Television viewing isn’t what it used to be. Across most demographic groups, consumption habits are changing, some radically. Providers are feeling the heat of this shift, challenged to deliver to viewers where they are, on any device, any platform. This shift presents broader issues too, as viewers begin to seek more customized, regional and specialized content.
Welcome to the rise of virtual content and channels.
The Need for Innovation in the Age of Cord Cutters
As consumers continue to adopt new technology and behaviors, programmers and broadcasters are scrambling to find new ways of reaching established viewers while attracting new ones. Generational gaps in audience are creating new paradigms. Today’s kids aren’t watching a full lineup of nightly shows with their families in the living room. They are watching their favorite show on the go, and most likely on their mobile device. In fact, if you ask the average millennial which networks or channels they watch, you’re likely to get a blank stare or eye roll. The newest generation of viewers are watching shows, not channels. This behavior leaves broadcasters and networks wondering how to connect with these elusive viewers, who are less likely to subscribe to expensive cable packages. But these viewers are potentially showing an affinity for customized experiences, where an entire channel of one show is offered. Or perhaps a specialized regional stream featuring teams from a particular geography is offered where it wouldn’t ever be seen on a traditional broadcast.
This is Virtual Channels.
Virtual Channels Give Broadcasters Options
Virtual Channels are the answer broadcasters and networks have been looking for. These channels are the bridge to the younger generations. Video streaming and delivery technology is also drastically shifting the economics of creating such channels. What would cost a programmer millions of dollars in dedicated personnel, specialized equipment and carriage via a transmitter or uplink to satellite now costs orders of magnitude less. The future of television is being created now and will take the industry by storm in the next few years. Virtual Channels combine live and video-on-demand assets to create a specific channel, enabling programmers to build multiple channels with their tailored content to reach specific audiences. This new technology also helps to create a more personalized experience for viewers, as the content is tailored to their viewing preferences, prior history, and choices.
As consumer habits evolve, this data and behavior will continue to innovate to push the limit and drive adoption.
New Audiences, More Revenue, Low Cost
Using these new technologies helps to build audience with additional efficiencies in cost and size. For the programmer and broadcaster, offering all their content in a variety of consumption options opens the door to new viewers. New viewers equal subscription or advertising dollars, depending on the model. Monetization is the gold star or blue ribbon in today’s OTT strategic landscape.
For ad supported models, the latest streaming technology is solving the online video monetization problem through dynamic ad insertion, where the logical breaks in television shows are replaced with different digital ad inventory that is stitched into the stream, replacing the broadcast ads in real time, without interruption.
The Future of Virtual Channels
Over the course of the next year, we will see more and more virtual channels pop up. This is good on a few fronts, because it benefits viewers and organizations alike. From an organizational standpoint, look for virtual channels to:
Repurpose content efficiently and cost effectively.
Leverage live content to garner interest and create additional monetization of assets to provide viewers with a broadcast experience whenever, on whatever device.
Launch and bring to market a new channel able to reach smart televisions like Apple TV, Roku, and the like in a similar fashion at a fraction of the cost.
Seems like a win-win for all, right? Viewers are able to watch content of interest to them wherever they want without entirely losing the benefit of live TV, and content owners are able to grow their audiences and increase revenue. Will this solve the conundrum of reaching the ever-elusive younger generations? Time will tell, but I believe it is a giant step in the right direction.