Prior to Parks Associates’ 1st-annual Future of Video: OTT, Pay TV, and Digital Media conference, Michael McCluskey, VP, Product Management, Espial shared insights with the analyst team to discuss the future of video.

Michael will be participating on the The New Economics of Video panel on Tuesday, December 11, at 3:00 PM. Panelists joining him on this session include:

Kristen Finney, EVP, EMEA TVD, 20th Century Fox
Chad Harris, SVP New Media & Innovation, Crown Media Family Networks
Colleen Moraghan, Senior Vice President, Data Solutions, 605
Steven Schachter, VP of Business Development and Distribution, Cannella Response Television

What is the greatest challenge facing the video industry over the next three years?
The digital revolution is changing not only how businesses are conducted but also how they are perceived. Relics of retail, phone and video rental industries are a clear testament to how antiquated approaches are being replaced by more scalable business models and digital innovation is fueling this change. The Video industry is no different. There are multiple players in the video industry ecosystem including cable operators and consumers. For cable operators the greatest challenge is how to maintain relevance (slow the accelerated rate of cord-cutters) in an incredibly fast changing industry while delivering innovative offering and maintain scalable and cost-effective operations. Consumers are focused on value and convenience. Traditional Pay TV providers need to move rapidly to focus on the needs of the consumers. With truck rolls and term agreements signed in triplicate, a Pay-V operator has a hard transition. These models must be replaced by on-line sign-up for app-based TV, which can solve challenges on both the sides of the ecosystem. There must be total shift in their approach towards how they conduct their business and how they service consumers.

What is driving growth in video entertainment today? How does that change over the next few years?
This is the golden age of content with consumers having access to a fast-growing variety of content. Consumption is growing on mobile and on media platforms like Apple TV, Roku, and Amazon Fire. Consumers can find and watch content faster and more easily and SVOD and similar services have increased the perception of value for consumers. Content consumption is transitioning from linear to on demand and new forms of content including short form content targeted at social platforms are increasingly part of the entertainment mix. The challenge is to maintain the consumer value and convenience as major platforms like Netflix and Amazon start to compete and fragment consumer access to content. Over the coming years the challenge is to maintain the delivery of value to consumers and avoid the platform centric fragmentation and cost growth.
What technology will have the biggest impact on your business in the next 18 months and why?
Cloud based technologies are having the largest impact as they permit radically different business models for the delivery of video services. Hosted and multi-tenant cloud-based delivery models permit service turn-up in hours with a cost model which scales with revenue. Offers can be highly tailored to target multiple market segments – offering consumers in each segment the maximum value.

What is the top growth opportunity for content producers over the next few years? What about for the cable networks?
Cable networks and content producers need to be on their toes to deliver rich, real-time interactions with personalization to keep their customers engaged. For cable networks the biggest opportunity, or even imperative, is business transformation. The video market is changing rapidly driven by technology and consumer behavior. Digital transformation is critical to fueling the future growth as it will permit new ways of targeting and communicating with consumers; frictionless ramp up; customer centric service and a platform tailor-made for content owners and partners. I feel, the question is ‘if’ or ‘whether or not’ digital transformation will happen, the question is how the cable networks will respond. We have started to see that transformation happen and cable operators has already started to work with us on that.

What is the one thing that the pay TV ecosystem need to learn from the online giants in video (Google, Netflix, Facebook, and Amazon)?
The key thing to learn from these giants is ‘Digital transformation’. The online giants fully embrace digital transformation in their business permitting them to offer consumers value and simplicity at scale and cost points unmatched by traditional Pay-TV. These platforms are already instrumented for supporting consumers, content creators and advertiser needs.

What will pay TV services look like in 5 years?
Pay TV services will be personalized, intuitive, and seamless. For consumers content will be simple to access and be offered in a manner which makes sense to them. For content creators Pay TV platforms will offer ease of access to target consumer groups for their branded content. For advertisers Pay- TV platforms will offer multiple targeting and monetization approaches. Digital technologies will be fully embraced in the delivery of Pay-TV services. The focus will be on customer experience and customer service.

For more information on the Future of Video, visit: www.fov2018.com.