Made for mobile: The next step for streaming video
(This article originally appeared on RCR Wireless).
They said mobile phones would never replace cameras. They said mobile phones would never replace car sat navs. They said mobile phones would never replace home Hi-Fi systems. And yet for most people, in most countries, most of time, mobile has done exactly that. Even everyday devices like the humble battery operated flashlight seem to be, if not extinct, things we just can’t be bothered to look for any more.
So how long before the traditional TV set gets overtaken by mobile devices … or will that “never happen” either?
Content is no longer king
Without question, the market for TV programming is brutal. Netflix lost 130,000 US subscribers, it’s biggest loss of customers since 2011 when it split its streaming and mail delivery businesses. Moreover, the company signed up only 2.8 million subscribers internationally, about half of what Netflix predicted for the year.
Meanwhile, hungry new contenders are flooding the market. Disney announced it is bundling Disney+, ESPN and Hulu for the same monthly subscription that Netflix currently charges. Given that Netflix has lost the rights to offer flagship content including the full range of Disney and Marvel titles, which one would you go for? Moreover, new entrants like BritBox, a venture from BBC and ITV that features British television shows, are entering the fray looking for their own slice of pie.
How do so many players ensure success? In the past, traditional streaming services relied upon a single concept to drive users to their service: unmissable content. If you could produce that unmissable show commercial success was guaranteed. So, Netflix created House of Cards and Hulu created The Handmaid’s Tale. When premium cable providers began offering TV everywhere – think HBO and Game of Thrones – the goal of creating unmissable content to attract viewers still applied.
But unmissable content is no longer sufficient. In fact, there’s glut of “must see” shows out there, all of them amazing. Consider, for instance, that HBO is producing five new spinoffs from Game of Thrones alone. And there are many more fantasy / science-fiction shows inspired by Game of Thrones in production elsewhere. In addition, Marvel Comics is releasing eight new television shows by 2021. It seems many players have now cracked the formula for creating that “must see show” for TV. The result is content exhaustion – too much great content on too many streaming services with too little time to watch it. So, bizarre as it seems, creating that unmissable TV show is no longer enough. As the contest ensues, new thinking is needed.
Adapted for Mobile
Currently, there are two ways of tailoring streamed video for mobile devices. The first is to take conventional TV content and adapt it to work on smaller screens with dodgy mobile connections.
That’s pretty much the idea from Netflix as they launch their mobile-only plan in India later this year, priced lower than existing fixed-line subscriptions. Netflix is developing its mobile-only service to reach a larger audience in India, while also expanding its business in a market where the average revenue per user (ARPU) for pay TV is less than $5.
While this strategy might work in geographies where fixed-line subscriptions are naturally limited by infrastructure, it doesn’t translate well to developed markets. There a more radical strategy is needed to unlock new revenues.
TV shows made specifically for mobile?
That’s pretty much the view of billion dollar start-up Quibi. Historically, whenever new consumption devices hit the market – smartphones, tablet computers, etc. – the initial impulse from the industry was to shoe-horn existing content developed for the old consumption device into the new one. So, for example, the first television shows were really souped-up radio plays, and even when the internet appeared, newspapers initially just created PDFs of their newspaper and uploaded to a web site. However, as understanding grew and entrepreneurs willing to take risks emerged, new content ideally suited to this new way of consuming emerged … so we see that Game of Thrones is definitely not like a radio play!
Entirely new content made for low attention spans and small screens. That’s what Quibi aims to do. Or, from their website, “quick bites of captivating entertainment, created for mobile by the best talent, designed to fit perfectly into any moment of your day”. And when they say “best talent” they’re not kidding. They have Jeffrey Katzenberg, former CEO of DreamWorks Animation, who it is said, “knows everyone in show business”, along with the likes of Justin Timberlake to star in short-form movie content. The goal is to create movies for mobile: feature length films in seven- or eight-minute chapters, targeted at 25-35 year olds.
Will it work?
Interestingly, Quibi doesn’t view traditional streaming services like Netflix or Amazon Prime as its competition. Instead, Quibi is focused on attracting Facebook, YouTube and gamers, who tend to be mobile, have shorter attention spans, and a few minutes here and there during the day. (So Netflix can at least breathe a small sigh of relief there).
For sure as 5G ushers in yet another new data tsunami, this will largely be video over mobile. Research indicates that up to 90 percent of 5G traffic will likely be video. Whether that includes epic, short-form, unmissable content, directed at the small screen is yet to be proven, but, if history has anything to teach us, it is that there is always a new unexpected inflection point just around the corner.
This article originally appeared on RCR Wireless. Read the rest of the article here