John Lynch

Interesting developments in TV - content creation and delivery (Part 1)

'You ignore the Internet at your peril' Eric Schmidt told his audience at last month McTaggart Lectures.'The Internet is fundamental to the future of television for one simple reason: because its what people want' So has the internet finally brought the sweeping change its promised for year to the TV content supply chain?

Well it’s certainly started. For reasons you may already recognise, your television watching experience is already fundamentally changing. It seems that the perfect mix of available technology, economic pressures, consumer desire and political will have converged to set the proverbial cat among the pigeons and make for a more dynamic disruptive TV market.

At Digital Ministry we have looked at a number of papers that advocate this metamorphous and have listed their collective predictions. Some are some may seem obvious, some controversial, and some are just speculative. Below is the first part of a 4 part series into the changes in TV as we have divided the predictions and changes into the below categories.

1.         Changes in TV content creation and Distribution

2.         Consumption

3.         New devices and screen technology 

4.         Impact on advertisers

In part 1 we have listed how we predict the creation of content to change and the knock on effects. Have a read and tell us if we have missed any or you disagree with any?

User Generated TV Contet (UGTVC) will grow and grow and GROW

UGTVC will be increasingly ready for prime time. Online (or software) agents will mine, cull, and publish these popular stories on future “YouTube” sites. This will result in an extremely long tail of content, with literally billions of titles served side-by-side with traditionally produced studio content. This will put content discovery technology centre stage as people look for the machine to learn and deliver the best experience due to the sheer volume of choice (More about discovery later).

Semi-professional and amateur film and TV-making will also flourish, As lower cost professional editing and production tools reach the mass market, user-generated content (UGTVC) will acquire a high level of quality. Furthermore, experienced but out-of-work Hollywood professionals and other skilled amateurs will produce their own high-quality content on shoestring budgets. The box office success of low-budget films such as “Paranormal Activity” and “The Troll Hunter” demonstrates that viral marketing can fuel positive revenue outcomes for the independent film market. Going forward, web-based collaboration tools will give these amateurs alternatives for marketing their content. This will also lead to the growth of decentralised methods of funding projects and finding affordable, skilled technical and creative people they need to execute their vision and deliver low cost quality content to the mass market.

Non-traditional TV content generators will also rise. In the same Mc Taggart leactiure Schmidt said the following ‘Some have suggested Google should invest directly in TV content. To argue that misunderstands a key point: Google is a technology company.  We provide platforms for people to engage with content and, through automated software; we show ads next to content that owners have chosen to put up.  But we have neither the ambition nor the know-how to actually produce content on a large scale. However word is that Facebook wants to be the new YouTube according to speculation coming ahead of this week’s Facebook F8 conference in San Francisco. And even though they deny it, you may even see Google to begin to snap up independent production companies and start to create their own content so as not to lose out. Or they may even buy a major network (or two) in the US and really take the fight to Facebook.  So if this happens, then watch telecom companies rush to buy broadcasters . If you think about it, these telecom companies are already under pressure to retain broadband and land line subscribers, so TV in the tri-service mix is essential for them to compete. Also traditional print will migrate to TV. Look at Fairfax with SMH.TV already, or the Guardian in the UK with is new declared focus on Video. Long play video or TV programs are the longer term plays with these companies as text has proven to be a lost cause. 

Consumers will redefine what TV content is

tv in the future We have all had enough of reality TV...Right??? Well no really, as content creators are always looking for ways to stay fresh and in sync with the pulse of the consumer and to do it at the lowest cost, hence the popularity of reality. But one new way to do this is to invite consumers directly into the process and ask ‘real’ people to contribute to fiction. Imagine that your favourite show airs on Wednesday night. Until Friday night, you can participate in online collaboration sessions to develop and vote on new ideas for the next week’s episode. On Friday night, the discussion is closed, and the producers write and tape the show between Saturday and Tuesday. On Wednesday, we all tune in to see the show’s latest episode.

Gaming also will provide a new consumer-created content source. Today’s massive multiplayer online games have a look and feel that rivals that of newly released films. Given the visual quality of a game like “Prince of Persia” and the compelling interactions among avid gamers, a portion of that game time can be immensely watchable, even to those not actively participating in the game. Or, think about the virtual world cup in 2020 which will have real avatars playing on each side, managed by real ‘football’ managers and playing in global leagues.

