With Pay TV subscriber numbers dropping, young people watching less TV, and a host of new competitors, the TV industry is undoubtedly entering the most challenging phase of its 60 year history. Here, Mike O’Donnell, VP of Northeastern Sales at YuMe, a video advertising platform, makes some predictions about what likes ahead for the TV industry over the next five years. Mike is speaking on the panel on the future of the video and TV advertising at New Video Frontiers NYC, on September 10th.
Imagining the near future of television is a tough business. While 2020 may sound like the distant future to those of us that graduated high school in the 1990s, it’s close enough that any yarn I spin has to remain rooted in our current reality. But that doesn’t mean there isn’t room for excitement: 2020 is far enough away that there is the possibility for unforeseen, and unforeseeable, innovations in technology, business models, and consumption habits to take root.
Take the five-year gap between 2006 and 2011 as an example. Absent a seat at the table with Steve Jobs and Jony Ive, they couldn’t have foreseen the advent of the iPhone (2006) and the iPad (2010), to say nothing of Facebook’s meteoric growth, Netflix’s launch of its streaming video service (2007), the rise of always on multi-screen video consumption, and, connected to all this, the phenomenon of “cord cutting”. These technological, cultural, and business model changes are a great example of just how challenging it is to predict the future.
That said, I won’t be a spoilsport. Here are some potential developments in mobile and digital video that I think will shape the next five years.
1. Audience Will Be the Defining Currency for Marketers
The name of the game for marketers has always been the audience. The difference is that now, and even more so moving forward, audiences will be reachable at a more granular level. Audiences that were once only reachable through the proxy of a publication, channel, or program, will be reachable anywhere they consume media. This means that the ability to make an impression where you want, when you want, will be greater than ever, and marketers will need partners to help them manage this shift.
2. Television’s Core Business Model Will Stay Standing
Don’t get me wrong, the way that television content is delivered in 2020 may be radically different. The manner in which networks license content, the status of retransmission fees, and the role of bundling, may all change dramatically. What won’t change is the appetite for high quality scripted story telling and live action sports. Viewers just might be consuming all of this content via their internet connects versus their cable box.
3. Measurement Will Catch Up with the Times
Given the focus on improving how both television and cross-screen audience measurement is tracked and the growth of connected and addressable TV, marketers should expect true audience measurement capabilities that account for viewability, attention, and a variety of other invaluable metrics to have reached maturity.
4. Even Walled Gardens Need to be Well Maintained
There is no guarantee that the groundskeepers won’t fall asleep on the job. I make no predictions about which will blossom, and which will wilt, but don’t expect them to be equally lush environments in five years’ time. It’s also clear that marketers and brands increasingly appreciate and understand that a stroll outside the garden can be to their advantage. This is because independent tech providers don’t face the inherent conflict that the larger players do when they use their technology to sell their own ad inventory. Expect this realization to impact buying decisions going forward.
As agencies evolve and diversify, this is just a sampling of what is likely to develop over the next five years. We can already see the seeds of these future changes, from the disruption of the traditional television industry to the technological innovation driving new trends in content consumption. So while only hindsight is truly 20/20, I’m looking forward to seeing the exciting changes in our industry that are just out of view.