Field of Streams
With subscriptions for streaming services on the up and consumers exerting greater control over the TV they want to watch, traditional broadcasters are poised to join the Field of Streams. Their philosophy is Costner-esque: build it, and they will come. The question is, can they build it?
You know that something big is happening when the management consultants dream up a new word. Meet the ‘MilleXZials’ – the newly defined demographic that’s driving a sea change in how we watch TV. If you’ve never heard of them, you might be surprised: you’re most likely one of the gang, says Chris Wood, CTO at Spicy Mango.
Because according to a 2018 Deloitte report, the fanatical adopters of digital media are not just Gen Z and Millennials, they’re also the 35-51 year olds camped out in Generation X. We’re all in it together. And our collective demand for the TV we want, wherever and whenever we want it, is redefining consumer expectations and forcing traditional broadcasters to rethink their business models.
That change is already happening. In the UK, the growth of video streaming services like Netflix and Amazon is forcing the hand of established broadcasters. In the next 12 months Sky plans a roll out of IPTV that will move its services ‘beyond the dish’. The BBC, ITV and Channel 4 have been slowly going OTT for quite some time and have recently announced plans to collaborate further.
At the same time, on the global stage, media companies like Disney and Discovery are looking to cut out the middle-man and go direct-to-consumer with their own digital streaming services. A 2018 report by the Diffusion Group predicts that all major TV networks will offer DTC streaming services by 2022.
These are huge strategic decisions that will require both legacy TV companies and media firms to reinvent their business models. But they’ll need to change their delivery models too – and that’s not a simple fix. For the broadcasters it means replacing an ageing video-based infrastructure. For the media companies it means establishing an infrastructure that doesn’t currently exist.
Building a sustainable platform for OTT services is complex, requiring infrastructure, architecture and knowhow that’s unfamiliar to most traditional operators. Making the quantum leap from video to a software-oriented domain demands expertise across all the multiple components of a diverse end-to-end process; from streaming languages, video formats, IP networks and encryption to content delivery platforms, transcoding, digital permissions and device-specific UI. These are specialisms in their own right – and they require specialist skills that, at present, many providers just don’t have in house.
That’s why the most progressive organisations are partnering with media technology experts to create the right roadmap for the journey. The best partners will understand the complexities of building service provider grade video platforms. And they’ll have worldwide experience of working with studios, content providers, broadcasters and licensees to establish sustainable integrated architecture for delivering video OTT.
The drivers for change are compelling; consumers’ appetite for watching video on demand over digital and mobile devices is both insatiable and unrelenting. It’s no surprise that traditional players are jettisoning long-standing business models and gearing up to join the Field of Streams. Their Costner-esque philosophy is sensible: build it, and they will come. But building it is a whole new ball game. So if you want to attract the MilleXZials, find the right partners and build it properly. You might just hit it out the park.
The author of this blog is Chris Wood, CTO at Spicy Mango