The Four “I”s of On-Demand

The question might seem somewhat moot today given the existing prevalence of broadcaster VOD services, but it came up several times during the Westminster Media Forum event on television convergence that I spoke at last week. So it seems as if the potential benefits of an on-demand service are worth reviewing as they are still evolving.

The Four Is

Here are four specific areas that I think are important to consider; the four Is of on-demand (okay, I had to prefix one of the Is but that’s just a small point!):

• Increased Reach

• Insight

• Interactivity

• Innovation

Looking briefly at each one in turn:

Increased reach

Delivering content-on-demand increases audience reach – both in absolute terms and into certain demographics who are either less inclined to view according to the linear schedule or prefer to watch on connected devices. And the numbers for both are big and getting bigger.

Adobe published their US Digital Video Benchmark this month, with some interesting findings. Adobe customers’ generated 15.6 billion streams in Q4 2012, this was up 30% on the previous year, and up 13% from the previous quarter. Mobile video starts tripled in the past year, and now represent 10% of total on demand viewing.

Within mobile, tablets over took smartphones – correlated in the UK by BBC iPlayer statistics this month that showed tablet viewing overtook smartphones for the first time. This is remarkable given that the iPad is only three years old this month.

Netflix has overtaken HBO in US subscriber numbers. The poster child of pure play content-on-demand providers posted impressive results last week and saw their stock price increase by 25% as a result.

But there are some disconnects– mobile takes less than 1% of the global advertising spend so monetisation is a challenge to be addressed in this segment.

And let’s not forget that in terms of total viewing, on-demand is still minutes per day versus hours for linear. But as on-demand is sometimes considered a more active form of viewer engagement (although so is switching to a linear channel in the EPG) then some question whether all viewing hours are in fact equal.

Insight

We are moving into an era of data driven television. Long established methods of measurement are no longer as relevant when our connected devices can report on actual usage at scale and our underlying viewing patterns evolve.

The front cover of this month’s Wired magazine proclaims that data is powering the platinum age of television, broadcasters are hiring data scientists and media organisations of all sizes are struggling to process and derive insight from massive volumes of analytics.

Large scale, data driven, viewer preference is also being brought more directly into the commissioning process as we have seen with the Amazon Originals launches this month. The 14 pilot episodes became the most watched content over the launch weekend on the Amazon Instant Video platform and viewer ratings will determine which series get commissioned.

We can expect to hear a lot more about Big Data for TV over the next 12 months.

Interactivity

Connected devices allow for much more sophisticated audience interactions than has been previously possible with traditional television. Whether it’s on a connected device that’s displaying video or on a connected second screen, we have really only scratched the surface of what might be possible.

Of course, interactive TV is not a new concept and it has had a false dawn during its previous incarnation when digital television services first launched. The question is whether that was because of technology limitations or viewer inertia – we should find out soon.

Innovation

Finally, delivering content on demand allows for much greater experimentation than has previously been possible as a result of both the method of delivery and the devices that are being used to consume the content.

This in turn can drive innovative new business models such as paid pre-broadcast access, secondary rights exploitation, targeted advertising and a host of new ideas that we have not invented yet.

It’s an exciting time to be in television.

Steve Plunkett, Chief Technology Officer