Digital entertainment on demand is set to disrupt broadcasting, traditional media, telecoms, marketing and more and there’s no going back, writes STEPHEN WATSON, MD of Discover Digital.
Digital entertainment on demand is set to disrupt broadcasting, traditional media, telecoms, marketing and more. There’s no going back. Whether you’re talking streamed linear broadcasting (accessing scheduled TV channels online), VOD (video on demand available online), SVOD (subscription video on demand where subscribers pay monthly to access content from a bouquet), TVOD (transactional video on demand where content is rented per movie or series), hybrid VOD or even EST (electronic sell through, where viewers download content to own it), digital entertainment now gives viewers unprecedented levels of choice, and they like it.
Next-gen entertainment arrives
Internationally, multi-screened entertainment experiences have become mainstream, led predominately by Millennials and Gen Z youth and underpinned by affordable high speed bandwidth. Nielsen reports that globally, 31% each of Generation Z and Millennial respondents pay an online service provider for content, compared with 24% of the older Generation X, 15% of Baby Boomers and 6% of Silent Generation respondents. And 40% of Gen Z and 38% of Millennial respondents who subscribe to cable or satellite say they have plans to cancel their service in favour of an online-only option.
You Tube and other social video platforms paved the way for this and encouraged a culture of short form, shareable user generated content. Whilst this content is not necessarily of premium quality, it nonetheless attracts millions of viewers seeking authentic clips of real-life where the need for an emotional experience can be fulfilled instantly.
In South Africa, You Tube was the first video on demand service to heavily influence viewership habits and in doing so fundamentally changed the way content generated revenues from advertising and subscriptions. Now, the country’s viewers are following international trends by seeking premium digital content customised to their own preferences. As eyeballs turn to new screens, new industry players and marketing professionals are sitting up and paying attention.
The enormous success and meteoric rise of You Tube Stars ranging from Justin Bieber to Caspar Lee and Suzelle DIY and the multitude of ‘Tube Stars’ in between, proved to advertisers that the millions of eyeballs it attracted – often more than traditional TV – could make the on demand industry enormously lucrative, not least amongst the ever changing and fickle high spend influencer youth market.
A further benefit of this success was the emergence of new local filmmakers and celebrities, producing accessible and desirable content that slowly began to change the face of the local industry. Rather than equating a successful launch through the prestige of securing a big screen cinema release, these various platforms showed success and influence was not determined by the size of the screen.
New opportunities, new bedfellows
The field is open for new business, and traditional players and start-ups are moving to capitalise on this new trend. Discover Digital, the longest-standing digital content on-demand company in South Africa, is bringing to market an on-demand content hub offering a broad bouquet of premium local and international entertainment and educational content and linear channels. Discover Digital is taking this new service to market in partnership with mobile operators and big consumer brands that may opt to offer the service as a value add or add their own branding to the service.
The new multi-screen environment presents huge revenue and value-add opportunities for telecoms operators. Pyramid Research noted recently that in Europe, an increasing consumer appetite for on-demand video services presents an opportunity for operators to complement their core portfolio of services and add new revenue streams. The company said that adoption of subscription-based OTT video and video on demand (VOD) services has grown steadily in the UK over the past two years, reaching 37% and 23% of pay-TV users respectively in the second quarter of 2016.
Discover Digital is aggressively entering the African market through partnerships with mobile operators, aiming to take fully converged linear on-demand news and entertainment streaming services to viewers across the continent.
But Discover Digital is not alone in pioneering the possibilities for on-demand content. Netflix and Showmax are making inroads in South Africa and across the continent. Naspers is reported to be seeking partnerships with mobile network operators across sub-Saharan Africa to boost Showmax. The company has already concluded a partnership with Safaricom in Kenya and says talks are underway with other telcos. MTN Nigeria recently announced its converged OTT VOD service for subscribers, while Ericsson is actively securing content deals for its Nuvu VOD service, which it is taking to Africa in partnership with mobile operators.
