Seven West Media chief revenue officer Kurt Burnette has urged caution when outsourcing technology as a major lesson from the network’s glitch-prone Rio Olympics app.
During the recently concluded games, Seven’s app was plagued by outages and other technical glitches, leading to a user backlash.
The app, which cost up to $19.95 to unlock premium content, was hit by unprecedented demand, which Seven blamed on the problems at the time.
However, at the ASTRA conference in Sydney, Burnette said Seven was caught flat-footed by a third party supplier that delivered the technology late, only days before the opening ceremony, and without testing.
“Whenever technology is involved there is always a risk. The greatest takeout for us, if I could be so bold to say this, is be wary of outsourcing,” Burnette said.
“If you have the capabilities to build, which we have now, then do it internally. Then we can hang ourselves if we mess it up, versus another third party perhaps falling short of what the expectations are.”
Despite the glitches, Burnette says the Rio Olympics delivered unprecedented viewing interest across multiple screens. This included 18 million people on 37.7 million screens and 70 million video views on social media.
“What drove 95% of those app downloads and the move into social – Snapchat, YouTube, Instagram – was television,” Burnette says.
Seven's revenue boss was speaking at a panel on growing a stronger TV sector alongside Foxtel’s MD customer and retail Mark Buckman and Deloitte Access Economics partner John O’Mahoney.
Buckman told the conference that TV as a medium to connect brands to audiences is stronger now than it was when he was a CMO at Telstra and Commonwealth Bank, particularly with audiences above 25 years old.
“A total of 50% of viewing is still being done in the lounge room. The brands I’ve been involved in, CBA and Telstra here and some of the multinationals, all think TV is the primary medium in terms of connecting with their customers in an emotive way,” he adds.
“It would have been good if the Australian industry could have come together much earlier…to promote the benefits of television.”
Protecting local investment
Burnette points out that free-to-air and subscription TV broadcasters invest $2.2 billion in locally-produced content each year and this is at risk due to the threat posed by new media rivals.
This threat, as well as some of the “bullshit” claims being made by digital rivals around metrics, spawned closer co-operation between subscription and FTA, culminating in the formation of Think TV.
“It would be a wonderful outcome [of Think TV] to protect that [investment in local content],” Burnette adds.
“We recently entered into subscriptions ourselves coming out of the Olympics. I think what you’ll see is more of the subscription move from the free-to-air sector as protection against [lost advertising revenues].
“Advertising is going to be the backbone of this business for a long, long time to come but we have to look at all other aspects and subscription is one.”
On advertising, Buckman says Foxtel will look to follow the success of Sky TV's targeted advertising.
“Sky TV in the UK has done a remarkable job of being able to make advertising a lot more relevant to their consumers through ad targeting and that’s certainly something we intend to get a lot better at and closer to in coming years," he says.
O’Mahoney talked up the benefits advertising has on the wider economy; creating 200,000 jobs and provides a $40 billion lift to Australia’s GDP each year.
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