NEW YORK — Now that TV audiences are no longer stuck on their couches to watch television shows and can instead watch video content wherever they want, whenever they want and on any device they want, it’s critical that media and entertainment companies provide the best viewing experience possible or risk viewers turning elsewhere, according to Google and T-Mobile executives.
In this “time of transformation” for the TV industry in which there are “so many options for content consumption today, distributors need to provide a truly premium viewing experience,” Peter Dolchin, Google head of telco and video distributor partnerships, said Nov. 1 in the afternoon keynote “Delivering a Premium Viewership Experience” at the NYC Television Week’s NextTV Summit. But “clearly, this is not an easy task,” he conceded.
Today, TV viewers “expect a seamless, personalized and cohesive experience and that experience expands beyond the content, into advertising as well,” he said. adding: “That experience needs to exist on live, linear VoD content across all streams – whether that’s in the living room or on the big screen or also on mobile devices.”
Meanwhile, the “fragmentation of devices…just creates more complexity when it comes to ensuring a strong user experience, as well as a great ad experience,” he said.
Noting that 2019 will mark his 20th anniversary in the cable TV industry, Jeffrey Binder, T-Mobile EVP of home and entertainment, recalled: “When I started, the whole world was about on demand. Of course there wasn’t any. But it was the thing that folks were talking about … . It was sort of phase one of the tech bubble and Internet, and whether it was pizza or shopping … interactive TV commerce was sort of the rage.” Digital video recorders (DVRs) were also just starting then, he noted.
If we “fast forward 20 years, on demand is finally here,” he said, calling it “sort of the core staple of what the next generation of TV is looking like.”
But he added: “We actually haven’t progressed all that much in 20 years, which is sort of the disappointing part. We should be a lot farther along.”
Indeed, for one thing, viewers still get buffering when viewing streamed video content, Dolchin pointed out. Binder agreed, but said, “not with us you don’t,” which was greeted with some laughter from the audience.
“We really haven’t progressed that far,” Binder went on to say, adding: “Even if you look at the ad space … the cable industry still hasn’t sort of realized that competitive desire to compete with Facebook and digital and social and Google. So, we’ve got work to do.”
For Binder, “the journey has been certainly an interesting one,” he said, telling the Summit: “I guess the takeaway is things move a lot more slowly than people think they will.”
But Binder said, “I think we’re on the cusp of” major change that will move the industry forward – in particular with 5G coming into the next generation of wireless distribution, with the content models finally starting to get lubricated in a way that’s allowing programmers and distributors to sort of figure out how to deliver content to consumers in ways that still allows them to build a business and create good marginal economics, but at the same time satisfy customer needs.”
At the same time, however, there still aren’t many great alternatives for customers who still want some sort of traditional pay TV package, he said.
There are “a whole bunch of things that we’ll be doing over the next year or so” at T-Mobile “that I think will sort of meet” that demand and are “right for the marketplace,” he told attendees.
“The reason that you’ve got all of these different products flooding into the marketplace is because consumers have not been satisfied” by the pay TV choices, he went on to say, predicting some of those services are going to be successful, while others won’t be.
“I think we’re starting to see” over-the-top (OTT) “peak” in general when it comes to demand and subscriber numbers for “skinny bundles,” he said, adding: “The reality is I think there’s something else consumers want that we’re not delivering in the traditional television ecosystem because given the fact there are 360 million people in this country and skinny bundles — not Netflix or Hulu — have maybe 4 or 5 or 6 million people using them, that says it’s kind of 2 percent penetration.”
T-Mobile is “hard at work cracking the code on” what consumers want, Binder said. “It’s not easy but we think we’re on that path and we are going to deliver things that are much more interesting for consumers and that are much better aligned with their personal needs,” he told the Summit.
But there is no one solution that will satisfy all consumers equally, he said, adding a “killer” offering is going to be different depending on each individual viewer.
Asked by Dolchin how T-Mobile is using technology and data to enhance the ad and user experience for viewers, Binder replied that his company is being helped by its partnerships with companies including Google.
Binder explained: “It’s early for us. It’s late for a lot of other people. We’re just sort of getting into the combination of wireless and TV and home and all those pieces. It’s a shame that the television industry is as far behind as it is. That’s the reality of it. There’s billions of dollars being left on the table every year in terms of ad monetization.”
But he said, “we’re 20 years closer to” the dynamic ad insertion (DAI) “holy grail than we were 20 years ago.” He declined to predict when we’ll actually get there finally. Nevertheless, he said: “We feel like we have a very clear path [at T-Mobile] to monetizing the ad opportunity that exists in our platforms and we think that that’s something that happens a lot sooner than later. But there’s work to be done because an ad strategy in dynamic insertion requires a broader ecosystem than one market-leading provider with technology. It requires the entire process of selling ads, defining data pools, building demand, pricing it properly, the introduction of how does programmatic fit with local and upfronts and all [the] other pieces that have to be woven together in a way that permits real, true monetization.”
However, “I think we’re close,” he said, adding: “I think pre-season is just about over and we’re ready to go into, to use a World Series baseball analogy…the first inning.” There’s “a lot of upside” to the industry achieving that, but he said: “It’s going to take the collective of the provider and distribution community to get their act together to really get to the scale that drives advertisers to put real dollars into the pool.”
Dolchin agreed with that assessment and noted Google already had the technology in place for it, including artificial intelligence and machine learning to create more personalized ads. “There’s a lot of money being left on the table,” he agreed.
But Binder said it’s also important to “figure out the balance between the monopolization of the consumers’ time to promote a given product through advertising versus the monetization of a given space or impression.” The right balance, which “we’re going to work hard to figure” out, would include interrupting viewers with ads as little as possible while creating the most value, he told attendees.
However, Binder noted: “The truth is most consumers don’t want to see ads.” Therefore, “I don’t think” the solution “can be monetization at all costs at the expense of consumer experience because … that will create opportunities for consumers to move away from advertising” completely and pay money to view content entirely without them, he said.