It’s that time of year …
Now that 2016 has arrived, those with insight into current and emerging pay-TV trends are once again taking out their crystal balls to make predictions about the state of the industry for the new year. With OTT multiscreen video consumption on the rise, Internet-connected TV becoming more mainstream, and pay-TV cord cutting gaining traction, it looks like next year is going to be a wild ride! Let’s take a look at some of the exciting developments in store for the TV industry.
Next year, we anticipate that the full potential of Internet-connected TV will be revealed. A recent study from Leichtman Research Group (LRG) found that 56 percent of all U.S. households have at least one television set connected to the Internet via an Internet-enabled STB, video game system, smart TV set, Blu-ray player, and/or stand-alone device (e.g., Roku, Apple TV, Chromecast, or Amazon Fire TV), up from 44 percent in 2013 and 24 percent in 2010. As Internet-connected TV watching on the main screen becomes more engrained in society, TV providers will need to put greater emphasis on answering consumers’ demands, providing them with the full potential of connecting a variety of online resources and functionality to the TV experience. The way that TV providers will do this is by bringing data enrichment that is relevant to TV content, personalization, user-generated contextual content, and more, to the main TV screen.
In addition, we can expect cord-cutting to continue growing, in particular, among young TV viewers. Forrester Research predicts that by 2025, 50 percent of all TV viewers under the age of 32 will not pay for TV as we understand it today. Cable and satellite operators will need to find a way to respond to this epidemic, for example, by offering targeted OTT services that allow them to attract this audience and keep their subscribers from cutting the cord.
In 2016 OTT video consumption will continue to rise, and most importantly, on the main TV screen. According to recent research from Parks Associates, 57 percent of consumers in U.S. broadband households subscribe to an OTT video service, such as Netflix or Hulu Plus. Next year, we can expect to see more OTT offerings being launched by pay-TV operators as they look to compete with these online-only service providers. By launching their own OTT service, operators can differentiate themselves in the marketplace, offer unique services that are only available by connecting online resources with main screen content, attract cord-cutters, and increase revenue.
A spotlight will be shined on the TV experience in 2016, as TV operators scramble to differentiate themselves from the increased and diverse competition and maintain subscriber levels on the main screen. By infusing the TV experience with the full power of the digital world and by that, introducing personalization, contextual engagement, and social capabilities to the TV screen, operators can provide a similar experience to what consumers are already used to getting on second and third screens.
Consumer demand for user-generated content (UGC) is growing. In fact, Crowdtap found that millennials trust information received through UGC 50 percent more than information from other media sources, including TV, newspapers, and magazines. In 2016, we’ll see TV operators begin integrating UGC with premium content on the main TV screen, with a key differentiator being their ability to bring it in a contextual way that is relevant for the TV watching experience.
Finally, we believe that cost pressures will make it critical that pay-TV operators look for significant new revenue streams. In 2016, we can expect operators to start exploring content connected eCommerce, targeted contextual advertising with immediate and relevant “call to action,” as well as next-generation business models.
A lot of changes are in store for the TV industry in 2016. We at Comigo offer the solutions to help pay-TV providers navigate through this market evolution, by infusing TV with the full power of the digital world and allowing pay-TV providers to offer fully contextual data enrichment, personalization, advanced social, and viewer engagement capabilities on every screen, including TV sets, smartphones, and tablets.