As linear and IP‐delivered television continue to converge, viewers are coming to expect to watch whatever they want, wherever they are, on any device. Here are some key trends and opportunities the media and entertainment industry is facing in 2015 and beyond:
- Media companies with a deep understanding of their audience will have a competitive edge
When competing for consumer attention, companies that best understand their audience will have an edge. This may seem intuitive, but we’ve heard some of the largest media companies in the world observe that they don’t know how to use data effectively to derive meaningful insights about their own viewers.
Data can provide an understanding of viewing behaviors, both online and offline, which can power personalized experiences, content recommendations, and one‐to‐one advertising. Smart data management is the starting point for all these things. That’s why we believe that data management will begin to play a much bigger role in helping programmers and operators to generate a better understanding of their audience and use it to drive tune‐in and engagement over time.
- Alternatives to the traditional cable bundle will continue to increase viewer choice
Programmers will continue to launch direct‐to‐consumer offerings to capture three key opportunities. First, to gain a better understanding of their viewers. Second, to make their back catalogs available as directly monetizable VOD assets. Third, to reach cord cutters and cord nevers who can’t be reached through cable distribution agreements.
Already, CBS went direct‐to‐consumer with their All Access platform. Rumor has it that direct‐to‐consumer offerings from HBO, Showtime, Nickelodeon, and ESPN (for Cricket’s World Cup) will launch this year. Disney CEO Bob Iger has hinted at TV streaming plans for Marvel and Star Wars. We expect this trend will continue.
Another win for viewer choice will come from a new crop of a la carte services from the pay‐TV providers themselves. Dish Network’s Sling TV debuted a TV service in February approaching the a la carte model. It offers a $20‐a‐month package with $5‐a‐month add‐ons. Verizon has announced an intention to launch an a la carte service by mid‐2015, and Cablevision is exploring strategic options for OTT. One thing is for certain — consumers stand to benefit from the fierce competition that’s only just beginning to heat up.
- Pressure will be on TV programmers and operators to monetize every ad impression
As TV Everywhere and OTT continue to attract consumer attention, it will be essential for TV programmers and operators to achieve optimal ad monetization of all the views happening outside of traditional, linear TV. Traditional, linear TV will still account for the single biggest share of ad spend in 2015, with 42% of total spend, or nearly $79 billion in the U.S. However, signs of a decelerating linear TV ad market make monetization of TV Everywhere and OTT all the more important. For example, Pooja Midha, SVP Digital Ad Sales & Operations for Disney ABC TV group, reports that “traditional, linear GRPs are declining.”. Scripps Networks executive Lori Hickok reports that, “Scatter versus scatter CPM pricing across the network was flat to down low‐single‐digits year‐over‐year.” One way to mitigate these risks is to understand and monetize audience more effectively across screens and devices.
These three trends reveal a lot of action in the areas of data management, alternatives to the traditional cable bundle, and ad monetization. What big trends are you seeing? Let us know in the comments.