One reason for this change is the unprecedented growth in the adoption of new technology. Think back: BBC launched the iPlayer just five years ago. Before this, all television content was viewed through a traditional TV set. Today, there is a multitude of existing and new media companies launching services that deliver TV and movie content both live and on demand onto any connected device with options to subscribe, rent or own.
In fact, there are now more connected devices in use than traditional TVs. Research studies indicate that consumers are using these devices as a second screen not only to watch TV content but also to select the content they want to watch. It is being used as a remote control for the main TV and also to interact with a programme, friends or other communities whilst watching the main screen.
So this all sounds like good news for the consumer, but what is happening in the industry? Competition is well and truly intensifying around ownership of the consumer relationship and ultimately the consumer’s wallet. About ten years ago the launch of TV platforms such as Sky and Virgin Media caused major disruption to the delivery of TV content. These platforms packaged and aggregated content from existing broadcasters but in some cases they competed against them by buying valuable content rights to create their own branded channel portfolios, establishing themselves as a disruptive interface between broadcasters and consumers.
Today, more platforms are emerging, but these platforms are global technology giants and they’re intent on disrupting the industry beyond recognition. Organisations such as Apple, Google, Amazon and Samsung are just some of the players. These technology giants are fighting to own consumer relationships by providing not only connected devices such as tablets and smartphones but, more importantly, the software layer and apps infrastructure on the device and of course, the content itself.
Connected TVs are also a major growth area and an important part of this new TV ecosystem. TV manufacturers have integrated the ability to connect the main TV screen to the internet without the need for any external device. Why is this important? Because it allows consumers to seamlessly switch between live and on-demand viewing without having to switch devices. But there’s a major benefit for the manufacturers too. By creating a software layer on the TV, manufacturers have consolidated their position in the TV value chain, moving away from providing commodity products to becoming a consumer’s primary TV and entertainment platform and interface.
The world of TV has suddenly been turned on its head. The constraints of technology have been lifted and consumers’ expectations are fast outpacing what the media industry is currently delivering. Consumers want personalised TV schedules and recommendations based upon their preferences; they’re willing to receive targeted adverts and even offers and promotions pushed via a second screen. But delivering this requires radical shifts in the way the media industry works, at a time when competition for consumers is at an all-time high. The race has begun but it’s anyone’s guess who will come out on top.
Stella Medlicott was interviewed in Content disruptors, a UK Trade & Investment (UKTI) report written by the Economist Intelligence Unit. The report examines the key trends reshaping content markets and explains how companies are adapting to succeed in a fast-changing world. To shed light on these topics, the EIU conducted a global survey of 485 executives in the media and entertainment industry. To read the full report, clickhere
