“On TV And Video” is a column exploring opportunities and challenges in advanced TV and video.
Today’s column is written by Brienna Pinnow, co-founder at Blinc Digital Group.
The popular topics at the Consumer Electronics Show were TV audience recognition, going beyond an IP address to understand who is behind the screen and, no surprise, Nielsen’s continued struggle in this era of connected consumers.
The other hot topic: flixes.
Have you heard the term? A spin-off of Netflix, the No. 1 choice for TV viewing, flixes encompass on-demand content and curated recommendations. Sounds pretty sexy, huh? Personally, I wish I would have coined it. The phrase is great – but jury is still out on the product offering itself.
Media companies seem quite excited about flixes. By delivering their own streaming service, they now have access to audience data, content consumption insights, complete pricing control and authority over user experience design.
At first glance, offering this type of service seems like a no-brainer: Media companies win and they give an ever-growing number of cord cutters the content they love when, where and how they want it. But could this strategy be a bit short-sighted?
With the proliferation of flixes, consumers can access more content on demand, but at what cost? In 2019, there are a host of new services available for consumers to choose from, including Disney+, Apple, Facebook Watch and DC Universe. Are you a die-hard fan of “The Office?” Don’t worry. NBC plans to pull it from Netflix so it too can start its own streaming service.
Add this to the mix of other leading flixes, such as Netflix, Hulu, Amazon Prime, YouTube Premium, HBONow, Starz, Showtime, CBS All Access, SlingTV, DirecTV Now, fuboTV, PlayStation Vue, Philo and Xumo. And now, we’ve created a world where consumers must manage even more accounts and passwords, pay for multiple services and remember which service provider offers which content. Sure, there may be some upfront cost savings for consumers, but perhaps the real expense is the valuable brain real estate gobbled up by managing yet another bill or service.
Although they look bright and shiny with the promise of addressable advertising capabilities, flixes may become a bit of a headache for advertisers, too. Another streaming service means another potential media vendor for advertisers and agencies to negotiate with and manage. Fragmentation of audiences and inventory could slow down the buying workflow, audience activation process and the overall progress that is making the OTT advertising world sizzle.
I have a bullish prediction: History will repeat itself in the OTT world.
Services will consolidate
I predict that we’ll never again see positive growth for traditional cable services. But right now we’re going through a period of streaming service expansion, which means at some point there will be a period of contraction. Perhaps the media companies pulling content from Netflix, for example, will realize there is strength in numbers and that when their content is part of a larger service offering or bundle, the scale of those partnerships outweighs the negatives.
Consumers will pay more and manage less
I won’t be giving OTT up any time soon because there are so many benefits, particularly the premium content that I can access wherever I want and across devices. But it sure would be nice to have one less thing to manage in my life. I know I’m not alone when I say I am willing to pay a premium for convenience and ease. I believe innovative services will emerge with the sole goal of solving that problem.
Hmm, a bunch of channels and content with a single agreement or interface. Sound familiar?
Advertising inventory will be aggregated
While working at Yahoo 10 years ago, I remember big, important deals like Yahoo Front Page Takeovers. These were multimillion-dollar engagements with brands that were focused on making premium, direct, guaranteed buys. Of course, direct buys like this still take place today across the digital world, but they are now the exception and not the rule. Over the past 10 years, the infusion of identity, aggregated inventory and real-time bidding has made the digital media buying process more efficient, automated and data-driven. OTT will take the same trajectory, perhaps a bit more slowly due to tightened inventory, but the benefits are there nonetheless.
I look forward to reflecting on this article in 2029 to look at just how far and fast the OTT world has progressed and seeing if what was once old is indeed viewed as new again.
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