Digital Media 2017 – Five forecasts
2016 was a year flush with innovation in the digital media industries. The launch of SkyQ set the pace for mainstream TV platforms. Amazon’s launch of GrandTour on Amazon Prime, Twitter buying NFL rights, and Facebook Live streaming election coverage from the US laid down a calling card from recent entrants into the TV market. Most of these innovations weren’t immediately game-changing but hint at further sweeping changes to hit media markets in 2017. Decipher’s consultants have put together our list of the changes we anticipate for the coming year. We will be examining these trends, innovations and commercial changes in more detail at conferences like CES and IBC through the year and reporting back to you our thoughts and insights. As we head towards CES 2017 we start the thinking with these five forecasts:
In 2017 we redefine what we mean by a ‘platform’
In recent years, we have got used to the idea of describing a companies as ‘platforms’ or ‘platform operators’. This has normally meant a company that gives us some form of digital device, backed up by some form of distribution network, and which sold us services or content to use on that device. We have used this term to describe TV companies, mobile phone companies and broadband companies.
Our understanding of what was a ‘TV platform’ used to be so simple. If someone gave you a set top box and unlocked TV services for you, they were a TV platform. This definition was challenged by the merging-in of the telcos who added phone and broadband into the service mix to create a new ‘triple-play’ definition of a platform; and then again with the addition of mobile companies/services into the mix to create the most recent ‘quad-play’ platform definition. Most recently, the merging of mobile into the mix marked the death of the idea that ‘mobile’ is a separate or unique market.
In 2017 these definitions will be challenged again with the arrival of Amazon and Google into the group we define as ‘platforms’. The emergence of Amazon Echo (and soon Google Home) as companies that ‘put devices into our homes and sell us media services’ has been shockingly quick. These companies don’t yet deliver linear broadcast, or fixed line broadband/phone, but there are ways to achieve that very quickly. Google’s experiment with selling super fast broadband in the US shows they are preparing to take this step.
We therefore have a new class of ‘connected home platform operator’ to consider, offering an ever expanding list of services, now including voice commands and home automation. The arrival of these companies into the ‘platform’ mix left us at the end of 2016 with some interesting questions. Will they compete or collaborate (Dish in the US is already incorporating Amazon Echo commands)? Is Amazon Echo a re-definition of the humble ‘set top box’? Do I need a network of Sky MiniQ boxes attached to a main SkyQ box, if I also have a network of Amazon Dots and Firesticks attached to an Amazon Echo? And most importantly, why can’t we turn our Xmas lights off with a SkyQ voice control system?
We clearly have a group of companies who, from different starting points, are heading towards the same end-point which is to be the main provider of media devices, services and content in our homes. Working out who might win and why will be part of our focus for the next year
Key issue for main players – Beyond working out which existing services are fundamental and which are nice to have, existing platforms need to innovate quickly to meet the threat of the new entrants. They need innovation that truly exploits all elements of quad-play and the connected home, and they need to match the data and AI innovation being pioneered by the new entrants.
Crazy prediction – Amazon bids for Fox (inc Sky)
In 2017 cloud services move into the consumer arena in TV
While we have all been talking about ‘cloud services’ for a few years not, the cloud revolution has mainly been a back-office revolution for the TV industry, with massive changes to how streaming, catch-up and metadata infrastructure and services are managed. For the consumer, apart from broadcaster catch-up players, the impact of cloud has been limited and largely invisible. 2017 however, is the year when cloud services will burst into the open. One strange impact will be that we lose sight of the difference between PVR and catch-up.
When catch-up first arrived it was assumed by many industry players that we would no longer need PVRs in the TV service mix. There was a clear distinction between PVR recordings and catch-up on-demand, but the problem was that consumers still liked the PVR model. They liked the sense of control and ownership, and the relative speed of access (compared to on-demand).
Recently, there has been a host of innovation that challenges this old model. These include pushVOD (platforms using PVR hard-drives to host VOD services); network or cloud-based PVRs (where recordings are held in a Dropbox-like remote hard-drive), true start-over (where a consumer can play an on-demand version of a programme that is still only halfway through its first broadcast) and the recent innovation (seen on the EE TV set-top boxes) of recording programmes off-air to deliver a PVR/catch-up hybrid. All of these innovations blur the lines between broadcast, PVR and on-demand and create the idea that a broadcast channels output should be fully controllable by the viewer.
Research into all these models in 2016 has shown that that consumers don’t know or care where their programmes are stored, or how they get to screen, as long as their list is manageable by them. We have come to realise that a PVR recordings list is really just a favourites list and could link equally to cloud-based recordings or to on-demand content.
However, what is increasingly clear is that the choice of how to manage these choices is best managed by platforms not broadcasters and, if we are to reach the optimum model, it is likely that broadcasters will have to slowly give up control of catch-up to the platforms delivering broadcast. Cloud capability means that catch-up content becomes just another functionality that your platform arranges for you.
Key issue for main players – For both broadcasters and the platforms they work through, the key issue will be finding a new commercial model for recording and catch-up that protects the rights of broadcasters while delivering customer functionality and a balanced commercial return. Broadcasters will have to find a new role for their online players, as their original rationale – delivering catch-up – moves elsewhere.
Crazy prediction – A UK television platform launches cloud PVR as a commercial service without having resolved the tortuous rights issues (this is not so crazy- it is what KPN have done in Holland). …
… read on at decipher-blog.co.uk
Originally posted at Decipher
4th January 2017
Nigel Walley discusses why so many myths about television seem to persist (2016 International Television & Video Conference, November 2016, Budapest). Click here for video.