The threat of Silicon Valley hung over the TV Connect conference on Day 2 but not all executives are feeling the heat.
Liberty Global’s Lead Architect/ Technologist / Advanced Video Innovations and Trials Team, Phil Sellick, said he didn’t think FAANG was a threat to Virgin Media’s business.
“I don’t view FAANG as competition since each member has different motivations – they shouldn’t necessarily be parcelled as one,” he said. “Netflix’ business model is different to Amazon’s. We compete with Netflix in some areas but cooperate in others [Netflix is available on Virgin’s platform] just as we do with Sky.”
Disney’s SVOD ambitions might be considered another threat. “They may have a lot of premium content but may also find the distribution part more challenging than it thinks,” said Sellick. “The ecosystem will evolve.”
Displacing linear services with a direct to consumer offer is not an either / or proposition. As motorsport right holder Formula 1 is finding, a live OTT super fan experience can work in the same market as the existing commercial broadcast.
“We would apply the same concept to SVODs like Netflix with which there is a huge payTV overlap in most markets,” said Ed Barton, Ovum’s senior analyst.
However, Bjarne Andre Myklebust, Head of Distribution, NRK said, “We are taking more and more viewers over to OTT but we’re not managing to take them all. We are losing some to FAANG. We are in a fight and it’s only just started.”
Broadcasters like NRK and cable operators like those in the Liberty stable are looking to technology to help them scale their services to connected devices.
“Our OTT service is growing and with it our CDN bills,” said Myklebust. “Plus, we see rising demand from the public for 4K. We need to think how we distribute over the internet.”
He said 28% of viewing on NRK’s OTT player is linear. “We are experiencing much more data traffic and we need to manage this more effectively. It is costly with more traditional CDN business models.”
An alternative distribution method is offered by Teltoo which claims to shave up to 83% of bandwidth usage with a peer to peer system that “involves every single device on the network when needed,” according to Pablo Hesse, Founder and CEO. “We’re going beyond edge-based CDNs down to the nodes where each node is a lean resource.”
Artificial Intelligence and Machine Learning is increasingly being called on to streamline efficiencies in the network and can also be used at editorial level.
“You can apply machine learning to create a much richer personalised experienced and to improve video encoding performance,” said Sellick. “ML can also be used to drive natural language programming and changes to the UI.
“For example, instead of having users search for a particular Tom Cruise movie and then being offered an approximate selection of ten choices, natural language via voice assistants enable conversational descriptions of the particular Tom Cruise movie they want. Not only will their search and discovery be more satisfying and relevant to the customer but you immediately have a much deeper level of information about them. You can look at clustering of customers around certain contexts, for example to enable predictive content licencing acquisition.”
Allan McLennan, CEO / founder PADEM Group & TV Connect Leaders in Global Video Group Chairman opened the day by asking delegates to look to cultures in other markets. He showcased the Korean OTT service Viki which engages its viewers to do language subtitle localisation.
“The ability to have an audience participate in programming alongside a social component that allows them to see themselves helping to programme the content on the fly is impressive. It’s symptomatic of a shift to hybrid programming, a combination of linear and OTT over IP, which will increasingly open up innovative business and creative opportunities.”
While technological advance, consumer viewing behaviour and business model dynamics are happening at pace the overriding impression given by payTV, service provider and commercial broadcaster players at TV Connect is that change is manageable.
“All ships will rise with the tide,” said McLennan.