At the turn of the century, the media and entertainment industry was presented with both the opportunities and the challenges made possible by the digital world. With the growth of digitally born organizations such as Netflix and others over the last decade or two, the move to streaming was becoming increasingly apparent for the media industry. The technology industry read the writing on the wall and began gearing up for it with well-equipped streaming platforms. In 2018, there were 200+ streaming platforms and so many component products and services vying for attention, in anticipation of the traditional media industry orchestrating digitally.
Just before the pandemic, as streaming plans for most of the media companies were becoming apparent, it was clear that the streaming universe was going to be more or less a replication of the cable-centric world with new gatekeepers controlling the user access to networks and other media brands. Instead of accessing your favorite show through Cablevision or U-verse, you would now have to log in through an Apple or Roku, etc., for most content on OTT. Despite efforts by cable TV companies to reinvent their propositions to the customer during the long tail provided by their contracts with the content companies, they were being rapidly replaced by smart TVs and devices in a very familiar business model, inspiring déjà vu. The full potential of available technology was still not leveraged and the media industry lost its chance to reimagine the content viewing experience. For instance, user-generated content and its potential has been talked about for decades, and yet, was never nearly leveraged the way it could be. TV viewing itself was moving further into an individualized experience with personalized profile creation features for members of a family that previously viewed it together, without replacing the erstwhile community aspect of the experience in any creative way.
The plethora of OTT streaming platforms, component providers, and media companies themselves faced a glut pre-pandemic, struggling to differentiate themselves beyond the one to two better known brands such as Ooyala or Kaltura. Many created bundled offerings of various technology components or other differentiation strategies such as a ready catalog of content, enabling ready-to-launch channels. Content companies were happy to experiment with opening up their non-prime content for additional revenue through these channels e.g uCast and its partner HCL launched 12 channels for Hooq and some other content aggregators/distributors in Asia that included the technology plus content deals.
Some platforms went direct to consumers on their own, leveraging such content. e.g Pluto TV showcased non-premium content from Nickelodeon and other brands was eventually acquired by Viacom itself. Other brave attempts included experimenting with other content-centric strategies such as with short-form content, as in the case of Quibi (which had to shut down after six months) or a focus on niche offerings, among others. And yet, they were only intending to recreate a one-sided experience quite like the television as the cool medium of McLuhan’s book Understanding Media from the 60s where he popularized the famous “Medium is the Message” phrase. This was not nearly heating up to the possibilities enabled by the current technologies.
As the dust settles, the names of the MVPDs are different but consumers access their OTT brands through content aggregators with new names and logos. Despite some new trends pertaining to content specialization such as Crunchyroll, Shudder, Dekko, or the launch of gaming-related content as a separate and vibrant streaming genre, what has really changed is the backend technology and the remote control based user experience for the consumers— a new medium with a toned down message.
The ad spend has continued to follow this movement of content and viewers. The global video streaming market size was estimated at USD 50.11 billion in 2020 and at US 59.14 billion in 2021. Both subscription- and advertising-related revenues are on the rise and industry is expected to grow at a compounded annual rate of 21.0% from 2021 to 2028. Perhaps this is why the industry hasn’t felt the need to think out of the box, unlike the photo sharing space that segued into a streaming platform like Crackle or spawned TikTok and other platforms that enabled special effects and other forms of engagement.
It is the secondary effect of this digital wave that was further accelerated by the pandemic that’s, in fact, more interesting. The ability that digital provides for not only individual consumers to access their preferred content ‘one on one’ through a handheld device, also created aspirations for content creators to want to control the last mile. While big media brands like Peacock, HBO Max, and Disney Plus merely replicated their previous MVPD-guarded access through a gatekeeper of another kind, sports entities (for instance, such as the NBA, that has its digital properties managed by Turner currently) began building their own digital platforms and capabilities to go direct to their consumers. The sports leagues are beginning to see themselves as not just sports organizations with a charter to promote a specific sport but as de facto media companies that could directly control the relationship between their brands and the fans. They are learning to think and act like media companies, increasingly hiring talent from media and broadcast companies and investing in creating digital platforms capable of taking their content direct to the consumers.
Non-sports centric content producing companies from genres including music and other live entertainment do not have the advantage of similar broadcast deals and yet many have attempted to adopt similar behaviors in a more limited capacity, further feeding the demand for video management solutions.
What the pandemic did for the content companies described above, was merely create a sense of urgency, thereby accelerating the build-up of the digital journey that was more cautiously being executed so far. The surge in content demand as people are confined to their homes coupled with the unique inability to create new content, put the focus on repurposing old content efficiently and fast, leading to accelerated adoption of automation- and AI-related solutions that were already in the market. But as the pandemic extended and the end became fuzzier, point solutions that were geared for different purposes were quickly extended to fit the need of the hour, as media companies scrambled to meet the increased demand or stem the dramatic loss of revenue. This has impacted the product evolution journeys of many solutions and will continue to influence alliances and acquisitions in the months to come.
A whole set of products and solutions that were originally designed for collaboration began demonstrating their ability to fill the gaps to create ‘streaming’ solutions that were stickier. Microsoft, after announcing its status as a Digital Partner for the NBA, spotted an opportunity to position its Teams product to fill the gaps in user experience design as live events restarted with remote audiences. The feedback from the initial experiment was closely followed and will most likely take the future development of the platform into tangential territories than originally planned. Competing products have launched similar experiments with other creators of live events, such as WebEx with City Football Group and the USGA etc.
