Drawing upon our research and interactions with clients, Accenture is making seven predictions for stories to watch at the National Association of Broadcasters (NAB) event that occurs April 18 through April 21 in Las Vegas.
Here they are:
-Super Platforms Spawn a Billion New Live Broadcasters
-Ad Blockers In Digital Advertising
-Virtual Reality Gets Real
-Broadcasting’s Big Disruptor: ATSC 3.0
-A “Data Driven” Broadcast/Video Business: What Does That Mean?
-Urgency of Delivering Digital Content
-Cord-Cutting Won’t Kill Cable
Prediction One: Super Platforms Spawn a Billion New Live Broadcasters
The growth, power, and influence of super platforms, such as Amazon, Apple, Facebook and Google, will be a big story in the media and entertainment industry over the next several months and at the National Association of Broadcasters show that begins April 16th in Las Vegas. These companies provide attractive, low-cost cloud super platforms and services. Watch for news about them offering competing video products that have emerged as an increasingly important channel for consumers. The super platform giants are on a blazing innovation pace that will drive an increasing amount of radical disruption for broadcasters. For example, Facebook sees video as a growing primary form of communications. The company’s Livestream is a prime example. Facebook will enable a billion new broadcasters with a potential audience of the same size, coupled with an analytics capability to make the right connections.
Consider what these billions of new broadcasters could do to live news broadcasting where everyone at the scene becomes a camera-person. Unlike broadcasters who constantly struggle with what footages to save and archive, Facebook will rewrite the storage rules – by storing all of it.
Prediction Two: Ad Blockers in Digital Advertising
Digital advertising is being threatened. Expect this to be a major story during the next several years. There is widespread consumer frustration with poorly targeted digital advertisements. Digital ads are too frequent and do not address their personal interests. Ad blockers are becoming a required application for these viewers, and the growing sophistication of these tools threatens to undermine the revenue of major media companies.
These challenges affect not just advertisers but broadcasters, cable providers, Internet service providers, content creators networks, and consumers. Expect there to be plenty of news in the next year focused on what can be done to personalize advertising content to consumers and create a monetary system that works for everyone.
The cat and mouse game between digital advertisers and ad blocking providers will be a major story as vendors release programmatic solutions backed by powerful analytics engines. These solutions will do a better job of pulling data together from disparate sources and matching ads with specific audiences. Expect to see programmatic advertising that can travel across devices for a consistent ad experience. There will be announcements about successful ad formats, leveraging analytics tools, enabling interactivity, embedded live texts, and integrating content and ads.
Prediction Three: Virtual Reality Gets Real
Virtually reality will be a bigger story in media and entertainment in the next year than ever before.
VR technology offers financial and creative opportunities. The technology opens the door for communicating new types of original stories and selling a unique immersive experience to a broad audience. A growing number of audiences are no longer watching TV or going to the movies in the traditional sense.
The technical capabilities of VR in cameras, lighting, production, special effects, concert-going, editing, media distribution, encoding, headgear, projectors, and mobile applications will all be rolled out in the next year or two. In particular, there will be products unveiled about the latest VR presentations for live sports.
Like virtual reality, augmented reality will be an important story. This technology can help directors lay out pre-visual effects on top of a live scene while virtual reality can help producers tinker with any element of a scene before committing to it. Watch for important advances in cloud computing to be evident in the back end, processing VR/AR content in the front and distributing it to applications and mobile devices in a way that doesn’t impair bandwidth. Also anticipate announcements of several VR-specific studios creating content for this market.
From a business perspective, the VR storyline will center on the challenge of monetizing the experience and offering low-cost VR solutions customized for the casual user, giving them an opportunity to express their creativity through the medium. This is the only way VR can escape its specialized niche and avoid the same fate that befell 3D. Anticipate plenty of experimentation with VR and other takes on creating a more intimate viewing experience.
At this year’s NBA All-Star Weekend the league piloted Intel’s freeD replay technology that allows fans to experience a 360-degree view to replays on their TVs, the NBA Website or the NBA application. The technology still has a long way to go to before it hits all our screens (whatever their size), but companies will be exploring this year the medium’s full potential for capturing, compressing, transmitting and displaying content specifically for sports. Whatever the next wave of technologies bring to broadcasters, fast, flexible, responsive delivery will be paramount.
Prediction Four: Broadcasters’ Big Disruptor: ATSC 3.0
For traditional broadcasters, the 3.0 version of the Advanced Television Systems Committee (ATSC) standards (ATSC 3.0) offers the best chance for competing with digital-savvy providers such as Netflix and technology companies including Apple that excel particularly well in the digital market.
The standard could allow North American broadcasters to bypass Multi-Channel Video Programming Distributors, which are service providers such as cable TV companies that deliver video programming services usually for a subscription fee such as pay TV. This would enable linear signals to reach most TVs with HD or 4K resolution video including broader over the air offerings.
