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The Netflix factor: A catalyst for broadcasters to change their own VOD offers

Channel 4 has created a competitive VOD offer at All 4
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No one can deny that the way viewers are watching TV has changed dramatically in recent years, with video-on-demand (VoD) services such as Netflix, Hulu, and Amazon Video taking centre stage in this new global trend. The streaming giant Netflix is undoubtedly the largest subscription VoD service of the lot, delivering a combination of existing and original content to more than 75 million subscribers in over 190 countries . Yet Netflix has not succeeded in isolation. Countless other streaming platforms have also sent shockwaves through the broadcast world as together they gain a foothold in the digital market and secure the attention of today’s viewers.

Millennial audiences are at the head of this shift in digital viewing. Younger generations are watching four times more video content online than older viewers , which is compounded by the fact that over 70 per cent of 18-29 year olds use at least one streaming service. As a result of increasing demand for the ability to stream content anywhere and at any time, however, the question many are asking is what does the future hold for traditional broadcasters?

 

Growth of video streaming

Audience behaviours have steadily shifted from traditional linear viewing to VoD services and established broadcasters have already started altering their strategies to address this change. Most recently, BBC Three became an online-only channel, giving viewers the opportunity to not only ‘binge’ on TV series – similar to the way they would on Netflix – but also watch unique and exclusive bite-sized content that is well matched to the modern anytime, anywhere viewing concept.

Channel 4 is another player that has taken steps in appealing to today’s on-demand audience through online-only content. Together, these changes further demonstrate how the growth in VoD services need not mean the death of the broadcaster. Instead, it is merely a wakeup call for traditional players to react to the changing habits and expectations of today’s consumers. Rather than posing a threat, the likes of Netflix should be viewed as a blessing in disguise and encourage broadcasters to adapt and cater to the audience of the future.

The challenge, however, is how to remain profitable during this industry-wide shift and retain the high viewer figures that traditional broadcasters have seen for decades. It’s not a question of competing directly with Netflix, as there is no one-size-fits-all approach for VoD services. Instead, making this a reality depends on broadcasters playing to their strengths and developing platforms that are targeted at their own unique audience, bringing something new to the table that Netflix and other steaming giants are unable to.

 

Localisation

Taking Netflix once again as an example – and as a service that’s available in nearly 200 countries – it faces a number of challenges in understanding people, the culture, and technological requirements in each region. While some countries have traits and characteristics in common, there are significant distinctions that influence how people consume and are affected by content. Often, the culture of regions within a country, even though they share the same language, can differ and content wouldn’t necessarily appeal to all.

Traditional broadcasters, on the other hand, do not face this challenge and stand to take advantage of this gap in the market. One such example is how the BBC and ITV were recently given the green light from the Government to launch a joint venture paid subscription service. It goes without saying that a service like this from the two British broadcasting giants will do well in its ability to provide content which appeals to British values and culture. However, simply plugging the localisation gap left by Netflix will not be enough. While the content on offer will initially draw in subscribers, there are a number of other factors, such as content discovery and personalisation, which will also play into its success.

 

Content discovery 

Broadcasters can use their innate knowledge of their audience to address the ways in which they encourage viewers to find new series or television programmes. With the shift to video-on-demand, broadcasters can use their expertise in scheduling, including how to arrange and promote content for daily, weekly, monthly and yearly cycles, to sell content to viewers in a way they can easily digest. The content presented to subscribers on a Friday should differ to that on a Thursday and time of day and calendar events, such as Christmas and the Olympics, should also be taken into account. The type of content that will interest day-time viewers will vary from those looking for entertainment in the evening, and from their experiences traditional broadcasters will be aware of this.

There is often a tendency to focus on technology solutions when discussing VoD products but technology used by broadcasters that is aware of a wide range of content types, a trailer, a bite-sized video or feature-length, is crucial to presenting and marketing content to viewers. One noteworthy way in which technology is at the forefront of proactivity in talking directly to consumers is through mobile phone push notifications. Broadcasters use push notifications to suggest to viewers new programmes as well as building a positive, personal relationship with customers.

 

Personalisation 

Personalisation is another important factor that is crucial to address in order for broadcasters to remain successful in the Netflix age. User expectations often centre on simple functionality, such as resuming content, or watching the next episode with ease. But there is a fine line between beneficial personalisation and over-personalisation, and on occasion automated recommendation engines can get it wrong.

Traditional players can play to their unique strength of an informed understanding of what users want and need, and social and geographical positioning, by adopting a human editorial approach instead of the machine-automated recommendation system commonly used by streaming services. A service which is run by humans can take personalisation to a much more valuable level, and is something broadcasters must use to their advantage.

 

The future of broadcast

With Netflix alone in nearly 25% of British homes, now is the time for broadcasters to evolve to ensure they remain effective in the age of VoD and find new ways to connect with audiences, making their content readily available and intuitive for viewers to use.

The future of commercial broadcasting is certainly changing. However, the one-size-fits-all approach to VoD platforms is no longer economically sustainable in 2016 and broadcasters must avoid creating platforms that add no value or are undifferentiated from competing services. Preventing this relies on working with a VoD delivery expert that has knowledge of the technology requirements and expertise to create a unique, meaningful delivery platform.

Traditional players in the broadcasting space must use their long-standing expertise to acclimatise and thrive in today’s VoD environment and successful content delivery specialists will have a thorough understanding of the broadcaster’s users and their unique needs and expectations. It is an array of techniques that are needed to coexist comfortably alongside the continually expanding content giants; knowledge of localisation, personalisation and content discovery are all natural advantages that broadcasters can utilise in order to stay ahead of the game.

It seems that Netflix and other streaming services are here to stay. But, rather than killing traditional broadcasters, they are merely acting as a medium for change.


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