We all talk about the streaming wars, especially during this time of year, while reflecting on the lessons we learned and thinking about what the future of the TV industry will look like. Yes, streaming will continue its quest for ruling the TV world, consumers will keep shifting their viewing preferences towards digital-first platforms, more traditional operators will uplift their services to the cloud to meet users’ expectations, and more direct-to-consumer services from broadcasters and media companies will continue to pop up as those adopt new technologies with a hope to attract new audiences and retain viewers. There is a lot to expect in 2020.
As the great battle for eyeballs escalates, here are the most interesting (and less obvious) trends worth paying attention to this year:
The dawn of the hybrid models
Keeping up with constantly evolving consumer needs is not an easy task. It requires operators to develop creative strategies to stay ahead of the game. One of those creative ways is flexibility of business models that the TV industry has begun to embrace. So after several years under the SVOD regimen, we will see more AVOD service introductions and more demand for mixed business models across the board.
If the traditional cable bundle of “one size fits all” no longer leads the subscriptions race, why does its commercial offering need to remain the same? The market is saturated with SVOD services, with households subscribing to over 3 streaming services on average, and some predictions expecting this to rise all the way to 10 services. Viewers have become more receptive to advertising and more concerned with costs. Consequently, operators and media companies are forced to take more innovative monetization approaches. We will see companies, in particular telcos, inserting AVOD into traditional subscription-based services to enable lower pricing tiers what will allow them to offer more competitive price points compared to those of the global SVOD players. Easier said than done? Not necessarily. Thanks to the availability and the maturity of the Cloud TV infrastructure to support multi-million audiences, and to tame the amounts of data associated with it, those companies have the technical capabilities to experiment with different models and refine their offers in a smarter and more efficient way. AVOD will become more appealing for both consumers and service providers, as it will be driven by data, offering hyper-targeted advertising that is much more relevant for viewers and more profitable for advertisers and operators.
Why choose when you can fuse: the super aggregator
It’s 2020. Today we have more video capable devices than people and an endless amount of services to choose from. The perks of the modern world. At the same time, half of consumers feel frustrated by having too many options to choose from and by the difficulty to find something to watch. So how come everything is amazing and nobody’s happy? Most viewers are required to maintain several subscriptions in order to watch the content they like, hence close to 90% worry that it will become too expensive to maintain. Content discovery has become extremely challenging, involving hours of scrolling and browsing through the different options, no wonder users’ frustration from navigating between the different apps becomes the next main concern after cost.
But there is also a bright side to all of this, an opportunity for service operators, namely telcos, to save the day and provide users more convenient access to the desirable content. We will see telcos gaining the ability to offer subscribers Cloud TV services that are based on multiple source content aggregation, with convenient packages and micro-bundles of specific content libraries, by simply upgrading their legacy Pay TV infrastructure. These super-aggregating telcos will be able to deliver unified experiences comprised of streaming as well as broadcast, and free-to-air content. So it’s a ‘win-win’ for all parties involved.
Connecting the (TV) data dots
Today we have a plethora of TV services to choose from, therefore the value of operators will come from their ability to offer highly personalized offers and experiences. Taming the massive amounts of data plays a key role in this, since any meaningful personalization must be data-driven. Creating tailored service offerings, individualized content recommendations, and targeted advertising, will play a much more significant role in assisting providers in making their services distinctive, acquiring subscribers, and mitigating churn. In light of the advancing capabilities of data processing utilization, integration of data layers within TV experiences will take an important step forward in 2020. Technologies such as deep learning, real time experimenting, IoT, new mobile devices, and TV screens all connected to the cloud, come together to enable next generation TV services - dubbed Cognitive TV. This 3rd wave of TV services is ‘conscious’ and capable of learning, providing users the ultimate entertainment experience. Cognitive TV is fueled by AI and ML, and will offer omni-screen experiences, alongside predictive UX, directed by human voice, and the ability to understand and predict what users will want to do next.
Long live the live stream
Despite everything that has been said about streaming being not good enough to deliver live sports broadcasts, sports has been one of the main drivers of live streaming adoption. The infrastructure improvements and technological advancements just had to keep up, as viewers’ consumption habits keep migrating towards over-the-top services. 2020 is shaping up to be the year for media companies and IP-based TV service providers to finally express their confidence in streaming to deliver The Holy Grail of content - sports. And just to prove how much faith they all have in the open internet, the entire 2020 Tokyo Olympics is expected to be streamed in 4K.
In this crowded space, service operators turn to live content offerings for differentiation. No wonder live streaming is expected to demonstrate a remarkable growth rate of 73%, accounting for 17% of all video traffic by 2022. Like the legacy Pay TV industry, streaming service providers play the live sports card more often to lure new audiences and win the hearts, and more importantly the eyeballs, of the viewers. Everyone from established Cloud TV providers, sports-oriented services like Fubo TV and DAZN, to broadcasters and social network companies, are joining this arena. So the 2020 events are going to continue the trend of the record-breaking live stream viewing the we witnessed during the 2018 World Cup and 2019 Super Bowl.
Now let’s talk about all the monetization potential of live streaming. You don’t really need a crystal ball to predict that it is the next big thing for advertising - last year alone, the ad views in live content showed almost 90% growth. The growing popularity of the streaming platforms will continue to encourage advertisers to shift budgets away from traditional broadcast. Having the ability to serve targeted ads to specific audience segments during the same commercial break can be directly attributed to the benefits of Cloud TV services, and is only one example of the opportunities that data-driven service operations introduce.
Kaltura is a leading video technology provider; it’s award-winning Cloud TV Platform helps major global media companies and mobile operators like Vodafone, Turner and Viacom, among others stand out in today’s crowded streaming space.
