Alex Green, Director of TV at BT, talked about the telco’s relatively recent expansion into media and broadcasting following the creation of BT Sport. Having taken a significant gamble by entering a field that seemed virtually sewn up by Sky, the operator says it is paying off, with its share price having doubled since its investment in costly premiership football rights. It was a calculated risk. The operator recognized that there is a degree of certainty with sports – in terms of consumer behavior – that is absent from spending on acquiring rights to movies, commissioning TV content, or producing original programming.
When questioned about the implications of going OTT to promote BT Sport to a wider audience, Green rightly pointed out that, given BT’s position as the UK’s broadband market leader, it already has a sizeable addressable audience and its focus remains on cementing its relationship further with the existing customer base.
BT Sport, like other BT TV services, is cross-promoted as a value-add to BT Broadband customers and its positioning highlights the key difference between telco TV operators and their cable or satellite counterparts, which is the fact that TV is primarily a vehicle for selling broadband rather than the other way around.
A recurring theme on Day One of TV Connect was that of Millennials, with plenty of speculation as to how the new generation will wish to consume their TV and video once they reach adulthood. Sam Toles, VP of Content Acquisitions & Business Development at online video service Vimeo, set the scene, arguing that while “TV is the primary focus for my generation, for the next generation it may not be” adding that “13-year-olds are not going to the movies anymore…it is now a different dynamic where they want a two-way dialog to interact with the content creators.”
Allan Dembry, CIO at premium content specialist Vubiquity, sees the demographic changes as a key component to OTT’s future success, saying: “As this generation become earners in their own right, it is then that generation change that will drive growth.”
Espen Erikstad, COO of TV Everywhere specialist Norigin Media, was a little more apocalyptic, arguing that “when the YouTube generation leaves home, the shift will happen quicker than you think…there is a chance linear TV may not be around in five to 10 years’ time.”
It is no surprise that, when attending an event where the focus is on multiscreen TV, many of the opinions expressed by the players within this space assume demographic changes are shifting strongly in their favor. Conversely, when Ovum attends events where the focus is on traditional TV, then the potentially disruptive impact of new forms is downplayed.
As is so often the case, Ovum’s analysis leads us to believe that the truth lies somewhere between these two extremes. Anyone with children will know that Millennials are now used to consuming video in a way that is significantly different from their parents. It is not plausible to assume they will leave the family home and instantly drop these long-established consumption patterns in favor of the modes used by their parents.
Nor, however, will there be a meltdown of existing models. Companies such as Comcast and Telefonica are already introducing Millennial-friendly initiatives that familiarize younger demographics with their products and services, ensuring they will be well-positioned to take advantage when a potential new subscriber starts to look for premium TV options in the future.
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