This year there will be important news about broadcasters testing ATSC 3.0 with 4K broadcasts, interactivity, local ad insertion, service guides and content delivery to mobile devices. ATSC 3.0 will be the big disruptor for which this industry has been clamoring.
The standard offers a proven and agreed-upon platform for digital TV transmission over terrestrial, cable, and satellite networks. The technology delivers vast improvements over antiquated transmission standards that providers have previously used. Using this standard they have a flexible medium for delivering a wide range of digital services ranging from 4K to mobile streaming.
ATSC 3.0 standards are expected to be in final approval this year. Once an industry consensus forms, we predict a number of services will hit the market powered by the capabilities of ATSC 3.0.
The most immediate application will be 4K over-the-air broadcasts. Delivering higher-quality content more efficiently will give audiences a clear differentiation between broadcasters and over the top providers.
Prediction Five: Buzzword Bashing: A “Data Driven” Broadcast/Video Business: What Does That Mean?
Changes in digital consumer expectations will be a bigger story than ever this year. Video services must now learn personal preferences, and continually update, customize, and improve experiences they offer across multiple screens. Experiences across navigation, consumption, advertising, and marketing must all be relevant, or consumers will become more frustrated and less engaged.
Anticipate news this year about how data and analytics can power product innovation, marketing, advertising, content creation, and operations. This means not just “more reporting” but business insights becoming available in real-time, and predictive and actionable models driving and adapting propositions. Vendor platforms must converge data from disparate sources, both traditional and digital, and measure feedback to power a continuously evolving and relevant consumer experience. From a business perspective, top of mind among industry players this year will be promoting use of data-driven processes that support rather than hinder creative and editorial programs.
Broadcasters are challenging themselves to embrace data-driven decisions and operations harnessing consumer data, in the same way super-platforms do to remain appealing and profitable. Consumers’ readiness to share their personal data, in return for better experiences, provides the opportunity. But questions remain:
-How to truly become a “data driven” business?
-How will editorial use consumer data to make informed commissioning and acquisition decisions alongside creative?
-Which experiences are most effective to influence loyalty per segment, increasing critical key performance indicators of content consumed per “session”?
-Which ad formats and subjects will resonate best with each consumer segment?
-Which consumers are most likely to buy premium subscriptions?
Prediction Six: Urgency of Delivering Digital Content
Consumer expectations are accelerating faster than ever. Fueled by social media, they are more engaged and technologically literate with their expectations. In this whirlwind of constant change, nowhere is this pace felt more quickly and broadly than the world of sports. Viewership for major events such as football, the World Cup, and the Olympics remains strong. Broadcasters are investing millions in exclusive deals to ensure that they, rather than competitive over-the-top providers, remain the only outlet for delivering video on a TV or mobile device.
Watch for news this year about the expansion of sports content on mobile devices and the Internet as providers look to use this asset to bolster their digital strategies and investments. Content delivery across devices will be an important story this year. Expect news about how cloud technology will be a primary enabler of this. Sports broadcasters are using the cloud to better manage bandwidth requirements for livestreams and to cut production costs. Whereas before they gave that content away for free online, they are now looking for ways to monetize that content.
To cope with this frenetic pace of change, it’s crucial to build delivery organizations that welcome change and innovation and encourage transparency and predictability with supporting processes to ensure high-quality output. Teams need deliver products to consumers faster and iterate based on feedback.
Technical experts and complementary teams must all be embedded into an effective ‘factory’ shaped to support a company’s goals and capabilities. Successful organizations must thrive on this opportunity, nurture innovation, and build upon the insights it brings.
Prediction Seven: Cord-Cutting Won’t Kill Cable
It’s a myth that cable TV companies are facing their last days of existence. While over-the-top (over the Internet) providers (OTT) are currently riding a wave of success with original hit shows and international wins, cable TV and broadcasters still maintain some distinct advantages that will keep them in the game.
Anticipate this being a big story this year.
While Accenture research provides evidence that viewers are watching more shows and movies on mobile devices, we still believe cable providers, broadcasters, and pay TV providers hold a position of strength.
Viewing may be fragmented but consumers are telling us they still value reliable platforms with popular content (ex: live sporting events) for which they receive one bill. Only cable providers can offer this premium experience.
A complete over-the-top bundle remains an expensive and complex proposition that presents a challenge for most viewers. The burden is on them to put the package together from multiple providers. Even then, however, they still may not be able to see the shows they want to see. This will be an important story this year and beyond.
Also expect news this year about more innovations within cable TV and broadcasting companies in the digital arena. For example, there will be stories about cross-integration between digital platforms and set-top boxes, smarter content discovery tools, and easy-to-use offline and time-shifting options. Likewise, OTT providers will demonstrate that they, too, can offer a premium streaming experience of the same quality as cable. Integration and less complexity will be a defining feature of their offerings. It may take a while, but eventually cord-cutting will become a reality, just not right now.
Gavin Mann is the global broadcasting lead for Accenture, He can be reached atgavin.mann@accenture.com.
