With this year’s NAB and INTX shows now behind us, we’re taking a moment to consider a few areas within the pay-TV and broadcast industry with considerable momentum or challenges to surmount. The abandoned Comcast and Time Warner Cable merger has been making headlines and appears to be more about the Internet than TV. In fact, the impact of internet technologies like OTT and cloud-based delivery on the industry is becoming more and more obvious. It’s even heightening consumer expectations for personalized programming streams, quick access to theatrical releases and unified discovery across TV services. Here we’ve summarized these trends that are shaping the future of television.
- Broadcasters are embracing the cloud
When one of the big three television networks that has dominated U.S. television since the 1950s publicly declares that it has moved to the cloud, it’s pretty safe to say that others will follow. At this year’s NAB Show, Broadcasting & Cable reports that in a supersession titled, “Television’s Transition to an All-IP Future—Why It’s a Big Deal,” Disney chief technology officer Vince Roberts “explained that they had already adopted cloud based technologies to handle the delivery of content to digital platforms like the Watch ABC app. ‘The only ways to automate those process and the only way to scale and be device agnostic was cloud-based,’ said Roberts.”
Charter Communications is also bullish on the cloud and is investing in a cloud-based interface for its WorldBox. According to DSLReports.com, Charter CEO Tom Rutledge said, “this makes every box in the Charter footprint state-of-the-art. Smart networks make dumb screens smart. We can take any kind of device and make it a sophisticated device.”
- Millennials are the future — and they love streaming
New survey data shows that the youngest millennials prefer streaming video to linear TV. Specifically, more millennials age 14–25 value streaming video sources over cable and satellite TV, according to the ninth edition of the Deloitte “Digital Democracy Survey” released this April. By the percentages, 72% value streaming video sources while only 58% value cable and satellite TV. This is quite different than the older cohort of millennials age 26–31, among whom 63% value streaming video sources and 75% value cable and satellite TV.
NetNewsCheck reports on a “millennial problem” for local TV whereby “most millennials just don’t give a damn about local TV.” The article suggests a number of solutions including developing content that appeals to millennials and distributing it across platforms, including OTT.
- Will day-and-date come to TV Everywhere?
The IP-delivery of movies is influencing the traditional movie release cycle. One example of this is day-and-date video on demand (VOD) whereby consumers pay to see a film at home while it’s still playing in the theaters. Variety reports the results of a survey by RBC Capital Markets, which states that 7% of consumer respondents were willing to pay $11-$15 for day-and-date VOD access; 4% were willing to pay $16-$20; and 3% were willing to pay $21 or more.
In a recent white paper, Juniper Research describes the typical movie release cycle as going from cinema distribution to DVD/Blu-ray to pay-per-view to pay TV and finally to free-to-air distribution. Following this model, day-and-date could skip VOD and go directly to pay TV as a form of exclusive content. We know that movie content has the fastest rate of unique visitor growth in TV Everywhere at 216% YOY, according to Adobe Digital Index. Day-and-date could be an interesting way to drive TV Everywhere viewership. TechHive offers a recent and comprehensive pro and con exploration of day-and-date releases.
- Innovating the TV user interface
Internet technologies are making it easier to execute innovations around the TV user interface and the pace of innovation is rapid. Crackle is introducing an “Always On” stream of television programming customized to the viewer exclusively on Roku this month, with other platforms to follow. Netflix is planning a new user interface for its television apps later this year that executives say will “bring video playback forward into the browse experience.” New research by Amdocs and IE Market Research suggests that the user interface is the key to making pay-tv work with OTT. LightReading reports, “51% of North American consumers planning to cancel or reduce their pay-TV subscriptions would maintain their monthly spend if service providers offered a unified interface for searching, discovering and watching both pay-TV and OTT content.”
These trends point to a bright future for consumers of television content. Things like cloud-based delivery, personalized programming streams, quick access to theatrical releases and unified discovery across TV services are either already here or not far down the road. Do you agree? Let us know in the comments.