If you were to cook up a video service for subscribers today what ingredients would you need?, asks Niko Waesche, Global Industry Head, Media and Entertainment at GfK.
The recipe for success would surely include a significant measure of exclusive content, mixed with a generous combination of subscriber and other data sets, served with full control over brand, content and delivery. And of course, appetising presentation would also be crucial, regardless of screen size.
We've inherited a rather different offering, and the industry previously horizontally split into studios creating content, and operators and networks curating and distributing it is now gravitating towards a vertically integrated end-to-end model, inspired by Netflix and Amazon Prime. At the IBC Conference in Amsterdam on Saturday 10 September 2016, a panel of industry leaders and experts will discuss how they see the future of video emerging.
Is the Future of Video Vertically Integrated?', part of the Business Transformation conference stream, will take place at 13:30. A group of industry leaders and influencers, moderated by Niko, will discuss the future of subscriber video on demand and the direction the industry will take in the future. To launch the discussion, Niko will present insights from GfK s Viewscape study which aggregates unique data about SVOD use in fourteen countries.
Getting the Right Recipe
The overwhelming reason that users sign up to Netflix is for its original content. In the GfK SVOD content consumption tracker, we have seen the importance of exclusive content grow, mirroring Netflix's increasing investment in producing its own programming. Netflix-owned titles make up half of the top ten titles viewed on the service, and include drama like House of Cards and Orange is the New Black, as well as factual series such as Making a Murderer.
Amazon too is investing more in content creation, though it's not yet the principal reason to subscribe. This is already changing, however, and we expect massive publicity and advertising around the launch of its original content series, such as the multi-million pound UK investment in The Grand Tour.
Flexibility and ease of access enabled by end-to-end control of content, platform and subscribers - are also key elements that underpin the attractiveness and value of SVOD services. Our tracking shows that, far from being watched on the move and on mobile devices, the majority of content is viewed at home and on a TV screen.
This is where the vertical integration of some services pays dividends, as they also control the method of delivery. More than half (54%) of viewing events for Now TV are watched on a TV screen using another device, and two thirds of these are through the Now TV box. The Amazon Fire device also drives most of the connected viewing for Amazon. The fact that Amazon can control the distribution of its app across connected devices, including its own branded product, adds more value for users.
Finally, ease of use is crucial, too. Viewscape, a new global viewing study, shows that Netflix rates higher on satisfaction metrics than almost every other digital video provider in the UK, with the exception of BBC's iPlayer.
For decades the industry has prospered with horizontally segmented industry models. If this indeed is the only blueprint, then it has huge implications for licensed content owners, broadcasters, networks, cable operators even (smart) television manufacturers.
Many players that have previously been part of the existing industry models are contemplating launching end-to-end vertical SVOD services. Going direct is a global trend. It is true for broadcasters (Globo's AVOD launch in Brazil November 2015), media owners (Turner's FilmStruck, TYVO by Do u Media Group for Turkish drama) and cable operators (Sky's Now TV). With everyone trying to go direct, will all these different services actually reach their respective targeted audiences or will there have to be consolidation?
The industry - to some extent - has answers here. Smart TV manufacturers like Samsung are vying to become OTT hubs that help manage different light' subscriptions. Even more interesting is Amazon's move to offer its new Streaming Partner's Program, which bundles video subscription services la carte.
The result could be a few powerful hubs with a menu of light' subscriptions available. The key question for the future landscape is which players will be able to offer a hub, and which will have to become subsidiary services to the hub?
This unmissable session will deliver insights from a panel of senior industry leaders and influencers including Christian Brent from Fox, Francesco Venturini of Accenture, Martin Guillaume from Ericsson and Efe Cakarel of MUBI.
Find out what they will have to say about the future of SVOD in the IBC conference session Is the Future of Video Vertically Integrated?' on Saturday 10 September at 13.30 - 14.45.
Registration for the conference is now open with early bird rates still available at IBC.org/register
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If you were to cook up a video service for subscribers today what ingredients would you need?, asks Niko Waesche, Global Industry Head, Media and Entertainment at GfK.