It’s from the likes of game play that we will develop a need to see things from our angle of choice. They may view plots from different characters’ viewpoints, or from different camera angles. Producers will cater to these trends by developing specialised content that incorporates these sensory and plot elements.

This will lead to the rise of 4D. Have you ever gotten hungry just watching a cooking show?  What if you could smell it too? New sensory elements are emerging and enable consumers to have more choice in how they interact with their content. Olfactory reproduction will enable viewers to perceive smells and taste in real time. Tactile reproduction will let them feel the impact (within reason) on a driver as he crashes his car or the waft of a sea breeze at the beach on a warm summer day. Above all, the experience will be natural and nonintrusive. Viewers will not need clumsy helmets or glasses, and will be able to “disengage” from sensory stimuli as simply as turning down the TV’s volume. But when viewers do fully engage, the TV experience will be immersive and deeply stimulating.

Content becomes a commodity

With the above proliferation supply of content like ant commodity will need to become more sophisticated. With end user suppliers been forced by competition to reduce their margins and with an ever extending long tail of content, the costs will be passed up stream to content wholesalers and ultimately to content producers. This must ultimately lead to a yield management culture on content and the rise of a spot buying market, where end distributors will buy on the fly content based on linking it to actual consumption rather than potential demand. As an extension of this content security especially with Pay TV OTT content will become a bigger issue. Platform operators will expect the same levels of security on smartphones and tablets as they have on the set top box (STB). They also want a managed security service and not just Digital Rights Management (DRM) security.

So with the wave of all that content coming our way there will be opportunities for many start-ups in low cost program and games creation, content brokers, and investors with money to fund the above. As this will be a pretty fluid article we will add any further suggestions to the list of you feel we have left anything out.

Distribution of all this new content commodity 

TV content distributionAs for distribution, of this content IPTV/Over the top (OTT) is apparently the new Hybrid. OTT may be the new IPTV but the true killer combination is a mix of both.  IPTV will continue to deliver consistent broadcast and quality on-demand which will be complemented by OTT to deliver niche content, applications, gaming and communications.  We are already seeing DVB/T OTT hybrids with the likes of GoogleTV in the US and Cubovision in Italy but I see a number of IPTV service providers starting to enhance their solutions with OTT delivered media.

OTT offers independent producers of content worldwide distribution and access to global markets.  Scarcity of bandwidth has an evitable effect of disproportionately empowering the industry distributors that currently tightly control on who gets to see what and where. This is where the lawyers and their Government lackeys will step in. Incumbents will simply use regulation to slow or even stop innovation. This is understandable as incumbents who have invested billions in satellite networks and laying cable have a lot to lose. They will innovate for sure, but lots of legal lobbying will be used also as their innovation cycles are slow. They will do this to slow adoption of disruptive technology. Political debate heating up in the US currently that this is causing long term economic problems as innovation is being stifled. 

The most obvious outcome is the loss of Net neutrality and the development of a two lane internet. The fast lane for the incumbent’s (who laid the wires) and a slow lane for those not willing to pay for the fast lane (start-ups etc. beware). This was a surprisingly quiet subject in 2011 but is set to reignite in 2012. The current FCC’s ruling has been in place for a while now but is open to interpretation and circumvention. It was challenged by a few brave souls like Comcast when they tried to hike the fees on level 3 for the Netflix data (their biggest competitor).  Netflix put forth an argument that Comcast is breaching net neutrality and chocking them, but Comcast’s counter argument is that Level 3 is abusing its peer-sharing agreement with Comcast by dumping a heavy load of additional data onto Comcast’s networks. The outcome of this dispute will set a clearer tone for the state of net neutrality in 2012 and the rate of OTT TV adoption in the US and elsewhere. Pundits say the guidelines should be published in the Federal Register within the next three weeks. So set up that alert.

Feedback very welcome

Next off the rank is a piece on how TV content consumption will change


COMMENTS

Posted by Mike Gardiner, 21 September 2011

John great read thanks. This is Digital Ministry's best Internet TV related article to date and I look forward to your next one looking at the shift in consumption patterns by the punters. I can't help but think of this coming shift as a rogue wave.

