What happens next?
- Structural media trends – there will always be new tech.
- Choice in OTT will grow, but it’s niche or additive, not a take-over.
- Challenges in clutter and content discovery.
- Smaller bundles will have better adoption than à la carte.
- Dual revenue streams (ads and subs) will beat single revenue streams.
- Cluster theory (geographical co-location of competitors in an industry) suggests that there is a big moat for Silicon Valley to cross in terms of competing on storytelling. Storytelling is different from coding and distribution. There are culture and talent issues.
Conclusions:
- Multiple big companies with overlapping agendas matter.
- There is no ad fraud in TV, like with digital.
- Sound, motion, storytelling, emotional connections all matter.
- TV incumbents must get bigger to compete.
- TV Everywhere and linear TV ad targeting will help.
- GDPR means a walled garden win – they have an excuse to not share their data.
- The digital aggregators’ Achilles heel: their smartphone focus; the USA market is not big enough; they must fight each other.
Final takeaway:
FAANGs will not be successful in “defeating” television because of the need for storytelling excellence and creation of emotional connections. The only path to success for FAANGs is to acquire a media company outright and let it do its thing. But legacy media must get bigger to compete.
Analysis Report:
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Presented at AUDIENCExSCIENCE, June 12-13, 2018