Viewpoint: Big Data Analytics Pivotal to Future Of Pay TV

When we look at the various TV packages available today, the vast majority of pay-TV service providers are failing to maximize the amount of data that can be attributed to all the content that is watched by viewers. Yet, in an era where personalization will be one of the biggest drivers towards purchased consumer content, the television industry has far wider scope to maximize the possibilities associated with big data. Ericsson’s Warren Chaisatien argues that pay TV operators are failing to exploit the data they have.

The rise of big data is playing a highly influential role in the way content is created and how original programming is put together. Back in 2011, the CEO of the UK broadcaster Channel 4, David Abraham, said audience data is “the new oil or soil, of television”, and that sentiment is starting to take shape. With the emergence of many online platforms, it provides service providers access to real-time information, ranging from the length of time content is consumed, to the time of day that it is being watched and from whom it is being recommended. It delivers a deep knowledge of the key influencers in today’s TV industry, enabling service providers to pinpoint the challenges and opportunities on offer to them.

In other words, they have the scope to go beyond making basic recommendations and can now outline the specific types of content that will appeal to individual consumers, both in terms of adverts and content programming. In my region of Australia, for instance, a study by Telstra and Kannuu Pty found “for some of the ‘top 30’ movies, more than 25 percent of the purchases resulted from discoveries on the Kannuu platform.”

Ernst Feiler. Head of Technology bei UFA SERIAL DRAMA GmbH, Germany notes that broadcasters do not yet understand the value of big data.

Ernst Feiler. Head of Technology bei UFA SERIAL DRAMA GmbH, Germany notes that broadcasters do not yet understand the value of big data.

The role of analytics in the future of TV

Analytics play a pivotal role in the delivery of buying decisions, and we believe big data will play a fundamental role in the future of advertising. By measuring the way consumers choose their content, advertisers can begin building multi-platform campaigns across multiple screens and media to build higher levels of awareness and retention among consumers. Although no one can be certain as to the precise added benefit this data can offer advertisers, for those who wish to be competitive or increase innovation in their business, it’s crucial to access this data from the beginning in order to have an edge. It’s an area my Ericsson colleague Simon Frost addressed in his recent blog post on the importance of personalized discovery.

A 2015 whitepaper "Big Questions, Big Answers", from the research firm GFK ,references Ernst Feiler, Head of Technology at UFA serial drama in Germany, who said: “We have no experience with (data) and we have to learn. The broadcasters do deal with data but only after we deliver them our production. This is not an intelligent way forward. What we see is that we have to digitize our whole production workflow so at the end we have a video with all the data on it. This will help to create new business models.”

Broadcasters must soon begin to understand and use

Broadcasters must soon begin to understand and use "big data" to reach new audiences as well as improve content production efficiency. Image UFA.

By doing so, advertisers will be able to begin drawing key information, ranging from consumer habits on the set-top-box, to the demographic information of the subscriber, their location, their daily travel patterns and their projected household incomes. This will help them to leverage more mature ad insertions and target processes that will determine the various workflows and analytics that decide what to show where and when.

This will be a major differentiator for TV service providers who are engaged with brands. It will lead to broader advertisements, transitioning from impression-based metrics to transaction-based metrics. This will also lead to improved measurement, as brands recognize and prioritize the need to understand what consumers like and dislike. Media enrichment is a pivotal element in driving agility and performance and by addressing this area, we can significantly enhance the value of the content itself.

Exclusive OTT content is helping to form the integrated TV experience

Exclusive content is another differentiator in this highly competitive market. Netflix is already well on the way to becoming a global content producer, having successfully launched shows such as ‘Orange is the new Black’ and ‘House of Cards’ to critical acclaim. Amazon Prime expects to make huge in-roads in this market through its recent acquisition of an “all new car-show”, presented by the former BBC ‘Top Gear’ team. YouTube, owned by Google, is also enjoying success and creating stars due to the popularity of a number of its user-produced channels. They are able to analyze the data within their own platform and harness the power of every ‘like’ and ‘share’ that their subscribers make. They represent highly valuable data points and they form the basis from which specific kinds of interaction methods can be sourced to ensure interaction with viewers and tap into the deluge of social media engagements that take place during a single program.

Original content like the Netflix series

Original content like the Netflix series "Orange is the new black", is key to meeting viewers' demands. This requires data on viewing habits. Image courtesy Netflix.

John Moulding, Editor, Videonet, recently described this new era as “an attitude towards self-disruption.” Although the roadmaps for success are still undefined, there is simply no counter argument to the notion pay-TV providers must change and integrate greater OTT offerings and streamed video content into their platforms. Broadcasters must begin to understand the power of digital audience data.

Curation is now king. As the entire video landscape moves towards online delivery, the likes of DISH (U.S.) and Sky (UK) have enabled a cord-cutting generation to take advantage of their core video services and programs and reach out to larger audiences. With so many different ways to access and discuss various forms of content, service providers must look to offer more personalized and flexible packages that avoid strict lock-ins or binding times.

Research from the IP Awareness Foundation found that the arrival of new online streaming services has actually led to a 4 percent drop in the amount of illegally downloaded content in Australia. The growth of legally available streamed content is helping consumers to break free from the restrictions of TV schedules and move towards an era where live content will be the main driver of traditional broadcast delivery methods. In the future, OTT will represent a route for choice and viewer autonomy. Crucially, each content form will present a number of new opportunities for monetization and as a combination will deliver the viewing experience that consumers are demanding.

As Jonathan Sykes, chairman of UK TV analytics firm Genius Digital, said, “More (big data) doesn’t necessarily mean better…The bottom line is understanding that the behavioral data helps in all areas of the business, from strategy to operations, advertising, acquisition to churn management.” Ultimately, pay-TV providers must understand the importance of integrating big data and harnessing its power to deliver customized content to all devices and locations, at any time the consumer wishes.

Warren Chaisatien is Head of TV Marketing, Australia and New Zealand, Ericsson, in charge of positioning the company for market technology and thought leadership across the region.

Warren Chaisatien is Head of TV Marketing, Australia and New Zealand, Ericsson, in charge of positioning the company for market technology and thought leadership across the region.

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