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Your view of the TV Business in 2018

SurveyLeaderboardAt the turn of the year, TV Connect asked its past speakers and industry influencers for their predictions for 2018. The response was overwhelming and is a reflection of the passion that Media + Networks’ community has for the business its in.

 This week we will look at the business changes predicted, from market consolidation to changing consumer habits.

Will Ennett, head of TV Content, Talk Talk

Changes in consumption

shutterstock_167358809guywatchingtv1The days of viewers happily paying over a £100/$100/€100 a month for TV are fast disappearing. Expect customers to get increasingly savvy and want to get better value for their TV; providers who can deliver great content simply, reliably and cost-effectively will prosper

Changes in consumption patterns of viewers continue to accelerate, in particular increased on demand and multiscreen usage. Expect this in the same trends as previous years.

And as are in the midst of some mega-consolidation in the industry, 2018 may be the year we await for the deals to pass and new management to take hold, and see less innovation and new products. The quiet before the storm.
(business strategy)  (audiences)  (multiscreen)  (bundling)

Charles Dawes, Senior Director, International Marketing at TiVo

 The ‘gig’ economy and pay-as-you-go mentality will affect media consumption

With the ‘gig’ economy providing workers with the ability to work on short-term contracts or freelance, as opposed to permanent jobs, 2018 will see these attitudes being reflected in the entertainment industry – particularly in the way the younger demographic consume content.

As consumers move away from the commitment of contractual arrangements and towards a pay-as-you-go mentality, providers will need to adjust their business models to meet this demand.

YouTube has already capitalised on the potential of spontaneous viewing, reinforcing the taste for instantaneous watching in audiences, rather than a long-term commitment. In 2018, the flexible provision of entertainment content will be a step in right direction for media and content organisations, and the industry as a whole.
(business strategy) (Pay TV) (VoD) (SVoD)

Mobile will fulfil a huge part of content consumption in 2018

MobileAfrica1There has been a rapid uptake of streaming in Europe, particularly when it comes to sportcontent consumption. Take, for instance, the Wimbledon 2017 tennis tournament, which served 24.1 million stream requests this year via BBC Sport and BBC iPlayer, making it the most streamed Wimbledon to date[1]. The most popular match was Rafa Nadal versus Gilles Muller, which brought in 1.4 million requests in total.

With global events to look forward to in 2018 – such as the royal wedding of Prince Harry and Meghan Markle, and the Winter Olympics – it’s likely they will also be watched live from mobile devices across the world.

What’s more, with events such as Formula One – which is hosted in countries including France, Dubai, Australia and China – mobile device viewing will be highly dependent on location, with time zone playing an important role in how viewers will watch these key events. Indeed, this could lead to an uptake in device viewing on catch-up services. (tech) (mobile) (sports) (live streaming)

Regional OTT services will remain the global frontrunner until global OTT harnesses localisation

In many markets, multi-country over-the-top (OTT) service providers are currently battling for viewership with regional service providers. With regional OTT proving a vital part to play in content that certain regions can identify with on a cultural level, having access to aggregate the content will grow in importance in the tug-of-war between global and regional OTT.

The fact that regional OTT often ends up more cost effective too plays a role in this. Different languages and culture informs this local content, and having access to a good selection of more topical, local issues which are in tune with people’s every day can provide regional OTTs with the leverage they need to not be swallowed up by the global players.
(Business strategy) (OTT Strategy)(Localisation)

Bjarne Andre Myklebust, Head of Distribution, NRK Norwegian Broadcasting Corporation

Linear TV

landscape-1486986380-stranger-things-mike-wheeler-2Traditional linear TV viewing will continue to decline while Disney and Amazon will give Netflix a much-needed competition in the SVOD marked. Consumers can look forward to more services and more high-quality original content.
(business strategy) (Pay TV) (VoD) (SVoD) (Linear TV)

Advertising

Advertisement driven VOD services will gain more attention as new ways of inserting personal ads on the fly is maturing and advertisers are looking for new channels to reach their potential customers.  (Advertising)  (personalisation) (Business strategy) (VoD) (SVoD) (Linear TV)

Colin Dixon, Founder & Chief Analyst, NScreenMedia

Cord cutting the continued rise of SVOD

Cord-cutting in the US could double in the US to 2 million and vMVPDs like Sling TV and YouTube TV will pick up many of the cord-cutters. Amazon will continue to be a major disruptive force in the television and video industry and Netflix will finish the year with close to 140 million subscribers – 80M international, 60M US.

Globally, local and national broadcasters will lose audiences to global SVOD services at an accelerated rate. Co-ordinated, targeted multiscreen ad campaigns will become more common.
(Advertising)  (personalisation) (Business strategy) (VoD) (SVoD) (Linear TV)
James-Marsden-and-Evan-Rachel-Wood-in-Westworld

Teresa Potocka, CEO & Founder, sensethefuture pictures

  1. Television will reflect a society that no longer uses collectives, like the family and the nation, as organising principals. Our media will be experienced personally but organised globally.
  2. More IRL experiences will be created with more value from talent and IP: Expect attempts to extend one-offs into returnable franchises.
  3. Era of one big subscription is coming to an end; content connoisseurs will drive change and set new expectations that bring consumers and providers closer together.
  4. Regulations and licensing restrictions will continue to provide ongoing challenges to market development of OTT streaming services across the world.
  5. Expect more Awards' nominations to go to TV shows that are exclusively owned and distributed by streaming services.