There are opportunities for smaller, niche players to enter the market too. Pride TV, a VOD channel for Africa’s lesbian, gay, bisexual and transgender community, recently announced its launch.
VOD is set to create new bedfellows as content specialists, software firms, telcos, media companies and big brands partner to tap into the potential. Even the hospitality sector is seeing the potential for VOD services.
In the world of sport, Rider Research reports that 2016 was the year live sports went over the top, with mainstream live sports coverage moving from TV to the internet. Rider cited a Consumer Technology Association study as saying a third of sports fans now want to watch sports programming on their cellphones and tablets. In South Africa another brand-VOD service partnership saw Discover Digital breaking traditional moulds for sports event coverage, with a simultaneous live stream of the SuperGP Championship to the SuperGP website and the organisation’s Facebook page, presenting new options for web page branding, advertising sales and monetising of archived content.
Behind the scenes
While the world of VOD presents heady new business opportunities, on-demand digital is not a goldmine in Africa – yet.
Start-up costs in this space could be prohibitive for would-be on-demand service providers, and newcomers must seek mutually beneficial partners and new business approaches to make the business viable. Content licensing and screening rights issues can hamper content offerings, while issues such as technical quality, payment gateways and recommendation engines must also be addressed. And these investments must be made ahead of mass adoption when economies of scale are achieved.
VOD is definitely having an impact on audiences but unfortunately this remains limited to the high LSM, high spend end of the market and therefore is still relatively small. It means the ability to generate revenue in the short term through subscriptions is extremely limited and therefore high-cost VOD businesses are running, and will continue to run, at a loss for several years.
Because of the enormous expense of content rights, marketing and technical development, and the slow uptake of services, VOD is most certainly a long term business strategy and so one needs to be able to remain sustainable for a lengthy period before beginning to turn a profit. The casualties in this industry to date – The Node and Vidi (Altec and Times Media respectively) – have also shown that big listed companies don’t necessarily have the stomach or dedicated financial resources to stay in the game and so success in the VOD space heavily relies on being nimble, cost efficient, remaining dedicated to your cause and really to think out the box in terms of long term sustainable business strategies. Those that do will strive and thrive.
The emphasis is on long term. South Africans tend to resist new technologies initially – not trusting elements like e-commerce, recurring subscriptions and feeling uncomfortable taking their viewing experience into their own control and away from scheduled linear TV.
But like all major digital trends, once the benefits are clearly understood, South Africans will begin to take up paid- for on-demand services in greater quantities and I believe this will then start to significantly shift broadcast ad budgets and spend.
Early adopters are giving VOD firms some idea of the viewing trends to expect in future. In terms of storytelling and content we are seeing at the top end of the market the usual mainstream genres – one-hour dramas, half hour comedies, reality, soaps, documentary and movies. However, we are seeing a growth in short form content too. Webisodes, skits to educational ‘how to’ videos are proving popular across a continent where mobile is the overwhelmingly dominant device and data access is expensive and/or limited.
Short form content is giving legs to a great variety of content for all members of the family and the way content is packaged and offered is changing. Audiences no longer want to be prescribed extensive, expensive bouquets of channels that they may only watch a small percentage of, or that overwhelmingly do not speak to their interests; they want to be able to choose and so smaller packs of niche focused content or channels are becoming more readily available. Where some services will offer niche packs of programming as part of a general content offering, other services will launch an entire service aimed solely at a specific market. We will see more of these services and offers emerging and again this will have benefit to advertisers because brands can align themselves far more strategically with their target markets.
Not only does the VOD revolution present room for advertisers to attract a multitude of eyeballs and click throughs, but it also brings the opportunity for brands to sponsor select content packages and specific titles on the service – and in doing so make use of the characters and film studio creative collateral without incurring any licensing costs. This makes the space enormously exciting and racked with potential for advertisers to offer their clients bespoke money can’t buy experiences for their customers.
