Matthew Bailey, Principal Analyst, Media and Entertainment at Omdia, shares his insights about the main discussions at IBC 2022, and what they tell us about the industry.
Linear TV still dominates viewing time and revenue, while FAST gains momentum
It can be easy to forget when working on the frontlines of the media industry — where we’re accustomed to the idea of subscriptions and video-on-demand — how big of a slice linear TV makes up in today’s market. Across all regions, linear TV remains the single largest component of viewing time and continues to take home the lion’s share of broadcaster advertising revenue.
Amid the continued relevance of linear, we are seeing the rapid rise of FAST (free ad-supported streaming TV). This is a relatively simple transition to make from linear TV for both broadcasters and consumers as the monetisation and user experience is largely consistent, with the major difference being whether the programming is broadcast over the air, or over the Internet.
This transition is more a question of local market infrastructure than a change in consumer preferences. In Europe, where there is already a robust infrastructure for free broadcast TV, the shift is very gradual as the current service suffices for most of those who use it. In the USA, however, the more rapid shift towards FAST is driven by cord-cutters and non-pay TV customers who often have easier access to the Internet than traditional cable, and are less well-served in free broadcast TV.
Big tech makes its presence felt
Google was a major sponsor of IBC 2022, and Amazon Web Services hosted one of the conference stages for a day. Not long ago, big tech showing up at a broadcasting event would have been unusual, but now digital media giants are keen to put themselves front and centre to get the attention of broadcasters and streaming platforms.
It’s no surprise the leading providers of digital advertising solutions are making themselves known at a time when traditional broadcasters and streaming platforms are making moves in this area (think the Netflix and Microsoft partnership).
Google wants to be as big a player in OTT advertising as it is on the web, though it is entering a well-established market with many gold-standard platforms, while Amazon’s role as both major advertiser and media company makes it well-positioned to understand the needs of both sides of the ad exchange.
However, big tech’s bold ambitions in the media space also makes broadcasters wary of their growing influence, as Google and Amazon gradually turn into serious competitors in the video landscape. This will likely sustain a strong demand for alternative OTT adtech products from independent vendors, a market that was bustling with activity at IBC 2022.
SVOD and AVOD platforms are going hybrid across the board, but the change will be harder for some
It seems a safe bet that the lines between SVOD and AVOD will soon blur completely, as hybrid monetisation models become the most valuable option for consumers and media owners alike. The hybrid model is becoming increasingly important to major streaming services, and in some cases is now more important than either fully subscription or ad-supported tiers.
Hybrid models are easily understood by consumers, as they are accustomed to the ads-for-content value exchange, as well as the ability to decide which content they experience ad-free and which is interspersed with marketing. The challenge for streaming platforms is not consumer acceptance, but the scale of the inventory they offer.
For example, Disney can add Disney+ as an extended buy of Hulu when their ad-supported tier launches, but Netflix will have to build an audience of willing ad-watchers from the ground up. Simply having an ad-supported tier is not enough – Netflix must also convince a big enough audience to use the ad-supported tier to make it valuable for buyers, while also producing new content optimised for ad breaks. Netflix has no choice but to go all-in.
Remote production goes from pandemic necessity, to efficiency opportunity
The pandemic accelerated the adoption of remote and virtual production practices, and now that studio productions are back in full swing, these new ways of working have remained in place as a means to boost efficiency, improve staff’s work-life balance, and allow for more on-location filming and production suites.
Technology to improve the capabilities of remote production was exhibited widely at IBC – including smart LED screens that can be used as a digital backdrop, ultra-low latency video streaming to power frictionless collaborative work in a virtual environment, and cloud-based technologies, which are playing a growing role in the broadcast industry.
A decentralised production environment is more than a cost-cutting and efficiency measure, it can also be used to control the carbon footprint during content creation. The less staff have to travel and the fewer sets have to be built, the lower the total emissions of a production, which is sure to be a pressing concern in coming years.
