I of low maintenance have one remote. I recently visited a friend and sat down and noticed multiple remote devices on the coffee table. She began to explain to me what duty each one performed. “This one is for Netflix, but not volume. This one gets Hulu and will do the volume, but you have to press this button to make it work. And this one…”yadda yadda. Content is as ubiquitous as it has ever been.
Companies such as Netflix, who is burning cash at a tune of $3 billion dollars a year, are all vying for your viewing pleasure. Content is king, but users are getting tired of the less than seamless presentation of obtaining this entertainment. We all can agree that a one-platform model will make our entertainment needs more palatable, but who will take the lead in providing this lucrative service.
Big tech would be the first place to look. The movement to computer streaming from couch potato TV watching is widening. Daily unique visitors to top web properties total hundreds of millions, compared with the tens of millions of viewers of the top TV channels. Will television be the next radio? Radio Shack suggests that one of the reasons for its demise was that younger users didn’t know what a radio was. Over-the-top (OTT) content—audio, video and other media that’s distributed directly over the Internet are in direct competition for your viewing pleasure.
Obviously, the more content offerings big tech provides, the more time and money consumers will spend in their ecosystem. Let’s look at some of the reasons giant tech firms have the edge in the one-platform game.
- Economies of Scale: The user base of big tech is massive and engaged, and as mentioned, has enormous numbers compared to that of television.
- Access to Data: Data is king and these giants have it. Knowing more about your customer translates into money by allowing them to analyze usage and behavior to curate customized content experiences.
- Technology: Innovation is a hallmark of tech giants, which enables them to roll out new capabilities and improved user experiences with increasing speed.
- Money Talks: As the adage states, it takes money to make money, and these guys have it. With big revenues and profits, it allows them to take bigger financial risks in areas like content creation, investing in talent, and bidding for live content such as sports.
The bottom line is still content. Consumers are moving to OTT in big numbers as mentioned, but it is still content that keeps them coming back to cable. Content is big, but not everything. According to a KPMG consumer survey of more than 2,000 pay-tv and OTT subscribers, people still enjoy unwinding from work by flipping on the TV and channel-surfing. Live sports is big business and must be folded into any single platform for success. However, this will likely become more challenging as movie and television franchises increase rights fees to their content. Sports is being advertised heavily as an add-on by Hulu, YouTube, and others.
The current convenience of Wi-Fi and connectivity bundled with video is still the mainstream. However, a consolidation of content delivery is bound to happen at some point. The rewards are big and the race is on between studios, networks, wireless carriers and others to see who will gain the biggest foothold in the OTT market.