If anyone surfs, fishes or sails you would probably know about rogue waves. These are trains of waves that converge at a point amplifying their wavelength & power to make them many times bigger than the waves before and after. Has there ever been this intensity of convergence in media, technology & content? Exciting times...

Posted by John Lynch, 22 September 2011

Thanks Mike. I agree with you that the coming shift in how TV content is consumed is a rogue wave. I do like the analogy. One of the areas that will influence this change in consumption is TV Apps (your field) . Drop me a line as i would love to get your opinion on how with will pan out.

Posted by Fred, 27 September 2011

Oh,come on! will user-generated TV content ever acquire a high enough quality to form the majority of our TV consumption? The Digitalministry paper has less than 5% credibility on this point - about the same percentage of our TV viewing that is currently VoD/IPTV/OTT/UGC combined... (though you'd be forgiven for assuming that the end of broadcast TV was nigh, from all the hype surrounding the new technology features).

We are creatures of habit... and while yes, all of these new features will add to the choice available to us outside the 20-odd hours per week the average viewer watches TV for their 'habitual' programmes, the idea that having 'billions' of pieces of content available for our choice is just not appealing at all, after a long day at work.

Yes, TV viewing will morph in several directions, but will continue to be oriented principally around major mainstream programmes, which just can't work in a world of infinite choice.

The average viewer is still a couch potato.... and as life becomes ever more stressful, there is little likely to change that. Give them a simple timeshift capability and they're happy. Yes, a minority will want to 'engage' (for some of the time), whether it's in interactive gaming or other form of participation. But TV is fundamentally about delivering entertainment. The creation of good entertainment relies on the 'broadcast' model to be economically viable.

Fred Perkins, Chief Executive at Information TV Ltd, London

Posted by John Lynch, 27 September 2011

Not sure where you get the 5% Fred but would love to get the data on that. Bunching VoD/IPTV/OTT/UGC and saying its only 5% seems conservative but willing to be swayed by research. On viewers being creatures of habit, thatâs the Old Dog, New tricks debate and I would also question that statement as new technology has always formed new consumption habits for many. OnDemand TV is the prime example, but look at Nabster, Bit Torrent, smart phones, iPads, etc.

Yes the Internet video today mainly consists of low-quality, user-generated content sites like YouTube and Daily Motion but this is because connected TV's are not ubiquitous. But millions of people still spend hours watching the small screen and grainy images. However with connected TV's and as High speed broadband access becomes ever more widespread, startups like Joost and Babelgum will become main stream and in direct competition with traditional distribution platforms such as cable and satellite. Hence the demand for User Generated TV content, and yes possibly by the billion :).

Posted by Ash Nallawalla, 27 September 2011

Quote, UGTVC will be increasingly ready for prime time..... Did the laser printer and word processor/DTP app replace books and newspapers? Did karaoke boom boxes replace radio? YouTube isn't something that most people I know watch in the evening prime time slots. Even indie films have some semblance of a budget and the rigour of a script, but very few people get to see a given indie film. UGTVC might get into some obscure TV channel in the US if someone can monetise it. New smart TVs can see the web, but mainstream TV would need to get a lot worse before I feel that a dose of random videos is worth my attention.

Who will make money from other people's UGTVC?

Posted by Marcus Vaigncourt-Strallen, 27 September 2011

I'm largely with Fred on this one. However much content exists in the multi-media ecosystems, we as individuals only have a limited number of hours in any one day to consume it. My anecdotal research amongst friends and family spanning 4 generations suggests there is a shift back towards people looking for "quality" viewing on fewer TV channels, rather than a desire to search for something that might be interesting/worth watching from the myriad sources of "user-generated" materials available.

Hard drives in set-top boxes that allow us to store favourite content to watch at a time of our choice has meant in our household we are much more likely to settle down to watch a mainstream programme from beginning to end, rather than surf the channels to see if there is anything interesting we didn't know about.

As a sports fanatic with access to almost every sports feed there is, I find myself less and less interested in the fringe stuff and am increasingly inclined to concentrate my viewing across no more than 3 or 4 quality channels showing top quality stuff that is professionally produced and delivered.

Posted by Fred Perkins, 27 September 2011

@John Lynch: buried amongst all the hype on 'new' technologies are quite a few pragmatic reports on the realities... I could find them for you in a little bit of time. They've been cited on other threads.

