Recent research has shown that television remains the main reason people spend time in front of a screen, even amongst the millennial generation. The research also demonstrated however that TV consumption on non-traditional television sets is growing. So what do these two statistics tell us about the future of television? Peter Cox, Marketing Director of PerceptionTV Ltd, argues that television’s delivery mechanism and consumption devices matter less than recreating the living room experience for viewers.
The death of television has been greatly exaggerated.
According to research carried out by the Video Advertising Bureau in Q2 of 2015, 90% of all viewing time was still spent watching television. Even millennials – generally believed to be the audience least likely to consume linear television – spent more than 80% of their video time consuming television.
This is backed up by the OFCOM Communications Report 2015 in the UK which showed that, whilst younger people watched less television than older people, the differential is not as marked as might be expected and that, rather than less television being watched overall, television is simply being watched in different environments. This OFCOM report may only relate to one country but it is comprehensive and its finding have, in the past, been broadly representative of other television markets.
The obvious reason for this is growth in choice. Ten years ago, viewing on tablets and on demand did not exist. Digital video recording was in its infancy and traditional VCRs were the primary means of catching up on TV. The combination of reliable fast internet, significant developments in overcoming buffering and the capability of catch up services has opened an entirely new industry dynamic: the freedom to watch what you want, when you want and where you want.
The opportunity for service providers
This provides an opportunity for service providers to deliver an enhanced viewing experience that, to date, is in its infancy. The capability to deliver content when and where someone wants to watch it provides access to new revenue streams that have barely yet been explored.
To date the traditional broadcasters have been the main beneficiaries, but this will rapidly change in the next decade in two primary ways.
Building an effective broadcasting experience
Television has traditionally been an expensive business, but the growth of internet delivered TV services will dramatically level the playing field, enabling businesses to broadcast high quality TV experiences at a fraction of the previous cost.
Critical for new entrants will be the capability to deliver a TV-like experience over the internet. This primarily depends on creating TV services that are planned, managed and executed to the standards that viewers demand from traditional TV. For those that run TV networks nothing gets the heart racing as much as dead air caused by a technical issue. Whilst the first generation of TV over the internet experiences suffered from these issues, the next generation need not. The most critical factor is to take a broadcasting approach, namely deliver an experience that closely matches the traditional broadcast experience. For the viewer this means fast switching of channels, seamless integration of services and access to all information from one menu.
In the background things are more complicated still. Content needs to be ingested, planned into an engaging viewing experience, and delivered effectively over networks that are not necessarily 100% reliable, and broadcast in real time with the option of catch up and on demand. Local or specific programming needs to be seamlessly integrated to different geographic or demographic audiences. Additional services such as payment on demand need to be integrated, reliable and seamless.
The capability to generate revenues from relevant advertising provides the final part of this technological jigsaw. Dynamic advertising will enable brands to automatically consider the device on which the content is being watched, location, the subject of the content and the historical preferences of the user to deliver a more relevant advertising experience on the fly. This will enable television to begin to address the ongoing reduction in advertising revenues that has been a fixture of the industry since the development of the internet.
Cloud technologies adds further flexibility
The advantages of properly deployed cloud technology to the broadcaster, new or old, cannot be underestimated. Broadcasters can now use the cloud to more cost effectively store, manage and deliver complex content with a variety of different digital rights issues.
Perhaps the biggest advantage of cloud technology is for the viewer. As the availability of cloud storage grows, the ability to store and access content from any device, anywhere will be one of the major opportunities for the television industry.
TV brands will be able to offer users a digital locker in the cloud where they can record and store content with relevant digital rights. This protects rights holders more effectively as local copies do not exist to be pirated.
For the user the benefit is clear: wherever they are, whatever device they are using, viewers can gain access to the content that they want to watch on any device, delivered to them over the cloud. As long as they have a wireless connection (and the growth of 4G mobile networks combined with super-fast broadband is making this ubiquitous) they have access to enjoy whatever content they wish to: live; on demand; previously recorded or through catch up. Viewers can even start watching on one mobile device before finishing on another or in the home.
The cloud offers a flexible and reliable place to secure content for the individual, without the need to install complex digital video recorders into every household, potentially saving broadcasters millions in installation and service costs whilst delivering a simpler experience for the user.
Delivering on the promise
Whilst the promise of a seamlessly flexible and scalable television service might seem like a nirvana, fully integrated end-to-end platforms that manage the process from content receipt to broadcast are available today. The primary risk for brands wishing to use these services as a platform for new television services is twofold: non-integrated systems and lack of broadcast experience.
Whilst many managed services claim to offer every aspect required to deliver a TV service, several are actually a combination of systems bolted together. These cannot hope to deliver a user valued end-to-end experience and can only lead to user frustration that will rapidly reduce demand. Broadcasters should look to understand where systems have been deployed before and the number of users currently being served as well as lag times for channel changes and how managed services cope with localised content.
The second risk is lack of broadcast expertise. Television is extremely complicated and relies on many things to be successful. A user that is frustrated by waiting a second for a web page to load may remember the experience before broadband where pages took longer still, and be forgiving. But the historical broadcast experience has been seamless. Managed IPTV services need to be the same, built and maintained to the standards that traditional broadcasters have always aspired to, but at a fraction of the cost. By combining an integrated IPTV service with experience in delivering broadcast quality programming, brands entering the television space for the first time enable themselves to have the highest likelihood of success and to offer levels of flexibility to viewers that will continue to see television as the primary entertainment medium for decades to come, whatever device it is consumed upon.