dimanche 18 octobre 2015

Two ways to watch the TV World

Here are two remotes, for the same household, in Cambridge (near Boston, Massachusetts). Same TV set, same TV world.

One belongs to the Samsung TV. The other one belongs to the local cable operator, Comcast.

On the Samsung remote there is a button for Pandora, a radio / music operator (more than 4 million paying subscribers).
There is also a big button, right in the middle, for Netflix.
Netflix has 43.2 million subscribers in the USA, twice as many as Comcast (Multiple System Operator, MSO).

Samsung showcases the two brands Netflix and Pandora; it obviously has a commercial agreement with the two brands (bundling), which sell subscriptions and, in Pandora's case, advertising time. Both services can be used on the TV set, if connected (streaming).“One in 3 US adults now owns a connected TV and one-third of them stream video to their TV daily", says IAB.

At the top, the Comcast / Xfinity remote shows 9 buttons for "my DVR" and one big button for "ON DEMAND" TV. This makes sense since Comcast earns money from renting DVRs (Digital Video Recorders) and from On demand TV (VOD, catchup).

Samsung could very well target, among others, the cord-cutters, TV viewers who, instead of subscribing to cable services, can combine over-the-air antenna (free broadcast TV: networks and local stations) and OTT on their connected TV, along with Netflix (movies, exclusive series). This solution is cheaper than cable: a Netflix subscription costs $10 / month.

Millennials indeed seem to be less likely to subscribe to cable; younger generations (18-39) get their programming from OTT services (Netflix, Hulu, Amazon, YouTube), until they start a family. Cable operators hope young Millennials will subscribe once they have kids... unless they never subscribe at all (cord-nevers). In order to satisfy families with young children, Netflix now proposes a large choice of programming for kids, as does Amazon.
On another hand, an increasing number of broadcast-only homes, reaching 12.7 million households according to Nielsen (The Total Audience Report, September 2015), could very well be a sign of another change in behavior.

Update 23/102015
Comcast has a new remote with voice commands (voice searching, etc.): "Say it and see it".

5 commentaires:

caadxa a dit…

La television n'est pas morte mais doit se re-inventer : cette solution (bouton Netflix) est judicieuse, mais pas suffisante.
Avec le téléchargement et les plateformes en ligne telles que Netflix, il est moins couteux de tout regarder sur son ordinateur que d'avoir un abonnement au cable. Ainsi, les opérateurs devraient également revoir leurs business models afin de proposer un prix bien plus attractif, ciblant la generation Y

tgderuty a dit…

My real issue with the standard cable package model is the notion that through the exorbitant subscription costs I am in fact subsidising certain channels that I will never watch. These companies consistently tout their high amount of channels as their unique selling proposition. I have yet to see a company offer channel bundles tailored to specific or niche interests without having to buy access to the general channels. I don't know if they ever will be able to do so with their business model the way it is. Until then, the price is too much to pay and I'm content enough with "outdated" content available on subscription streaming services like Netflix. I am aware that I won't necessarily watch everything on these services, but so far they are costing me less than 10 euros a month instead of 50+. I also happen to really enjoy thee content that various MCNs are putting out for free on YouTube, they cater to really specific niche interests better than channels who for profitability reasons are forced to cater to a much broader audience. I'd even be willing to pay a subscription fee for individual content creators if it removed ads.

Adrien Lemire a dit…

Today, young generations don't conceive TV as a one way broadcast : they want to choose. They are used to choose what they want to watch. This is how they conceive TV (or video watching). But can we still talk about TV as it's primorial definition ? As it's not a one way broadcast anymore, TV changes its business model by bundling. It has no choice. But bundling is not new. What changes today is that bundles are not traditional ones. Now, TV bundles with Internet operators to propose new and On Demand content that generation Y wants. More than the price, I think this is the multiple choices and the freedom of watching that attract the consumer. Hence the Netflix button. Decreasing prices will not raise the cable suscribers as long as the way of broadcasting content stays the same.
Moreover, the devices used to consume media has changed : one device is not only use for one application : we use our smartphones for TV, Internet, Social Media, Music, … We used the computer for those exact same things. We need to be able to use our TV for everything as well. TV content, or way of consuming content, needs to change such as the device itself. Hence the Pandora button on the remote.

The goal for TV industry is to think that programs can be watched on multiple devices and TV as a device can be used for multiple actions. A program is not attached to a device now. So TV must be reinvented both as a device AND as a content provider. This, I think, is where the issue stands today.

Meissonnier Olympe 226 a dit…

The comparison of these two remotes makes a relevant point about the interdependent technical and behavioral transitions we are experiencing in terms of TV - and on a larger scope, media - consumption in the 2010s.

Time and space, brought together by the notion of "availability", have been progressively endowed with a completely different meaning. While yesterday's spectators used to make themselves available to watch their favorite TV show, today, it would rather be TV professionals that are urged to provide a 100% availability to reach their audiences.
Indeed, if the ratio of power between users and operators has not been completely reverted, it proves a lot more balanced than it used to be with linear, traditional offers.
Spectators are no longer able to give their loyalty to a single program, but tend to sample bits of various short contents, or on the other hand, indulge in "binge watching" for several hours.

Cable operators, broadcasters, TV manufacturers and producers are coming up with new strategies, such as the bundling mentioned in the article. For now, the success of one of the actors will not necessarily be at the expense of the others, but they all have to reinvent their models and alliances to remain competitive and keep up with the pace of innovation. But the "cord-nevers" cannot be expected to change their habits so easily.

This revolution will also mark an editorial turning point. Added value may be found in niche markets, with the development of highly personalized digital platforms : in France (a market that has converted to catch-up TV and VoD more recently than the US), websites such as MUBI (for quality cinema) or La Cinetek (for classical movies), are reaching qualified and very specifically targeted audiences. Therefore, it is very likely that new OTT applications will be developed to go even further in preference and recommendation mechanisms than Netflix's algorithms. New communities of spectators, or an atomized audience ?

Camille Berthault a dit…

The step toward linear broadcast channels to on-demand services like Netflix isn't the end of the story.

Even if most broadcasters seem pretty confident that their industry is really safe and that mobile livestreaming or short mobile video use would never substitute the 'proper TV', we can see several trends arise.

For example, a few weeks ago, the BBC launched a new plateform ('Visual Perceptive Media'), which aims to create video stories that respond to our personality and preferences. In real time, the whole video (the narrative, background music, colour grading and general feel of a drama) is shaped to suit our desires. Although this project is at its early stage, it reveals how the future of online videos may turn out.

As for Facebook, it launched its own live video service out to all users. Facebook previously allowed verified users to use the feature with their fans, but now anyone can stream to their friends directly within the app.

We can easily imagine that the Snapchat & Netflix generation won’t be happy with just broadcast television. Contents and consumption are endlessly evolving, and I might be a little bit dramatic here, but TV as we know it is doomed.