Bob Zitter, Chief Technology Officer and Executive Vice President of Home Box Office (HBO), gave a keynote presentation this morning (March 21st) at TV Connect in London in which he emphasised that technology has been a catalyst for change over the course of his 45 year career in the TV business, and that the one constant has been consumer desire for top quality content.
“We are a programming and marketing company, but HBO management has long recognised that technology is something to take advantage of, it gives us a business advantage and catalyses growth,” said Zitter, speaking to a packed audience in one of his last official engagements before retirement.
Adding that he believes the subscription model is better suited to a producer of top quality programming like HBO than free (ad-funded) or transactional – and with around 115mn subscribers around the world (including 41mn in the US) that creates a big budget for content creation – the outgoing HBO exec emphasised the importance of making programming available on any device, any time and any place.
“Our strategy is at the core of what this conference is about,” said Zitter. “We focus on consumers – we believe that if you know what consumers want and where they are going, what will best serve them, you will do well. If they are satisfied, they will continue to subscribe.”
Describing the Internet as a dramatic agent for change, with around 11 connected devices to be found in each US home, he celebrated its ability to bring HBO programming outside the confines of the home – consumers demonstrably have the time and inclination to watch content on the move, so this need should be met.
HBO’s over-the-top offering ‘HBO GO’ is now showing some interesting differences in consumption patterns, according to Zitter, with viewers generally watching more short form content on the service (around 80% being TV shows), compared to a similar proportion watching longer form content on HBO services delivered via conventional pay-TV services such as cable.
Looking to the future, Zitter revealed that HBO has just completed a project in which Apple’s Airplay technology can be used to easily switch content from Apple devices to large screen TVs, said that he never believed 3D TV would take off in consumer homes due to the extra cost and glasses required, and has similar reservations about 4K (so-called “Ultra High Definition”) TV, albeit for different reasons.
“4K is the next thing that consumer electronics companies want to push, but I’m very sceptical that consumers are going to want to buy that – the difference between HD and 4K can only be seen if the TV is 60 inches+ – but just a small proportion of US homes can accommodate a TV that size.”
Having been asked by many people to give some thoughts on what is coming down the line for the TV industry, Zitter predicted that VOD demand will increase, though this does not mean linear consumption will go away, and that the business models of ad-funded/transactional/subscription will not change.
“I think OTT players will continue to make ground, and cable companies are not going anywhere – the one thing that is a constant is that at the end of the day, consumers care about content, not where it comes from or how it gets there.”