But even without that, do a simple, understated, sum:

The USA has 115Million households with TV. let's say that's just 230 million viewers. Each viewer watches > 20 hours of broadcast TV per week. Assume an average 30minute programme. That's 9,200 million 'views' per week. Annually, that equates to 478 BILLION views.

So... where do the few billions of VoD etc stack up ? TINY!

I don't dismiss these new technologies. But their impact is minimal.

Posted by Bob Warfield, 28 September 2011

Sports and other events which have controllable rights and require real-time to be of maximum value (football, royal weddings, and so on) will continue to support commercial production and distribution. Movies will remain big business. For different reasons, I believe quality journalism will also remain professional rather than amateur.

However, a "channel" is no longer a scarce resource allocated by a broadcasting authority, it is merely any company that buys or makes content, and sells access to it, so I suggest the number of "channels" will continue to multiply without any real limit. When it comes to entertainment, the Internet supports a cottage-industry approach. Comedy sketches, live performance, reality shows, spontaneous news and commentary all can be delivered effectively by individuals or micro-enterprises.

Posted by Richard Kastelein, 28 September 2011

On UGTVC, Take Print and Music. Extrapolate to TV.

How much have blog sites run by 'amateurs' eaten into time people send reading the main stream media?

How fragmented has the music industry become due to Myspace? How many new acts can sell out stadiums? Stadium gigs are generally grey haired people watching grey haired people.

How many Journalists are now doing PR gigs and professional photographers back to shooting weddings? Too many... with 200 million blogs and digital cameras that make everyone a pro.

And then take your heads out of the Gen X, Baby Boomer sands and start thinking like a Millennial or Gen Z. Their demographic is three times the size of the Boomers.

And start thinking of the tools they have in the hands now and will have more of in the future. Affordable HD video cameras off the shelf that fit in a Santa sock. Software like Final Cut and Premiere all over the place.

Then start to think about all the reality show drivel that broadcasters are shoving more and more into the faces of the audiences. Because it's cheap to make (at the cost of killing drama) and frankly... people seem to love it. And ANYONE can make it.

@Fred - Live, VOD and Catchup are the future. Deal with it.

People want to watch, what they want to watch, when they want to watch it, on the device they want to watch it on, whereever they are. The idea of having to sit down at a certain time to watch a certain programme that is not live in five years will be laughable.

My two cents.

Posted by Zach Weiner, 28 September 2011

You guys make excellent points, but you are really over-intellectualizing.
There are very clear barriers that make UGC intriguing and acceptable to watch in addition to TV, but never to replace it. Connected TV makes no difference.

You know why? Lets start with.....

1) Budgets.

You know what people will watch most of?

A) What is being marketed to them the most. Or what their sister who has the remote gets marketed to the most. Or the marketing that affects that guy at the water cooler who tells you about a new show. Or that friend on facebook who saw a promotion for the newest vampire TV show...etc. Or that advertised show you saw a friend check into on Miso.

You know who doesn't have the marketing dollars to do that? UGC. You know who does? Large networks/Traditional broadcasters. This will always be the case, as large marketing budgets lead to large audiences, which lead to larger revenues, which lead to.... more marketing.

While Marketing (And content distribution) will change. The incumbent TV content producers will always rule the day. They will always have the marketing budgets, that create, drive and socialize audiences.

Budgets: Part B.
You know what else large networks have because of the above?

Talent. I'm not just saying that popular "dreamy hearthrob" all the 13 year old girls are into at the moment,( but lets be honest most UGC won't be able to afford him) But I am talking about the best directors and producers, the best writers, the best wardrobe etc..etc..

We're always going to be humans. We're always going to be swayed by the best stories, the best effects, the best actors and the most impressive way for all of them to be displayed and directed. The Amateurs out there, no matter how advanced home production becomes will still never be able to compare. The hearts and minds of humans, will always be won over by Talent. This may be a cast. This may be the popular actor. But more than likely it will always be the people behind the scenes. The ones who create story worlds that are detailed, cohesive and visually and emotionally impressive.

2) Dependability in storytelling.
You know what won't change? The lean-back nature of television. The ability and desire to plop on the couch and watch something we like. Something that is easy, easily found and takes up our time.

We also want to watch with others, and watch events, and be in tune and socially acceptable with our friends and social networks.

