June 2014
www.tvbeurope.com
TVBEurope 21 Feature
of the most compelling content is now in the hands of the TV service provider. There is a lot of money at stake; the global TV market of 2020 is estimated to be worth $750 billion. However, to succeed, or indeed, even compete in this new digital landscape, our industry needs to consider how to take advantage of this fundamental change and the opportunities it presents. We are set to enter a world of universal broadband access, which completely redefines what television is and what it will become in the longer term. A plethora of connected devices will provide unprecedented availability of content, which can be both found and consumed easily and directly. In 2020, content owners will need to create the most compelling and differentiated consumer experiences in order to meet ever-increasing expectation. To that end, connectivity will be matched by cloud services, which will bring ‘anything to everything’. This will irrevocably change consumer demand for ownership and the necessary storage of assets. They will expect, and become reliant on, their devices always being connected to high-speed and universal broadband access. This will enable them to prioritise, personalise and share content, capturing their individual preferences. Success in the TV game of 2020 will force players to innovate and deliver what consumers are demanding; namely multi-screen services which enable seamless, convenient and simple ways to consume any content, in any way, anywhere.
of television and herald a new era of entertainment and connectivity. In a world where global brands combine consumer electronics, social media and apps, we will see new disruptive business models emerging without warning. When you consider IP as a fundamental part of this enhanced consumer experience, it underlines the point as to why TV service providers will need to find new ways of delivering or leveraging platforms that are both flexible and intelligent. This will require better dialogue with consumers and a desire to push boundaries by testing new services and driving innovation. The potential opportunities for the TV industry are enormous. The power of inter- connected social interaction, the simplification and aggregation
How is the Networked Society affecting the production and consumption of today’s broadcast media?
The Networked Society is driving radical change across the entire TV landscape, particularly with regard to the consumer experience. Quality and quantity are now considered vital proponents, ranging from the living room TV and extending down to a proliferation of new home and portable devices. Mobile devices are making up an increasing share of TV and video. Ericsson ConsumerLab’s 2013 TV and media research indicates 72 per cent of viewers use mobile devices at least weekly for video viewing, while 42 per cent do this outside the home. Furthermore, consumers are increasingly moving away
from choosing content based on a TV schedule on a single domestic device, to one where the source is chosen based on the availability and suitability of the given situation. In the future, the television experience will continue across platforms, services and time. This evolution is already accelerating as consumers embrace internet-connected technologies and devices. In fact, Ericsson ConsumerLab found that more than 50 per cent of all people surveyed stated that their computer and internet connections form an integral part of their TV and video consumption habits. Mobile devices are being used to discuss live TV content and have taken a focal point in the home TV set-up. Our research found that 49 per cent of people are using apps or browsing the internet to find out more about what they are currently watching. The content experience in the Networked Society of 2020 is going to be part of a wider shift encompassing how viewers manage their work and leisure lifestyle balance. The already eroded notion of entire families gathering on a couch to watch linear TV will change forever. By 2020, we predict that consumers in advanced markets will have shifted their viewing patterns to a 50:50 split of time spent with on-demand and time- shift versus linear and live TV. Thanks to the seismic change in consumption models towards on-demand and multiple mobile devices, we will see the rapid adoption of IP to become the dominant delivery technology for video. Consumers will not accept buffering, stuttering and ill-performing services on any of their devices, in the same way today’s generation demands and expects a particular standard of experience from the high quality digital platforms which deliver to their main living room television screens. As we move towards 2020, consumer expectation for immediacy and relevancy will diminish the value of the traditional multi-hundred linear channel pay TV package. Consumers will concentrate on building their own schedules and their personalised packages of ‘channels’. This will negate the need to navigate through
large amounts of content, which is rapidly putting consumers off watching, and paying for, TV content. Instead, they will be able to pick and mix from smaller bundles of linear and live content.
Furthermore, we will see new opportunities and challenges emerge in advertising placement and revenues, not only around live content and popular linear scheduled TV, but also due to the shift towards on-demand consumption. In other words, the personalisation of content will be key. By 2020, successful TV service providers will already be offering intuitive and automated recommendation of personalised offers. This will encompass everything from TV, film and gaming experiences, as part of one integrated model.
How will its effects reach into the future?
The internet is set to play an increasingly critical role in the television industry with mobile broadband taking an essential position. Today’s rapid rollout and ever-growing uptake of mobile broadband is being driven by the availability and convenience of smartphones, tablets, computers and smart TVs. Over 90 per cent of the world’s population will have easy access to the internet by 2020 — more than quadruple
“The Networked
Society is driving radical change across the entire TV landscape, particularly with regard to the consumer experience”
the number of people that enjoy connectivity today. The IP revolution will force major change for TV service providers and even within operators like telcos and broadband providers. IP access will have a transformative effect on the TV industry and its widespread availability will trigger a consumer shift towards an even greater use of connected devices. Demand for this service
will drive a need for new TV platforms that can leverage the inherently flexible and intelligent processes of cloud delivery and enable deep analytics and high intelligence in terms of user recommendation. As the importance of mobility, broadband and cloud enablement takes hold, the growth in IP delivery will demand video-centric networks in order to deal with an unprecedented amount of video traffic. Ericsson’s November 2013 Mobility Report predicts mobile data traffic will increase at a compound annual growth rate (CAGR) of around 45 per cent (2013 to 2019). This will result in an approximate tenfold increase by the end of 2019. These networks will open up new monetisation opportunities through sales of assured delivery capabilities in unmanaged networks, which offer highly efficient video processing. The early part of this decade outlined the potential impact of disruptive internet delivery of video. We can now engineer and understand the value of these video-capable networks and the huge opportunity for traditional pay TV operators. It’s abundantly clear that by 2020, the over-the-top (OTT) model for the delivery of content will become just as applicable to TV service providers and content owners as a way of reaching consumers, as it will be for new disruptors. The stage is set for broadcast- focused pay providers (such as satellite) to adopt this model and enhance their delivery platforms. This year, we have already seen Netflix complete deals with Verizon and Comcast for the direct access of their networks, in order to improve streaming video quality for viewers. By 2020, collaborative business models such as these will become the norm, with each individual player understanding its specific role in the TV game. The realisation of the Networked Society will see a variation in the demands of TV viewers. Although we will see a rise in the number of predominantly solo ‘bingeing’ habits, shared experiences will still be appreciated. However, viewers will expect to gain access to the content they want, in a format they need. This independence will open up new
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