By Jason Friedlander, Senior Director of Product Marketing
The time is ripe for rewarding innovations in broadcast technology. So, what opportunities were left on the table at this year’s National Association of Broadcasting (NAB) Show?
There comes a time in every person's life when we've got to cut the cord. For most people, that means going off to college, getting our first job or moving to a different city away from Mom and Dad.
For us in the broadcast tech world, we're seeing cord cutting of a different kind—customers transitioning away from cable. From Saturday morning cartoons to Friday movie night, the cable subscription has been one of the mainstays of American life. But now, with the rise and increasing adoption of streaming platforms, 61% of young adults in the US have ditched cable entirely and rely exclusively on streaming for their entertainment needs.
This trend has major implications for cable companies and other broadcast providers and has driven massive technological and infrastructural changes in the past couple years. The industry is primed for innovation of all kinds. And the rewards are potentially huge, from figuring out the next big thing in augmented reality (AR) to creating a blockbuster ad monetization solution.
That's why I was surprised to find a relative lack of innovation at this year's NAB. NAB is like the Oscars of the broadcasting space (though with fewer ball gowns). Everyone who's anyone in broadcasting is there, from the big legacy media brands to companies that make specialty camera lenses. The yearly NAB show should present the cutting edge of industry innovation.
In this year of flux, with the challenges great but the potential rewards even greater, I expected NAB to be buzzing with new ideas. But this year's show saw the continuation of old debates, rather than any major paradigm shifts. The big guys continue to be in consolidation mode: an AT&T and Time Warner merger is underway, and Disney is acquiring part of Fox.
Meanwhile, arguments over relatively small concerns continue to rage. Of course, the company whose video encoding protocol wins out in the codec wars, or the company who figures out how to get the most out of super-high-definition 4k TVs, is sure to reap some rewards. There was also some notable energy around innovations in AR and video recognition. But ultimately, this year's NAB left me with one big thought: It's high time to stop sweating the details and get back to big-picture innovation.
The relative stasis of the industry demonstrated at this year's NAB does mean that companies have managed to work out a few older problems. For example, there have been some big developments in workflow management, with leaders emerging to offer end-to-end solutions in that space. Whereas it used to be that content producers would have to use different systems for each stage of production, from editing to content delivery, new platforms allow companies to integrate from start to finish. These innovations make the entire process more efficient and allow content makers to spend less time organizing their workflow and more time experimenting on the cutting edge. OTT and broadcast workflows have finally started to become merged as well, giving broadcasters a major opportunity to streamline and scale up OTT content.
All of these changes and innovations have a catch, though—and there's a big prize for whoever can solve this issue. Media companies still haven't figured out how to monetize OTT content so it brings in the same revenues as broadcast TV. While more and more Americans are cutting the cord, companies are still figuring out how to cash in. The subscription model has dominated streaming services so far, but it's far from foolproof. The traditional audience may have been loyal to a cable company for years, but today's more selective viewers often let their subscriptions lapse month to month, meaning unreliable income streams for the company.
That's why I think innovations in ad content is truly the way ahead. OTT content delivery enables highly targeted and, therefore, highly effective ads—and so far, we've just scratched the surface of seeing what those ads can do for media companies. Part of the trick will be getting advertisers to understand the potential of new and innovative programmatic technology, which could make targeted ads shown to a few thousand people more profitable than traditional primetime cable spots shown to millions. But there is plenty of space for more tech and business model innovation, too—and that's what was noticeably missing from NAB this year.
While I was looking for more innovation than I saw at NAB, there's an upside: The field is still wide open for the next big idea. As Americans continue cutting their cords, I predict that enterprising companies will step into that wide open space and blow us all away with innovations we never expected. And whoever does it, I look forward to meeting you at next year's NAB Show.