In other words we want to watch something we know will be around. Know will be talked about. And know we can easily find. We want dependability.

You know what isn't dependable? UGC. It may be going great one week and the next week the stars may have gotten a differing job. (amateurs right?) Or they may have moved in with their girlfriend and decided to stop creating mock star wars videos.

Bottom line, when we watch traditional shows, we know they're going to be on, we know they're going to be popular. and we know it's an easy story we will enjoy. We know it's going to be dependable. UCG doesn't have this seal of safety.

Last item (otherwise I'll go on for pages)

Psychology: Human psychology when presented with too many options- You know where it goes...Where it's most comfortable. While it will explore and play and adopt new items, it will always return to and utilize most what it finds most comfortable. Many will always find traditional "more comfortable" For many of the reasons explained above, but also because of ingrained consumption habits and patterns, that while they may change and evolve in massive ways, the basics will always be the same.

Last part of my novela here...Also do agree with Richard- People will watch anything they want, where they want in, when they want it and with unlimited choices.

But I'm pretty positive that the ones with the cash- the traditional content producers, will figure out advanced ways moving forward to create time benefits to watch within certain time frames. To socialize within certain time frames. To create dependable watching patterns to display to advertisers.

Time orientation creates pattern watchers. Pattern watchers create better ad revenue. So....

More Live events? Of course. More live interaction to non-live events? Hype around Advanced Release strategies? More incentive based programming with a time orientation.. Time based promotion? Etc.

Posted by Richard Kastelein, 28 September 2011

Hi Zach, Let me play Devil's Advocate if I may. *smile* Because it's pre-coffee time here in Holland and I am finding myself disagreeing a bit.

* Budgets. People in the near future will watch what their friends or trusted social graph helps them decide what to watch. Augmented with artificial intelligence that helps them decide what they might want to watch based on a number of algorithms. Not what big budget marketing efforts tell them to watch.

Big budgets won't matter in the future when it comes down to mass market penetration because people won't all be watching those 30 second spots anymore. If they even exist in five years. Fragmentation and thousands of offerings via Connected TVs and Devices will create a new intelligent IPG that includes Social and AI.

No longer will a brand be able to - AS EFFECTIVELY - reach a mass audience by spending pockets of money to an agency to get them the 30 second spot (except perhaps for Live) that will allow for the kind of mass marketing penetration we are used to now.

Large networks/Traditional broadcasters may have marketing budgets overflowing. But can they produce Viral like UGC? No. http://en.wikipedia.org/wiki/Charlie_Bit_My_Finger will likely hit a half a billion views by 2012. Numbers that Networks and broadcasters and brand and agencies can only dream of.

The incumbent TV content producers will NOT always rule the day. They may have the marketing budgets, that create, drive and socialize audiences.

But they are slow to move and adapt to change. It's like turning the Titanic.

Whomever owns that second screen experience with TV of the Future is going to rule the roost. Because that's where the ad budgets will go. Seventy percent of tablet owners use it while watching TV in the USA already. Twitter stats show huge spikes during commercials as people's eyes move from the big screen to the smaller ones. It's not rocket science. And the two directional data from the second screen is incredibly valuable. Way beyond what linear TV could ever chock up - vis a vis Neilson or Barb in the UK.

* Budgets. Google will probably spend in excess of 600 million in 2012 on original content on Youtube. Not to mention probably buy Hulu.

If the studios are so chock full of money why are they sacrificing Drama for Reality? Because it's cheaper and people don't care about budgets. They care about the unexpected, unscripted, cheap reality experience it seems.

And creativity exists everywhere. As Time Magazine once put on the cover as the person of the year - you are the media. We are the media.

And people say the same about photography and writing. Oh there's professionals for that. What makes a creative professional?

Because they work on Jersey Shore?

Posted by Zach Weiner, 28 September 2011

There are few people I would rather have play devil's advocate. I am also happy to admit when I am out of my league a bit on the philosophical side of these matters which in this case I know that I am. But- on the opposite- it's late here, I'm a touch exhausted and can't sleep so was prompted to very respectfully agree and disagree.

I do agree with several points and the overall bigger picture of your reply, but let me question on a few as well.

