It was back in 1996 when Bill Gates wrote his famous essay, "Content is King," saying, "Content is where I expect much of the real money will be made on the Internet, just as it was in broadcasting." Today, as content becomes an ever more important part of a consumer's connectivity experience, Gates' statement resonates more strongly than ever.
In an era of increased convergence across distributors (cable, telco and satellite providers), major content owners like Disney and Time Warner, and such large over-the-top (OTT) providers as Netflix, Amazon and Hulu, there is an opportunity for communications and media providers to leverage their scale and customer data to deliver a truly personalized experience, while also creating a new revenue opportunity.
Show choice vs. channel choice
As all large players vertically integrate their offerings with content, I predict an increase in direct-to-consumer offerings (see Disney's OTT streaming service), as well as licensing rights to media using a variety of models with distributors.
Instead of purchasing entire bundles of channels from our providers, we'll be able to select the specific shows or titles we're interested in, similar to the "download-to-own" model. For example, I may want to buy the right to watch The Walking Dead on AMC when it becomes available, without having to get every show that AMC has to offer. This could also potentially herald the end of most scheduled programming, with everything you want to watch becoming available on demand.
In this scenario, I believe we'll see more content from both pay-TV and mobile providers becoming available closer to the original air date, as opposed to the following morning like some current offerings.
Too much content has its challenges
In the increasingly complex world of content, navigating through the choices and finding relevant recommendations become the real challenges for consumers. For example, how do consumers search and discover the content they want in the most economical way possible? This drives the need for rich metadata (big data), a better user experience and a sophisticated recommendation engine, which providers are well positioned to incorporate due to their knowledge of any given consumer.
Another challenge lies in delivering the high levels of personalization that consumers demand. According to the analyst firm Ovum Ltd. , we’ll continue to see increasingly granular, personalized TV services as TV consumption trends increasingly shift from households to individuals. Due to this, the ability to identify various personas across multiple devices will be key. With large amounts of customer data at their disposal, it’s not unrealistic to think providers will be able to leverage various data sources to create a unique, personalized profile for every user. This information can then be used to suggest not only targeted content based on preferences, but also to push targeted advertisements.
However, there are some caveats. Providers should ensure that consumers are not overwhelmed with too much personal choice, as it may come across as intrusive. And with privacy being an ongoing consumer concern, service providers will need to manage consent by offering the ability to opt in before information is leveraged in this way.
More opportunities than just personalization, recommendation and advertising
Beyond the demand to access personalized content at any place and any time, consumers have different preferences for how they pay. This too can be tailored to the individual; for example, offering a premium subscription for ad-free content or a lower-price subscription that includes targeted ads, similar to Hulu's current approach. This can also include a pay-per-view option or the ability for someone on the West Coast to watch something live from the East Coast without broadcast delay, with the latter made possible through a cloud environment.
Further, there is the potential to become a "super aggregator" that pulls together compelling commercial packages and all the content consumers want into one place. This is especially important as OTT offerings continue to grow in popularity, and players like Disney move in to the direct-to-consumer space with their own streaming services. Indeed, Ovum recently stated that becoming a super-aggregator or a pMVPD (personalized MVPD) should be a strategic option for pay-TV players -- an argument that will only gain strength as this trend gathers speed.
Providers have the scale to do this right
With their scale, data and resources, communications and media providers have proved they have a key role to play in the digital economy. The time is now ripe for these companies to leverage big data, cloud-native offerings and OTT to give their customers the best possible content experience, while also creating a sizeable monetization opportunity. It's a win-win.
— Gary Miles, Chief Marketing Officer, Amdocs