Big Data’s Seismic Effect on the Broadcasting Industry

Digital transformation has left hardly any industry unshaken. In broadcasting, it’s safe to say that it has transformed completely the way we create, deliver and consume content. Undoubtedly, the most noticeable change lies in the shift toward the OTT (over the top) format.

Traditional TV now plays second fiddle: Sixty-five percent of consumers pay for cable or satellite, while 69 percent of them use some type of OTT streaming service — a major rise from just 10 percent in 2009.

It’s easy to see why more consumers are cutting the cord: At a more affordable price compared to their cable alternatives, OTT platforms simply provide more value to their viewers.

With convenience as a major advantage, on-demand content allows consumers to watch practically whatever they want to, whenever and wherever, due to its accessibility on a range of devices. However, with new channels, formats and experiences, content providers face new demands — and with ample competition filling the marketplace fast, it may be difficult for them to keep up.

That’s where technology comes to the rescue. When applied correctly, it can be used not only to provide an extraordinary user experience, but also to help broadcasters automate and optimize their service provision. With elaborate machine-learning engines, content providers can match viewers with their desired content — be it a YouTube video or a series recommendation.

Personalization is coming to ads as well: Broadcasters can target them at specific audiences using artificial intelligence to deliver precise messaging. For example, the Hulu platform is almost completely ruled by AI. The streaming giant Netflix estimates that using AI technology to automate its workflows and reduce churn saves the company around US$1 billion annually.

Leveraging technology to collect and utilize data has become no less important. By collecting massive amounts of data for six years after its launch in 2007, Netflix could tailor its first original production House of Cards to fit consumer desires. The show’s overwhelming success was not just a stroke of luck. The mastery of digital technologies can secure broadcasters a position at the forefront of the whole industry.

Omnichannel Experience Is the Norm

The advancement of technologies must be carried out in accordance with the needs of consumers. With the digital space oversaturated with content, capabilities and options, consumers have developed particular expectations that broadcasters need to understand.

First, the quality of experience is at the absolute epicenter of consumer needs. The content must be topnotch. Technical difficulties are rarely forgiven. Consumers are in the driver’s seat, and they steer away from poor viewing experiences such as long buffering times and low-quality video.

Some broadcasters are well aware of this: It was this realization that led Netflix to partner with Comcast and Verizon, to ensure the undisrupted streaming of its content.

Second, flexibility and mobility are also requisites. Broadcasters need to ensure a seamless experience that allow their audiences to consume content from a variety of devices, and to continue watching specific videos wherever they left off.

These specificities demonstrate that any broadcasting platform should be built to absorb new features. That’s why broadcasters need to embrace innovation as part of their new business model and maintain a close connection with their audiences, being constantly plugged into their digital lifestyle.

Third, broadcasters must understand that the modern digital experience is all about interaction, engagement and community. These preferences have encouraged the creation of new formats, including branded content and influencer contributions.

Most importantly, it encompasses a major game-changer: user-generated content. Finding a hybrid model with premium linear content complemented by user contributions has gained particular traction. For this reason, broadcasters shouldn’t fear to open their platforms to their audiences.

All of these trends clearly speak in favor of a comprehensive omnichannel experience. Therefore, in order to win audiences over in the future, broadcasters must provide a full entertainment package.

Traditionally, the industry has been a one-way medium, but the adoption of social media and digital technologies has encouraged more multiscreen formats. Whether by giving your audiences more say through polls, live streams or production decision-making, you need to make them a part of your strategy.

The result is a more interconnected digital ecosystem. With consumers using multiple devices, it’s crucial to be present on a variety of channels, bringing in apps, influencers, social interactions and other interactive strategies.

As viewers are far more likely today to be engaged in at least one other activity while watching — including tweeting, chatting, and searching for additional information — the more broadcasters can help mediate these experiences, the more platform loyalty they will cultivate.

Various broadcasters already drive viewer participation during events such as local news or sports broadcasts, bringing a more holistic approach to storytelling.

Addressable TV and New Monetization Streams

The expanded horizons also mean new opportunities for monetization. It’s all about finding the sweet spot, ensuring that broadcasters make the best out of their content.

The most obvious way to monetize is directly through content, subscriptions, pay-per-view or premium access systems. Another possibility is through gamification, by providing diverse entertaining features on platforms that allow users to buy hints or lives to progress in a game. Then there are advertisement options, centered around branded content, influencer collaborations, or dynamic ad insertion.

In fact, ads have developed substantially in the context of digital TV. Coming together under the umbrella term “addressable TV,” ads now have the capacity to target a specific viewer. By using big data, broadcasters can pinpoint specific consumer behavior and use it as a basis to match the individual with customized advertisements, either in a live TV or on-demand setup.

More precise targeting means less wasted advertising dollars, and the precise metrics of programmatic advertising empower brands to explore their message deliveries. Channel 4 experimented with addressable TV and tested its AI-driven contextual version on 2,000 people. It found boosted brand awareness and doubled ad recall to 64 percent, showing big promise for the feature.

Addressable TV could reach $4.7 billion dollars in 2020, according to forecasts. This is because it represents a win-win for all parties: broadcasters, advertisers and viewers.

With some advertisers moving away from Facebook, the whole sector has a lot of potential. Even companies such as Vizio or Samsung are now enabling technology to support addressable ad services on smart TVs and connected devices, while platforms like Hulu gradually are incorporating addressable into their live TV service.

The biggest challenge in the digital advertising realm is still the traditional display of promotional messages. Advocated for by giants like Facebook and Google-owned YouTube, ads normally are shown pre-roll or mid-roll, which may significantly disrupt the viewing experience.

That’s why broadcasters should explore new arrangements to make ads more appealing to the end-user. For example, by displaying the ad while playing the content in a smaller window within the screen, broadcasters can achieve much higher viewer satisfaction and better impression rates.

Powerful Recommendation Engines

The drive toward personalization is not limited to ads. Broadcasters need to acknowledge that only engaging and customized digital experiences bring great results. With prime time now a thing of the past, content discovery has become a struggle.

Let’s be real: More time watching and less time making a selection means a happier customer and decreased churn, which is exactly what broadcasters want.

While it’s now the viewers’ responsibility to choose the content they want to consume, successful broadcasters know that it’s in their best interest to guide these selections in the best way possible. After all, more than 80 percent of all TV shows watched on Netflix come from the platform’s recommendation engine. That’s why accurate and intuitive content discovery should be at the heart of every broadcasting platform.

The key to that is having a sufficient amount of highly individualized data from the user base. This can include information about viewer preferences, their watching history, the content they marked as favorite, binge-watching tendencies, viewing frequency, clicking activity, and much more.

AI systems can distinguish an unprecedented number of variables and create correlations even among seemingly unrelated criteria. Through elaborate machine-learning setups, broadcasters can track individual habits in real-time and use the data batches to recommend the best “what’s next” options consistently.

Digital disruption has descended on broadcasting like a whirlwind. There’s no doubt that only by adapting to the newly established and fast-paced status quo can broadcasters maintain their positions.

What’s more, should they embrace the changes, they can discover exciting new formats, strategies and monetization opportunities. Technology can help them meet the heightened expectations of their audiences better.

Through new, hyper-personalized and interactive experiences, broadcasters can raise the bar of user experience further in the digital world. There’s still a lot to discover — from automatic transcript extraction for easy subtitling, to face detection for fast cast recognition. As the future unfolds, broadcasting will be fascinating to watch.

Gio Punzo

Gio Punzo is the CEO of Streann.

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