By some estimates, the amount of video watched on mobile devices will shortly overtake the traditional living room TV - and mobile offers considerably more than just a smaller screen and portability. With mobile as a personal viewing platform and a beacon for a more granular understanding of the viewer, the mobile video experience offers many benefits and considerable challenges for TV service providers and broadcasters. For this IBE Market Briefing, we look at both the technology and social-economic impacts of the mobile video revolution. We examine new technologies such as LTE broadcast and compression technologies aimed at bridging the bandwidth gap for mobile viewing of HD content as well as innovators that highlight the potential of engaging a mobile audience.
Mobility equals intelligence and convergence
Mobile forces TV operators to adapt
New mobile revenue streams
Real world example - Box Television Dynamic Ad Replacement for mobile audiences
Deploying mobile video
Real world example – Mobile video as a service
Enabling technologies: LTE broadcast and advanced compression
The smartphone has become the fastest growing consumer electronics device in history with annual sales worth $380 billion. The technology propelled Apple, an also-ran in the PC market, to the world’s highest value company, recently overtaking Exxon with its $700 billion market capitalisation. Since the iPhone launched in 2007, the rise of the smartphone has been almost unstoppable, punctuated by a few sidebars such as the tablet market and, by 2020, it is expected that 4 billion smartphone users will be online and the number one application is likely to be video. According to networking giant Cisco, in 2012 mobile video traffic exceeded 50% of total mobile data traffic for the first time. However, the firm expects mobile video will increase 13-fold, accounting for 72% of total mobile data traffic by 2020. And the smartphone, unlike the traditional TV, is a much smarter receiver.
Figure 1: Data from Cisco Visual Networking Index 2014
Mobility game changes
Intelligence and consumer insight
Traditional TV for the large part is essentially a linear, mass audience broadcast medium funded with the overarching revenue stream derived by generic advertising based on broad demographics. The mobile device represents a personification of its owner able to divulge a user’s location and, with the right permissions, it can gain knowledge of age, sex, marital status, browsing habits, and even friends and family through connectivity to social networking. In essence, the data collected by and viewed on the smart mobile device builds a more accurate picture of the viewer than any other method in history. This rise of mobile video offers broadcasters unprecedented opportunities to adapt the flat TV experience into a dynamic and highly personalised experience where the consumer can be catered for and advertised to in a way more akin to Internet-based services than the linear egalitarianism of TV.
Mobility offers convergence
Where TV has traditionally been split into the competing domains of analogue, digital, cable, satellite and propriety devices between each transmission method, mobile is in many respects more streamlined. The current generation of smart devices is centred on two camps with rivals Google and its android competing against Apple with its iOS. Microsoft and Blackberry own sub 10% market shares. A similar convergence is present within areas like the browser where the top three vendors - namely Google Android/Chrome Browsers, Apple Safari and Opera Mini - effectively carve up 96% of video in a browser viewing audience. Add in the underpinning of IP and the Internet as a common distribution method and the mobile space offers a relatively neat convergence of technologies for the effective delivery of content to subscribers.
Mobile forces TV operators to adapt
Mobility offers a path for new competitors
The vast majority of smartphone users in developed economies are tied into monthly contracts that offer bundles of minutes and data allowances. This effectively provides a subscriber billing and payment method, managed by mobile service providers, that allows a relatively easy way of allowing a subscriber to purchase items with costs attached to monthly billing. Although still at an early stage, the potential for the telcos to become more heavily involved in pay-TV content services is not lost and follows a progression of broadband service providers delivering IP TV services as part of quad play bundles. Delivery of video content over the Internet and increasingly over mobile cellular networks can potentially side step the hurdles of obtaining governmental TV licences or other restrictions over broadcast transmissions. The prospect of mobile video is increasingly used as a lure by mobile operators as a reason for subscribers to swap to higher ARPU 4G services with notables like EE in the UK providing free access to sports highlights as an incentive.
Content as the new app store
Subscribers, especially millennials, also seem to value the flexibility offered by mobile video. For example the BBC, which in 2014 served over 3.5 billion requests for TV and radio programmes through its iPlayer VoD services, found that in January of 2015, 40% of requests came from either smartphones or tablets. Other data elements highlight mobile viewing is growing across the board although data from Ofcom suggests that although the number of items viewed is growing, much of this is still short duration clips versus traditional TV. Traditional TV still owns the bulk of time consumed, especially for long duration content like football matches and films. Mobile video is another facet of wider changes within the content distribution consumption model. More TV operators are looking at ways to tap into the potential revenue stream offered by mobile centric users in much the same way that mobile apps went from near zero to a $25 billion a year business in less than a decade. This shift is causing content owners to further slice and dice rights agreements depending on Internet and, increasingly, mobile access as demonstrated by Spotify, a music streaming service which has different pricing and advertising inventory depending on mobile or fixed users.
Mobility shifts advert delivery and value
The growth of mobile video has the potential to dramatically alter monetisation – especially when it comes to advertising. Where traditional TV viewers were a relatively unknown quantity other than the BARB panel assumptions, each mobile viewer has the potential to disclose a lot more viewer centric information. Unlike the communal nature of the TV in the living room, the mobile device is more personal and even shared devices like tablets tend to have individual profiles. This makes the notion of much more targeted advertising a realistic option as well as interactive video adverts with ‘click through’ options to further increase the ability of advertising to lead to actual sales or at least brand interaction.
