The convergence of technology, devices, new content forms, and data continue to make the media industry one of the most fascinating consumer categories in the 21st century. The pace of change continues to accelerate as consumers move from the time-shifting paradigms brought on by the introduction of the DVR, to the long tail content discovery of the original Netflix offering, to the more recent behavior of binge watching one’s favorite show over the course of a single weekend. But even with this fast-paced change, you can still catch, and utilize, the key industry trends in 2015 which include (1) the battle for the living room, (2) the water cooler of the future, (3) media metrics and (4) a new Golden Age.
The Battle for the Living Room
For years, the battle for dominance in the living room drove competition amongst technology giants like Sony, Microsoft, Apple, Amazon and others to develop new smarter set-top like experiences that gave users more control over their viewing experience and greater flexibility in content offerings (video, games, and music) controlled centrally from the living room. Motivated by an overly optimistic perspective that the days of the cable bundle were numbered and the dawn of the à la carte entertainment service model was near, technology companies invested heavily in “Trojan Horse” like operating systems to take over the living room. The reality proved much more challenging. Comcast, Time Warner, DirecTV and other TV service providers demonstrated that they were up for the battle and have managed to slow the flow of cutters, at least for now, with nifty technical innovations of their own, as well as the clever management of digital rights across platforms, to make their service irreplaceable for marquis broadcast events.
Similarly, the proliferation of mobile screens with strong A/V capabilities is chipping away at the old media adage that “the best screen” wins and thus rendering the battle for the living room as nearly irrelevant. The new battle will follow the trend of TV’s “appification” as device makers and content providers will follow viewers across these devices and battle for ownership and loyalty from the audience. As more viewership moves to Apps, we will continue to see an emergence of new media brands (the Kardashians, Five Thirty Eight, TED) and a reshaping of existing established brands as providers realize they are competing not only on the quality of their content but the quality of their experience across multiple platforms.
The Water Cooler of the Future
Much has already been written about the roiling impact that Big Data is having across the business landscape. Media is no exception as content providers, platform owners, and device manufactures have more sophisticated insights into how, when, and where users are engaging in content experiences. Over the last view years, the industry has seen several attempts to enhance this experience with interactive features on screen and via companion viewing devices like Xbox Smart Glass. While we have not yet witnessed the ultimate breakthrough experience, it’s likely coming soon. Broadcast hits like “The Voice” have proven that they can create a market for a previously unknown artists on iTunes. Sports giant ESPN has led in leveraging social media to extend the discussion on the latest sports story online. The industry should expect the social integration of media experiences to increase rapidly. Today, one’s social graph quickly extends the discussion about the latest show like a virtual water cooler, helping followers discover new content, while building viral excitement around the next big thing. Expect content creators to continue to leverage social sentiment and real-time data and analytics to more quickly inform decisions about what content to create and for whom. The emergence of the Audience Manager is a trend that is here to stay.
In the midst of all of this, the manner in which we track audiences across devices and platforms is changing as advertisers want better gauges of their true reach. Billions of media dollars are still exchanged on the basis of outdated panel-based methodologies. Expect to see continued innovation in performance-based media measurement that follows users across platforms and ad dollars flow to providers that are able to demonstrate effective messaging performance against their marketing objectives.
A New Golden Age
Like the fabled Golden Age associated with the birth of television, we are in a new Golden Age of media. Consumers have more ways to access, discover, and enjoy content whenever, wherever, and however they choose on sleek, new & shiny devices. The quality of the content continues to improve as providers battle to “out-innovate” each other in search of the next big franchise. The proliferation of apps and platforms enhance the experience in ways previously unimagined. All of this comes at a cost that has to be funded by someone. Cord cutters hope that they will only have to pay for content that they enjoy. Glib in their technical savvy, many of these cord cutters don’t realize that they would not be able to enjoy “Breaking Bad” via their streaming subscription if not for the millions who still buy a cable bundle and fund AMC’s development cycle. Advertisers dream of more precise and efficient placements that solve the age-old Wannamaker problem – identifying the 50% of advertising that’s valuable – yet they still participate in media upfront buys and bid millions for 30 seconds spots during Super Bowl broadcasts.
The business models that control this global category are deeply entrenched and managed by very strong and sharp companies. The trends outlined above will continue to put pressure on the existing status quo but we are still a few years away from true business model innovation in this category. Technology giants, TV service providers, device manufactures, and content providers are all battling for supremacy here. Innovation will come, the stakes are too high and the players too big. The clear winner will be the consumer in the short run, as they will have more unique content experiences to immerse themselves into. What will be fascinating to watch is whether the net cost of all this innovation comes at a cheaper price for the consumer. Regardless, as this battle continues to unfold, it promises to be one of the most exciting areas of business innovation for years to come.