NAB Amplify
In a year of unprecedented change — during which the word
unprecedented was used an unprecedented number of times — the media industry
experienced futureshock. Streaming has become the principal route to get video
content to consumers, but the winning business models are all works in
progress.
With these ramifications set to continue far beyond 2021, industry experts lay the groundwork for the year ahead.
Exhibitions return in hybrid form
Peter White, CEO, IABM
“Expect to
see sustained growth in DTC following the massive boost in VOD viewing and
subscriptions during lockdown. Disney has announced that it is aiming to grow
from its current base of 87m subscribers to 300m+ by 2024 and broadcasters
continue to roll out new SVOD services – Discovery+ has just gone live, for
example. How will consumers make sense of the explosion of choice? The answers
may lie in the super-aggregator with a single interface as well as the
technology to enable a truly personalized experience.
Big
sporting events will be back, but will leverage much more remote production –
building on what the industry has learned during the pandemic. This will give
broadcast advertising revenues – hit by 20-40% this year – a kick in the right
direction again. While they may never return to previous levels, broadcasters
who also have VOD and streaming offerings will have the opportunity to
cross-sell between platforms – a luxury big-tech players do not yet have.
Behind this, ad tech will increase in prominence in 2021, with big companies
bringing it in-house to give them more control and increase their
differentiation, using ML to place ads contextually.
On the tech
supply side of the industry, IABM research finds vendors optimistic that sales
will recover in 2021 – though not necessarily with all the same technologies as
the industry moves increasingly into the cloud and SaaS business/operating
models.
What will also be back at some time in 2021 is exhibitions. All of IABM’s research clearly shows that while virtual events have provided some benefits, the need for face-to-face interactions has not gone away. That doesn’t mean things will return to how they were pre-COVID – events will take on board the best of virtual alongside the in-person element to provide a hybrid experience – with virtual contributions going both in and out of the event hub.”
DTC everything, data compliance priority and
entertainment at your fingertips
Jennifer Cooper, Director Business Strategy, Media and
Entertainment, Microsoft
2020 was definitely the year of direct to consumer
everything - from DTC streaming services to DTC e-commerce and DTC t-commerce.
Now that media brands are interacting with consumers directly they need to have
the intelligence for how best to serve their communities, so the trend that
will continue into 2021 and beyond will be data driven audience intelligence.
2021 is also the year of the digital event. There have been
no live experiences for most of 2020 and this will continue for much of 2021.
Many experiences that we used to travel to will remain virtual. The media
technology industry has mobilized to support these digital events with
innovations such as low latency delivery from the network edge.
An example takes place in two weeks when Microsoft Azure
partners with Consumer Technology Association and MediaKind to bring the
industry direct to consumers for digital CES 2021.
Second, I see the impact of 5G continuing to support and
evolve new consumer experiences the telcos are stepping up to the challenge.
Connectivity and 5G in 2021 and beyond will bring more AR/VR, more gaming and
new entertainment to the fingertips of your hand. Lower latency, superior
quality video will permeate throughout every technology consideration.
The third related trend is concern for personalised data.
Just as everything is shifting DTC and the focus shifts to audience
intelligence so the privacy and security of consumer data and compliance with
data security laws will become even more important. The pandemic required all of
us to share more of our data from financial to health care data. Every video
streamer, studio, media organization, broadcaster, publisher, ad agency – every
company - will be laser focussed on keeping consumer data safe. It is the
technology foundation for the media industry into 2021.
Tristan
Veale, Head of Video Content Research Team, Futuresource Consulting
“By the end of 2020, worldwide SVOD spend is set to reach
$55 billion, with Netflix capturing almost half of all global value. It’s
inevitable that SVoD will continue to power the growth curve. By 2024, we
expect over a third of home entertainment spend will be on SVOD.
That said, pay-TV subscription revenue dominates the market
globally, accounting for $172 billion in consumer spending worldwide in 2020
and 70% of total global home video spend across pay-TV, SVoD, TVoD, EST, DVD
and Blu-ray.
While the SVOD services have developed a business model
which suits modern living, there remains value in the linear model, with the
vast majority of content spend directed that way. Is there a way to combine the
two?
SVOD services certainly believe so. They are experimenting
with scheduling and acquiring sports rights - two key pillars of the pay-TV
industry. The aim is to improve visibility on distribution platforms, including
fitting in with current EPGs on legacy infrastructure, while still retaining
the consumers ability to start from the beginning of the program if they wish.
Thinking about the customer journey, the first challenge is to entice them to
the app or service, with the second challenge being to make it easy to find the
right content. Whichever service can make that journey easier will have a
competitive advantage.”
Paid and free are no longer the only business models in town
Stuart
Boorn, VP Product Management, MediaKind
“Streaming TV now has more in common with direct-to-consumer
experiences than traditional pay-TV, as rights holders increasingly look to
deliver more personalized viewing experiences on flexible and scalable
platforms. ‘Paid’ and ‘free’ are no longer the only two business models for
media content. The burgeoning DTC market suggests a more complex picture with
various underlying models and multiple variations, including free to access, subscription,
‘freemium,’ and companion services. Operators and service providers are likely
to adopt one or a hybrid of these models going into the new year.
We expect a wholesale shift to streaming as a means of offsetting the impact of cord-cutting, as well as a way of introducing unique and compelling content to consumers under one aggregated platform. This investment will ultimately help operators diversify their offerings, deliver modern TV services, and open up new monetisation routes.”
