New Viewing Habits are Flipping the Script across the U.S. Media Landscape
By Mike DeMarco, Senior Vice President, Product & Management Solutions
For decades, consumer trends and business models have been shaped by the older generation, those who grew up watching television in their family living rooms, witnessed the evolution from black and white television to color; from analog to digital; rabbit ears to satellite antennas; large TV tubes to flat screen….Today, however, it is not even their children, but their grandchildren that are driving changes taking shape across the media landscape.
Sure, we still gather around the flat screen to catch the Super Bowl, World Cup or movie on demand. However, at the same time, your spouse may also be on his or her tablet binge watching Orange is the New Black while your child is streaming John Oliver from a smartphone. In fact, many of today’s viewers do not even bother to purchase a television, but instead rely on streaming content directly from laptops. These emerging viewership habits are dramatically changing how content is consumed and distributed to this segment of the market.
For any company operating in the media landscape, this is causing a major fast forward of our approach to content distribution. Media companies are throwing out their old ‘script’ and developing new business models and adopting new technologies that will allow them to deliver content everywhere while still achieving a strong financial return.
Today, viewership habits are being measured and carefully analyzed, advertising trends are closely monitored, business models are being tested and in a volatile top line environment, increasing focus is being placed on how to keep distribution costs in line and content secure as it will now be disseminated over multiple screens.
As a result, consumers of this new multiscreen environment are raising the following fundamental questions for media companies around the world:
• Does the current bundled linear model still work in a multiscreen environment?
• Would a subscription based service model be the better option? While a la carte services may meet viewers’ content demands, would it turn out to be cost prohibitive in the end?
• How will advertisers allocate their advertising dollars between linear and VOD streams and PayTV versus OTT distribution platforms going forward?
• What will the proportion of viewers streaming linear channels versus watching traditional linear channels via television?
• Will network technology be there to support OTT audiences matching those of traditional TV?
• Lastly, how do you distribute content over multiple screens and contain distribution costs when the economics of your new business model remain unproven?
As the market moves to a multiscreen environment and a threat of fragmentation, all media companies will have to grapple with the first five questions stated above.
For the last question, however, an answer is available today: satellite distribution. Satellite operators are uniquely positioned with solutions to that challenge. For example, once a media company starts to distribute content across multiple screens, the comparative distribution costs of unicast versus multicast may surprise many, as satellite becomes a very compelling alternative.
A segment of capacity on four satellites can distribute a program globally to the network last mile edge, covering virtually every possible existing (and potential) viewer at a nearly fixed cost—regardless of the number of viewers. With satellite, the delivery of content to the last mile for media companies will be secure, accessible and of a high quality.
Given that the ability to monetize content over alternative distribution platforms is still quite uncertain, even as audiences continue to grow, one would argue that most content providers would rather have a fixed cost base providing global coverage (and thus minimal incremental cost per user or format), than a highly variable cost structure where surges in cost might not be matched with predictable revenue streams.
Once media companies address the questions posed above, they will need to make sure that the right technology to support a multicasting environment. This will be particularly important as more viewers are expected to go online. For our thoughts on this, visit here.