Monday, October 6, 2014, 12:56 PM ETPosted by:Frank Besteiro
VP & Head of Business Development/Partnerships, AOL Video
A new wave of viewers has emerged: they're connected, they know what they want to watch, when they want to watch it, and most importantly, how they want to watch it. They are chomping at the bit for premium content that is both accessible and affordable. At the same time, the advent of OTT and connected TV devices has made way for a whole new viewing experience where "television" simply refers to the largest screen in the house.
We all know the TV ecosystem of tomorrow will look vastly different than today's current landscape, but what changes can we expect? Here are four predictions for what trends will emerge over the next few months and years:
1. Content creation will get more competitive.
The American living room has grown to accommodate the countless devices now synonymous with "watching TV," making a section of eyeballs once out of reach more easily attainable. The battle to capture these viewers and effectively monetize content has upped the ante for content creators. As more demographic information is available, licensing becomes more targeted and complex.
Buyers are more knowledgeable about what types of programming (and what advertisements) will resonate with viewers, therefore content has to get better in order to compete. Breaking Bad was a game-changing cultural phenomenon that proved viewers are ready and waiting for similarly great shows. Accordingly, content creators will be driven to create increasingly better content.
2. Theatrical releases will get shorter.
As creation gets more competitive, so will the windowing strategies that make content available to viewers. For motion pictures, theatrical releases have always been the first step in the process. While theaters will continue to be the first stop for film, I predict that the amount of time each movie is available in-theater will become shorter. In exchange, we'll see shorter windows in order for these releases to reach consumers digitally across various platforms.
Take "Snowpiercer," likely a blockbuster were it widely released in theaters. Instead, it was made available this summer on VOD and has seen unparalleled success. I foresee independent films taking this route more and more often, especially as smartphones, tablets, and connected TV devices are optimized for full-length viewing.
3. Device fragmentation will continue, but content search and discovery will be standardized.
Content creators have taken advantage of consumers' changing viewing habits. HBO, Showtime, ESPN, and the NFL have taken strides to become more device-conscious. As existing devices refine their product development strategies and more effectively identify and market to their target audience, I predict that a standard interface for seamless search and discovery will emerge. Since this is a major pain point for consumers and distributors seeking to maximize the exposure of their content, it's only a matter of time before a consistent solution takes shape.
4. Traditional will start taking cues from digital, and we’ll see more hybrid deals.
Whether subscription-based or ad-supported, online video is growing. Nielsen reports online video viewing has doubled in the past two years. An eMarketer study finds SVOD services garnered $1.9 billion this year - an increase of 26.2%. In a world where online platforms are both creating and distributing, how can the old guard of cable providers maintain relevance? I envision hybrid business arrangements spanning the traditional and digital space.
This is already starting: HBO and Amazon inked a content licensing agreement bringing back-seasons of shows like True Blood and complete series like Six Feet Under. And we all remember when Netflix announced that it was integrating with cable companies to effectively have its own channel. The idea of bridging the digital-traditional divide isn't new, but it will become the norm.
Service providers cannot rest on the laurels of their past successes. The old guard must innovate and strive for the flexibility that has proven crucial to the ascent of online video - and, ultimately, the redefinition of "TV". There was a time when streaming services thought they should emulate the big cable companies. But now the tables have turned and companies like Comcast and Time Warner need to look to these digital players to map out their future strategy.
Frank Besteiro is VP & Head of Business Development/Partnerships, AOL Video