Advertisers also benefit from the most sought after campaign result – attaining individual relationships and granular knowledge about their specific customers – who they are, their behaviour and habits, and their demographics. This is all information not available via traditional television advertising. Cost of sales and acquisitions become clearly defined and the richness of the results ensures effective targeted future campaigns rather than wastage through broad market spray and pray approaches.
Viewers today want freedom of choice. They want customisable, affordable access to movies, news, sports, music and TV series wherever they are. Disruptive new models are breaking the traditional broadcast and pay-TV moulds by letting viewers choose what packages and genres they want, what subscription models they prefer, and even how they’d like to pay. VOD delivers.
CES: So long, and thanks for all the beer!
Last week, the Las Vegas expo showed off its fun side with state-of-the-art technologies for enjoying beer, writes BRYAN TURNER
From craft beer-making machines to robots that pour beer, CES had more beer than usual in Las Vegas last week. And even free beer if you found the right stand. Stampede’s saloon-style booth offered beer to visitors who tried out its latest drones, virtual reality, and other gaming products. No beer tech, though.
Here are some of the beer technologies that stood out:
LG HomeBrew – Craft beer made at home
LG’s HomeBrew craft beer-making machine, debuted at CES 2019, brings the brewing process home thanks to single-use capsules, a self-cleaning feature, and an algorithm optimised for fermentation.
Like a Nespresso coffee machine, the beer maker uses capsules, which contain malt, yeast, hop oil and flavouring. At the press of a button, LG HomeBrew automates the whole procedure from fermentation and carbonation to ageing. A companion app lets users check HomeBrew’s status at any time during the process, from their handsets.
The beer machine not only offers a simple way to make craft
Designed with discerning beer lovers in mind, HomeBrew allows for in-home production of batches of more than 4 litres of beer in a variety of styles. The following five distinctive, flavoured beers are available now:
- Hoppy American IPA
- Golden American Pale Ale
- Full-bodied English Stout
- Zesty Belgian-style Witbier
- Dry Czech Pilsner
The only catch? It takes about two weeks to make, depending on the beer type.
“LG HomeBrew is the culmination of years of home appliance and water purification technologies that we’ve developed over the decades,” said Dan Song, president of LG Electronics Home Appliance & Air Solutions Company. “Homebrewing has grown at an explosive pace, but there are still many beer lovers who haven’t taken the jump because of the barriers to entry, like complexity, and these are the consumers we think will be attracted to LG HomeBrew.”
Click here to read about the party speaker that holds beer and robots that pour beer.
CES: Alienware gets Legend-ary
At CES in Las Vegas last week, Dell’s Alienware released a family of high-end, thin, light, and affordable machines for both amateur and professional gamers – and a new identity.
Alienware marked CES 2019 as a brand milestone with the debut of a new design identity, Alienware Legend. It aims to set a new bar of excellence for what gamers want most – performance and function. Alienware says it evaluated multiple concepts and chose one that was the biggest and boldest departure from its current look.
Alienware Legend, says the company, stays true to the brand’s core design tenets, taking cues from its deep roots in sci-fi culture and its early industrial designs, to distinguish the brand from the rest of the industry. The new Legend design is optimised with cutting-edge thermal cooling technology to achieve and sustain overclocking power, improved AlienFX lighting, and ultra-thin screen borders. It also unveiled a new “three-knuckle hinge” design that reduces the overall dimension while creating a stronger assembly, all combining to yield a better gaming experience.
“We’re excited to come to this year’s CES with some truly groundbreaking products, next-gen software and strategic partnerships that will bring more people to experience PC gaming and advance the industry,” said Frank Azor, vice president and general manager of Alienware. “The legend design answers the call for more and better from our gaming community, and the new G Series laptops will make PC gaming even more accessible to those looking for high-performance gaming at a cost they can appreciate.”
Click here to read about Alienware Legend in action with the Area-51m and m-series laptops