In five years, the video service offering will be significantly more personalized than offerings available in the market today. Personalization in the user experience, advertising, and discovery are important first steps. However, in the future, the services and content offered to consumers will be smart, adapting to the interests and desires of consumers in a way that maximizes both use and monetization. Several trends that impact the TV industry today will drive this shift.
- OTT video services will increase competition for video service revenues, forcing pay-TV providers and other market players to adapt offerings in order to capture or maintain market share and revenues. Not only will consumer-paid revenues be part of this shift, but companies will increasingly compete for advertising revenues as the volume of Internet video viewing continues to increase.
- Because of increased competition, OTT video services will increasingly target niche audiences in order to remain viable and capture a defensible market segment. This move will draw advertisers that are eager to reach these niches. It will also allow consumers to self-aggregate content, building their own bundle of content that appeals to their unique interests.
- Personalization technology will allow consumers to more easily discover content options from new video service market entrants, further opening the video service marketplace. Likely, new services will arise that will bundle payments for consumers, allowing them to make a single payment that is then distributed to various video services. New aggregated interfaces will provide discovery of content options across various video services.
- Pay-TV providers, faced with this new threat, will create new types of offerings that will allow greater personalization. Initially, new offerings will include smaller packages or an ability for consumers to choose among a limited set of options within a channel package. Some operators will partner with OTT services, bundling third party services with their own offerings and seeking to own the user interface and experience. In five years, many operators will still be experimenting to find the right blend of bundling and personalization.
So, the future for the TV industry will be far more customized and adaptive to consumers in discovery, experience, and content. Which video services would I choose? Well, that’s personal.
- Brett Sappington, Director of Research, Parks Associates
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