Nick Fitzgerald Issue: Asia-Pacific II 2015
Article no.: 7
Topic: Smart TVs and even smarter consumers: The future of
content on demand
Author: Nick Fitzgerald
Title: CEO
Organisation: TV2U
PDF size: 389KB

About author

Nick Fitzgerald, CEO, TV2U

Nick’s experience extends over 25 years in the broadcast and new media Industries. A successful business leader and visionary entrepreneur, Nick is responsible for setting the strategic goals and objectives for TV2U.

Prior to TV2U, Nick served in numerous executive level positions and was instrumental in the setting up of many successful companies including Digital Rapids Asia.

Article abstract

The challenge the industry now faces is that today’s viewers are looking beyond video on demand, linear TV and pay per view. They still want access to this content, granted, but having had their fill of Netflix and similar services, and after binging on high-quality video sourced from elsewhere online, modern viewers are turning their sights on more diverse and alternative forms of content. They’re now looking for video matching their unique tastes and views, much of which is available from user-generated sources. 

Full Article

The availability of online content has dramatically expanded today’s entertainment options. Up until the early noughties, it was only possible to watch a TV show if you either tuned in when it was shown live on air, caught a re-run, or bought the box set. For decades the viewing public was at the mercy of broadcast schedules and rating seasons, but now the situation has changed. The internet has forced linear TV out of the limelight while ushering in ‘catch up’ and ‘on demand’, releasing the shackles imposed by broadcasters and letting the viewer watch TV at a time and place convenient to them, not the other way around. It’s not just television either. The film industry has also moved in this direction, music and games too. In fact, the entire media landscape has been affected by the internet in this way, and, with the influx of internet-enabled devices now available, the “content on demand” industry as a whole is going from strength to strength. So, when you combine the widespread availability of smart TVs and connected set-top boxes – bringing internet access into the living room – with hugely successful video on demand services like Netflix, it’s no surprise the average viewer has become accustomed to having more control over their content consumption habits than ever before, leaving broadcasters playing catch up.

The problem, at least for traditional players, is TV isn’t a walled garden anymore. The days where a cable provider or terrestrial broadcaster held all the cards are long gone. Instead, today’s viewers have grown accustomed to the flexibility offered by internet-based streaming services. New research from ZenithOptimedia further demonstrates this, emphasising what we’ve known for a while – although linear TV is still a major form of media usage among consumers, internet-based consumption is gaining ground every day, especially when it comes to video. Today’s viewers relish the ability to pause, play, pick up and put down content to fit around their schedules, and it’s reached a point where consumers now expect access to this content on any device, at any time. The extensive back catalogue offered by the industry’s biggest streaming players has also led to a common trend for binging on several episodes of a show in one sitting. Some audiences, millennials in particular, are becoming so invested in video on demand services it’s even reached a stage where they’re exclusively watching online content rather than live TV.

Over the past decade, broadcasters have responded to this change in user expectations by offering IP-based on demand delivery for their content. This, at the very least, gives viewers the flexibility to access what has traditionally been described as linear TV content, on any device of their choosing, at a time that suits them. But as many broadcasters only opted to introduce this functionality in response to growing competition from online players like Netflix, they’re at risk of falling behind once again. This is especially true in 2015 as there’s another change on the horizon, only this particular challenge has a much wider reach. It isn’t exclusive to broadcasters. Instead, all players in the video streaming space must adapt, or risk losing out to new competitors entering the market.

The challenge the industry now faces is that today’s viewers are looking beyond video on demand, linear TV and pay per view. They still want access to this content, granted, but having had their fill of Netflix and similar services, and after binging on high-quality video sourced from elsewhere online, modern viewers are turning their sights on more diverse and alternative forms of content. They’re now looking for video matching their unique tastes and views, much of which is available from user-generated sources.

The BBC’s iPlayer is a good example of this. When it was first introduced, iPlayer heralded the future of online video streaming. But, in May 2015, the Financial Times reported the service is declining in popularity. iPlayer’s latest usage stats are a clear representation of how it’s no long sufficient to only provide live TV and catch up content, particularly if viewers are paying for the service in question. As TV viewing habits are increasingly shifting towards alternative platforms like YouTube, particularly among millennials as they look for content more relevant to their interests, this demonstrates a significant shift within the industry that broadcasters need to follow or suffer a similar fate. With many of today’s viewers flitting between live TV, subscription-based video and shorter user-generated content, broadcasters must focus on introducing innovation to their digital services in line with changing user appetites.

By partnering with alternative cloud entertainment service and technology providers, it’s possible for broadcasters to fight against the changing TV tides and remain relevant and engaging in an ever-changing market. Modern IP-based content streaming providers offer the best of both worlds, encompassing VoD, pay per view and live TV services, plus the ability to create highly personalised channels tailored around an individual subscriber’s likes and dislikes. Some players in this space, like TV2U, can even supplement a wide range of premium video with user-generated content to add more value and drive subscriber loyalty, and can also give broadcasters the flexibility to only charge subscribers for the content that interests them, rather than a flat fee.

In 2015 and beyond, succeeding as a broadcaster or internet-based streaming service will come down to providing the viewer with a range of content tailored to their needs. There’s no longer a distinct divide between professional video and what’s created exclusively for online channels. The walls have come down, and what would have traditionally been defined as ‘amateur’ video is now regularly reaching an audience of millions. Platforms like YouTube have become front of mind for certain viewer types, demonstrating a real opportunity for broadcasters to tap into a wealth of alternative content and use it to both gain new subscribers and retain existing ones. After all, if users know they’re only paying for content they want to watch – and can access it on demand, whenever they want to watch it – this can make a huge different between a subscriber switching over to a new network, or switching off for good.