“Traditional broadcast is dead”. This is a term I heard a lot at NAB. And I am on the fence. Whilst the rise of streaming and personalized content is hitting the headlines, you can see that there is still a place for traditional broadcast – certainly in the short term – and certainly when it comes to news services. Example: (https://news.yahoo.com/cnn-close-streaming-one-month-182836515.html)
We are in the middle of an industry transformation. And that’s exciting!
Part of that transformation is of course video on demand. In the many conversations I had with industry experts and visionaries, I learned that Hyper localization is key to capturing, retaining and rewarding subscribers in the media streaming world.
The average paid apps per household seem to be hovering around 4 (plus cable services) and this is seen as not sustainable given the increase in living costs across the globe.
We have seen subscribers drop at many household name providers recently and even a small drop in subscriber numbers can mean a large impact to profitability. Companies like SalesForce are working on solutions to help pre-warn providers of customer churn - and this kind of insight, together with AI will be a must for running behaviour analytics, shaping hyper localization and securing subscriber retention.
Whilst some in the industry are sighting a knee-jerk reaction of all SVOD turning to AVOD (advertisement supported video on demand), many are seeing this as an opportunity for a hybrid approach. Providing consumer choice. And I think this will be the success path for the longer term.
According to Rethink TV, the global SVoD subscriber count reaches 1.8 billion by 2027, in a market worth some $171 billion, while AVoD MAUs hit 8.6 billion, and reaches $91 billion in advertising revenue. These are some hefty numbers, but it is worth pointing out that if you include the subscription revenue that the AVoD platforms also generate, then the total AVoD revenue reaches $131 billion in 2027. These are big numbers and show quite how important it is for innovators in this market to act quickly to secure their spot.
Eventually, it is believed that there is a need for a new segment. Super-aggregators. These will be the streaming portals of the future. You can see many examples of this in other industries, with the likes of Amazon, Moneysupermarket and others. Smart TVs just don’t cut it. They are clunky and siloed and this comes down to the walls put up between content providers and platforms which protect their assets and value. The industry will need to consider this as consumer demand and customer experience drive the demand for better service.
Another subject we covered at the event was second-screening. Today's audience often has another device in their hand whilst consuming content. How can this support what is going on screen 1. We have seen watch parties, community discussions as well as people doing something completely unrelated. To capture the experience of double screening, content and platform providers need to consider how the second screen can add value to the experience and also provide insight to deliver the dual-device-wielding generation. The industry needs to involve social to build communities, build engagement and scale recommendations.
When the likes of Disney+ are spending $33b on content this year, you need to ask some questions. What is the return? Over what time? And is it sustainable? All are up for debate however one thing it does mean is that there is a content battle going on to both create and acquire the next big series or blockbuster for your streaming service. In my opinion, that level of investment is currently unsustainable, and while it hits the headlines and generates an uptick in subscribers, it might not address the long term viability of a pure SVOD strategy.
Another thing to consider is quality. Are we willing to pay more for a higher quality picture? How many consumers are actually receiving a true 4K experience? The answer is not many. Bit rates are not reaching the consumers yet to the level which supports the argument. And you have to address the masses. If four people are in a room watching Netflix, how many of them care about the image quality, how many care about the platform capabilities, how many care about the content, and how many care about all three? It’s not consistent when it comes to the picture quality and many organizations are surveying viewers about this to find out why.
And then we come onto the technology, and this is my passion. How do you provide high-quality content, in high resolution, to any device in the world, at any time of the day or night?
The answer that came in from 99% of the people I spoke with? It’s hybrid.
Traditionally, systems would need to be on-prem, close to the consumer. Then we saw the cloud ramp up, providing not only the creative world the tools to edit from wherever they were but a huge place to store your content, old and new. Then we saw some challenges in moving this content around, transcoding it, and analysing the network and usage patterns. It got expensive and quite frankly ugly.
A hybrid approach is important. Having the technology in the right place at the right time is as critical as having the screen online 24x7. What we are seeing is an elastic approach to the IT infrastructure required to be successful. Public cloud has a place, the private cloud has a place, and so do physical appliances and end-user equipment. Solutions from AWS, Microsoft and Google for example need to be paired with secure, faster and more cost-friendly parts of the IT ecosystem. The volume and velocity of data mean that a single cloud approach does not scale. And this is one of the reasons HPE GreenLake is proving so successful across industries as it gives you the flexibility and performance advantages of all three major parts of building a hybrid infrastructure. It really is “the cloud that comes to you”.
I also got some time to learn what HPE’s CTG group were up to at NAB this year. It was great to see my colleagues showcasing their solutions to enable Broadcasters to transform their business and embrace the new ATSC 3.0 standards. While showcasing new developments in the NextGen broadcasting, the ATSC President Madeleine Noland also provided a quick highlight about HPE’s contribution to ATSC and the broadcaster’s transformation from ATSC 1.0 to ATSC 3.0.
“HPE has been instrumental in developing exciting new use cases for broadcasters using ATSC 3.0. I want to thank them for their tremendous efforts and novel approach to this flexible new standard – ATSC 3.0. I am incredibly impressed. HPE is demonstrating at NAB a mature datacasting solution in operation today on ARK Multicasting’s ATSC 3.0 network. Nothing makes me more proud than seeing the hard work of the ATSC committees in real-world implementations", Noland said.
So that’s a wrap for NAB. A fantastic show full of insight and promise of the things to come.
I will be at Cabsat in a few weeks where we will get to see the latest innovations for content, broadcast and satellite in the MESA region. I can’t wait to meet with our customers again and to continue exploring what’s next for this dynamic industry. If you would like to meet at the show please reach out to me on LinkedIn.
Matt Quirk
Hewlett Packard Enterprise
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MattQuirk
With a passion for innovation and technology, I am lucky enough to work within high-growth opportunities across multiple industries including manufacturing, healthcare, energy, media and entertainment and security - with technology innovations that are advancing the way people live and work such as AI, autonomous everything and 5G.