Aleksandra Bosnjak, Strategic Planning Director, Multiplatform Content Distribution, Isla Analytics, gives her view on the five biggest trends in TV in 2018.
1. Premium OTT hyper competition. In 2018, the focus will shift from dominant players such as Netflix and Amazon to intensifying hyper competition in mature OTT markets, as both players find themselves competing with everyone from traditional pay-TV players to Disney, Apple, Google and Facebook. Until now, original programming was the key competitive driver on audience front, but with new entrants, advertisers will become an important driver of the OTT dynamics. With social media entry into the programming, they will only pay for targeted slots via leveraging data analytics, and this will determine the OTT spend on genre that can deliver target audience reach.
2. Focus on the development of ad-driven programmatic TV through digital products as traditional pay TV such as Sky, Virgin, and BT all invest into development of ad products exploiting first-party data and transition from set-top-box technology to apps (finally!). These platforms will continue to defend its premium audience turf by seeking more efficient ways to fight churn and maximize their addressable TV market, with stronger focus on datasets drilling across its converged consumer devices. The challenge to measure and to move overlapping linear/digital audience to truly connected multiplatform connected TV will remain the core of their strategy. In essence, this will mean to deliver more content through apps rather than setup boxes. Consumers are on the go for almost a decade, so pay-TV product must follow.
3. Social media will intensify OTT market competition and enter content distribution: Google and Facebook already control two thirds of global audience and ad revenue market. This gives them a powerful data backend to invest into content and monetize their existing audience pool. Their eventual hard cash entry into Premium OTT is likely to produce more immersive cross-platform content experience and boost content production of more innovative content formats.
4. Accelerating consolidation in Hollywood: In light of OTT pressures and technological transformation of content production and distribution, studios will continue past trend of “shrinking” output but in the shape of intensified M&A activity and consolidation such as Disney’s recent acquisition of Fox. Over the past few years, foreign buyers, namely Chinese cash, have propelled some of the Hollywood creative assets so it is possible this M&A activity will be partially financed by non-US capital.
5. Artificial Intelligence: Virtual technologies will be the where all investments will go, and increasingly change the dynamics of media and entertainment. We already see all key converged media/technology/entertainment giants such as Apple, Google and Facebook pushing AI, and 2018 will be interesting in terms of learning which AI products will be adopted and turned into revenue. According to various research houses, the global AI market cap for 2017 was estimated to be worth USD$2.5 billion, with predictions it will double this year, and it will hit USD$60 billion by 2025; so no suprize all R&D cash will go into development of virtual technologies.