November 27, 2017

Change is afoot in the media world

By Per Lindgren, SVP, Live OTT, Net Insight

First published in Connect-World: EMEA (2017), copy-right InfoComms Media Ltd, London, UK
November Issue
www.connect-world.com

The seventh edition of Ericsson ConsumerLab’s annual TV & Media report underscored the enormous and rapid shift in TV and video viewing behavior towards mobility. According to the report, mobile video traffic is forecast to grow by around 50 percent annually through 2022 to account for nearly 75 percent of all mobile data traffic. Furthermore, Verizon announced last year that delivery of OTT live video has increased almost 10x over the last two years.

The media world is in big transformation. In a media world turning IP and cloud there is a strong shift towards online viewing which has had a profound impact on business models and go to market strategies. While most broadcasters today have their own OTT service bypassing the traditional aggregators and operators, there has also emerged totally new players, both pure-play OTT providers such as Hulu and Netflix, but also the large social networks broadcasting live and on-demand content. In addition, operators such as BT, AT&T and Comcast has made large investments in media companies and content rights to provide their own channels direct to consumers.

Live events, and in particular, live sporting events have up until recently seemed immune to the gradual but irreversible shift to viewing online and on-demand, and has become an increasingly important asset for broadcasters. This has caused sports rights prices to increase significantly. But times are changing also in live sports. In Europe, Perform Group has launched a live sports OTT service, DAZN, aiming for the DACH and Japanese markets and last summer Japan’s J-League announced a large streaming deal which is purely online and was the largest broadcasting deal in Japanese sports history.

In addition, content owners such as Spanish Dorna are streaming their content as premium pay-OTT services directly to consumers, and large US sports owners such as NFL and NBA offer annual subscription video passes directly to consumers outside the US. Last year we also saw the large social networks entering the live sports broadcast arena with a large deal between NFL, CBS and NBC to broadcast NFL Thursday Night football on Twitter as one example. “This is about transforming the fan experience with football”, Jack Dorsey, chief executive of Twitter, said in a joint statement with NFL back then. “People watch NFL games with Twitter today. Now they’ll be able to watch right on Twitter”. The initiative proved that integrating a social platform, like Twitter kept the user engagement going even long after the game was over. However, it also highlighted the latency issues still inherent in live streaming.

There is no doubt. OTT platforms are becoming increasingly important for live events and in this transformation many traditional broadcasters find themselves struggling, competing with disruptive ad-revenue models, introduced by social networks, and battling technical challenges such as ad-blockers and streaming latency.

There are ways to solve these issues, and ways to bridge the gap between traditional TV broadcasts and live OTT, and if the appropriate tools and strategies are chosen, the disruptive consumption patterns of the millennial generation can be a golden opportunity.

The value and challenges of live OTT

The seventh edition of Ericsson ConsumerLab’s annual TV & Media report underscored the enormous and rapid shift in TV and video viewing behavior towards mobility. According to the report, mobile video traffic is forecast to grow by around 50 percent annually through 2022 to account for nearly 75 percent of all mobile data traffic. Furthermore, Verizon announced last year that delivery of OTT live video has increased almost 10x over the last two years.

The revenue potential of live is tremendous, total ad views for live grew 43% YOY from 2015-2016, significantly higher than all other video formats. And according to the FreeWheel Video Monetization report, pre-roll ad completion rates are 95% higher than any other format video, and there is an average of 2x more ad slots in mid roll breaks than you’ll get with VOD.

There is however a growing ad fatigue in the market and ad-blocking was one of the top issues faced by digital media publishers in 2016, having spilled over from 2015, and has caught the attention of the entire video industry. To tackle these issues service-providers are looking at less intrusive OTT ad-models, as well as server-side ad-insertion solutions, avoiding ad-blockers. Confident that there is still revenue to be made, especially in live sports, as 63 percent of sports fans have expressed their willingness to pay for an OTT subscription to watch their favorite teams and players, according to Statistica.

The value of social

Powered in part by the continued ubiquity of the smartphone, the role social media is playing in consumers’ lives is significant and increasing. According to Nielsen 2016 Social Media Report, this has also driven simultaneous device usage upwards. While 21 percent of tablet users say they use their tablet while watching TV “several times a day,” 30 percent of smartphone users said they did so several times a day.

Moreover, many consumers are using social channels to communicate about their media consumption, including the programs they’re watching on TV.

In the U.S last fall, social TV activity peaked on Sundays as audiences took to social media to talk about NFL games, specials and Sunday series. Nearly half (43%) of weekly Facebook activity and a third (33%) of weekly Twitter activity occurred on Sundays. On Facebook, the next-busiest day was Saturday – a day known for college football and pro baseball.

