Last week my MediaKind colleagues Meir Lehrer, Arnaud Caron and Erik Ramberg, looked back on Ericsson’s Media Vision 2020 series (which you can read here), comparing our predictions from way back in 2014 against the reality of the here and now. Today I’m presenting what we at MediaKind believe to be five key trends that will shape the media industry over the next 12 months – ranging from the dominance of live content and the growth of streaming, through to heightened demand for cloud services, 5G delivery and immersive second screen experiences…
Live for the moment: Live content continues to dominate
The last decade has seen an explosion of content. In 2010, analyst firm FX Research counted 216 new scripted dramas launched in the US. By 2018 that number had more than doubled to 495 – and still rising. The same pattern is happening across the world and will continue for a long time to come. We may even see even greater acceleration as the deep pocketed streaming companies start to restrict syndication deals to their respective platforms. Making new scripted dramas is a case of money plus talent. In effect, there is no limit to production capacity.
Live events however, are another story. Whether its NFL, the Cricket World Cup final, a royal wedding or Miley Cyrus on tour, there is only a finite amount of live content and often a smaller window to capitalize on value. And it’s not just securing the rights to huge sports events or epic music tours. As witnessed with the rise of lower cost remote production, if organisations can significantly reduce the cost of producing live events; even smaller bands or more niche sports can gain a valuable audience through global distribution via the internet. As my MediaKind colleague, Tony Jones, recently outlined, remote production will become increasingly more appealing over the next few years, thanks to advancements in technologies such as ABR streaming, which will dramatically reduce the complexity of delivering live content to consumers.
Islands in the stream
Today, 62% of US adults subscribe to one or more streaming services. Although broadcast-based services are still more widely consumed, the trajectory of the data suggests that within five years, streaming content on a one-to-one basis will become the majority consumption model, across all types of media. But streaming is more than just distribution mode change. The transition from being a broadcaster to a streaming service provider is a seismic shift for many organisations that have built a revenue model around the traditional advertising powered- broadcast model.
This is likely to change dramatically as streaming fosters a new wave of targeted, personalized advertising and micro-subscription models that allow consumers to move away from big, fixed term bundles including any number of channels and content sources they don’t watch – to a more desirable pick-and mix approach to content. Although traditional broadcasts aren’t going anywhere, anytime soon, the rise of streaming will force them to adopt a range of new technologies… which brings us to the cloud.
Media goes ‘Cloud first’
The cloud means different things to different people. From a technical perspective; it could infer limitless compute, storage and networking capabilities. For others, a change in business model – shifting from CAPEX to OPEX – is a far more important consideration. Meanwhile, certain businesses value above all else the ability to scale up and down rapidly – with global reach.
Whatever the focus, there is a significant rise in the use of the cloud across broadcast, media and entertainment sectors. Gartner states the global public cloud market was worth about $196.7 billion in 2018. By 2022, the firm expects it to hit $354.6 billion. For the TV industry, the migration to the cloud is entering a peak that is being driven by content demands and streaming.
The rise of cloud in this industry coincides with the end of an era, where investment was directed at highly bespoke production and distribution hardware that forced over provisioning due to the limitations of ports or bandwidth. It’s fair to say that we are now moving into the software-defined era.
As the economies of scale offered by the cloud increase, the owned data center will become less attractive and cloud-first will become increasingly the norm. The hybrid cloud will definitely take off in 2020. There are already a number of operators today looking to reduce costs in their TV service delivery and they see the cloud as a key solution in realizing that ambition. As my colleague Arnaud Caron explained towards the end of last year, the hybrid cloud model represents a good starting point for media organizations looking to embrace the cloud technology; it will help to trigger a number of new use cases throughout the industry.
5G delivery for media
If the relentless rise of the cloud has been a linear progression, the arrival of 5G is more of a step change for the industry – and one that has yet to be fully explored. Demand for mobile content is growing. Yet except for mobile gaming, evidence of a profitable business model based solely on mobile video is scarce.
For many, mobile video is a cherry on top of a cake that is tied to a fixed, at home, pay-TV service. The primary issue is that video over mobile networks is a bandwidth hungry beast and largely charged on a per GB basis, which makes its consumption an expensive option for most consumers. Although the benefits of 5G include more bandwidth, a knock-on effect is the likelihood of more all-you-can-eat data plans within 4G and premium 5G plans that include media services such as live sport or premium TV.
However, an often-overlooked aspect of 5G is in its suitability as a tool for production. From engineering crews transmitting back a story live as it happens, to remote cameras capturing a sporting event, the low latency, high bandwidth 5G network will provide a valuable resource for a host of production related activities.
Immersive second screen content goes center stage
In what is nearly a century of television, the progression of content has focused on quantity, quality and reach. Black and white moved to color – to wide screen, and onto 4K UHD (with a brief but unsuccessful foray into the world of 3D). Regional stations became national and thanks to the internet, we have now entered an age of truly global SVoD giants.
Yet the content journey has had a parallel evolution with the rise of video gaming. According to Newzoo, there are now more than 2.5 billion gamers across the world. Combined, they will spend $152.1 billion on games in 2019, representing an increase of +9.6% year on year. This market is also heading towards a streaming experience, but it is also spawning increased demand for TV content as witnessed by the rise of esports. Across the media landscape, new forms of immersive applications are appearing like 360-degree video and AR/VR hybrid content. Interactive content is also becoming more mainstream as witnessed by Netflix’s Black Mirror: Bandersnatch.
The future may well see the emergence of hybrid content that mixes esports, real sports, second screen interactivity and emerging trends such as Object Based Broadcasting that will be unlike anything we have seen previously.
These are some of the key trends that we see emerging in the evolution of the media industry – let us know how you see the future panning out in the comments below!