Streaming
TV to rescue theatrical
Loren
Nielsen, VP Content & Strategy DTS Inc / Xperi
“It’s been a disastrous year for theatrical. We’ve seen China,
South Korea Japan able to keep their cinemas open successfully with the box
office getting close to pre-pandemic levels but in the western world theatrical
is in total turmoil. A lot of theatres will close as content owners have taken
this time to accelerate streaming first strategies.
From the viewpoint of artists, though, I’d argue this is a
good thing. Over the last few years, a number of very high profile filmmakers have
made some of their best content for streaming services in a way that’s
reminiscent of the 1970’s American new wave. The auteur freedom that filmmakers
like Martin Scorsese enjoyed then is happening once more. In order to get access
to these kind of filmmakers, streaming platforms have given them artistic
freedom and the budgets to create exciting new feature and episodic content. As
the SVOD platforms multiply, there will be increased opportunity for more
filmmakers with the freedom to make exciting new content, and ultimately, more
choice for consumers.
Theatrical presentation will always have a place but it may
be those providing the X factor of a special experience or those that provide a
community service of some kind which will thrive.
At the same time, I believe filmmakers working for streaming
services will also want to take advantage of seeing their work on the big
screen. We’ll even see episodic content premiering in theatres, as a marketing
tactic but also as special events for super fans of a show. The distribution
business model will be different but there will be room for more of this
activity.”
Video and storytelling need to incorporate social experiences
Jonathan
Lupo, Head of Digital Experience Design, North America, EPAM
“Our need to socialize has been repressed for approximately
seven months now, and we’re absolutely starving for meaningful social
experiences. Just adding a chat or commenting feature into an eCommerce app
won’t give us the virtual hugs we desperately crave.
Streaming services such as Netflix, Disney+, Hulu, Amazon
Prime Video, HBO Max, and YouTube TV haven’t been able to replicate the
theater-going experience. While drive-in movies have been making a come-back in
small communities, there’s certainly an opportunity for digital streaming
giants to make their content more social.
Efforts, to date, include the ability to schedule Netflix
‘watch parties’ Netflix which synchronize video playback with a group
of watchers who can chat with each other during a movie or TV show. The ability
to chat is a rudimentary social capability, however, and without seeing your
friends, the experience feels somewhat disembodied.
Necessity being the mother of invention, digital media
consumers have found a way to ‘hack’ popular teleconferencing software, like
Zoom to create DIY watch parties with the ability to actually glimpse their
friends’ faces. Streaming content providers will likely follow suit, bringing
more embodied social entertainment to screens in 2021.
Deloitte claims that “there are more millennials, now, who
have a gaming subscription than those with a traditional Pay TV
subscription—and close to one-half of millennials and Gen Z pay for both a gaming
and video streaming service.”
Animal Crossing was a huge hit this year in part because it
provided an alternative avenue for social connection and interaction–a sort of
digital ‘third place,’ more geared towards casual togetherness or hanging out
than the purpose-driven and performative mechanics of conferencing software
like Zoom.
Since gaming is inherently social, and given the crossover
consumer base, it makes sense for movie studios and gaming platforms to join
forces and create mixed-media experiences that enable consumers a greater
degree of social interaction, engagement with franchises, and escape from
reality. With VR now within the consumer’s grasp, a properly immersive,
mixed-media experience could both entertain us and help satisfy that urge to be
social, in a real physical sense.”
Steve Miller-Jones, VP edge
computing and solutions architecture, Limelight Networks
“Younger generations especially are gravitating towards
short-form content and real-time, data-intensive OTT services. They are
beginning to expect more interactive experiences from their content, and that
means larger data volumes and more pressure to reduce latency. The next
generation of viewers won’t just consume real-time content, more and more
they’ll interact with it.
One area where this will be really prevalent is live sports.
As sporting events returned to our screens this summer, several broadcasters
experimented with new virtual offerings to make the real-time streaming
experience more engaging. This experimentation will only increase in 2021. We
can expect gambling integration and personalised services that provide
alternative commentaries, live audio feeds from the referee’s mic, and crowd
sounds for an authentic stadium experience. We will also see more features
focused on social streaming, allowing friends to watch together. These features
might be short-lived, but those that really engage audiences will remain and
change how live streaming experiences are defined. We’re not there yet, but
we’re approaching a model where the user controls the content experience for
themselves.”
Streaming services want the power of linear TV
Nick
Thexton, CTO, Synamedia
“OTT subscriber numbers that previously took years to
achieve have been reached in months. But as we return to a new kind of normal
there will be a real challenge to keep those subscribers, particularly because
they will have consumed content at a higher rate than that modelled by the OTT
vendors. Add to this a slowdown in content creation and there will be a
significant push to keep those new subscribers. As a result, in 2021 we expect
to see operators launching flexible pricing structures and new business models
as they look to establish differentiators for their services.
2020 saw a challenging advertising market and surfaced the
need for new, more robust advertising capabilities. Collaboration will be key
to unlocking new advertising revenues and we believe that in 2021 we will see the
first examples of localised advertisers, broadcasters and service providers
starting to work together to prove the value of the addressable model.
For years we have seen how pay-TV providers look enviously
at streaming services and work hard to emulate their offerings. Now the tables
are starting to turn. As subscriber growth slows, streaming services are
looking enviously at the power of linear TV. While Amazon Prime has
experimented with live sports and some French audiences have had access to a
pilot curated channel, Netflix Direct, we expect to see other streaming
providers following their lead over the next few years.”
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