By Jay Samit, CEO of SeaChange
The chairman of the FCC, the U.S. regulatory agency, Tom Wheeler’s recent announcement on Net Neutrality underscored the inevitability of the debate: openness spurs competition, which spawns innovation which benefits consumers.
Just as the breakup of telco AT&T opened a new era of consumer choice in the telecommunications industry, an unfettered net, minus the more onerous aspects of government mandated rate-setting, gives us an opportunity to finally concentrate on addressing the real challenge: how to provide consumers video services that match today’s lifestyles. Customers of SeaChange, a multiscreen software provider, such as Verizon and Comcast, are working with us to that end because one thing we all know for sure is that it’s not going to be your grandfather’s television, anymore.
A recent Sony-funded survey of adults aged 18-49 found that while watching what’s currently airing on live linear TV was their first consideration, streaming video across all devices came in a close second. According to the data, 61 percent across the board streamed video weekly (up from 44 percent last year) while 72 percent of millennials streamed weekly (up from 52 percent).
Multiscreen viewing is now so mainstream that the second screen has become the primary screen and advertising-supported video-on-demand (VoD) services are gaining preference over subscription services. Studies show that 57 percent of consumers increasingly prefer free, ad-supported programming on connected TV versus subscription pay-services (up from 51 percent last year). Moreover, 60 percent of video viewing in U.S. broadband households is now from SVoD, DVR, VoD and other non-linear sources, a figure that rises to 70 percent in the 18-34 year-old millennial bracket.
Broadcast and cable networks with direct-to-consumer online TV offerings saw their unique monthly viewership jump 146 percent across all online TV channels this year while the amount of online TV content watched per viewer grew by 55 percent. And OTT offerings from HBO, CBS and BBC expected to launch this year are poised to give consumers a wider range of content choices and pricing models than ever before.
In short, there is a $170 billion TV market in the U.S. that’s up for grabs in 2015. So, it’s a whole new game out there and net neutrality is placing the field directly in the hands of the players.
Within the context of this environment, corporate giants accustomed to dominating their oligopolies will find themselves in the uncomfortable position of having to compete with a diverse spectrum of new entrants from adjacent markets as well as nimble young startups.
Big data, the “Internet of Things,” wearable tech, mobile computing and social media will coalesce to transform the world of television as we know it into a dynamic market where large incumbents are being forced to rethink and reengineer their business models and upgrade their back offices.
Changing consumer behavior will align with advances in technology to storm the technological barricades and cause mass disruption of the social order. Empowered to watch what they want, anywhere, anytime and on any device, consumers will seize control of the media matrix while the battle for eyeballs and dollars among the advertisers courting them escalates in intensity.
Most importantly, innovation will flourish unobstructed as cable and satellite companies go head to head with fixed-line carriers and wireless companies, broadcasters and content producers go over-the-top (OTT) with multi-screen programming delivered directly to consumers, and tech giants such as Amazon, Apple, and Google re-define how video is consumed, distributed and monetized.
For their part, consumers are already leveraging their newfound freedom to record at home or in the cloud, watch locally or on the go, even binge watch an entire series they didn’t have time to enjoy the first time around. Channel guides that once told them what they could watch and when they could watch it are quickly giving way to tools for social discovery and sharing. So it comes as no surprise to anyone that Twitter is fast becoming a tool for programing television news, entertainment and sports while social media and personalization in general are providing both brand advertisers and end-users with hyper-targeted choices and opportunities for double digit growth.
Ultimately, the more contextual and enjoyable programming options become, the more video gets consumed. But it not just about video programming. State-of-the-art set top cable boxes are home gateways capable of providing a whole host of new home services. Everything from wireless nanny cams and thermostats to programmable door locks will change how we interact with our home and each other. Thanks to VoD, pay-TV has a micro-billing relationship with U.S. homes that can be expanded to offer ecommerce and eservices for the always-connected consumer.
The fight over Net Neutrality has been decided and consumer choice has come out as the winner. Let the innovation begin.
Jay Samit is CEO of SeaChange International, a leading multiscreen software provider for cable and telecommunications companies globally.