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June 20, 2016

Recommendation and Discovery to 2020

Survey and trends: Recommendation and Discovery is the only report on the market that offers revenue forecasts.
ROI is made up of the top 250 pay TV operators, the top 75 or so broadcasters, and a dozen pure play OTT operators. We have tried to define in ROI the technology suppliers that are used in every step of the supplier chain. We have about 65% of the data for these operators which, with intelligent guesses, we can get closer to 80% – but still some supplier relationships are under wraps and no-one will talk about them, deemed not just confidential, but mission critical.
Discovery is one of those areas, like advertising insertion and analytics, where operators are not keen to let on which are their main suppliers. Set top boxes, encoders and transcoders and content security are a little more transparent.

A review of the top 200 global video operators shows that increasingly they are turning to Recommendation and Discovery software technologies to drive VoD uptake, channel uptake, improve their UI and reduce churn.

We have limited this report to TV, and for the most part pay TV – and all the monetization efforts in paid OTT services, around paid VoD, SVoD or improved churn through UI improvement or the more efficient use of advertising.
We must say now that we anticipate a number of new players entering this market on the back of recent VC intervention around the idea of adding Artificial Intelligence to the mix. And we note that there are a number of new players in the Discovery market, based on a machine learning approach, similar, but not identical to the one that Discovery specialists work with today. Vidora is one such company coming out of the AI labs at Berkeley and Caltech and recently partnering with MobiTV to provide it with a video Discovery engine.
This will stimulate increased attention on Discovery operations globally, and may well lead to a minor consolidation in what has now finally become a noteworthy market by revenue.
Revenue will rise in a number of ways over the coming 5 years, with an increasingly number of OTT video services, and some broadcast services licensing more and more subscribers for Discovery tools. Broadcasters Catch up services and pure play OTT providers will also turn to the specialist community of Discovery software players and increasingly advertising decisioning will be carried out us-ing Recommendation and Discovery software. Multiple lay-ers of analytics to make more functions possible, will be one of the biggest market drivers going forwards adding $135 million to the pure Discovery component. There will also be a new wave of Recommendation and Discovery suppliers, leading on AI and machine learning.

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