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FB, Google's biz approach that of a media content company: GroupM chief

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MACAO: When the hundred billion dollar man, GroupM Global Chairman Irwin Gotlieb, says that the role of the media is to create content, it’s time to take notes. When he opines that Facebook and Google are tech companies whose “business approach is that of a media company” that relies on content, it’s more the reason that one should seriously relook at content creators and business strategies.

It’s inevitable that Facebook and Google will get more seriously into content creation, Gotlieb said here, adding that it may not be a very healthy trend considering the power that such companies wield in the digital realm today.

Speaking to former CASBAA Chairman Marcel Fenez during the Opening Keynote at CASBAA Convention 2016 here on Tuesday, Gotlieb held forth on varied media industry trends, including holding the view that the AT&T-Time Warner type of mergers (yet to be ratified by US regulator) are “just tip of the iceberg” in vertical integration, which can take interesting turn as FB and Google seriously get down to such M&A activities.

To buttress his argument Gotlieb said that Google had already started a division to create content to target consumers, while it may be a matter of time before FB also follows the same path. It’s “kind of “inevitable” that both these companies move into content creation too, which may pose a challenge to other industry stakeholders, the GroupM chief said.

Pointing out that both these tech giants were “walled gardens and very protective of the data they have”, Gotlieb, who as the GroupM chief is responsible for generating approximately US$ 100 billion in annual global ad sales, said it may not be a very healthy trend as people need to “see across them to target properly (consumers) to maximise client investments.”

“In the absence of big ideas…it (data) allows us to reach and understand the consumer better,” Gotlieb said, adding, while replying to another question, the measurement of TV as “we understand today is understated as there are alternate devices (to consume media)” available with consumers.

Holding forth on the changing nature and measurement of viewing behaviors, Gotlieb also touched upon how ways to reach audiences via the marketing funnel is the same but a granularity of data can help decision-making for each stage of the funnel.

He underscored how media will continue to play a role and become more targetable, addressable and, eventually, part of the transaction process.

Meanwhile, after Gotlieb had set the trend for the opening day of the CASBAA Convention here, Pricewaterhouse Coopers MD Oliver Wilkinson provided statistics to illustrate that pay TV was not dead despite what the headlines screamed and that it remained a primary form of entertainment.

Still, with digital players increasingly encroaching on the turf of pay TV, content and channel providers should look to diverse their business models and offerings, Wilkinson said.

Doing deals in China was the topic for Bennett Pozil, EVP of East West Bank. He discussed the migration of content both ways as well as some of the pros and cons of doing business in China.

Vivek Couto, Executive Director at Singapore-based market research company Media Partners Asia, flagged the rise of digital players with the forecast that pay TV growth would slow to about 3 per cent as content providers were looking to establish more direct to consumer offerings. However, he admitted that in some markets in Asia like India players had invested heavily in traditional TV infrastructure.

Reaching a vast audience through tailored video and gaming content was the topic for Chad Gutstein, CEO of Machinima, who highlighted that their most valued content was when viewers felt they had a connection to the creation of it.

James Schwab, Co-President of VICE, discussed how their local content policy over digital channels has helped the company grow exponentially over the last few years. The recent move into TV was important for the company as it gave them the ability to invest more in content.

Localized and Asian content was flagged by Henry Tan, COO of Astro, for being one of the main drivers that has seen the provider defy the trend of decline in time spent on TV and reporting healthy growth in this respect. A true understanding of the complexities of the Malaysian audience demographic was key to content that worked for Astro’s market, he said.

Piracy, online or otherwise, cropped up in conversations throughout the day with opinions polarized on whether this would continue to be an issue.

In a session devoted to the subject of content piracy, Avigail Gutman, Programme Director, Operational Security, Cisco, advised that the industry needed to “follow the money” in combating piracy. Lucia Rangel, VP Latin America, Asia Pacific & Worldwide, Game Strategy and Operations, Warner Bros. agreed the problem was global and that `ISD boxes’ formed a critical part of the problem as many consumers were not even aware of the illegality of these and other streaming mechanics. A global effort was needed to fight the pirates, Rangel commented.

Desmond Chan, Deputy GM, Legal and International Operations, TVB, highlighted the tangible impact piracy had already made to their business, while Nickhil Jakatdar of Vuclip talked about how the content provider’s strategy was to provide a better experience than that available from pirate outfits.

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