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Straight Talk Media & Entertainment

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Various people keep telling me that the industry needs to make online video “broadcast grade.” I disagree. Confusing the goals of yesteryear’s engineers with the needs of tomorrow’s viewers risks ruining what makes over-the-top (OTT) TV so great for both consumers and media businesses.

Yes, it sounds counter-intuitive. In an ideal world, we’d all want high-definition (HD) video – or 4K ultra HD (UHD) for that matter – to stream instantly and buffer-free just like it does over satellite, cable, or other conventional TV networks, wouldn’t we?

But when it comes to online video, we don’t live in an ideal world and we never will. There will always be a new format, device, or start-up pushing the boundaries of what, when, where, and how we can watch. Media businesses have always competed for attention, and competition will get increasingly fierce.

The most successful video service providers will strive to deliver the best possible experience at any possible time. History has shown – and will continue to show – that this doesn’t always mean providing a broadcast-grade service.

Netflix manages expectations before quality

Take Netflix. Videos usually start playing with a resolution somewhere below standard definition (SD), before increasing to HD. The adaptive bit-rate (ABR) technology that is used to dial resolution up and down is also employed by Netflix and other providers to keep streaming video over broadband networks with limited or unpredictable bandwidth.

Why do they do this? Because they know consumers would rather accept variable quality to start watching sooner and for longer than wait for a consistent broadcast-grade experience that ultimately might not be possible if network conditions are challenging. For most consumers, any video experience is better than no video experience.

The ultimate question: Did they watch?

Faster broadband speeds and improvements in content delivery network (CDN), video compression, and other technologies will enable service providers to offer more consistent and higher-quality streaming. But for many, the ultimate measures of success remain the total number of viewers and viewing times.

For Netflix, playing videos as soon as possible is a strategic imperative. Despite progress made by Hulu, Amazon Prime, and any number of OTT rivals, one of its biggest competitive challenges is getting subscribers to commit to view. Various data suggests that if people can’t find something to watch within five minutes of logging on to Nefflix, they log off, perhaps to other apps or broadcast TV.

That explains why Netflix has reduced the steps it takes to start viewing with each update of its user interface. Now, when a user selects to read more about a TV show or movie, the explanatory text not only appears, but the show starts playing in the background. Similar “autoplay” features are helping to generate billions of video views for Facebook and Twitter.

The rise of user-defined video

There will be times when super high quality will absolutely matter. When someone’s chosen to pay to rent a movie in 4K UHD from an online video store, for example, they will demand it lives up to its billing.

But where people have invested less time and money – whether in low-priced subscription or ad-funded online video services – broadcast quality will be less important than access to content when, where, and how they want it.

That’s not to say online video providers shouldn’t aspire to the reliability and consistency of broadcast TV. Of course not. But they shouldn’t let it get in the way of giving viewers what they want, whenever they want, and wherever they are.

Great video experiences will be determined more by the choices the consumer has made – what content, device, broadband speed, network, and ultimately why they are watching – than any industry standards body. Welcome to the customer-grade era.

Straight Talk is a weekly briefing from the desk of the Chief Research Officer. To receive this newsletter by email, please contact us.

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