Not only does mobile provide more information on the demographics of the viewer, the ability to know the viewer location allows for advertising that is more relevant and potentially dynamic. Based on access to GPS data, an ad-insertion platform could potentially serve up adverts that reference local retailers within the vicinity or calculated destination. An advert could, for example, target a person on a train heading into a major station that features a branch store with a relevant special offer. By linking social media and other identifiers such as email addresses, advertisements can quickly gain viral spread through simplified equivalents of Facebook’s ‘like’ mechanism.
The mobile device also has the ability to increase participation between brands and consumers as a call to action within video-led advertising campaigns. For example competitions, time-limited offers, e-commerce through embedded links and application download can become part of interactive video campaigns that mix video with dynamic content generated within HTML-based video environments. This theory is now turning into practice with tech savvy millennials as the first and most relevant target.
Real world example - Box Television dynamic ad replacement for mobile audiences
Box TV is the UK's #1 music TV network and offers a full spectrum of music TV genres across eight world famous digital channels: The Box, 4Music, Kiss, Magic, Smash Hits, heat, Kerrang! and The Box Africa. It broadcasts its channels to the UK and international markets with a focus on Africa and Europe, targeting 16 to 34 year old viewers. The UK channels are available on cable, satellite and free-to-air digital terrestrial as well as via Internet delivered TV simulcast online and mobile players to connected PCs, tablets and smartphones.
When launching its online and mobile TV offering, the challenge was to find ways to engage with its connected audience, and stay relevant - particularly to the younger 16-24 year old audience. Box TV’s music channels differentiate themselves from a la carte on-demand music playlist services through packaged and editorialised content, something that is core to its heritage as a network of trusted music brands.
Post launch, a key business requirement was to optimise its simulcast ad-funded monetisation model, by introducing new digital advertising opportunities. “Originally, we launched the online player with two non-skippable pre-roll ads before each stream,” said Julie Wright, Box TV’s commercial and business development director. “Viewers were comfortable with this, and it brings revenue opportunities. But we wanted to explore innovative and more integrated digital advertising options.”
Dynamic Advertising Replacement
“We knew that we would engage better with our audience if we found a less intrusive way of advertising,” Wright continued. Box TV found the solution with Yospace and its Dynamic Advertising Replacement.
The critical element of the Yospace approach is that it frame accurately switches content before delivery to the end user’s device thanks to integration with the broadcast playout automation. The result is that the replacement is seamless, whatever the delivery platform: viewers do not realise that the advertising is replaced. The replacement advertising can use all of the functionality of the online platform, for example many of the online ads are clickable. Dynamic content replacement can be set at the platform level or it can be even more granular, potentially down to tailoring advertising to individual viewers.
“Digital platforms are interesting, because of the one to one connection with the viewer,” Wright said. “We first met Yospace in 2012 and saw that they could deliver a better experience. Using their technology we could make the advertising more relevant to each of the viewers watching at the time. If the advertising is more relevant, then the overall channel experience is more relevant.”
Technically, the Yospace solution has a relatively small footprint at the broadcaster, where it integrates with the broadcast playout system and with the advertising sales platform: Tremor Video in the case of BoxTV. Most of the processing is in the Yospace cloud, which also handles content delivery. Yospace interrogates the broadcast playout system for details on upcoming commercial breaks, then plans the dynamic replacement of advertising for each platform and viewer. Because the content is switched in the cloud, the end user’s device sees only a continuous stream of content so there is no potential for disruption, nor a need for player-based ad fetching with the associated overhead in terms of bandwidth.
“Dynamic Ad Replacement gives the advertiser the opportunity to plan on different platforms,” Wright explained. “Our advertisers know our viewers are not watching less television, instead they are doing so through more touch points and platforms. Through traditional broadcast we are attracting 14 to 15 million viewers a month in the UK. Broadcast TV is very powerful, but now we are developing our connected experience to increase our reach potential. Online viewing is still small, but growing. Since we replaced pre-rolls with dynamic ad insertion, our ad impressions have tripled and digital platforms also allow us to measure how long a viewer will stick with an ad. We are now seeing view-through rates of 96%. That is a good 15 or 20% higher than conventional digital advertising. It is clear that dynamic replacement helps make the viewer stick with the advertising. The ultimate result is a four-fold increase in online ad revenues.”
Box TV is a pioneer in dynamic online advertising replacement, and is developing new business models around it. It sees it as a tremendous opportunity. The ad clickability feature adds another level of interaction and creates the engagement opportunity with the advertised product. Ads can be currently targeted by platform (iOS, Android, app, web) and TV channel (choice of 7). “With such technology now in place, our aim is to develop scale,” said Wright. “In the future we will look to deliver specific audience segments to advertisers. Dynamic Advertising Replacement helps us deliver a better product and, ultimately, to be more competitive.”
In part two we look at some of the challenges facing TV operators moving to a world dominated by mobile video and example some of the technical trends that will enable the transition.