There is a paradox facing the broadcast industry. Studios are producing better content than ever, and technology vendors are delivering it to consumers at record qualities and speeds, but the industry is under pressure. People are demanding personalised, engaging content in high definition, on any device, anywhere. Innovation and insatiable consumer appetites are driving up standards, but monetising new technologies remains a challenge. Some players will survive and adapt, others will lose. With this in mind, here are 5 trends shaping the industry that today’s executives should take note of.
Virtual Reality is becoming mainstream
2016 was the year that virtual reality hit the mainstream consumer technology market, with Oculus Rift, Samsung Gear and Nokia Ozo becoming available. But it’s likely we are only at the bottom of the ‘innovation S curve’, with further adoption anticipated. Analysts are predicting the markets for virtual reality and augmented reality will be $150 billion by 2020 and with a user base of more than 275 million people by 2025. It’s difficult to predict exactly how the next few years will play out in the AR / VR space. Certainly, there’s clear potential in gaming, where it’s already proving a success. Sports broadcasting is another area that’s likely to see growth, however challenges remain in integrating the social element, since sports are often social events, and a VR headset can be isolating.
Successful players are optimising across platforms
A recent report by Accenture found that the TV is the only category of device experiencing double digit usage declines - across all types of media worldwide, and among viewers of nearly all ages. However, it is not our appetite for entertainment that is waning, since the decline in linear TV is balanced by the explosion of content consumption happening on other devices including smartphones, tablets and laptops.
Screen use is expected to further grow and diversify, with new screens appearing in the connected car and the connected home of the future. Some analysts have predicted that smart mirror screens will replace standard bathroom mirrors in new build homes, so you’ll soon be able to catch up on the news of the day while taking your morning shower.
This shift to multiplatform has put pressure on broadcasters to not only create content with the omni-channel experience in mind, but also ensure content can be seamlessly delivered across all platforms. Since each device requires slightly different encoding in terms of screen size, ad content and stream quality, it becomes critical for content providers to choose the right technology partners to ensure their architecture can fully optimise multi-platform streaming.
Data analytics is driving personalisation of content
Netflix and Spotify have already led the way in using data analytics to link consumers with shows or music that they love. But this is only the start of the big data revolution that is creating huge opportunities in the broadcast sector and beyond. The primary way that data analytics is being applied is still in advertising, although it is expected to drive more content creation decisions in the future.
Moving forward, as more people opt for OTT services and subscription models that enable more accurate real time data collection, big data will do more than targeted advertising. Content will be increasingly personalised – with technology knowing that you like to stream music first thing in the morning, or watch a comedy show on your device (or even in your car) on the way to work. Using machine learning techniques, broadcasters will be able to learn viewing patterns and preferences, collecting enough data on you to predict whether you might like an upcoming release and exactly the right time to suggest it to you.
Data will also drive more decisions on content creation, allowing broadcasters to take creative risks with commissioning content and better predict what shows might be a success, in what geographies and at what time.
Social viewing clusters around top entertainment ‘brands’
At its heart, consuming digital media and entertainment is a social activity. Now that people tend to watch TV in their own time, they are looking for new ways to share their love of a new show or the excitement of watching a live sports event, often through social media. Live events and ‘experiences’ are growing in popularity across music, sport, gaming and more - and creating new revenue opportunities for savvy executives in the media and broadcast world. Encouraging social engagement with brands can be one way.
The paradigm is shifting away from merely creating good content to generate big viewing figures for advertising revenue, but creating fans around a brand – active followers united by shared ideas, interests and experiences. Having a strong fan base that providers know they can serve will help media companies better monetise their services – by collecting data on fans for more targeted advertisements, by upselling and cross selling new services such as live events, and by encouraging the recruitment of more fans.
Cloud use is growing
As the industry shifts away from traditional linear broadcasting towards OTT streaming to multiple devices, cloud computing has become an essential part of the infrastructure, in both production, post production and delivery. In terms of delivery, broadcasters are increasingly turning to suppliers like Microsoft and Amazon Web Services for content hosting and delivery over IP, Netflix and ITV being notable examples. Cloud based services have advantages in terms of agility, flexibility and scalability to provide reliable distribution to cope with today’s consumer habits. Broadcasters are also able to collect powerful data insights that can be used for personalisation of content through add on solutions.
In the production and management phase too, cloud services are enabling remote virtualised production, so studios can cut the cost of expensive facilities, and shortening release times to keep pace with growing consumer demand for content. With the rise in UHD content, and looking to the future with 8K and virtual reality, further innovation is needed to provide dependable cloud based solutions that can cope with such vast quantities of data.
It is an exciting time to be in the broadcast sector, as technology continues to change the ways of digital entertainment consumption. For firms that keep pace with shifting trends and use data intelligently, there are great rewards to be had.
The Diffusion Group, The Future of Consumer VR and Its Impact on Video Viewing, 2016-2025