from your friends who you trust and value. It’s all becoming much more centered around you.”
During the Olympics, MTG’s viewers will get a glimpse at what that programming experience might look like. Through video on demand, the broadcaster is able to show every event — hundreds of hours of digital-first content that would not fit a linear TV schedule. And if they are watching on a computer or Internet-connected TV, viewers will be able to watch up to four events of their choice simultaneously.
Through its Like.tv second screen app — designed to be used on a mobile or tablet while watching TV — viewers can play quizzes and make predictions during the broadcasts. “We’re adding a gamification element to the Olympics, so, for example when Sweden plays Russia in hockey, you can invite your friends and together play a game around who’s going to win. You can also compare to everyone who’s playing,” says Steiber.
Some of the services MTG plans to offer around the Olympics, like second screen gamification, “are things we will do again when we have Premier League, or Champions League, or some of the other sports throughout the year,” he says. “It’s a way of advancing how you present to and engage your audience through digital and social. Sports is very interesting because people are fanatical about it.”
Beyond the Olympics, Steiber is excited about an MTG digital music service for 2014 called “Visual Radio.” “As the home of Spotify, people in Sweden are really advanced when it come to digital music consumption. Since we have a lot of content around music — talent shows, music videos — we’re trying to combine the best of streaming radio with the video world and the social world,” Steiber says. As a song plays, a selection of video content linked to the musician will appear along with content related to that musician from social media such as Facebook, Twitter and Instagram, he explains.
Future services MTG plans to develop will be funded mostly by advertising, which Steiber says is set to “change dramatically.” Digital means advertisers will soon be able to combine the reach of traditional TV with the precision targeting of Internet ads. “Advertising will become much more relevant and non-intrusive in this new world because we know much more about who you are and where you are as well,” he says.
As advertising evolves, new business models will emerge with the emphasis likely to shift away from subscription models, Hansjee says.
He says confidence in online video monetization was shown by three IPOs last year. Rightster, a British video distribution and monetization start-up floated in London, while digital ad network Tremor Video and video ad software developer YuMe went public in New York. Meanwhile AOL’s $405 million acquisition of video ad exchange Adap.tv helped the company overtake Google for the first time as the company serving the most video ads in the United States, according to comScore.
“The nature of the economic game has changed,” Hansjee says. In his first deal for MTG, Hansjee oversaw an investment for a 35% stake in Splay, Sweden’s leading YouTube network, to help support MTG’s digital content strategy. Splay has more than two million subscribers and content spanning humor, music, extreme sports, fashion, beauty, gaming, vlogs and podcasts.
“There are the new product areas that we’re building ourselves and that’s absolutely core,” Hansjee says. “But we have to recognize that innovation comes from elsewhere and we need to find products that are complementing what we’re doing and also doing stuff that we wouldn’t have time to do.”
Hansjee says the biggest lesson that he took from Google was embracing ambitious ideas. “What they pride themselves on was ideas that would have a major impact over a ten-year period. The big factor is not, ‘let’s improve our business by one or two times’; it’s ‘let’s improve our business by 10 times,’” he says. “The big ideas might take five years to get there but if they improve your business by 10 times, it’s worth it.”
United Screens, a company founded in April last year by four of the Swedish media industry’s top names and Bonnier Growth Media, a subsidiary of Bonnier AB, the Nordic region’s biggest media company, hopes to benefit from some of those ambitious ideas. Through YouTube, United Screens offers new programs, live broadcasts, news, series, podcasts, trailers, and feature films as well as many of Sweden’s most popular traditional TV programs. Its aim is to work with media and production companies and copyright holders to help them generate more revenue from their content.
United Screens will be helping its partners and advertisers keep up with innovations that YouTube is introducing this year. “The possibility to make pay services on YouTube, for example, I think is something that may both bring new content owners to our network, as well as something that will affect the media companies’ online pay services,” says United Screens chief executive and founder Stina Honkamaa Bergfors, who previously headed Google Sweden.
“I remember well when in October 2008 we launched YouTube.sein Sweden, at that time YouTube.sehad one million views a day in Sweden and we thought that was fantastic,” Bergfors recalls. “Now YouTube.sehas more than 30 million views per day — the development for YouTube has, as we all know, been huge.”
Bergfors’ biggest takeaway from her five years at Google was the scale and growth potential of services like digital video. Her prediction for the future of TV is that no one will draw distinctions between platforms. Regardless of the screen, it will simply be “reaching the audience.”