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21 May 2020

NAB panels grapple changing business models, disloyal Zoomers

NAB’s virtual conference session continues, with two related panels trying to make sense of the shifting consumer marketplace. Hosted by Vicki Lins, President and CEO of CTAM, a marketing organization focused on the media and entertainment technology industry, the first session was looking to explore best practices for keeping brands relevant and appealing for migrating content consumers.

Steve Nason, Director of Research at Parks Associates, outlined the increased amount of free content available from the pay TV ecosystem, longer free trial periods, the halting of original content production and live sports, the shorter theatrical pipeline windows, as well as historically low advertising spend and the 6 to 12 month delay on blockbuster movie releases. He also outlined how over half of US broadband homes have two or more OTT subscriptions, and that nearly a quarter have four or more.

Adam Hotchkiss, Co-Founder and VP Product at Plume, the mesh WiFi purveyors, outlined Plume’s visibility into consumer homes, before and after the Covid-19 pandemic took hold. Faultline has covered Plume’s reporting on this before, which found that the number of people working from home has doubled, from 22.6 million to 44.7 million, leading to the question of whether home and ISP networks are up to the task – in the upstream requirements.

Hotchkiss explained that security was becoming much more of an issue now, for corporate networks that now have to interact with devices outside their direct control. On the consumer side, Plume saw a 50% increase in entertainment consumption, not only during the day but also at night, and Hotchkiss doesn’t think this is going to go away – stressing that the cloud side of things needs to be able to support this shift going forward.

Steve Kazanjian, President and CEO of Promax, a nonprofit member association for the entertainment marketing industry, pointed to the latest Nielsen claim that 154.6 billion hours were spent streaming video in mid-April – up around double on the count from a year ago, and representing around $20 billion in revenue, itself up around 25% to 35% from last year.

However, Kazanjian was most interested in how consumer habits are going to change, when they can head back to the office and to movie theaters. His view is that as restrictions are eased, there will be a correlation between consumer retail spending and in-home OTT consumption.

When people start to go back to retail environments, he argues, one of two things is going to happen. Either, service providers are going to double down on their marketing spends, in order to stave off attrition from their online services, because they need to capture eyeballs, or, because they are so leveraged at this point, they will massively cut back on marketing. Kazanjian sees there only being two extremes – doubling down or penny-pinching.

Nason added that from there will be a huge amount of churn in the SVoD space, as consumer habits readjust and return towards a new normal. Hotchkiss said that Plume sees OTT use increasing, and that this should drive investment in the home WiFi environment – both from consumers and from ISPs. He argues that OTT experiences are only as good as the networks they run on, and these investments will be prolonged. Hotchkiss thinks this pandemic is going to have a lasting impact on working routines, and that this leads to a migration of working traffic to the home.

The conversation shifted to brands, where Kazanjian pointed out that Gen Z drives about $600 billion in family spending, and that they are always online – connecting and shaping culture like no other demographic. Some 25% of them post original video content on a weekly basis, built on other intellectual property – chiefly images, video, and music, which belong to copyright holders, through memes, mashups, and recuts.

Kazanjian’s view is that Gen Z becomes the next generation of earned media marketers, who drive that $600 billion in family spending, and are then a new lever that the marketing industry can pull. On the networks side, Kazanjian says that the chief question is whether a service provider wants to be a branded house or a house of brands – known for the marque or known for the content.

Knowing this is key to connecting with the new Gen Z marketers, and Kazanjiak added that it is a little insidious now, as this is very much a captive market that could be shaped as desired. Nason added that consumers are becoming less loyal to the services themselves, and more loyal to the shows or characters. To this end, brand affinity is going to be tested among the service providers, accordingly. Lins closed by noting that we should never let a good crisis go to waste.

The other session that caught our eye looked to examine the streaming challenges that just won’t go away, and was led by Peggy Dau, the Founder of MAD Perspectives, and the co-founder of the Women in Streaming Media initiative, which looks to improve visibility and diversity in the OTT sector. The session is part of NAB’s Women Leading Change program.

Dau outlined how streaming consumers expect the same or better quality video than they get through broadcast TV, and how latency seems to be the biggest influence on quality. The question was how to address latency and quality in streaming, and first up was Megan Wagoner, VP Sales at Vimond Media, a vendor that provides management tools for video distribution and postproduction, aimed at broadcasters.

Wagoner argued that Covid-19 has led to a lot of need to work with compressed video formats and protocols, pointing to NDI and RIST as good candidates, compliant with SMPTE and IETF certifications and requirements. Suzana Brady, VP Sales at Cobalt Digital, a provider of software tools for production and broadcast TV, as well as the co-chairman for the RIST Forum, said that the historic approaches to low-latency communications have tended to be proprietary and not interoperable.

Here, Brady says, the Video Service Forum (VSF) created the Risk Activity Group in 2017, to look for the best technologies out there to find a way to create a common interoperable specification for streaming. This resulted in RIST – something that Faultline has covered in quite some depth.

The next question from Dau was how broadcasters are using streaming in unusual ways, and was aimed at Mary Crebassa, VP Major Accounts at LTN Global Communications, a firm that specializes in media workflow technologies and optimization. The first part of the answer was lost due to video quality problems, before Crebassa cut back in, before cutting out again. It seems that UHD, in-car TV, and ATSC 3.0 were the gist of it though.

Targeted advertising would be sent OTT and integrated into the broadcast TV feeds – with streaming being used in the contribution phase, as well as distribution too. Brady pointed out that RIST’s new Main Profile has support for the high bitrate streaming, needed to move lightly compressed or uncompressed video around the production phases. Building on these Covid-19 related responses, Wagoner pointed out that a software-only approach has become very valuable to Vimond’s customers, due to the elasticity offered.

Brady then described the difference between consumer and contribution scenarios, where VoD delivery has a lot of tolerance for buffering, as they are prioritizing smooth overall delivery. In contribution applications, you don’t have the luxury of time, to accommodate pre-emptive buffering, especially if you are trying to broadcast live sports. You can’t afford delays here. Wagoner added that Vimond’s edge-to-cloud software suite has proven quite popular, due to pandemic lockdowns.

Brady pointed to a survey that said 81% of pay TV live sports subscribers would cut the cord if they could get sports OTT, and that a low latency sports service could steal these subscribers. Wagoner added that AVoD services are now considering subscription options, due to the slow down in advertising spend, with shifts in business models likely to emerge.