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.
- 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.
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.
Presented at AUDIENCExSCIENCE, June 12-13, 2018