October 11, 2012, TV Next Conference, Santa Clara, CA—Greg Ireland from IDC moderated this panel on OTT opportunities and strategies. Panel members were Jim Louderback from Revision3, Alex Vikati from Tribune Media Services, Tracy Geist from Digitalsmiths, David Anderson from Shine America, and Wayne Purboo from Quickplay Media.
Apps can start as any function for any purpose, but what are the details?
Louderback commented that the best way is convenient, cost-effective, and provides a service.
Vikati suggested that the app provide TV data. VOD and online television need to identify the show and its content so users can find similar content or alternatives in whatever platform they're using. This information leads to discovery and better choices.
Geist stated that consumers are lazy, so apps must present content in an easy, simple, and relevant format. The biggest challenge is how to find content from the existing masses and data. People will spend money if it helps them find things.
Anderson offered hardware technology makes things smaller and simpler, but we still have islands of access. These islands lead to proliferation of devices and formats just in the TV room, not counting other platforms. Consumers are looking for more immersive experiences and are looking to the second screen to provide these.
Purboo opined that convenience trumps quality, But quality requires better technology and higher complexity. The same argument applies to wireless video technologies, which may be a no-go. Screen size is proportional to viewing time. The largest and most communion screen is consumers choice, and the user interface was noted at this year's IBC to be device agnostic.
Costs?
Anderson responded that the creep on monthly costs for entertainment is non-sustainable.
Purboo added that cable is counterintuitive, because broadcast is still free. In other areas of the world most people depend on broadcast.
The existing business models and distribution models hinder search and discovery?
Giest offer geographic markets are important and offer different models for businesses. The money machine in the US differs from other areas, because the aggregators continue to change license rights and models. Other areas are less structured. We are seeing some progress in interfaces from channel-bound to cable to a grid-based guide, but all are slow. The ecosystem supports other devices, so now people are searching on one platform, and watching on the television. Consumers are moving towards integrated cross-platform behavior on multiple interacting devices.
Purboo agreed that pay-TV operators still lay a big role in content delivery and are seeing revenues of about $250 billion a year. These operators will need help to change their concepts of intellectual property and also delivery methods.
Vikati disagreed by noting that change is happening fairly fast. For example, in '06 YouTube was questioned on viability. Now it's a platform for professional video. HBO has never been online but it's still a major presence in the industry. All the companies are looking at the second screen and other devices for interface, search and watch -- pay -- consume processes. The NFL rewind-on-line change the business models for football highlights. Operators and carriers need to understand what is worth the extra money, which could be bundled, and what choices the consumer really wants.
Louderback compromised and said change and progress are uneven. By '16, all people in the US will have eight connected devices, creating a need for new models.
Consumers look at service providers?
Anderson responded that the challenge is at the bottom of the food chain. Producers have to determine what rights to give to the broadcasters and how to monetize.
Louderback added to concerns for ads and sponsors.
Purboo suggested that the industry try new experiments. Hong Kong has a vibrant technology base and get new technologies up quickly to prevent pirates from taking it all. Local carrier needs to post and translate content in under four hours to serve 4000 device skews, to include ads, pre-rolls, and post rolls. They have no rights issues because they can scrub and repost anything within five hours. The apps are like walking down a street in Hong Kong, people were watching on many platforms.
Louderback observed that they have gigabit Ethernet to their houses.
Web-centric original content, is consumer demand growing?
Louderback answered that the new medium is not quite the same as training wheels for TV. His company provides connections with phones, existing community, host-art people without walls. New content is driving passion and engagement in niche areas, but premium is still scheduled. The challenge is to balance content versus house perspectives. Content providers need to create properties to drive income.
Anderson noted that scripted and unscripted content in the US needs more creative development. This new content is unique and has differentiated ideas. So what can the creators do with these ideas, then choose some distribution channel. There is no difference between the web and regional broadcast platforms. These changes drive business models. Good properties can drive viewership, allowing the business to take care of itself.
How to find a community, discovery?
Geist suggested that mix-and-match providers need someone to personalize the content and bring the pieces together to manage the data. Changing the basic model with reach helps the consumer, but you must start at a large scale to affect significant change. The pay-TV service model is still viable.
Purboo said that metadata through b-roll can help the situation. There's too much content available so consumers are starting to rely on curators, just as people hope that DJs will find them good music. The video jockey will emerge, but has to get increasingly personal. Sirius XM is considered it better than Pandora due to its human element to direct listening. The enemy of channels is this lack of duration which is driving down the quality of trust as the channels lose focus.
Vikati added that consumers are overwhelmed and confused. Content exists in many copies of locations so consumers who know what they want can use various data to search. The technology exists to integrate metadata into search to provide better results, but this technology needs help from all parties.
Geist offered producers have to take in all their data and turn it into something useful. Most consumers are not intentioned at the start, so the relevance of search results needs a baseline as a service.
Purboo stated that synchronizing the data and the metadata has to be built-in at production time.
The fundamental behavior shift?
The next generation people are changing everything. Louderback acknowledged that a fundamental behavior shift in information processing is happening in the millennial generation. However, media consumption habits don't change.
Vikati dissented that the choices and options are too open, so we're never going back.
Geist offered digital children drives spending, and changes in behavior are part of growing up.
Changes in content creation?
Anderson agreed that content creation is changing, and children are a proof of the real shift in portable content. TV is moving towards special events as main content and everything else is on the mobile device. Changes require creators first come up with ideas, and possibly gain elements, and natively social content tends to be successful. Programming formats are drifting to TV and games
Purboo noted that young people now watch the same episode more than one time to find missing elements. Old people did not have an ability to review television, but kids are used to repeating. Perhaps the older people paid more attention. The biggest change is related to the best screen. Patterns of consumption indicate if quality is similar then people will use the most convenient screen.
Vikati contributed these young people watch any video, any time on almost any topic.
Reasonable expectations?
Geist answered that consumers have some tolerance to pay for content, but the providers must balance rights and costs. These issues will resolve themselves over time.
Anderson contended that the content ecosystem controls lots of money for content. Content creators need this money to make good shows, and there are a lot of stakeholders with different views.
Vikati commented that people are paying for content but would prefer moving to an à la carte basis. So the questions become where to spend your money and who gets it.
Purboo noted that money exists in the Internet just changes the distribution percentages. The big companies are still determining splits. Consumers don't want to pay more, so the money pie is capped. Fragmentation causes rights issues.
