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Cable Technology Feature Article

February 13, 2013

Media, Pay-TV Look to Blend Linear, Second-Screen and Digital Content

By Tara Seals, TMCnet Contributor

As consumers are exposed to more content across more platforms than ever before, content and media companies are finding themselves rethinking their strategies in order to both embrace the digital opportunity while protecting their existing content carriage revenue streams with pay-TV operators. The rise in smartphones and tablets, more and more over-the-top (OTT) options and the proliferation of second-screen and social TV activities means the way content is discovered, shared and consumed is fundamentally changing. A challenge to be sure, but also a potentially huge opportunity for a savvy innovator.

Martin Guillaume, media and entertainment leader for IBM (News - Alert) Global Business Services in Europe, points out in a blog that the initial challenge for service providers is simply that Internet video and catch-up/on-demand services give audiences many more choices for accessing the latest in programming—thus reducing the value proposition for classic linear TV.

“As a result, delivering differentiated live content such as sports, concerts, reality shows or news across an expanding set of channels and devices is a challenge broadcasters need to tackle quickly and claim their rightful place in this rapidly changing landscape,” he said.

But the challenge also extends to multitasking. “How many times have you caught up on your Facebook or Twitter feed whilst watching TV?” Guillaume noted. “Consumers tweet, comment, play, blog and surf the Internet all the while watching television, therefore, broadcasters need to work even harder to engage viewers.”

As an example, the French operator Canal+ announced it is using IBM technology and services to launch and manage a new multichannel and services platform for delivering on-demand, web and mobile TV within a single interface, to enhance the customer experience. “This demonstrates how broadcasters are seeking to differentiate in a world where they no longer have audiences – they have consumers,” Guillaume said.

Media companies (and their cable, IPTV and satellite partners) can leverage consumer thirst for anywhere, anytime, enriched content by creating new engagement tactics. For instance, the Shazam app has gone from a simple music-recognition service to a monetization opportunity in the TV space. For Sunday’s Grammys broadcast, consumers could use the app to “listen” to the broadcast and, in return, get bonus content, the ability to participate in polls, check in on Twitter feeds and -- here’s the monetization part -- see the nominees, performers and winners and buy their music from iTunes.

Similarly, TV shows have already started pushing hashtags at the beginning of broadcasts. And zeebox—which Comcast (News - Alert) has invested in to bring it to the United States—offered a “virtual viewing party” for this year’s Super Bowl designed to appeal to “sports fans and those just in it for the commercials and halftime show,” the company said.  Fans were be able to chat in real-time with NeNe Leakes (The Real Housewives of Atlanta, The New Normal) and other fans, vote on favorite commercials and answer trivia questions for a chance to win NFL 2013 season tickets.

“[Stakeholders] must continue to innovate and look for new ways to engage this connected consumer and the growing phenomenon of ‘second screen’ is becoming an integral part of this strategy,” Guillaume said.

He added that the boundaries between television, Internet and gaming are blurring too—adding yet another wrinkle of opportunity. “Simply look at EA’s FIFA 2012 football game, which now offers a replay of any action from any angle,” he said. “Consumers expect to navigate and experience live sports in the same way with the ability to replay a sequence from the vantage point of any player via a second screen embedded in live programming.”

Nickelodeon too is looking to gaming, inking a recent deal with Activision (News - Alert) to create new games around its rebooted Teenage Mutant Ninja Turtle franchise. After suffering lagging ratings and eviscerating its programming last fall in an effort to find fresh engagement (and advertising dollars), it seems as though Viacom’s kids’ network is finally moving beyond the standard business models.

Distributors are looking at the same challenges and opportunities. Cable and satellite penetration peaked in the summer of 2010 at 90.5 percent of households, but has edged back to 90.1 percent, according to Nielsen. ABI Research (News - Alert) meanwhile recently found that U.S. household penetration for pay-TV is set to decline approximately 0.5 percent per year through 2017. To offset this, the firm recommends that TV operators build a business that leverages OTT components.

Consumers have an extraordinary number of ways to go over-the-top: smart TVs and connected Blu-ray players; OTT set-tops like Apple TV, Boxee and Roku; gaming systems like the Nintendo Wii U, Microsoft (News - Alert) Xbox 360 and Sony Playstation 3; plus anytime, anywhere Web-delivered services like YouTube, Netflix, Hulu and Amazon Instant. The comScore Video Metrix service showed that 182 million U.S. Internet users watched 38.7 billion online content videos in December 2012, while video ad views totaled 11.3 billion.

Savvy TV operators that can mix a lightweight tier of broadcast and cable content with broadband and, say, content discovery for OTT across these platforms would have a winning strategy on their hands, ABI postulated.

“While many OTT services focus on movies, the goal of lightweight pay-TV packages should be to introduce customers to the brand and tease customers with premium content offerings,” said Sam Rosen practice director for TV and video at the firm.

The bottom line? Even though TV consumption habits are changing, “this challenge is an extraordinary opportunity in disguise and broadcasters can use it to enrich experiences and engage viewers,” Guillaume said. Fortunately, there are now more ways than ever to achieve that goal.

Edited by Rachel Ramsey

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