An industry in transition

Intensified competition also brings with it increased confusion for viewers, and content curation becomes more important for OTT services to find success.

This March, the annual Connected TV World Summit continued its journey to help the industry transform itself.

It’s a sign of our industry’s growing maturity that more than 90% of operators now have some form of VOD on their set-top boxes, according to Jon Watts of consultants MTM, but innovation is starting to become polarised—its only the industry “whales” that have the ability and scale to really invest in innovation.

It’s not just a story of maturity, though. It’s also a story of intensified competition—telcos offering video; pay TV offering video; pure OTT providers (YouTube and Netflix) offering video; and broadcast channels offering their video direct to viewers (including former cable stalwarts Disney and HBO). Competition can be confusing to viewers, though.

One useful new service that manages to peer into Netflix and 9 other UK services (even though Netflix turned off API access a year and a half ago) is Everyflix. Launched by former ASOS head of tech Simon Hamblin, Everyflix aggregates and shows all of those services’ video content, combined with data from IMDb and Rotten Tomatoes. It is intuitive and useful for viewers, but more interesting for conference-goers was the data already collected and series of graphs that retail expert Simon showed.

For example, according to Everyflix, Sky’s Now TV has the highest “average movie IMDb rating” with Amazon Prime the lowest of all 10 services; iTunes has the highest total movie count (by a long way) and Netflix had just about the worst “Family Genre – Average IMDb” score of all. Move over utility comparison websites, we’ve now got a useful tool to choose which video service is best!

With all these platforms pouring content into our screens, it’s no surprise that the overall consumption of video (including linear channels) is up, says Sky director of strategy Nick Herm. But viewing habits vary hugely across the audience, and a single product is clearly no longer sufficient, hence Sky’s focus on understanding its viewers and creating services that match these requirements. Consider NowTV (pay lite, dip in when you want, soon with integrated DTT tuner); Sky+ (multichannel payTV with its growing library of on-demand content) and new SkyQ (premium, UHD support, flexible, whole house service).

However, the down-side of this greater choice is succinctly summarised by Ericsson’s Simon Frost, who suggested, politely, that the media value chain is “disrupted.”

The problem for broadcasters (and the opportunity for services such as Everyflix) is that the key audience of millennials are “delivery agnostic.” A couple of UK examples will perhaps show why—Sherlock, the highly rated BBC detective drama can currently be seen on Amazon Prime, Amazon (to buy), iTunes, Blinkbox (from TalkTalk) and Netflix. How to Train Your Dragon is on Amazon, iTunes, Blinkbox, Sky Store, and Virgin. And those are just the legitimate channels.

Viacom’s Christian Kurz, as well as sharing the company’s audience trends with us (through its International Insights website), also showed a video summarising extensive youth interviews (more than 65,000) from 2015. To quote from memory one young viewer, “If I get a message saying [this content] is not available in your country, it’s frustrating, but I know how to get round it.

It’s a timely reminder, that, as Wired reports in its April UK edition, “as many as one in four people” use VPNs and “by far the most popular ‘need’ globally is the need to access [geographically blocked] entertainment content.” And this, coincidentally, appears in the same magazine that comes with 12 pages of advertisement for SkyQ.

If the audience really is becoming delivery agnostic, but they still love video content, do we risk going the way of the music industry? That was the question posed by Jette Nygaard-Andersen from MTG. 15 years after the peak for the U.S. music industry with CDs responsible for more than 90% of revenue, the U.S. music industry is now only half the size, with digital sales taking perhaps 60% of the revenue. Yet the passion is still there—of the top 20 videos on YouTube, 18 are music. The most loved celebrity on Facebook is a music star. The most followed celebrity on Twitter is a music star. Ours is an industry in transformation, and to “follow the eyeballs”, esports and multichannel networks are becoming a key part of MTG’s digital transformation.

To survive, summarised Kai-Christian Borchers from 3 Screen Solutions, you just have to be uniquely the best in the market. As Facebook found, native mobile apps are much more successful than a generic HTML5 app due to better speed and functionality . Or, to continue the music industry parallels, a top dance DJ “steers” the crowd at a music festival, and he just couldn’t do that if he was just running a Spotify playlist. Borchers suggests broadcasters aim for top performance and fast-changing features, have a very clear focus and a very clear USP, and don’t just use a specification with a million items of shopping list features put together by a consultant!

We’ve nowhere near finished the industry transformation, but events like Streaming Forum and Connected TV Summit provide great meeting places to learn and share ideas. Here’s to a disruptive future—long may it continue!

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Jukwa Group provides broadcast and OTT consultancy to clients in Europe and Africa.

We can support you from the business plan for a new TV channel or platform to reinvigorating your programme content or sales activity.