As usual, at the beginning of each year, let’s take a look at the trends to be followed in the year to come in the media and entertainment industry (TV, Cinema) and online video (streaming services). 2019 promises to be rich in new products and innovations, in terms of content, business models, distribution and technology.
Battle of the Giants
In 2019, we will continue to witness the war between old and new producers over exclusive programs. This battle is partly responsible for the concentration strategies operated by these giants through major acquisitions: AT&T buying Time Warner (85 billion dollars) or Disney buying 21st Century Fox (71 billion dollars). One of the barely hidden objectives of these transactions: to expand its catalogue offer and acquire massive production weapons to hunt for subscribers. And in 2019, it is likely that Apple will also make an acquisition (Paramount? Sony?) to develop its exclusive content offer.
These new services will compete with Netflix: the long-awaited Disney+, but also Warner and Apple (NBC having decided to wait until 2020). Let’s see how these giants will try to emerge unscathed: innovation on content, race for the most prestigious casting (directors, showrunners, actors), price battle, launch of new business models (free with advertising? Hybrids advertising and subscriptions etc…).
MAINSTREAM VS. NICHE CONTENT
While films and series will certainly be featured on these new services, on another hand, sports content is expected to continue to attract many viewers in 2019. ESPN launched (successfully) ESPN+ in 2018. DAZN, the netflix of Sport, has bought back the rights to 3 seasons of Italian Serie A soccer games. Why does sport have a bright future ahead of it? Quite simply because the commitment of sports fans is particularly strong: 91% of sports fans subscribe to paid services to watch live sports. And also, and most importantly, the sports fan is willing to pay an average of $23 per month to access sports content. With a strong demand and a rather high average shopping basket, OTT sport is expected to do well in 2019.
Of course, we remain convinced, as we do every year, that niche video streaming services have real arguments against the generalist, as they can find and retain ultra-targeted and ultra-passionate audience willing to pay for content. More than a belief, it’s a necessity to have independant and alternative content. At OKAST, we announced several new SVOD platform launches at the end of 2018. And follow us, because in 2019, we’ll see a lot of new great platforms.
INTERACTIVITY, A NEW MARKETING WEAPON?
So nothing very new regarding category of contents? Sport, series and films will obviously be the most popular. But we can expect some innovations in the creative aspects of the contents produced. Interactivity could be the next big thing. Netflix paved the way in 2018 with the Bandersnatch episode of Black Mirror in which the viewer can choose between different scenario options. This kind of format, without being revolutionary, has several advantages:
- it is more difficult to pirate because it requires a specific technology within the video player
- it is more engaging than other content, since it requires the active participation of the viewer
- Finally, it makes it possible to extract very relevant marketing information, whether it is data on behaviour with regard to brands or behaviour with regard to dramatic structures. It would not be surprising if others streaming services took over this structure, including for brand content.
Distribution & Business Models
If content is King, distribution is Queen
The battle between the future “flix” giants of online video will not only focus on content, it will also definitely focus on distribution. Those who will benefit from the most extensive distribution will be those who are more likely to win the battle for streaming services.
Apple, for example, could take advantage of its 1,3 billion network of active devices (iphones, ipads, Apple TV etc.) to offer exclusive content on a very large scale via its future streaming service planned for 2019.
AT&T could also benefit from its huge network of mobile or Internet customers to promote its future WarnerMedia service. In any case, the question of the distribution of video or SVOD services arises. Multi-distribution is a real challenge for a streaming service. While OTT has enabled new brands and content to emerge, it remains that to consolidate your business, the distribution of your service over multiple offers is necessary to establish a brand in the long term.
At OKAST, for example, we offer new distribution systems, whether via applications stores (Ios, Android), aggregators (Amazon, Roku to come) or in B-to-B. Finding a distribution partnership with those who own the cables (Cabloperators), the customers base (Mobile Virtual Network Operators, MVNOs), the devices (manufacturers) is certainly one of the most powerful levers to develop its video streaming service.
Towards new business models?
Another issue that is burning everyone’s lips is the business models for streaming services. Netflix has democratized the SVOD model but is it the only possible model for premium content? The AVOD model, even if it has been proven for many years on services such as Hulu and Roku, has recently seen many initiatives developed: XumiTV, TubiTV, Pluto TV… In an increasingly globalized market, with large audiences, and tools to target consumers very precisely this model certainly has a future. Especially since some technologies, such as blockchain (see below) will add transparency, making the model even more virtuous.
Finally, other, slightly more complex models, such as “bundle” or “exclusive content”, could be adopted by some streaming services. Like Amazon Prime Video, the idea is to integrate the video service as an additional value-added service. Or as a bait to sell more products or subscriptions. Apple, as it has been doing for several years, could offer its future video service only to owners of apple brand devices. AT&T could offer a subscription to its next OTT WarnerMedia service to its Internet and Mobile subscribers. And why not imagining that Disney, after the acquisition of Fox, could offer content bundles with press titles and other video streaming services?
OTT video services no longer become an end but a means to offer more expensive services or products, or to get consumers data as Amazon does.
In the media and entertainment industry, the blockchain will definitely be the star of 2019. Some people are even talking about a real revolution, with applications of this technology that could disrupt the sector on many levels:
- Distribution: thanks to “smart contracts”, the tracking of rights and royalties related to video content would be recorded in an inviolable blockchain, and could in some cases be associated with automatic royalties payment. The decentralized system proposed by the blockchain helps content providers to better monetize and track their rights. The blockchain also makes it possible to set up reward systems for viewers via tokens promising more commitment and loyalty around video content. New services, like TaTaTu will emerge, paving the way for new virtuous models for content creators.
- Hacking and/or advertising fraud: the blockchain via its distributed, decentralized and transparent system will make it easier to track video content and its associated royalties revenue. The content will be better monetized, the beneficiaries better remunerated, which should mechanically benefit the Creation in a broad sense.
- Information, since the blockchain will allow greater transparency in the production of information and traceability through digital proof.
The list of possibilities for the TV & Cinema industry enabled by the blockchain is immense. And contrary to popular belief, it is not just an embryonic idea but an existing technology with already concrete and used applications.
To find out more on this topic, you can read our articles: “Why independent content producers need to know the blockchain” and “How The Blockchain Can Help Video Producers And Content Providers To Be More Visible (And More Profitable)“.
And for those who are interested, don’t hesitate to follow our iKast.io initiative and connect with us.
And you, what do you think will be the more significant trends in 2019 for TV, cinema and streaming video services?
To be continued,
see you next year 😉
The OKAST Team