Boom or bust: the four main challenges of digital video and how providers must overcome them
There are four main challenges facing players in the disruptive environment of digital video. Scott Dinsdale shows how they offer the opportunity to rise above the competition.
Recent market entrants in Australia’s digital video business have shifted industry dynamics and transformed the competitive landscape virtually overnight. In May 2016 Australia’s first subscription video-streaming service, Quickflix, went into administration citing competition from Netflix and Stan.
Shortly after in October, Foxtel shut down Presto, their venture with Seven West.
To become or remain relevant and capture Australian audiences in this continually disruptive environment, incumbents and entrants will have to up their game. Organisations in the industry, including broadcasters, pay TV providers and super platforms (eg. Amazon, Google, Facebook) and telecom service providers, must overcome four major challenges in order to play, let alone thrive.
1. Avoiding viewer dissatisfaction
The recent arrival of Amazon, the rapid growth of Netflix, the continuation of the YouTube franchise and the growth of Australian-based services like Stan, demonstrate a meaningful appetite in Australia for video streaming services.
With the rapid increase in adoption, viewer expectations will rise, creating highest-common-denominator expectations exposing practices that drive dissatisfaction. This could include the poor performance of basic features such as video start-up time; complex or inept search mechanisms; irrelevant or repetitive ads; and a less than completely intuitive UX.
To attract and retain audiences content providers must:
- Create relevantly personalised and immersive experiences,
- leverage click level viewing data to drive targeted content and advertising, and
- optimise satisfying uptake through thoughtfully targeted promotions and offers including ‘pick-and-mix’ packaging.
2. Content discovery
With the explosion of channels and sources video content is becoming more ubiquitous. But at the same time viewers are becoming overwhelmed by the volume of content available. As a result, consumers are challenged to find programs they actually want to watch. To address this challenge, video providers should consider:
- Enabling unified search mechanisms with category filters to allow customers to easily find content across multiple platforms including those not their own,
- employing machine learning and advanced predictive analytics techniques to provide search results tailored to a viewer’s profile and considerate of their social graph, and
- taking the lead from leading global players, iTunes and Netflix, that categorise content into bundles to allow fast and easy browsing experiences with quick access to discovered content.
3. Insufficient insights
Viewers have developed liquid expectations, presuming personalised experiences from digital providers in any product category. Digital video providers collect reams of data from their video platforms but often struggle to generate and leverage meaningful insights.
Whether a business model is based on subscription, advertising and/or transactional revenue, consumer insights are the key to maximising profitable revenue. To realise the potential of customer insights, video providers should:
- Measure cross-channel business performance by having a 360-degree view of the consumer, and facilitate consistent interactions by using the right reporting and business metrics,
- draw from different data sources including real-time usage data from set-top boxes, devices, online and customer relationship management systems to third party consumer data sets,
- foster data-driven cultures, recruiting and retaining analytics talent and developing a data-oriented mindset across the organisation, and
- optimise programming and content acquisition teams through data-driven, audience relevant insights.
4. Demand sourcing
Social media networks drive demand for content through peer-to- peer sharing and social media chatter, a force arguably more influential that traditional marketing techniques or post-air ratings posturing. Content providers need to both promote and react to these signals and consider:
- Continually optimising entry and exit points from social networks, exercising content teasers and chatter among friends and family,
- allowing customers to filter and find content based on the buzz across their social graph, and
- investing in flexible infrastructure and the algorithms to address dynamic demand scaling in real-time.
The digital video industry has never before seen so many opportunities, challenges and challengers. It is unclear how traditional local players will successfully compete against increasingly global competition, however rising to the challenges suggested above, in combination with long developed insights into local culture and taste, is likely a good place to start.
Scott Dinsdale is media and entertainment lead for Accenture in Australia and New Zealand.
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