Forcing It: Square Content On Round Devices?

DATA and ANALYSIS by Stephen Johnson

 Abstract:

Interactive technologies have a far more checkered history than many proponents would like to remember – and many of the failures fall into what early cinema pioneers called “filming the play”: myopically applying a new technology (e.g., film) to the one it is soon to usurp (e.g., theater or vaudeville). This article argues this is exactly what’s happening with legacy video services like “TV Everywhere”: attempts to translate older established activities (i.e., watching TV) to new platforms where they not only don’t apply, but the actual lifestyle attributes these new technologies support (e.g., mobile, personalized, constantly online) have effectively created a new medium. We’ll expand on this idea to show why OTT services are inimitably tied to the platforms on which they run – and therefore why they ultimately support today’s mobile, personalized and connected consumer.

That media distributors are racing to deploy Over-the-Top (OTT) services hardly qualifies as breaking news: the drumbeat of announcements from both networks (e.g., HBO, CBS) and distributors (e.g., Dish, Verizon) is increasingly difficult to ignore. But largely due to its novelty, industry reporting on consumer rationales behind OTT uptake has focused on technical, economic, or raw business perspectives. Little attention has yet been paid to a simpler reason OTT looks increasingly attractive to the paying customer: that OTT services tap into how consumers live in 2015 – and the trends supporting this arrangement are only increasing.

The particulars of media consumption can never really be separated from where and especially how consumers entertain themselves. In the case of TV, a comfortable living room with a large, high-definition display and rich surround sound is ideal for long-form, relaxed, and/or communal viewing. Indeed, viewing of this type (albeit at lower resolution) has been going on in the U.S. for nearly seventy years – and won’t end any time soon. But think of how consumers – particularly young ones– “watch TV” now (Figure 1) and this image starts to shift rather dramatically. Connected devices of all kinds have proliferated (Figure 2) and thanks to their popularity consumers increasingly expect mobile, personalized, and customized media – nearly the antithesis of gathering around the big screen.

Figure 1: OTT Uptake by Under 35 demographic (Source: Fiber to the Home Council America / RVA LLC)

Figure 2: Tablet Ownership (2010-13) (L); Smartphone Ownership (2011-13) (R) (Source: Pew Research Center Internet & American Life Project)

Of course, the legacy distributors who’ve made their fortunes off a mass-market, sedentary viewing lifestyle are hardly standing still. Major cable and satellite service operators have hurriedly deployed applications (“apps”) on every popular device. The cable-driven “TV Everywhere” campaign aims for ubiquitous access at little to no consumer cost – provided the consumer in question is already a paying subscriber. Current subscribers can also now control their DVRs and other devices remotely with services like Comcast’s Xfinity. (see Figure 3) And so on.

Figure 3: DVR and VOD control features among major Pay TV services (Source: PC World)

These efforts have had some effect (Figure 4) but (leaving aside the abysmal public perception and customer service of legacy MVPDs) are also failing to catch an increasingly moving target. The “TV Everywhere” pitch to subscribers assumes they’ll watch their paid programming on any screen – new or old. But extending an existing service (i.e., long-form video) – particularly one with a long association with consumer behavior – into a new medium often fails for the simple reason that the new one is used differently.

Figure 4: Multi-Platform Application Usage for US MSOs (2010-13, Percent Reporting) (Source: Technology Policy Institute)

This usage therefore requires new – or at least innovative – ways of repackaging existing content. Failing to adapt to a new medium often results in what media historians call “filming the play”, i.e., forcing “old” media into a new technology without updating the former – usually to the detriment of both. Historical examples include early film efforts using stationary cameras (e.g., no reaction or establishing shots) and more recently “interactive TV” ventures that vainly attempted to activate a medium that was (still) fundamentally passive.

Of course, this doesn’t mean new technologies can’t apply to existing content – DVR and VOD services have been relative successes for legacy MVPDs – though clearly extensions to existing behavior has its limits. (see Figure 5) Nor does it mean that legacy media are always overtaken: with apologies to Mark Twain, reports of the deaths of theater, film, radio, and television at the hands of later technologies have often been greatly exaggerated. But note these media are “exceptions” that prove the rule: when an upstart came along they adapted to the shifting consumer behaviors – or really did perish.

Figure 5: DVR Take-Up & Time-Shifted Viewing (2007-13) (Source: BARB)

In contrast, OTT services continue to adapt to the circumstances where their host platforms are used. These attribute are hardly a secret: while the time spent on home viewing has remained fairly static (and would even be shrinking without services like DVR), the growth rates for mobile video are exploding (Figure 6). Viewing on connected devices of all kinds will soon overtake “stand-alone” alternatives worldwide (Figure 7); high-end TV manufacturers like Samsung and LG are furiously deploying “Smart TV” (e.g., connected) products to meet this demand. And perhaps the biggest shift – constantly reinforced by the individualization of the latest media devices – is the growing demand by media consumers for personalized and customized content. Indeed, programmers, consumers and not least advertisers see this as a key differentiator for their new OTT services (see Figure 8).

Figure 6: US Mobile Video Viewers (2010-16) (L), Share of Time Spent with Major Media per Day (2012-14) (Sources: eMarketer.com, Statista)

Figure 7: Global Installed Base of Video Players (vs. TV) (Sources: Apple, Google, Nokia, Blackberry)

Figure 8: Consumer Attitudes to Personalized Ads (Percent Among Online Respondents Aged 13-64), June 2014 (Source: Yahoo)

By recognizing and adapting to the behavior attributes of its native platform(s), OTT is leveraging why consumers love their devices in the first place. Simply put, these services are fitting the mobile, personalized and always-connected lifestyle that current media consumers expect. And there doesn’t appear to be any going back: beyond the endless individuation driven by social media, wholly new technology areas like the “Internet of Things” and “Sharing Economy” (e.g., Uber, Airbnb) are only reinforcing these trends. Of course, current OTT service and providers can hardly afford to be complacent and legacy MVPDs are not going away anytime soon. But staying focused on how consumers use their cool new devices – rather than adapt it to existing content – looks like the best bet in an increasingly splintered, chaotic and exciting world of video distribution.