By Chris Carey, Head of Sales, Strategy and Business Development
As I prepare to head out to the Variety Entertainment and Technology Summit in New York, I’m reminded that my 21-year-old son and most people my age live in two different worlds, technologically speaking. At the end of a long day, I may put my feet up and watch my favorite cable shows on a 60-inch television. However, my son streams all the video he watches on his phone or laptop. Millennials didn't grow up watching channels; they grew up watching video on demand (VOD) on OTT platforms. But that's about to change.
I'm looking forward to hearing my colleagues' thoughts at the Variety Entertainment and Technology Summit about the future of OTT. However, among the discussions of monetization, personalization and other big topics at these events, I often find something major missing from the conversation: an appreciation of the complexity of the digital ecosystem and the way in which new digital capabilities will enrich the viewer experience.
The current digital ecosystem is vastly more complex than the old, traditional network system. Not only are the choices of content far more vast and intricate, but there's the challenge of building the technological infrastructure to get that OTT content from its origin server all the way through a massive global network and the last mile to the consumer device – in a robust and reliable way. Consumers expect their TV experience to be as reliable as an appliance, like a refrigerator. On the OTT side, we have a way to go to get there.
One of the most exciting things we're working on right now at Verizon Digital Media Services is bringing the premium broadcast TV experience (reliable, high-quality, consistent video viewing) to an internet-delivered, always-on, cross-mobile platform; so viewers will feel like they're watching broadcast TV, whether they're actually watching an app on their 60-inch smart TV, on a 13-inch computer screen, or on their 5-inch mobile device. We're building the infrastructure to deliver this experience with the appliance-like reliability consumers demand.
Once that infrastructure is in place, I expect to see that tidal wave transition to OTT or virtual MVPD (which looks like broadcast, but has the OTT capabilities we know and love) and with it, a huge shift in the way viewers interact with content. The one-to-one experience for the consumer is massively important to us at VDMS, and, as an industry, we've only just begun exploring the possibilities of programmatic or dynamic ad insertion, which are advertisements tailored to individual viewers.
Even more exciting will be the ability to tailor the actual programming experience, which will eventually let broadcasters offer virtual linear channels programmed to feed viewers what they love. So, a viewer tuning into a sports channel will see content that matches her preferences: yes to football and basketball, no to soccer and cricket, etc. There may even be aggregators that pull content from multiple platforms to create even more varied streams—a viewer might see their favorite local news program at 9:00 p.m. followed by the latest episode of their favorite TV series at 10:00 p.m. Broadcasters will literally be able to program what's on that channel to deliver experiences that are unique to each viewer, along with advertising that's personally relevant and context-aware. For instance, if I'm watching a sporting event, I might see ads for a new athletic shoe from one of my favorite brands; if I'm watching a romantic drama, I might see ads for trips to Paris on an airline where I've racked up frequent-flyer miles.
The possibilities are endless, and it's the complexities of both the infrastructure and content that provide opportunities for exciting viewer experiences. But we can't deliver these enriching and rewarding experiences until the system is consistently reliable: one begets the other. That's why I hope that at the Variety Entertainment and Technology Summit, I'll see some interesting new ideas about both viewer experience and the robust infrastructure necessary to deliver it.
Currently, budget-conscious Millennials and their younger Gen Y cousins are at the vanguard of OTT adoption. Baby Boomers and Generation Xers are sticking with their tried and true set-top box because they value reliability and are less sensitive to the cost of a cable subscription. But we’re on the verge of making the OTT experience reliable enough to convince those older viewers to dip a toe in the OTT waters. Once we get there, when it comes to OTT innovation, the sky really will be the limit.
Don't miss Chris Carey this Friday at Variety Entertainment and Technology Summit NY.