HIGHLIGHTS
- We have great role models
- Dynamic catalogs are key
- Technology is the enabler
The National Association of Broadcasting exhibition in Las Vegas this past year affirmed trends in the Media and Entertainment Industry that will continue to evolve at very fast rates, driven by some of the largest companies in the space including Amazon, Microsoft, and Google. Microsoft’s CEO Satya Nadella has transformed his company to be “mobile first, cloud first” in everything they do, and M&E is a
huge part of their B2B service offering. Addressing the technical hindrances of today’s supply chain will significantly be streamlined with the introduction of mass compute and storage cloud environments. The work of these large media companies is just beginning.
Content Type Trends
When we evaluate at the trends of the mainstream consumer market and assess how this impacts the IFEC market, we can often derive key features that are needed to better align the onboard passenger experiences with what passenger’s experience while off the aircraft. One of the biggest takeaways of the trends in today’s M&E market is the need for a more dynamic set of content that includes time-sensitive on-demand content updated onboard as fast as its released from the distributors. Cloud-based automation helps this use case tremendously.
Dish Network CEO Charlie Ergen said “My belief is that OTT [over-the-top] video will take share away from pay-TV, so satellite and cable will be smaller five years from now than they are today. You’re already seeing that reduction [in satellite] … and phone companies; you’ve seen reductions really for the last couple of years.” [Source] This means that the value propositions of the past, massive aggregated sets of content that focuses on live broadcast, have evolved to curated sets of targeted content that is best consumed on the viewers schedule.
Device Type Trends
However, we have learned that the traditional “lean-back” large displays mounted in the home are still the preferred way to view television content by far. Nielsen reported that 82.1% of all viewing is done on televisions, which is more than all other devices combined.[Source] This is a good argument that consumers like displays that are large and fixed, similar to displays mounted in an aircraft seatback. Nielsen also reported that news consumption is on the rise. In the US, there was an 18% increase in 2016, bringing the number of total annual minutes consumed to 72.5 billion from 61.2 billion in 2015.[Source]
However, we have learned that the traditional “lean-back” large
displays mounted in the home are still the preferred way to
view television content by far.
Backend Drives Frontend
Hulu is projected to grow nearly half a billion in revenue from last year to about $2.4B. Furthermore, each Netflix subscriber on average is spending over an hour and a half every day on the platform. These are both OTT platforms that have developed a multiscreen strategy that capitalizes on time-shifted television content, with significant focus on capturing personalization data for the purposes of ongoing refinement of the media experience. The content on these platforms is released from the distributors in a very streamlined workflow that uses cutting-edge technology for transcoding and packaging, and does not have contingencies on any other title/episode before it is pushed out to their application. The technology that drives the backend is what serves the viewer effectively, and ultimately has driven their year-over-year revenue increases. The scale and global footprint that these companies operate on provide so many great takeaways that we can benefit from in IFEC and we should definitely keep our eyes on them.
John Jezowski is the Managing Director of Cloudcast and leads strategic business development efforts in the Inflight Entertainment Industry. He has a degree in Film and Television from Chapman University and has been distributing content to aircraft for over eighteen years. If you have any questions, please contact John at [email protected].
