We live in a disparate and disrupted landscape of content sources and interfaces that make it difficult to create a truly happy medium that satisfies all users when developing a Pay TV UI. Different viewers have different preferences about how they access content. Dynamic, agile, responsive solutions are the answer, working for all users across all generations and demographics. We will see non-graphical interfaces compete with the GUI, including the VUI - Voice User Interface - and VR navigation. Because these technologies are new to all users, they are unlikely to drive a wedge between generations, as other UI concepts have done.
Premium digital video advertising is advancing beyond the desktop and becoming firmly established on the living room TV set. While desktop accounts for 35% of digital video ad views in Europe, OTT and set-top box VOD devices are not far behind with a combined share of 34%. As a result, the TV industry will start to embrace the experimentation and format development more commonly associated with digital advertising. Networks such as Fox and AMC are testing ultra-short six-second TV ads to improve the viewer experience, for example. As premium (digital) video gets comfortable in the living room, 2018 will be a year characterised by convergence, automation and collaboration in advertising, as well as experimentation.
In less than three months, the European Union's General Data Protection Regulation (GDPR) takes effect. The potential penalty for non-compliance is an astronomical 4% of annual revenue. This analysis shows that most media delivery companies in the Nordics are not following the requirements of GDPR. Only 19% of the companies studied give an opt-in choice for the collection of private data, and only 33% offer opt-out. Local Nordic media companies are not as good as Netflix or YouTube when fulfilling the right to be forgotten, either.
With growth stalling in many markets across the Pay TV industry, operators need new strategies to attract and retain customers, and avoid revenue-crushing price wars. They need to maximise the value of different consumer groups, including the demanding and big-spending ‘Content Connoisseurs’, who love everything that is new, and the middle-aged, middle-income ‘TV Traditionalists’ who are the stalwarts of big-screen consumption. Operators must use the right content, tech and UEX to move beyond a one-size-fits-all strategy.
400 hours of video content are uploaded to YouTube every minute and compete with broadcasters for our attention. Live streaming could be the key to winning the battle for viewing time as it drives reactions and provides an incentive to comment. Live streaming also provides ways to engage viewers with content they are familiar with, but in new ways, like motor racing where the presenter is shown in 2D but the rest of the feed is 360-degree video. 4K could be the springboard for more 360 video.
Predictions for 2018: ‘Specialist’ voice services will win when it comes to the entertainment experience, with Pay TV operators benefiting from their ability to serve complex queries; AI will realise the importance of ‘emotional intelligence’, aiming to grasp the emotional factors in content that someone is interacting with; The ‘gig’ economy will foster more of a pay-as-you-go mentality, and media business models will need to reflect this; Mobile will fulfil a huge part of content consumption in 2018, particularly in sporting and special events; Regional OTT services will lead until global OTT harnesses localisation.
It was clear at FTVA 17 that broadcasters are rediscovering some of their swagger, after several years worrying about the threat from major Internet companies. Some of the biggest advertisers still have a preference for live and linear television and over-50s, a key target demographic that holds 40% of all consumer wealth, watch lots of TV. This gives broadcasters breathing space to get their OTT offering right and translate the unique selling points of TV advertising to the online world. Do not under-estimate the scale of this task.
On-demand services like Netflix are starting to over-shadow broadcasters, who have responded with their own OTT offerings. To succeed in this market, you need more than exclusive TV shows or movies – also good QoS, including for 4K, HDR and HFR content. Given the cost of upgrading networks, video compression can help make services sustainable, helped by codecs like HEVC. Now research is focused on how AI and machine learning can shrink the size of content, making ‘Constant Quality Rate’ rather than ‘Constant Bit Rate’ the target. Bandwidth savings of 30-60% are possible and this approach is codec and resolution agnostic.
The eighth edition of Ericsson’s ConsumerLab TV and Media report predicts that 50% of all viewing will be on a mobile screen in 2020, half of which will be on a smartphone alone. The analysis also suggests that by 2020, one in three consumers will be VR users. Around half of consumers are planning to get VR devices, although cost is still an issue. Meanwhile, time spent watching TV and video content has reached an all-time high of 30 hours a week.
More consumers are taking multiple subscription video services and their high levels of satisfaction with OTT means they should be willing to spend more for video, in total, not less. Meanwhile, the falling unit cost of set-top boxes means operators can use them as a competitive weapon against independent service providers. The VR headset market is going to come alive as all major tech vendors launch standalone headsets in the $100-250 range.