As digital content consumption grows, for the first time broadcasters have a direct customer relationship with the viewer with “real-time” insight into the user experience, writes Yeming Wang.
If you were to ask anyone born in this century what is a TV schedule, their response may be to look at you pityingly. A full page of TV listings in every daily national newspaper once constituted the core of the nation’s evening leisure planning. While this may still be true for older generations, for millennials it is increasingly irrelevant. Even the move to EPGs (electronic programme guide) was a temporary fix, as next generation digital transformation has already made this largely redundant for a younger generation for whom on-demand viewership has become their default watching method.
Why does this matter? It matters because the one-to-many model of content delivery is being challenged from all sides.
By 2026, according to a forecast by Enders Analysis, less than half of video consumed in the UK will be from traditional TV platforms. While the old broadcast models are not dead yet (it currently accounts for around 80% of viewing in the UK), new opportunities must be grasped, and new business models executed in parallel to keep existing businesses operating if broadcasters are to compete and thrive against the internet giants. In fact, the BBC is seeking to remove regulation to allow it to compete.
Currently, Netflix and Amazon account for around 7% of UK viewing but they are growing fast. The BBC and ITV have grasped that a major part of their future business will be online video with the announcement of Britbox, a streaming service partnership to rival Netflix.
- Read more: Britbox: Too little, too late?
They also recognise that, as the battle for eyeballs has shifted online, it is those content creators and distributors who know most about their customers who will win.
As BBC director general Tony Hall put it: “It might be five years away, it might be 10, but soon our digital services will be the only ones some of our audiences use… Not long ago, traditional broadcasters and media organisations could each do our thing and expect audiences to make time to come to us. Now we must fit around their lives. Deliver value directly to them. Or we all risk irrelevance.”
Traditional broadcasters are by no means doomed. Even as customer loyalty erodes, they retain many advantages and this shift to streaming is creating fantastic opportunities for broadcast and media businesses to become truly data driven. They know that understanding the digital behaviour of the customer is key to being able to match the experience provided by the streaming firms. This has already shifted the thinking within incumbents from seeing advertisers as their customer base who they serve with eyeballs i.e. viewers to seeing the ‘viewership’ itself as a customer base to be served with more than content. This mass consumer landscape must be targeted and engaged using digital data. Getting customers to stay or come back is paramount to success irrespective of the business model.
Along with service, content, experience and value a new battleground is in data. Content creation and broadcasting is increasingly a data business.
Being data driven
There is no shortage of data already pouring into big media companies and TV networks. Set top boxes have captured data for years. Cable TV firms and satellite TV platforms can gather data directly from consumers. The challenge has been fragmentation. But the rise of streaming digital video on demand has taken data to a whole new level where the provider has a direct relationship with the viewer and can see their behaviour in real-time.
“The shift to streaming is creating fantastic opportunities for broadcast and media businesses to become truly data driven”
Whether operating direct to consumer or business to business to consumer models, there are new types of engagement which are wholly data driven. The customer data revolution happening in broadcast goes far beyond capturing cold data about ratings. It has even moved beyond building smart algorithms to do sentiment analysis based on consumption patterns, and to power recommendation engines. Data means new opportunities in personalisation and premium services. Data is feeding emerging business models in digital advertising in contextual and targeted advertising which enable content providers to find new value from viewers.
Broadcasters are building data first cultures and increasingly decisions are becoming data driven – this is impacting all areas of the business from commissioning to distribution. Analytics is the new discipline in content creation and broadcast. Gathering and analysing customer data will even open up new offerings through wider collaborations with platform and network partners. It is changing how broadcasters operate in the new competitive landscape.
Just as content streams to the device, so further data makes the return journey. If it is to become a powerful tool for broadcast, the exponential data growth curve that is driving much of the rest of the digital world needs to be harnessed as well as harvested.
Today companies are using public cloud platforms to collect this vast pool of audience data. As the data moves through the different layers, entering a data lake, moving to the orchestration layer and into a data warehouse, only public cloud platforms have the scale to viably meet the demand for raw storage, compute and networking required. Public cloud also provides the means of meeting challenges in compliance and cybersecurity.
The cloud is meeting the infrastructure challenges of capturing, moving, storing and analysing data at scale. Once solutions are in place, it becomes a battle of ideas and of acting on the data. In broadcast, data won’t kill creativity but knowing the customer will create differentiation by providing new and better experiences. The continued evolution of streaming data combined with real-time computer technology will allow business owners to react to customer behaviour in real-time. Broadcasters know that in order to compete they must understand and predict customer needs. Understanding the digital behaviour of the customer is the new playing field for broadcast and media companies.
In reality, most broadcasters will be sitting on pools of consumer data which they have amassed over time and which are most likely to be dotted around the organisation. But whether aggregating existing datasets for analytics or deploying a platform for harvesting new data, the time to start mining the data is now. Most media organisations are just beginning the journey to a data driven direct to consumer relationship. Those that don’t will be quickly left behind.
Yeming Wang is Alibaba Cloud senior director and head of global key accounts.