1) People will find out about the shows based on their social graph/friends

- Absolutly - 100% and while I agree that those big budgets won't be push based Ad formats, you don't think that a combination of experiential,social and advanced marketing won't play a role in what those friends are watching? It's still going to be marketing's influence. Just new marketing. Marketing that is geared towards the subtle influence of your peer group, group reccomdendations and talked about experiences.

While it may not be "pushed" to those friends, (change in marketing in general) the people and funds are still in place to motivate and influence that social graph. which of course leads to audience..

And artificial intelligence is just one way we'll decide on programming in addition to other discovery sources. I.E Genius on Itunes comprises one very small section of new music buys. .The thing to keep in mind with A.I is a) Pattern Breakers - We want total novelty at times and to personally discover it on our own. b) Point of entry. A.I is there when you're actively looking. Not when you've already found something via other means.

Viral- Viral Vid's are the exception. Not the rule.

Can traditional created viral? Sure. Have they...no... But, I'm sure they could.... Like you said, creativity is everywhere. But Time and money isn't.

The Amatuers have a stumbling block- They need to put food on the table. The old hats...well they have the time and money to start evolving and creating vids that do go viral. In fact creating is the way they put food on the table.

I agree -They are slow. But my thought and it's just opinion is that They'll evolve- Maybe in the 11th hour as they start running scared, but one would have to imagine they would have learned to be a bit better prepped after watching what's happened to their older media pals (Newspaper, magazine, etc..)


Reality: Why if they are chock full of money are they creating the garbage that is Jersey?... Because it's been novel, Mass voyeurism has been popular and trendy . It's been cheap. It creates a better ROI. While it's watched and only when the best formula (sigh...like Jersey) is found.

But there is no denying that the marketing, producers, editors etc..etc..have resources and talent that no UCG can effect at the moment.

There's also something else to look into- If they AREN'T Chock full of cash why are they producing shows like Terra Nova- A spielberg production that I believe is one of the more costly productions....or 30 rock, Sons of anarchy and Wilfred utilizing A-list movie talent (not cheap)

It's the blend. It's the hedging of bets. Reality TV may continue to draw. So may sitcom however. so may drama. If anything watchers have diverse taste and so Content Prcers will always need diverse ways to monetize these demographics, their preferences and their changing trends.



300% agree on the ad movement towards 2nd screen. And all other factors.

Posted by Darragh Grealish, 28 September 2011

Fundamentally User Generated will reach the TV, but more on a user driven way, rather then provider pushing it. As we see more and more Interactive TV's with Youtube, Flicker and Facebook plugins. However for broadcasters to push UGTVC on there channels will be a different story as this brings in a hole different perspective into there domain.
Sure IPTV will make it technical possible at the provider level

Posted by Richard Kastelein, 29 September 2011

Great Stuff Zach! It's always wonderfully healthy to bang around dialogue like this! We should get on a panel together and rake it out one day!

I am neck deep in getting a panels for MIPCOM produced this year - got a few - Connected TV, Social TV and Disruptive Technolgies, so am going to retire this one for now, whilst I get stuck into work...

Take care and let's chat soon.

Rgk.

Posted by Steve Symonds, 29 September 2011

"Vanity" publishing has a long and honorable history in every medium -- writing, audio, and video. By definition vanity product is not for mass consumption. Occasionally a vanity piece may go "viral" of course...but the odds are astronomically long against this. Eric Schmidt & Co. are hardly disinterested media analysts on this matter. By any current accounting Google way overpaid for YouTube...so sure you'd expect them to talk it up, create as much buzz as possible. But the economics are awful for the producer.

Posted by Jennifer Bolton, 3 October 2011

user-generated TV content ever acquire a high enough quality to form the majority of our TV consumption - Absolutely. Look at the growth of bloggers and online media sites vs. the traditional publishing world. The same will, and is, happening with video. Now every smartphone has a camera and can consume online video. Quality is just part of it. Curation is also key.

Posted by Richard Clunan , 3 October 2011

Talented people will always make great AV -- some people will make a living from it; others won't.

And the distinction between 'user generated' and 'pro' might become less distinct, as a greater number of people make some money from it, while making money in other ways too.


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John Lynch Digital Ministry John Lynch
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Involved in the digital media and Marketing industry for many years, through working at the Economist Group (uk), Universal McCanns, Zivo, emitch, OneDigital, IBM (client side), Agency.com & now TBWA NY Now in Bath, UK working as a consultant

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