Boston, MA -- (ReleaseWire) -- 07/03/2014 -- High-speed broadband is pushing rich media ahead
OTT and the transformation of the media sector
The traditional media industry has been in turmoil since the rise of digital media platforms that impacted significantly upon many aspects of the media industry of old. These changes led to much unrest in the media sector. Major competing sectors include TV and radio broadcasting, newspaper publishers, film, music and video industries.
The digital media companies have become the clear leaders and to a certain extent there will be parallel developments - one driven by digital TV using the traditional broadcasting networks and one driven by broadband using new fixed and mobile telco infrastructure. In 2014 the advertising spending being directed towards digital media continues to grow, further escalating the problems for the traditional media.
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It has become clear that over-the-top (OTT) is 'the new normal' for the media and telecoms industries - with the emerging all-IP networks media and telecoms services are basically moving to an OTT model. These services are seen as a threat by the traditional operators in these sectors and the companies offering them are perceived to be getting a free lunch over the broadband networks. The European telcos are calling for international regulation, and in the USA net neutrality is no longer a given.
While the story for the traditional players in the market is all about shrinkage significant growth is taking place in many of the new subsectors of the broader market, which includes video-based entertainment on the internet, mobile apps, social media and new forms of interactive entertainment.
Advertising and marketing in the digital age
Spending on advertising using digital media channels is continuing to grow in market share despite the growth of overall advertising spending being slowed down by economic conditions. In 2014 the advertising sector is focused on the future opportunities offered by multi-screen developments - in other words, a cross-marketing approach involving multiple devices including TV, touchscreen tablets, computers, laptops, mobile phones etc. In addition, advertisers and content developers/providers are eyeing off the potential opportunities offered by the OTT content distributed by smart TVs. Digital marketing as a whole remains a growth area, as marketers shift towards these types of advertising methods at the expense of traditional formats.
National broadband network - changing the media model
The national broadband network is the next disruptive stage. Again the media has largely been absent from this debate, but the NBN will create new changes with new options. The traditional media players can take a leadership role, looking at the trans-sector opportunities the NBN has on offer - or they can simply copy their outdated models onto the new infrastructure, perhaps by using the wholesale services of a telco.
Initial indications are that, rather than moving towards media innovation, they are looking at more of the same. The media companies do have strong brands and millions of customers, but how can they utilise this advantage?
New video media
- Online video streaming is one of the fastest-growing digital formats and marketers are certainly recognising its potential. Online video streaming/web TV is being used by many different industries for advertising, marketing, demonstration, entertainment and communication purposes. The success of Google's YouTube has been well documented and YouTube continues to dominate in terms of viewers and streaming. Netflix, initially operating alone in the iVoD sector, has also entered the streaming video market and is gaining prominence and expanding internationally. Improvements in mobile technology and the introduction of smartphones have also assisted the development of mobile TV/video and we can now see it has a bright future ahead.
- Adding further competition to the already highly contested online video-on-demand sector, in 2014 Walt Disney and Apple announced the launch of a cloud-based service called Disney Movies Anywhere. Around a couple of billion online videos are watched worldwide each month. Online VoD has gained the attention of internet heavyweights, Google and Facebook.
- The US is an interesting market to watch for VoD developments, with Hulu, Netflix and Walmart Vudu just three of the players vying for position. There is a movement towards creating online video "channels" over the internet, aimed at target audiences, and YouTube has established a number of popular channels of its own.
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