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Online Video Trends to Watch in 2014

Date post:15-Jan-2015
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Learn about the online video trends that will shape 2014 and beyond. You will learn how social TV will fundamentally change how online video is consumed and shared, what's likely to happen with ongoing digital rights battles, and what's needed to improve QoE so that online video can reach its full potential.
  • 1. Online VideoTrends to Watchin 2014Now part of Citrix

2. This document features our 2014 predictions.To see our 2015 predictions, click here.Now part of Citrix 3. !1. Social TV will take offGiven the torrid growth of social media services and the influence they have on how users consumebroadcast TV programming it was only a matter of time until they began to intersect.While the ground was laid in 2013, with Twitter hashtags being overlaid into every conceivable program,the pace should really accelerate in 2014. Witness some recent announcements and launches. In October, Comcast formally announced its new See It feature that it hopes will turn social mediaconversations into instant content consumption and become aswidespread as Facebook likes. Comcast inked its first partnershipwith Twitter and will initially enable its NBCUniversal followers toclick a See It link embedded in a shows tweet to immediatelywatch live TV, access video on demand programming or watch itonline on any mobile device. In essence, See It holds the promiseto transform connected devices into online remote controls. Nielsen, best known for its TV ratings, recently launched Twitter TVRatings which measure how posts on Twitter impact televisionviewing. Clearly, Nielsen anticipates that social platforms likeTwitter will grow in their impact on viewership and engagement, asevidenced by the deluge of social media conversations thataccompanied the Breaking Bad finale. Companies are also leveraging Facebook for Social TV. Optimal, asocial advertising company, recently announced a new service thatallows brands to buy ads that display on Facebook almostsimultaneous to its commercials running on TV. That way, if a vieweris splitting his or her attention between the TV and a second screencompanion device, chances are greater that they will be engaged with one of the brands messagesand perhaps both. Hardware sales and app development should continue to also fuel social TV integration, especiallysince viewers increasingly consume content from social media and television in unison. Sales oftablet devices are projected to grow another 43% in 2014 (source: Gartner) and global smartphoneshipments are forecast to surpass 1.2 billion units (source: Digitimes Research).The hope from MVPDs is that they can reframe social networking from a threat to an opportunity. Byinserting themselves into the social dialogue and establishing new ways for viewers to discover shows,Pay-TV providers and broadcast networks can actually drive more consumption. In a world of continuouspartial attention, instant gratification and meme-driven media, thats a big deal. 4. !Implications:The rise of Social TV and second screen viewing portends fundamental shifts in how video content isconsumed, shared, promoted, measured and monetized.Some obvious challenges that will only increase over the next year include: How to accurately measure engagement with TV programming. When a person is constantly shiftingattention between a television program and second screen content which may or may not haveanything to do with the TV show how is that multi-tasking accounted for in the measurement info? How to value TV commercials. A Magna Global study recently revealed that the number of Tweetsjumps 21% during commercial breaks. Thats sobering news for advertisers, whose commercials arealready being skipped with increasing frequency by viewers using digital video recorders (DVRs).But the challenges also give way to opportunities: Social TV activity throws off a lot of data, some of which can be mined to create more effectivecommercials and more informed programming decisions. Getting what is, in effect, real-time focusgroup information holds significant promise. Advertisers can use social applications to extend the reach and effectiveness of their commercials.For instance, some advertisers encourage viewers to use their Shazam app while the commercial isplaying, which spawns special promotional offers. This, of course, assumes that the viewer isengaged with the commercial and isnt fiddling with their companion device. Some are looking to alter user behavior, incentivizing viewers to tune into live broadcasts and theSocial TV activity that accompanies them by rewarding viewers for watching and participating.The next great test for Social TV will arrive in February at the 2014 Winter Olympics in Sochi, Russia. Allthe elements should be in place for peak interactivity: a global audience, a post-holiday crowd with newconnected devices, a built-in fanaticism for sports, and the usual controversies and Hallmark momentsthat accompany the Olympics.Now part of Citrix 5. !2. Digital rights battles will escalateThe summer dust up between Time Warner Cable and CBS that resulted in