The newest cohort of “streamers” are now coming from the world of remote events and remote collaboration itself. According to a report by the EEMA (Events and Entertainment Management Association), around 52.91% of companies saw 90% of their business being cancelled between March-July 2020 due to COVID-19. Beyond large industry events and conferences such as the World Economic Forum and Dreamforce, etc., this pressure to continue remote collaboration has extended to small and mid-segment trade expositions and trade fairs, as well as schools and learning institutions, and other industries too.
Standard collaboration tools were never geared for the scale and quality of video streaming or the level of user experience design that requires better engagement and collaboration. Correspondingly, the traditional streaming solutions are faced with the need for more collaboration and interaction among viewers as they replace “at home” content consumption for “in-person” socializing. They are finally being forced to expand the video viewing experience to go beyond a one-sided broadcast-consumption model that has changed only minimally since TV was invented.
So, from video management solutions like Vimeo offering their own content library to Netflix introducing its “party” feature very early on in the pandemic to allow “virtual parties” to be organized around content viewing, followed quickly by Hulu, Amazon, and Disney Plus etc., the world of streaming and collaboration is starting to move in a dual direction more aggressively with new elements in user experience design. With TV anchors hosting shows from their homes, the barrier to entry for user-generated content creation is merely notional now. What the success of Facebook demonstrated in hindsight is the potential to create engagement and stickiness of user experience around video consumption; something traditional broadcasters have been slow to grasp in its entirety.
The importance of user experience was even more central for live events where the ability to attract audiences hinged on replicating the engagement levels of in-person live events, virtually. From scaling up back-end infrastructure to leveraging IoT capabilities in the stadiums to adding quick new functionalities in their digital properties, these companies have struggled to get back to their audiences under pressure of large revenue depletion. The WWE, with its commitments to deliver live events to broadcast partners, was one of the earliest to launch with remote audiences and attempt a compelling virtual experience.
However, despite all the brave attempts by streamers across the board, engagement levels for sports and other live events have been extremely low despite the significant increase in TV viewership across the board. According to data compiled by Sports Media Watch, Golf’s U.S. Open was down 42%. The Kentucky Derby was down by 43%. The Stanley Cup finals was down by 61%. Even the NFL had a 10% decline in average viewership per game from previous regular season. MLB’s division series were down by 40%.
Thus, there is a plethora of technology solutions that cover the spectrum of requirements from collaboration to pure streaming and, as the needs of one overlap with the other, the real need of the hour is to focus on user experience design.
The sector that is thriving in the current scenario and being leveraged by the various broadcast, gaming, and sports organizations as an extension of their business strategies is eGaming. The key to its success is the focus on immersive user experiences and their ability to replicate or replace the need for in-person interaction (also built around video content). Many media and gaming/casino companies have begun to see an alliance with e-Gaming as a natural next step in their strategic expansion. The Sinclair Broadcast Group partnered with Bally’s to rebrand their sports network as Bally’s Sports with a focus on innovative experiences. NBA and Take-Two Interactive launched an eSports joint initiative called the NBA2K League as a means of staying engaged with fans all year round. NFL too, is streaming its games on Twitch.
The lesson that all streamers need to learn from the e-Gaming industry is on the need to focus on user experience design as the single most important step in the creation of their service to the market. So, rather than replicating the “in-person” experiences with the best-case replacements virtually, or the linear viewing model on SMART TVs, or even extending a product to add a few more features, content companies need to start with understanding the context and experience of the remote user or participant and design the complete experience around their hot buttons.
In India, Netflix struggled for a long time to compete with local streaming platforms with their local content and lower subscription prices or pure AVOD models. During the pandemic however, one of the key reasons for the adoption of Netflix include “ease of use” and better user experience, especially for first-time ‘cord shavers’. Beyond a focus on content, Netflix has always focused on user experience, from its superior search function to the recommendation engine and ease of navigation. The psychology, constraints, and hot buttons of the consumer should be at the heart of an experience blueprint that should be designed from scratch without the baggage of the past. This isn’t a stopgap solution, but an opportunity to reimagine the entire approach.
The technology components have existed for a while and have only evolved over time and will be the easier piece to resolve. Designing a compelling remote experience, which is an attraction in itself, should be the target now, as is getting the users exposed and convinced about the convenience of ‘at-home’ viewing without missing the attractions of in-person engagement. As economies reopen and people gradually resume in-person interactions, followed by engaging in ‘in-person’ entertainment and events, the remote experience should become an additional and parallel option that becomes a robust extension of the event participation for an increased set of participants and key revenue stream. Content companies need to stop looking at their consumers as “viewers” and start treating them as “fans” to grasp the true engagement potential that is unexplored.
Going forward, following are some of the key trends anticipated in the industry:
- Continuing demand for content, leading to an increase in regional and specialized genres as well as focus on repurposing content across geographies as well as rediscovering of archives; the evolution and acceleration of usergenerated content will help fill some of the gap
- As demand for content remains strong, the focus on increased productivity as well as the increased cost of servicing the demand will mean that the adoption of AI and ML-based technologies will continue to be strong. This will impact all aspects of the workflow from editing, cinematography, dubbing, script writing, and video production, to innovative solutions pertaining to automated metadata tagging, software-defined workflows, etc.
- Merging of streaming and collaboration into a seamless continuum of video management solutions as video is increasingly leveraged for collaboration and engagement while standard streaming experiments with ways to increase stickiness and fight video fatigue. This will lead to mergers, acquisitions and partnerships support this trend.
- A renewed focus on user experience with an eye on increased adoption and retention as well standardization across geographies
- A relook at cybersecurity solutions and policies in the new paradigm