The TV Futures Report
Business Model Innovation In A Multi-Platform World
It’s been ten years since Google acquired YouTube, Netflix launched a new streaming video service, and Apple launched its first iPhone. Fueled by the proliferation of high-quality connected devices and constant improvements to video delivery, the pace of change hasn’t slowed down one bit. As traditional broadcast and over-the-top (OTT) digital video workflows converge, successful businesses are adopting new tactics that support the demand for quality video on any screen while also prioritizing the creation of content that keeps viewers coming back.
Comcast Technology Solutions presents this new report, created by international research and strategy consulting firm MTM that explores video developments in the U.S. in the coming years, and presents a set of industry perspectives on what the future of video delivery and consumption may look like.
Evolution of TV networks in a multi-platform world
Surprisingly, the majority of OTT services – 80% -- are authenticated TV Everywhere apps (TVE) relying on pay-TV providers to manage the customer relationship. Broadcast networks have been quick to embrace and respond to the challenges and opportunities presented by the growth of digital video and multi-platform TV. They have invested significantly in new technology and products, and are well into the journey of creating a sustainable multi-platform business. Generally, new developments fall under three key categories:
- OTT products and services: adopting to consumer behaviors and market dynamics.
- Advanced video advertising solutions: enabling new formats and content performance measurements.
- Technology and operations: driving innovation and elasticity in a fast-changing market.
Original content, created at scale, is a key driver of customer acquisition, and businesses are spending more time and resources than ever before to create it. At the same time, the costs and complexity of maintaining a competitive multi-platform offering are going up as well. Technology cycles are shortening, and it’s becoming increasingly difficult for businesses to see long-term value in building out a proprietary hardware / workflow system that perpetually drains capital.
Market evolution – challenges and opportunities
In the coming years, industry participants expect that the market will be characterized by diverse consumer viewing habits (and devices), converged broadcast and digital workflows, and increased competition as more businesses recognize the value of a video brand. These factors will result in a more complex distribution and monetization landscape, across owned and third-party platforms and channels.
Industry executives across the U.S. TV and video markets anticipate that the next few years will be characterized by diversification, convergence, and competition. Audiences will be faced with a growing range of content offerings across a range of platforms, services and devices – and will look for strong, distinctive brands, reliable cross-platform services, and access to the right content at the right time and at the right price.
TV network business model innovation
Television industry business models will continue to evolve, of course. Market disruptions will continue to be caused by advances in device, delivery, and advertising technologies, and by the ways in which those advances impact the choices and viewing habits of consumers. What steps do global operators need to take to strengthen business models and capitalize upon the new opportunities that will materialize? The report identifies seven building blocks - the strategic foundations of the next generation of elastic business models. Three of those seven building blocks are:
Establish a content innovation capability that can experiment and learn. Content providers need to be able to innovate with new content forms and formats across a range of platforms, and rapidly test and learn how audiences react.
Establish flexible windowing and distribution strategies: Digital distribution has created new windows, content purchasers, and distribution strategies – providers need to innovate, test, and learn to understand how to maximize reach and revenue across every pay window.
Develop flexible content management and multi-platform delivery solutions: As the TV and digital video market become increasingly aligned, providers should look to establish a flexible, cost-effective approach to innovation that can also adapt to an increasingly rapid pace of change.
For more insights and detail, we invite you to download the report.