IBC 2018 – OTT Goes Mainstream

IBC is the world’s leading TV technology trade show which takes place in mid -September every year in Amsterdam.

This year about 25 Accedo people traveled to Amsterdam to take place in our various activities. To try to summarise what happened, we spoke to Michael Lantz, CEO and Adam Nightingale, SVP International to get their impressions from the show.

What are your key takeaways from this year’s IBC?

Michael: I was not present at IBC 2017 due to the birth of my daughter but compared to 2016, the industry has radically changed. A few years ago OTT technology was the new growth area, but you could still feel that the bulk of the investment went to the traditional technology providers. This year it was clear that most new investments will go to OTT technology. The transition to OTT first was very obvious when walking around the halls reviewing market messages and positioning. This is obviously positive for us as an “OTT-only” tech provider with proven references and scalability, but it does cloud the market perception and it is more difficult to stand out from others. At Accedo, pure market momentum will mean we will  experience significant growth over the coming few years, but it is vital that we continue to innovate to avoid falling behind when large companies invest in our area.

Adam: Much to my shock, this was my 13th IBC (although I have a friend who remembers when IBC was held in Brighton, on the south coast of England. Yes, you know you you are!). Fast-forwarding to 2018, I love that Hall 14, the OTT, new-tech hall of this well established broadcasting convention is still a tent. Despite it’s temporary surroundings, Hall 14 is home not only to the future but to the present day drivers of growth in our amazing industry. IP / OTT distribution is no longer some slightly weird, new way of watching TV. All that stopped about four or five years ago. What is apparent this year is that OTT is being taken every bit as seriously as any other kind of TV consumption: it’s just another way of watching, and broadcasters and TV platform operators are now passionate about using the rich engagement which OTT offers to understand their customers and ultimately provide a more engaging service. What used to be peripheral is now mainstream. The game is in play!

What this means for Accedo and others in the industry is that we need to stay ahead of the market, to work out what the continuing technology revolution and fast-changing consumer behaviours will mean for our customers of today and tomorrow. If we continue to think ahead of the market then we’ll continue to help our customers compete better. Specifically, we’re now seeing some real interest in solutions which were considered as sideshow curiosities just a few years ago. If history will repeat itself (and it will!), today’s new tech of AI, AR, VR and machine-learning will be mainstream in two years. But, I hope, still in a tent.

What was the most surprising thing you saw or heard this year?

Michael: I have the impression that Tier 1 companies are once more turning their eyes toward end to end solutions. In a world where “Cloud TV” is becoming reality, this seems like a very surprising and counter-intuitive trend. I can only assume that with rapid industry transformation, many companies would like to lean on a large credible supplier who will bear the costs for innovation and drive the solution to success. We will need to monitor this trend to ensure that we’re part of large E2E offerings as well as being a component in best of breed solutions.

Adam: Yes, I agree. ‘End-to-end; and ‘workflow management’ were the IBC buzzwords maybe six years ago, and they’re creeping back. It still feels like there’s an unhelpful divide between broadcast and OTT infrastructure (doubtless hampered by cost and sunk investment) but the days of platform providers wanting to build out their own platforms in-house seem to be in the past. At the same time, many choices are deeply personal and my prediction here is that the most successful end-to-end stories will be the ones where there is a plug and play element as well: “I’ll take your end-to-end story, Mr Large Credible Supplier, but I will still use my preferred analytics engine / recommendation engine / UX management platform”. and so on.

What was the reception of Accedo’s offerings at the show?

Michael: This year, the team outdid themselves. In addition to winning two awards, we presented our range of products and services both in our own booth and in partner’s booth. I’m particularly excited about the joint efforts with Google and Amazon, which led to a lot of interest. As a specific interest area, the recently launched StarHub service on the Android Launcher product was probably the most interesting. At IBC there were probably 10-15 companies announcing Android Launcher offerings and for us to actually have a product commercially launched was fantastic.

Adam: My inner geek and talentless creative had a field day this year, and so did the visitors to Accedo’s stand. From being transfixed by our latest AR service, which allowed visitors to watch a cycling race on a mountain circuit perched on a coffee table in a tent in Amsterdam, to seeing how AI and machine learning can select and adapt metadata to grow video consumption; we had a lot to show off. It’s always a treat to demonstrate and discuss how we have been advancing the capabilities of our own and our partners’ technology, and a joy to see how well it’s received. The numerous possibilities to explore how Accedo’s solutions align with our visitors’ own business objectives is one of the key values of IBC for us. It’s a tremendous opportunity to align our vision with our customers’ mandate to combine meaningful product differentiation with sensible TCO and ever-increasing RoI.

How did we work with partners at the show?

Michael: I’ve already mentioned Amazon and Google, and I can go on about the great efforts from the business development team, but to make a long story short, I’d like to mention our efforts with Facebook Oculus and Harmonic. For two days, we hosted Oculus’s business development team in our booth, talking to customers and demoing the great possibilities with Oculus Go. Besides lending credibility to our VR story, we also provided a good service to our customers who are really intrigued by the technology. Harmonic on the other hand is probably the most positive partner we have at the moment. With the NASA and Telkomsel deployments in hand, we are now jointly defining a route to market for joint offerings.

Adam: If there is division in the industry, I see a frantic scramble from the established technology providers to cross the chasm and become the one-stop shop for their cash-cow customers. As finite budgets are increasingly diverted from traditional infrastructure towards building ever-better OTT platforms, so grows the need for tech providers to not miss out. The partner or build in-house debate is as prevalent in tech companies as it is with broadcasters and TV platform providers.

Do you have any key conclusions on market trends from the show?

Michael: Overall, the industry is divided. The production side of IBC is doing very well. More premium video content is being produced than ever before, and new quality requirements and production techniques are driving innovation and revenues. At the same time, the rapid transition on the distribution side from traditional broadcasting to OTT methods are rapidly reducing the cost for distributing content to consumers. While there is significant growth in OTT technologies (where Accedo is active) the total revenues in the industry decline, leading to a sense of desperation especially from the larger vendors. These vendors will need to radically transform their legacy business while still investing in new technologies. Accedo has a lot to gain from this trend but will need to make sure we bet on the right partners, and don’t waste our time on the losing companies.

Adam: Michael’s right about the production side of the business, and if there is a division it’s curious that it persists even on the buyer side of the fence, with many companies still splitting responsibilities between traditional broadcast and OTT. This is strange when consumers increasingly don’t care: buy a TV, plug everything in, connect it to everything and start hunting for stuff to watch. And what a wonderful hunt it is – there has never been a better time for TV, especially as a consumer. Whilst theatrical content seems to be stagnating towards the predictable returns from superhero-themed Hollywood movies, episodic and boxset content has never been better or more diverse. Although content production costs are rocketing, so is consumption. We are now seeing an average of 2.8 SVOD subscriptions per household in some parts of Europe. Whilst ostensibly good news, this is creating tremendous pressure for traditional broadcasters and platform operators. The rapid growth in competition for consumer attention is causing them to constantly rethink strategy, engagement models, churn reduction and how to drive ARPU upwards.

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