Netflix’s Chief Content Officer Ted Sarandos controversially said in October 2015 that, in 10 years time, he felt linear TV will be dead. Surprisingly, the response to that was muted except for certain observers like nscreen Media which posted an analysis to the contrary. The publication rightly pointed out that recent Pure Play OTT services that have launched with a heavy linear focus, showing it is still a valid proposition (in the context of this post, I’ll be referring it as ‘live linear’ since non-live channels that are programmed from a VOD playlist, do exist).
The industry trend has been to also introduce ‘lite’ OTT packages that actually focus on live linear streaming, catering to potential ‘cord-never’ customer segments. And don’t forget that TV Everywhere services still get great audience engagement from the linear channels that are streamed out – people want to watch TV on the go almost as much as they watch time-shifted content (from my personal working experience anyway).
But back to the Pure Play examples. These include Sling TV which was launched by parent company Dish TV, offering a variety of linear channels from Pay TV providers. Another giant weighing in is Sony Corp with Playstation Vue, which offers a large variety of linear channels as well. Both services also provide VOD content.
Pluto.TV with lots of live linear and play-listed channels to choose from, and each with its own programmed schedule, is also making waves. The company just announced 20 new channels from content providers such as IGN, The Onion, Legendary Digital Networks, Newsy and World Poker Tour. In Europe, France’s highly anticipated Molotov service promises over 100 free and paid channels contained within a stunning user interface. It’s the latest to be launched and it definitely won’t be last.
Next year Hulu is promising a new live streaming-plus-on demand bundle designed for the younger generation. According to several reports, Hulu is negotiating with the various studios and content owners to stream ESPN, Disney Channel, Fox News, FX and others.
So it is hard to believe – from the current trend – that linear viewing is dying. The problem has not been that live linear is out-dated, live linear as we know it has not evolved into the interactive, intelligent lean-back experience it could potentially be. The Pure Play providers are proving it.
Sadly, broadcasters are still struggling to hold on to terrestrial viewing and the all-important revenues they derive from it. Many are holding on to their golden geese of premium live sports, news channels and exclusivity. There’s no denying that these continue to represent the main reasons why people won’t churn away from TV so easily. Many broadcasters are grappling with ways to monetize TV Everywhere, especially if they are AVOD-based. It’s a constant battle to keep CPMs up.
But they should not ignore the huge potential being afforded to live linear streaming, with its ability to offer targeted advertising and interactivity. Initiatives like HbbTV promise a set of standards that result in the best of terrestrial viewing with broadband-based interactivity (ranging from companion device pairing to multi-audio and subtitling). However, the ‘h’ stands for hybrid and that is what it is: a transient state. A compromise that leverages legacy technology. Ultimately, terrestrial TV’s limitations mirrors a decaying castle under siege. At some stage it will simply give in. A fully connected world delivers too much potential to be ignored. The problem is that we don’t know when this utopian state will happen. We know that it will happen though.
Ted Sarandos was representing an iconoclasts view of the world. Ironically, Netflix has become an icon of SVOD in the way broadcast was, and still is, to the Baby Boomer generation. It’s premature to share his ebullient views but we know that live linear has a valuable place at the moment.
In my next post, I’ll even talk about why I think these two bastions of live – sports and news – are under threat. But for now, broadcasters can still breathe a little easier.
Oliver Stone apparently had his most fun making Alexander, detailing the Macedonian’s mercurial campaigns that culminated with the invasion of India. It was the height of Alexander’s conquest. Like Alexander, linear Pay TV is facing an inflection point as it reaches the apex of its offerings. After HD, the PVR and 3D, the next offering is apparently 4K, but don’t let that fool you as consumers know when overkill has arrived in their living rooms. Today’s consumer is too busy trying to figure out how to make use of the 150+ channels they subscribe to. Aside from battling the influx of pesky OTT players trying to outflank them, Pay-TV operators are simply trying to give customers a reason to pay exorbitantly high subscription fees.
The notion that content is King is no longer being touted. It is a given. It is a price-of-entry requirement. A hygiene point. Now the new, must-have is Content Discovery and your Pay-TV set-top boxes need to get connected to the web real quick. But overall, if your organization doesn’t have Content Discovery as a strategy, it could be on as rapid a decline as Alexander’s armies were after the Battle of Hydaspes. Sky Deutschland is one of the many operators (like Astro) that’s doing it now.
