How broadcasters can achieve success in the Netflix age

June 20, 2018 10:00 am


2017 was a year that SVOD services – led by Netflix and Amazon’s mass-market propositions – shook up traditional TV and video dynamics.

Netflix delivered strong financial results driven by popular original commissions and rapid global subscriber growth, with its members watching more than 140 million hours per day.

Both services now spend billions of dollars on content – Netflix earmarked $16 billion in 2017, while Amazon’s aggressive premium video push meant joining its counterpart in surpassing 50 million video subscribers in the U.S. alone, according to Kagan estimates for Q4 2017.

 

READ: Brands: Here’s what you didn’t know about Gen X

 

“One of the key challenges for broadcasters’ in 2018 will be the transformation of legacy infrastructure and services to cater for new viewing habits, brought about by advances in technology and consumer connectivity,” says John-Paul O’Sullivan, Research Analyst – S&P Global Market Intelligence.

Even as legacy media companies face more competition and audience fragmentation from digital platforms providing vast video content slates, opportunities still exist for them to offer broader, more targeted distribution direct to consumers.

This can be achieved through technology and content production partnerships, and understanding market demographics, in particular, younger viewers on mobile devices, says O’Sullivan who is also a speaker in ConnecTechAsia 2018.

Key Trends in 2018

For broadcasters, it is important to look beyond the numbers in this period of change as tech firms grow their influence.

Investment in technology and production assets provide new distribution opportunities and a stronger, more flexible content engine.

These are essential tools for a digital horizon, and the broadcasters that make the smartest moves will be the ones reaping the benefits in the longer term, adds O’Sullivan.

Over-the-top provides content owners a means to further monetize their content, either by partnering and aggregating with video-on-demand services or launching their own direct-to-consumer offering.

 

READ: Are you making mistake by advertising on mobile phones?

 

“For example, 2018 should be the year we finally see Disney launch both an entertainment and a sport subscription service outside of a traditional pay TV bundle,” O’Sullivan says.

Addressable TV advertising is another major growth opportunity, as the emphasis shifts from audience volume to efficiency.

Better pricing from smaller but more distinctive audiences is the name of the game.

Broadcaster video-on-demand or TV Everywhere services can profit from the greater availability and more precise nature of digital data, increasing value for advertising partners and distributors.

Consolidation and convergence are the overriding industry themes with scale increasingly key to challenging the digital media giants, he says.

Multichannel service providers, digital heavyweights and major brands are driving vertical and horizontal merger and acquisition (M&A) alignment to expand into new markets and cement their competitive standing in the content space.

 

READ: Brands, what do you know about the FIFA World Cup audience?

 

The theme is best demonstrated by motivations behind the potential acquisition of Sky – Europe’s leading pay TV service – with offers from legacy U.S. media giants Comcast and Disney, or the merger between international programmers’ Discovery and Scripps.

Consolidation in the production sector has also rocketed, bringing with it the risk of a negative impact on creativity.

“In film we continue to see a focus on building franchised titles to lower marketing and production costs due to existing fandom. There is no sign of this slowing down, which could mean less risk taking with costly script ideas, so a strong voice for the independent producers has never been more important,” O’Sullivan says.

Looking ahead

For broadcasters it is important to play to its strengths. Global viewing time in terms of linear television is still strong, and broadcast delivers uncomplicated mass reach.

 

READ: Have the Middle East hotels learnt new ways to attract travellers?

 

The traditional broadcasters have an illustrious history of producing quality and memorable content, but now editorial decisions need to be made in context of a more competitive environment.

O’Sullivan says it has never been more difficult to monetize traditional TV with the emergence of SVOD players, following on from other disruptive influences in the form of time shifting, cording cutting and viewing declines in younger audiences.

To ensure traditional players are not left behind they must innovative and become more agile, he adds.

“Broadcast heritage can only account for some much, so embracing the I.P. environment is an effective way to improve the distribution and presentation of content libraries both old and new.”

Tags:

Sunil Kumar Singh
By Sunil Kumar Singh
Sunil is a digital-savvy journalist and a leader in managing and integrating print & digital content in UAE, the Gulf and India. Sunil is an innovative editor with over 14 years' experience in digital content marketing, leading team and ability to deliver quality content for both print and new media.



AMEinfo EXPERTS