New ‘must-haves’ raise the bar for the end-to-end user experience
The growth in digital consumption and competition for consumer attention create a new set of must-haves for media companies. Digital-native services are best placed to meet growing demands through existing channels and well-funded content to satisfy record-high consumption levels. To drive a similar experience, traditional players will need to adopt new interaction models, such as dual-screen experiences and social viewing.
Meanwhile, entirely new experiences and businesses will be built upon emerging channels, particularly gaming, as in-game commerce, advertising, mini-programmes and virtual events continue to gain popularity. Innovations in advertising, such as transactional ad units, non-disruptive displays and frequency capping will further define the user experience. The customer experience is not limited to media consumption, but extends to a continuous integrated cycle from acquisition through engagement to retention and everything that happens in marketing, sales and support.
We are thinking about how we can use technology and innovation to create an enhanced communal experience for fans watching at home, while replicating the atmosphere and look of a home arena for players in the venue.—Mark Tatum, Deputy Commissioner and Chief Operating Officer, National Basketball Association (NBA), USA
Key trends and proof points
Differentiated content is still king
- Exclusive rights to differentiated content: Disney+ acquired the film rights to award-winning play Hamilton, which drove 47% more Disney+ downloads the weekend the film was released compared to the average download volume for the previous four weekends.
- Exclusive access to top talent: Spotify acquired the exclusive rights to Joe Rogan’s podcast to expand its footprint in podcasting, while Amazon Prime Video signed a first-look TV deal with actress Priyanka Chopra Jonas to expand its footprint in India.
- Differentiation through hyper-relevance and fast feedback loop to creators: Throughout the crisis, YouTube served relevant content, such as information related to financial stimulus, and saw daily views of videos with “stimulus check” in the title increase +300% from early to late April.
Back catalogue proves sticky
- Struggle for exclusive content libraries: Amazon, WarnerMedia and NBCU have joined Disney in pulling titles from Netflix, as Amazon’s IMDb TV secured the rights to Mad Men, HBOMax pulled Friends and Peacock pulled The Office.
- Focus on original content hours: OTT Players increasingly funding original content libraries, with Netflix expected to spend $17 billion on originals in 2020, up 13% from 2019. HBOMax is expected to spend $2 billion and Disney+ $1.5 billion in 2020.
Better experiences driven across devices and formats
- Availability across device categories: Despite drastic shifts in the music industry due to COVID-19, in Q1’FY20 Spotify posted strong financial results, which it attributed to the “ubiquity” of its platform across 300 devices, as the service saw listening shift from cars to gaming consoles and smart speakers.
- New formats driving engagement: Musical artists reached large audiences on gaming channels, such as Fortnite, while Condé Nast invested in video on its Bon Appétit YouTube channel and grew subscribers 50% from July 2019 to July 2020.
- Greater personalization, less friction: UX is enhanced through personalization, such as TikTok’s hyper-personalized feed, and less intrusive ad experiences, such as Hulu’s improved frequency management and non-disruptive formats.
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Local capabilities, global reach
- Organic growth through regional audiences: Chinese companies ByteDance and Kuaishou launched local versions of their apps in the US, India and Brazil. The English Premier League has turned to the US, Asia and the Middle East for growth, seeing a 35% increase in the price of international broadcasting rights for the 2019-2022 seasons compared to the 2016-2019 seasons, offsetting a 7% decrease in the price of domestic rights.
- Inorganic growth through international M&A: Tencent Video announced it will buy Malaysian streaming platform Iflix to expand its WeTV streaming platform in South-East Asia, while Facebook bought a 10% stake in digital services company Jio Platforms to expand its ecommerce and digital payments footprint in India.