The IBM Institute for Business Value (IBV) 2019 Global Telecom and Media Consumer Survey revealed the following trends:
• Consumers are excited about the new 5G technology. The most important 5G benefit to consumers is improving mobile video streaming quality, eventually moving to ultra-high-definition (UHD) format as it becomes available.
• Immersive media is capturing significant consumer interest. Consumer enthusiasm for immersive media—deeply engaging, multisensory, digital experiences—is on the rise. These enhanced experiences are made possible by evolving technologies such as virtual reality (VR), augmented reality (AR), and 360-degree video.
• eSports is emerging as a main genre of entertainment. eSports is gaining popularity, attracting both viewers and players across the globe and becoming a serious rival to broadcast and traditional sports.
Internet technologies have resulted in a proliferation of streaming video platforms, offering consumers an alternative to broadcast and cable TV and posing a major threat to those traditional industries. And especially with the new fifth-generation wireless network technology—5G—pending, new players could shake up the status quo as they compete for consumer time, attention, and wallets.
The direct-to-consumer relationship
With consumers dropping cable and satellite TV packages faster than expected, traditional broadcasters and cable companies are experiencing difficult times. In the US, for instance, the pay TV industry is seeing a five percent decline in subscribers, resulting in more than a third of US households not having a traditional TV subscription at all. The number of streaming subscribers is actually surpassing the number of traditional pay TV subscribers.
In addition, the group of “cord-nevers” is growing as well. These are people who never used commercial cable for television service, and instead relied on internet sources from the start.¹
The current wave of internet-streamed content disruption has radically changed customer behavior. It has empowered consumers to pull the content they want from whatever source they want, consume it when and where it suits them, and use the device of their choice. Moreover, consumers can now choose from an abundance of content. This makes it more critical for media companies to gather and analyze data about viewer wants, needs, and favorites—and offer the content the audiences crave.
The importance of streaming unique content
Original and local content is in demand today, and streaming platforms such as Netflix, Amazon, and YouTube are tailoring their content strategies accordingly. For instance, in 2018, Netflix spent USD 12 billion to create original and international content, much of it non-English and originating outside the US and Canada.² And Apple, with its streaming service Apple TV Plus, offers an impressive slate of upcoming original projects, ranging from animated musical comedies to paranormal thrillers.³
Consumers can view this original content at their convenience, literally on demand. Sports, however, has remained a popular genre of content for consumers to watch live and therefore has been a strong asset of traditional TV. While years ago, sports streaming on digital and social media was difficult to imagine, now the streaming platforms have invaded this area as well, using their deep pockets to compete against traditional TV. Streaming platforms’ development of original, exclusive content is also driven by their desire to become more self-sufficient.
The emergence of 5G networks
The emergence of 5G networks is set to unleash another wave of innovation, new players, and potentially disruption on the existing value chain as video consumption grows more mobile. 5G networks promise much faster speeds, more reliable connections, and lower latencies. This results in better quality video on mobile devices and far more immersive experiences with virtual reality (VR) and augmented reality (AR), among other benefits. It will also drive the changing sports technology ecosystem and the ever-growing appetite for sports consumption. “eSports,” which refers to the world of competitive organized video games that are treated as a professional sport, is slated to become a legitimate competitor to traditional sports.
The battle is reshaping the industry landscape. New players are entering and existing players are no longer satisfied with performing business-as-usual roles. This evolving landscape offers consumers an abundance of choices, and it’s too early to declare the winners. But the victors are expected to be those that track, measure, and improve consumer engagement; understand and address preferences; and give consumers the content they want whenever they want it on a wide range of devices.
¹ Lafayette, Jon. "Cord-Nevers Grow to 12% of Adults: MRI-Simmons." Broadcasting & Cable. April 9, 2019. https://www.broadcastingcable.com/news/cord-nevers-grow-to-12-of-adults-mri
² Reyes, Mariel Soto. "Netflix's original and international content are fueling its growth." Business Insider. April 18, 2019. https://www.businessinsider.com/netflixs-original-international-content-fuel-q1-growth-2019-4?international=true&r=US&IR=T; "Netflix eyes Europe and Asia for local content." Broadband TV News. January 8, 2019. https://www.broadbandtvnews.com/2019/01/08/netflix-eyes-europe-and-asia-for-local-content/
³ Radulovic, Petrana. “Apple reveals Apple TV Plus original series lineup with first footage.” https://www.polygon.com/2019/3/25/18277261/apple-tv-plus-streaming-shows-movies
Meet the authorsJanet Snowdon, Director, IBM Media and Entertainment (M&E) Industry Solutions
Steve Canepa, Global Industry Managing Director, IBM Communications Sector
Bob Fox, US Telecommunications Industry Leader, IBM Consulting
Rob van den Dam, Global TM&E Industry Leader - IBM Institute for Business Value
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Originally published 16 September 2019
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