a 32 day blackout of thelatters programming to TWC customers underscored the festering tensions between broadcast networksand multichannel video programming distributors (MVPDs) over digital rights.While this was originally covered by the media as a tussle over retransmission fees where cableoperators must compensate broadcasters for retransmitting their content the real nut of the problemrevolves around TV Everywhere rights.And that problem shows no signs of abating.MVPDs are leaning heavily on TV Everywhereto keep their customers from defecting tofree or low-priced subscription video-on-demandalternatives like Netflix that delivercontent over-the-top (OTT) of broadbandconnections. Ideally, operators would like tonegotiate fees for content rights thattranscend device, so that they pay the samecost whether a customer views that contenton a TV, tablet, smart phone or otherconnected device.Unfortunately for them, many broadcast networks dont see it that way.As their advertising revenue continues to get squeezed by various forms of online advertising, broadcastnetworks and their affiliates are coming to view retransmission fees as an important revenue stream andmeans to profit from the disruption being caused by new distribution channels and devices.CBS CEO, Les Moonves clearly articulated his position on a recent analyst call, saying: The right of ourcontent traveling with the consumer, we think we should be getting paid for that. .....everything cantbe included in the one rate that we negotiate with the (MVPDs). And also, Its our content. We spend alot of money for the intellectual property, and we want to fully monetize that.Flaming the tensions further, broadcasters are pushing for shorter, more flexible agreements that allowthem to capitalize on any further market disruption to come. That way, they wont be confined to rigid,long-term contracts and unable to respond to a fluid, changing landscape.Now part of Citrix 6. !Implications:It would seem that the balance of power is currently with the broadcast networks and their affiliates andthat they will continue to press for compensation across all delivery platforms. Not to mention, anincreased push for increased flexibility in cutting distribution deals with the SVOD players that arecausing traditional Pay-TV operators so much heartburn in the first place.With Netflix forecasting that it will double streaming volume by 2016, that bodes further problems formultichannel video programming distributors.To blunt the continued encroachment of OTT content and gain leverage, cable TV operators like LibertyMedia CEO, John Malone believe that MVPDs could benefit from consolidation and partnerships, possiblyto launch their own national streaming video service. In fact, there are reports that a Time Warner Cable- Comcast merger may be in the works.Whether the multichannel video programming distributors can reset the balance of power anytime soonremains to be seen, but it is likely that the power battle being waged with broadcasters will continue tosee flare ups and further standoffs in the year ahead.Read More:What is the difference between IPTV and TV Everywhere? 7. !3. Quality of Experience will trump allThe correlation between positive quality of experience (QoE) and high user engagement levels is wellknown by now. You generally cant achieve one without the other, as lots ofresearch reports will attest. In 2011, a 1% increase in buffering time during video-on-demand(VOD) content resulted in a reduction of three minutes ofviewing time. Today, that same 1% increase in buffering timecuts viewing time by a whopping 8 minutes (source: Conviva). Another study, conducted by Akamai and the University ofMassachusetts, revealed that viewers who experience re-bufferdelays of 1% or more of a videos total duration play 5% less of itcompared to a similar viewers who experience no re-buffering.The problem is, research also indicates that producers and broadcasters arefalling short in their quest to elevate the perceived value of online video andmatch the lofty expectations consumers have come to expect from cable TV.While technologies like adaptive bitrate streaming and CDN-switching havegreatly narrowed the quality gap, they still fall short. Because bitrate downshifts are noticeable to users and because low bitrates(like re-buffering) are correlated to reduced viewer latency, publishers maybe hesitant to use ABR to its full extent. Clearly, re-buffering is not the onlygoal or the only element of video quality. Switching between upstream CDNs does nothing to address problems in the last mile. Regardless ofwhich CDN is used, video must eventually travel over a viewers ISP. Also, despite the claims of CDNswitching vendors, the switching capabilities offered are not as real-time or dynamic as they wantone to believe.Ultimately, end users desire for high-definition video images is outstripping the capability of theirinternet connections and their ISPs networks to deliver such data streams. Until every user has afaster internet connection and all ISPs can support these at times of peak usage, quality willcontinue to suffer.To compound the problem, poor online video quality

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