Looking at a week in November, records Nielsen, we get a sense of the TV topics that were capturing audiences’ attention as well. On Facebook, nearly three-fourths of TV interactions were related to sports events. Just under half of Twitter interactions were related to sports events, followed closely by series, with nearly a third of Twitter interactions during that same week.

This is also clearly demonstrated during large live events, where social platforms play an important role:
• Super Bowl 50 – 200 million Facebook interactions
• 2015 Champions League Final – +834 million Twitter impressions.

It’s not just live sports either; award shows and social media go hand-in-hand. It’s not even limited to real-time live. Some TV shows generate over half a million tweets per episode. Social interaction is a growing part of entertainment that lets viewers share the experience – unless they’re watching OTT.

Spoiling the moment

When people watch live events on traditional OTT platforms, the lack of synchronization becomes inherent, as the action they see varies from screen to screen. The issue lies in traditional OTT solutions being created for on-demand experiences, relying on buffering to maintain a high Quality of Experience (QoE). File-based workflows introduce latency, ranging from seconds to minutes, resulting in a lack of sync between individual OTT devices as well as a delayed experience compared to linear broadcast.

Nothing spoils the moment like finding out about a score on Twitter 30 seconds before you get to see it on your screen. As a result, people on OTT platforms are forced to stay away from their social network communities and the potential for broader engagement breaks down. It also further widens the gap between the traditional broadcast and OTT audiences.

True live OTT – bridging the gap

A true live OTT solution includes ultra-low latency streaming as well as functionality to synchronize the individual feeds across devices. True live OTT brings a TV-like viewing experience to anyone regardless of platform, including features such as; instant playback; fast channel changes; seamless ad-insertion; and higher quality viewing experience. It connects the TV audience and the OTT audience as they’re now able to share the same experience regardless of platform. No more “#spoiler” on Twitter. Everyone sees the goal at the same time and can participate in the online conversation. Making sure to drive engagement to your
live event.

Harmonizing the second screen with the first also opens up for new revenue streams, taking advantage of the interactive nature of the second screen to offer new services such as: in-game betting, polls, and mini quizzes.

Furthermore, combining true live with server-side ad-insertion that is resilient to ad-blockers is a way to further increase ad-revenue on the OTT platform. As the ad fatigue is increasing, an interactive second screen platform can also help introduce new, less disruptive ways to advertise.

Truly immersive experiences – the TV of tomorrow

Millennials don’t want to be broadcast at. They expect an engaging, immersive experience, enabled by the interactive nature of the second screen, their first screen. With True live, it is possible to create these experiences, providing multi-camera, multi-view applications letting viewers choose their favorite athlete, race car, or camera angle. Live and in sync. Include 360 cameras on the arena or back stage and let your viewers look around and choose who they want to follow.

Hand over the power to your audience, let them create their own experience, and they will stay engaged for longer periods of time. Take it a step further and integrate social platforms, to make sure that they stay connected to their community while still actively viewing the event. Truly providing the TV show of tomorrow.

Again, take advantage of the second screen. Introduce freemium models with micro-payments, and in-app purchases. Business models that are widely accepted to this audience. Transition your ad revenue models to less invasive product placements.

By synchronizing the OTT delivery to traditional broadcast, the OTT platform not only becomes a more agile and cost-effective platform for content delivery but can be harmonized with the first screen to provide a new seamless TV experience cross-platform. The second screen can now provide complementary content such as player/driver cams or new camera angles or 360 formats enhancing the overall viewing experience providing a more engaging and immersive experience, including social and interactivity. This allows the content owners and right’s holders to both drive people back to the first screen while opening up a new complementary and personalized revenue path on the second screen.

Conclusion

Live video is where the money is and OTT is the platform of choice for the next generation. Traditional players are coming out with OTT offerings but struggling to keep their existing revenue models as they compete with social networks with new disruptive ad-revenue models.

True live OTT is a way to handle this shift and bridge the gap between the OTT audience and the linear broadcast audience, uniting the two into one. Give the audience new immersive experiences, with a second screen that extends the first screen, complimenting the broadcast, driving further engagement. Utilize the interactive nature of the second screen and introduce new revenue models and new ways to monetize existing content rights. Support the increased demand for immersive experiences, driven by the millennials, where they not only demand the right to choose what they want to see, but also assume they can share and discuss the event with their online community. The ad fatigue on the market is also important to address. Short term server-side ad-insertion will help but long term new less introduce ad models needs to be introduced making use of the opportunities of a new personalized and engaging OTT viewing experience.

First published in Connect-World: EMEA (2017), copy-right InfoComms Media Ltd, London, UK
November Issue
www.connect-world.com

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