The end of each calendar year offers us a time to reflect on the previous 12 months and to hypothesize on what we can expect in the new year. This is always a fun exercise, even though, let’s face it, making assumptions about the future is 90 percent - informed but with a little whimsy added for good measure - conjecture. Given the rapid pace of transformation in the digital media industry, it's a particularly exciting time to make predictions about this space.
But before we can move forward, let's look back and come to terms with what’s happened in the past.
Below are my major, industry-altering takeaways from 2013 followed by my thoughts on how the digital media industry will evolve in 2014. Even more change [insert Bitcoin joke here] is in store!
2013: The Year of Content, Disruption, Devices and Much Ado About Nothing
- Consider Verizon’s $1 billion deal with the NFL allowing Verizon Wireless subscribers to access games via their smartphones, Netflix's history-making Emmy success with House of Cards, Amazon's deep dive into original programming and the success of non-traditional media companies in the "TV game" (i.e. Rovio) and it’s clear that 2013 was the year of premium content. From the jaw-dropping "Red Wedding" from Game of Thrones, to AMC's farewell to Walter White, to the hunt for Nicholas Brody, content is not just good - it's great. Without these stories keeping us glued to televisions and tablets and chatting at the watercooler and over Twitter, there would be no "fight" for the living room and digital screens.
- 2013 was a rough year for pay TV with the headlines dominated by subscriber losses, battles with content providers and competition with upstart Aereo escalating into the halls of justice. TV Everywhere evangelism (and acceptance) may help to make things right between content providers, pay TV operators and consumers (but more on that later).
- Despite this, 2013 was also a year of disappointments. Apple still doesn't have a clear strategy for its "iTV" vision. While a number of acquisitions point to a future move, it's also likely that Apple is being deliberate - similar to the early days of iTunes - in ensuring its technology advances are in lockstep with content availability. The importance and challenge of obtaining access to premium content was the likely Achilles' heel of Intel, now rumored to be working to offload its OnCue TV service. Hulu will likely partner with pay TV, an industry it originally intended to disrupt. And what ever happened to that rumored Amazon Kindle set-top box? Will I need to wait for it to be delivered by drone?
- Lastly, 2013 was the year of "more." More devices (PS4, the Xbox One, Chromecast, Bravia Smart Stick) and the continued proliferation of Android devices and platforms, with Samsung's increasing dominance translating into a "fork" of Android a la Kindle. Needless to say, fragmentation will continue to be a growing concern for content and technology providers.
So, what's on tap for next year?
2014: Mobile-first and Digital-first
- In the coming year, media companies will continue the trend of "mobile/digital first" distribution (i.e. Disney’s move to distribute new material initially to tablets), targeting, and delighting, the growing number of users who consume and access content via mobile devices with new programming. Along with this strategy, companies will begin to remove the internal distinction between "broadcast" and "digital". Content will simply be "content" and every screen will be required for distribution, monetization and measurement.
- Live and linear content will become a core part of the content portfolio. With technology making it easier and cheaper to operate and a broader set of devices that can support playback, companies will be forced by their peers who are monetizing and leveraging this for both appointment viewing and cross-promoting video on-demand (VOD) to integrate this into their own content strategy. And this won't be just broadcasters but marketers, enterprise and new media (e.g., eSports).
- Nielsen and other audience measurement companies will be forced to accelerate their plans to help broadcasters measure their audience across all screens. As we break through the walls of C3, we'll see the true numbers of consumption and realize how much money has been left on the table.
- Yahoo's move to recruit Katie Couric was just the beginning of the trend to online-only video news and entertainment hubs. More big name talent will take this leap, and Yahoo won't be the only tech company offering substantial online pay days. Imagine if Yahoo, instead of Fox, had snagged Maria Bartiromo away from CNBC.
- Unfortunately for cable and satellite providers, this year will again test the industry as issues continue to arise around consolidation. Not only will pay TV continue to raise prices as subscribers decrease, blackouts will continue as retrans negotiations are fought in the court of public opinion and the legal court, along with unbundling and the controversy surround Aereo's "Rube Goldberg-like contrivance" reaching the highest court in the land.
- Will TV Everywhere succeed in 2014? That is the question. Our bet is that it will, and that it will primarily be driven by programmers going directly to consumers with their proprietary content and forming highly valuable 1:1 relationships with viewers. User awareness of TV Everywhere will grow significantly enabled by the Winter Olympic Games and the World Cup.
- With these tentpole events dominating our screens this year, we'll see limited tests of 4K Ultra HD, H.265 and MPEG-DASH, but they still won't be widely embraced standards (yet).
- 2014 will be the year for Apple TV and Chromecast. We’ll see something from Apple that is hardware-based (finally) and centered solely on video consumption. It will succeed due to Apple's ability to get great content programmers onboard. At the same time, Chromecast will win more customers through its more "open" nature, supporting iOS, Android and desktop environments. Apple will grab the headlines, but based on its price premium, users will adopt the cheaper and more developer "open"- but not necessarily friendly - Chromecast. Since these solutions work with any "dumb" television with a HDMI port, they will put the nail in the coffin of the "smart" TV, with assistance by cohorts Roku, Xbox One and PS4.
- If, and it's a big if, unbundling makes waves this year, it won't be due to government intervention through legislation. Instead, one of the industry-leading programmers (i.e. HBO or ESPN) will force the issue. It's not clear that they will since they enjoy immense success under the current pay TV subscription model. But it's not outside of the realm of possibility given that both have strong control of content rights - especially sports - and both have a history of technology innovation (HBO GO, WatchESPN).
Are you excited for 2014? I am. I can’t wait to "lean back" and enjoy the show. Check out the video interview below with Brightcove's chief marketing officer, Jeff Whatcott, for even more predictions. And please let me know what some of your predictions are in the comments.