In the last few years the market for digital on-demand TV and video has boomed, fuelled by the pandemic and changing customer behaviours and boosted further by stand-out shows like Stranger Things, Game of Thrones and the Star Wars franchise. People expect to be able to watch any time, anywhere, dipping in and out of multiple broadcasters and digital platforms.
Things are changing so fast it’s hard to keep up with the players jostling for position. Digital platforms such as Netflix have become leading content producers. Content producers like Disney have stormed ahead with their own streaming platforms. Broadcaster Sky has moved into hardware with Sky Glass, and an Apple+ film production, Coda, won Best Picture at the Oscars. It’s become a mixed-up-shook-up world.
And although competition is increasing, in some regions growth is slowing. Subscribers, overloaded with choice and squeezed by rising inflation, are showing signs of fatigue in the US and Europe. By contrast in the Asia-Pacific region a multitude of players are vying for their share of a booming market. Meanwhile digital platforms are spending more and more on content, with Netflix likely to get through around $17 billion dollars in 2022.
So how can service providers stay competitive and create loyalty? Delivering a standout, highly personalised customer experience is going to be key to future success. Personalisation will also become central to the most effective advertising, using individual customer insights to create highly targeted ads that maximise income.
Dealing with ‘streaming overload’ and increasing discoverability
For customers, with TV and video as with everything else, choice is good, but too much choice becomes exhausting. A recent survey by Nielsen found that 46% of streaming consumers felt overwhelmed by the number of platforms and titles available to them. We’ve all opened a video on demand service, jumped around a bit scanning through myriad possibilities, and then given up, tired out by having to make a decision.
Major customer experience goals are improving discoverability on the one hand, and overcoming its evil twin choice paralysis on the other. This means focusing on two things. The first is exceptional UX design, drawing on best practices and insights from behavioural science to provide an experience that feels intuitive and effortless. The second is to make that experience highly personalised, based on a holistic understanding of each individual viewer.
This means using AI and machine learning to analyse browsing patterns, genre preferences, watch history, time of day and location to create a user profile. Using this information, an individual can be served with a highly personalised homepage and browsing experience that is meaningful and valuable to them, offering clear user journeys and delivering recommendations they will enjoy.
Personalisation must take centre stage
All the platforms are doing this to a greater or lesser degree already; Netflix famously even personalises thumbnail images based on algorithms determining a person’s interest in different themes, for instance action, romantic relationships or a particular actor. But there is always room for improvement. A subscriber with an Entertainment pass on Sky’s NOW TV has to wade through a homepage containing Movies and Sport options that they won’t have access to. Obviously the hope is to uplift subscriptions, but for many users it just creates confusion. With 93% of businesses in general seeing revenue growth through an advanced personalisation strategy this is not an area that any player in this industry can ignore.
Increasing levels of personalisation will also come into play in advertising. By understanding each viewer’s interests, habits and behaviours broadcasters and brands can work together to create highly targeted ads that add value for viewers and increase revenue for the business. Platforms do of course need to be careful not to make ad breaks too frequent or invasive, both in terms of breaking the ‘flow’ of watching and personal information. No one wants to sit down to watch a show with friends and family, only to see an embarrassing ad based on their earlier Google searches.
Even content itself can be personalised or at least customised to a degree. Black Mirror’s Bandersnatch episode enables viewers to make choices that will change the plot from that point onwards. It required substantial technical innovation, with Netflix developing its own ‘Branch Manager’ software in order to plan out all the possibilities of the storyline structure. But although headline-grabbing, interactive TV shows may remain a niche watch, because of both their complexity and the fact that some viewers feel unsatisfied with the results, wondering whether they found the ‘best’ or ‘right’ plot development and ending.
Perhaps more likely to end up in the mainstream is a different kind of content personalisation. In the UK a partnership between the BBC, the University of Surrey and Lancaster University is looking at creating media personalisation through ‘ethical AI’. It would enable viewers to choose options to shorten or lengthen a programme, see more in-depth information, enhance dialogue or add graphics and subtitles. The ethical element includes the use of a citizen council during the development process to help iron out bias and improve inclusivity.
Addressing ‘churn and return’
Finally there’s the challenging issue of customer loyalty. Some viewers subscribe when their new blockbuster of their choice hits, then immediately cancel once they’ve finished watching, perhaps coming back a few months later for something else. By using data to predict churn, streaming platforms and broadcasters can devise strategies to try and prevent it, from ensuring high-quality content at mass drop-off points to offering free upgrades or special deals to persuade people to stay.
To sum up, TV and video-on-demand is undergoing rapid change. New technologies and data capabilities will lead to the creation of highly personalised customer experiences the make watching and finding new content effortless. Meanwhile targeted ads based on data insights will help maximise revenues, and even content itself will become more personalised. All of these elements will encourage customer loyalty in an ever more fragmented world.
But there’s one more thing to mention. TV, like every other industry, has transformed in recent years and gained a solid understanding of what makes their audiences tick, particularly the younger cohorts: millennials and Generation Z. However in 10 years time there will be a new force in the market, those born after 2010. With a new set of wants, needs and priorities, Generation Alpha are the real future of TV, and every broadcaster, streaming service and content provider out there needs to start thinking about how to get their attention.