(Personalisation) (Business strategy)(Content)(PayTV)(Regulation)

David Crawford, Managing Director: Satellite & Media at Arqiva

Mergers & acquisitions

ScreensThere will be a wave of consolidation across the media sector in a bid for scale and control. There will more mergers amongst ‘traditional’ broadcasters to build content scale (Disney Fox one of several). There will also be increased consolidation amongst the broadcast vendor base (Harmonic Thomson was just the start) to achieve scale. This consolidation will also spread amongst OTT specialists: amongst to gain scale or be acquired for their expertise. RedBee will be, finally, offloaded by Ericsson.

In the UK there will be much debate over the strategies of public service broadcasters. There will be new CEOs at Channel 4 and ITV, as well as ongoing advertising pressures. In public service broadcasting we will see more development of online options.

(Business strategy) (OTT Strategy) (Broadcasters)

Tim Mulligan, Senior Analyst, MIDiA Research

Fighting for attention

Competition for time and attention will define the coming years for digital content; growth will come often at the expense of competing services. Free-to-view video services will provide subscription services with increased competition in 2018

(Business strategy) (Content discovery) (VoD)

Yasir Mansoor, GM Content and multimedia, PTCL

The rise of OTTs, rights management and regulation

Premium VoD OTTs like Netflix will keep flourishing in developing countries and will eat up VoD revenue of IPTV operators. Consumers will continue to churn away from linear to non-linear content will accelerate and hence more growth for OTT players.

Governments and regulators will be trying to tax global OTT players to protect local players and ensure level playing field for all.

Operators evolving from IPTV to multiscreen OTT players will be under pressure to invest more to keep their multiscreen services live in wake of Google and Apple’s strategy to push their native players and DRMs.

Consumers have demand for all sorts of content ranging from VoD to sports and news derivatives that are linear in nature. Operators can keep their OTT services relevant by integrating Premium players within their own app or multiscreen services.

Multi DRM support is expensive proposition for IPTV operators. The situation represents an opportunity as well where operators can move from CAPEX to OPEX based model for platforms.

In the advertising world of developing countries, the spend will be much higher in digital and social media compared with traditional media and hence TAM needs to cover 360-degree view of consumers content consumption Direct Carrier Billing (DCB) is an opportunity for IPTV players to remain relevant in premium VoD content space.

(Business strategy) (Content discovery)(VoD) (Cord cutting) (Audiences) (Digital Rights Management) (OTT strategy)  (bundling) (Regulation) (content) (live streaming) (Advertising)

Tom Weiss, CTO and Chief Data Scientist, Dativa

Netflix will introduce advertising

Netflix has been producing excellent shows and is growing its international footprint but still doesn't have the level of profitability it needs to become sustainable. As other media publishers commit to multiplatform, we expect a lot more streaming-first shows, and this is going to ramp up the pressure on Netflix' subscription fees. As limited advertising in streaming becomes the norm, we think it's inevitable that Netflix will follow suit.
(OTT strategy) (Advertising)(Business strategy)

GDPR will bite at least one streaming video provider

The new General Data Protection Regulations (GDPR) arrive in May 2018 and require all streaming video providers to re-work not only their terms-and-conditions but also much of their processing pipelines for consumer data. We’ve already started working with some providers to upgrade their platforms so allow users to erase or update their data history in a fully transparent way - across ALL of their data platforms.

Most providers underestimate what’s required, and we expect substantial fines to come to players in the industry who have not prepared sufficiently.
(Audiences) (Regulation)

Matthias Maurer, Head of Product management Internet & Content Deutsche Telekom AG

Trouble for linear TV

We will see the first popular private linear TV channels tumble as the advertising industry shift their expenses on IP as the customers step away from old traditional TV.
(Linear TV) (Advertising)

Marc Lorber, Lionsgate films

Disruption for traditional TV and distribution

  • Further disruption to traditional TV platforms by SVODs and OTT services
  • Further carriage battles between platforms and distributors
  • Difficulty for distributors with increasingly larger production deficits to cover

(VoD) (SVoD) (OTT strategy) (Business strategy) (Content discovery)

Steven Hawley, Principal Analyst & Consultant tvstrategies™, Advanced Media Strategies

SVoD too much for some?

At least one major Pay TV operator (MVPD) that launched a high-profile virtual streaming pay TV service in 2015-7 will decide that the return on the investment is insufficient for them, and exit.
(VoD) (SVoD)(OTT strategy) (Business strategy) (Pay TV)

Vendor consolidation

There will be further vendor consolidation in the video infrastructure space – wherein at least one Tier-1 vendor, and possibly two, will consolidate with other Tier-1 companies that were previously competitors.  My bet is that it will be a company (or more than one) in the video security space.
(Business strategy) (vendors)

Net neutrality and regulation

Actions against and by Regulators will have a sure impact. “Net Neutrality” will not be killed in the US, as a result of legal actions against the FCC that delay its removal past the next national elections, when the pending change will be withdrawn.  Also, at least one pending consolidation between a major video service operator and a media company won’t happen, due to objections by regulators.
(Regulation)

 

Michael Underhill, Strategic Media Consultant – EMEA, OOYALA

Amazonian sports move

Amazon will purchase one of the smaller Premier League packages. The timing feels right for Amazon to enter the Premier League rights market, though I do not expect them to pick up more than one, small package. The games will be offered as part of the Prime subscription, and, for now, will be UK only. (Sports TV)  (OTT Strategy)

Online advertising to take a hit

Online advertising will have a torrid year. While spend will continue to grow, the online advertising market will fail to deal with many of the issues that have plagued it in 2017: accountability, fraud, placement next to inappropriate content, the inexorable growth of the duopoly. (Advertising)

 

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