Content Discovery encompasses the following:
Search Engine. Usually productized in as Global Search, this powerful feature allows anything in the PVR to be searched from keywords entered. Both linear, PVR recordings and VOD catalogues should be included, and this can be powerful if aided with an advance EPG. Search, then Record. Simple as that.
Recommendation Engine. This is the where users will increase consumption. Content-based recommendations will ensure users get the most out of a vast catalogue but it is also important to note that a true, personalized recommendation engine (one that knows your past history) is deployed.
Social Recommendations. Using the wisdom of the crowd could be important. What if you could log-in using a Facebook account and share your Top 5 or Watchlist with others? And what if your OTT device or Set-Top Box told you that such content being shared by others was available already?
This is the future of TV as we know it. Don’t boast about content anymore. Shout out discovery and your customers will have one less reason to cut the proverbial cord.
As if their struggles weren’t enough, apparently it’s now going to be even harder for half the world’s population over fifty to win the battle against obesity. That’s because the new generation of Smart TV’s certainly haven’t made their job easier. Chief weight-loss adversaries include the Samsung L8000, which offers a multitude of Apps and richness in content delivery. Plus, cool Social TV interaction. I had a chance to sample its goodness when we got one in the office recently. Cool apps like Skype (must use with the Freetalk camera) make it great to use for video conferences or virtual classrooms but I also had a chance to sample the app provided by our local newspaper The Star (to see if I could avoid buying a paper copy from now on). No luck. Either the feeds went down or they intentionally want their app’s articles to just have a little more text than the headlines. Okay, maybe they want you to pay for it but it was never made explicit. The app was a tease, plain and simple, with no effort by the app owners to really provide a freshness and low-hanging fruit to port over to either the sale of a full digital copy or in-app purchase to full version.
Granted, it is probably easier to monetize video content on Connected TVs than other OTT solutions like tablets or the PC. And broadcast operators have it easier. The Netflix App is straightforward and delivers the same content. Non-broadcast media companies will find more challenges getting their Apps to be adopted and to monetize what is essentially still a new platform for them.Still, is this for a want of trying? If you can’t make a decent proposition on a Smart TV, don’t. Find a strategy or avoid the space and the hit to your reputation from a dead app. Given that app stores are getting noisier, you’ll just be adding to that. So get a product managers now and give him/her a mandate to make Connected TVs more compelling to a paying audience.
And once you do, avoid partnering up with Weight Loss centres. That’ll be a losing business for sure.
The ‘Cutting The Cord’ momentum has been picking up steam over the last couple of year. First it started with Warner Bros announcing a potential long-term deal to stream movies over Facebook, starting with the Dark Knight. Then Miramax recently announced an FB App to stream its movies. Now Netflix has bounced back from recent criticism to announce this mega-deal with DreamWorks (get Netflix stock now!) worth at least USD30 million. The fact that DreamWorks chose the streaming method instead of continuing its Pay-TV deal with HBO is a surprise. “We are really starting to see a long-term road map of where the industry is headed,” the New York Times quoted Jeffrey Katzenberg, CEO of DreamWorks Animation, as saying.
Given that statement, is the announcement really a surprise? Netflix is going to be the dominant cord-cutting leader purely because of its audience base. It has 20 million subscribers and profits of USD161 million in 2010. It operates in 45 countries streaming its famous USD8 a month flat fee. Sure, it has rivals but none can currently compete on its decade-old proven platform to stream premium content effectively.
But Facebook will definitely become the second formidable cord-cutter. With 800 million users, most of whom are active, the idea of streaming movies for 30 Facebook credits (USD3) may prove too tempting for Hollywood studios. By virtue of being social media, the network effects of friends liking what friends are watching will create a viral solution (or called passive peer pressure), that’s unstoppable. The only problem Mark Zuckerberg faces is ensuring that a streaming service can be put into place in the social media site without major hiccups. But if he does, then watch out.
Netflix’s DreamWorks content will only start reaching customers in 2013. By then the floodgates would have opened for other content providers.
Asia-wide shouldn’t be late in following this trend because Netflix has stated that they will conquer the world territory by territory. And if not them, somebody else. Watch those Connected TVs get into the action and look-out for more intense diversification from Pay-TV content aggregators. ‘Cutting The Cord’ is a race and the content providers are front of the pack.