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Finders-Keepers: Scenarios in the Open Market for TV Entertainment | Page 1 by the Generous Contribution Of F i n d e r s - K e e p e r s : Scenarios in the open market for TV entertainment Author: Colin Dixon, Chief Analyst, nScreenMedia | Date: Q3 2017 Introduction The emerging market for TV entertainment online What became clear from these conversations is The experience of a service is vital is unlike anything we have seen before. Gone are that the experience of the service is vital to its the constraints imposed by the days of restricted success. From the first-time viewer to the long- to its success. From the first-time bandwidth and entrenched content gatekeepers. term subscriber, the process by which users find Anyone with a video catalog and a target market and watch great content is pivotal to their viewer to the long-term subscriber, can launch a service. decision to stay or to go. the process by which users find and However, launching a video service is just the Each industry executive we spoke to articulated the beginning. The rules by which online providers need to keep the experience at the forefront of watch great content is pivotal to must play are radically different than in every decision. Moreover, nowhere is the impact of traditional media. Whereas the technical and experience more keenly felt than in the user their decision to stay or to go. business rules in pay television have been interface. An obsession with creating a great user established for decades, online everything is interface is a common thread the reader will find in flux. throughout this paper. That said, the online economy for TV This paper presents five key scenarios which came entertainment has existed long enough for some up repeatedly during our executive interviews. rules and trends to become clear. The five topics covered are: Analysts at nScreenMedia spoke with multiple • Being found TV/video industry executives about how they see • Simplifying authentication the open market for TV entertainment evolving. • Turning binge-and-bolt into anchor tenancy We also talked with them about the major • Increasing the funnel challenges they are facing, and approaches they • Coping with multiple distribution partners are taking to overcome them. Many of the We review each topic in one of the following discussions revolved around a single theme: how sections. Each section leads with a quote from an to find subscribers, and how to keep them. industry insider which distills a key challenge, and we present approaches to address it. This paper is made possible Finders-Keepers: Scenarios in the open market for TV entertainment | Page 1 by the generous contribution of Being Found Challenge I believe It is becoming increasingly difficult for online video services to be found by potential customers. For entertainment“ ’s example, T-Mobile lists 105 online video services available through its Binge On unlimited streaming plan.1 The top online video services are having no problem being found in this environment, but this is not the future is going to be case for smaller providers. 54% of consumers use Netflix, but one tenth that number use the fourth largest a bunch of apps, and I service, HBO Now. Worse still, just 1.3% use all of the other 90+ services altogether.2 think discovery is going This data shows just how challenging it is for a smaller service to be found by its potential audience. Online to be the big thing to prevent people video service operators (OVSOs) must have a strategy in place to aid in being found. from jumping in and out of a bunch of Approach apps to find out what’s on. That is what Jason Friedlander, Director of Verizon Digital Media Services, recognizes the challenge smaller video providers face in being found. He also thinks new cross-service search facilities could help: Apple TV has tried to do with their search and voice across multiple apps, “I believe entertainment’s future is going to be a bunch of apps, and I think discovery is going to be the big thing to prevent people from jumping in and out of a bunch of apps to find out what’s on. That’s what Apple and what Xbox’ One guide tries to TV has tried to do with their search and voice across multiple apps, and what Xbox’ One guide tries to do.” do. The ability to search across content sources, and recommend content across services, can have a huge ” impact on the ability for a service to be found. Consider its impact on the pay TV PPV. Between 2013 and Jason Friedlander, Director, Solutions 2017, the number of pay TV customers with access to search functionality has steadily risen from 44% to Engineering, Media & Entertainment, 51.2%. At the same time, some operators have begun to make TV show and movie recommendations to Verizon Digital Media Services their subscribers. The proportion of customers receiving recommendations has risen from 15.8% in 2013 to 26.8% in 2017. Over the same period, the proportion of subscribers making at least 1 PPV purchase per month increased from 21.5% to 35.4%, a 65% increase.3 Finders-Keepers: Scenarios in the open market for TV entertainment | Page 2 Cross-service search is becoming increasingly easy to use as voice capabilities become more common. A cross-device app platform can take Between Q1 2016 and Q1 2017, the number of people with access to voice search and control services from a TV connected device increased from 17.4% to 20%. Each of the top streaming media players supports care of many of the differences cross-service search and voice services, and many smart TVs and game consoles do, too. between devices without incurring As useful in aiding discovery as it is, cross-service search comes with its own set of challenges for OVSOs. One such problem is that all the connected TV devices have a different format for metadata.* Peter North of higher costs that come with native CuriosityStream points out that every time they get a new piece of content, the metadata must be translated and updated to each of the devices the service supports. However, working with a video app development. development company that provides a cross-device platform, rather than a developer providing device- specific apps, can ease this thorny issue. A cross-device app platform can take care of many of the differences between devices, including cross-service search incompatibilities, without incurring higher costs that come with native development. Another problem with cross-service search is that providers just aren’t happy with how the results are displayed. BritBox’s Soumya Sriraman is not comfortable with how some platforms prioritize their content over other providers in the search results. For example, a search on Amazon Fire TV for a recent movie shows Amazon’s sources for the title first. However, this is far from consistent across devices. Platform providers like Roku would like to do more to aid in discovery. Steve Shannon, General Manager of Content & Services, Roku, would like to put a link to the next episode of a show someone is watching right on the Roku homepage. Many service providers (Roku channel providers) just aren’t comfortable exposing that data to a platform provider: “The challenge is that content partners are not really interested in us knowing what people are watching. For Roku to know what the next episode of the show is that you’re watching, I have to do a deal with the content owner.”4 Despite these difficulties, however, cross-service search is an invaluable tool in helping consumers find a smaller video service. * Metadata is information that describes TV shows and movies Finders-Keepers: Scenarios in the open market for TV entertainment | Page 3 Simplifying authentication The Challenge If you are at home Pay television viewers expect to be able to watch the shows they love on their connected devices. In response and“ using the Internet to this need, TV channel providers are launching online video apps. To use these apps, all a viewer needs to do is enter their pay TV operator username and password. However, this step could be preventing viewers from your ISP, and they from connecting with the channel brand online. are also your TV 29% of US consumers have downloaded a TV network app onto their connected device. The vast majority of provider, you will get those apps require the user to log in with their pay TV operator credentials to view the content. Of those that authenticated without needing to enter have a TV network app on their device, only 21% use it daily.5 The authentication step could be a big part of why people do not use the apps they downloaded more. your pay TV credentials. ” TV channel providers need to simplify the authentication step for their viewers. Only by doing this can they Juan Weiss, VP User Experience, and Product guarantee that the maximum number of people that download the app use it on a regular basis. Design, Fox Latin America The Approach We see five times Adobe is the main provider of TV Everywhere authentication services to the pay TV industry. According to “ Horia Galantanu, Group Product Manager for Adobe Primetime, there are three basic approaches to more users of Fox Play simplifying the login procedure. in the regions that The first relies on the operator being both ISP and pay TV provider. When a customer is at home and opens implement these a broadcaster authenticated app on a connected device, the operator automatically allows the access without approaches than in the user entering any login credentials.
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