IBC is always a good place to take the temperature of the video market and see where it is heading over the coming months and years. This year, as always, the show highlighted a number of interesting trends which have been discussed at length in various event wrap-ups. But what do these mean for your video business and how can you maximize the opportunities they present?
1. Reconsidering monetization
As Paolo Pescatore of PP Foresight pointed out in his IBC event wrap-up, business models and ad-funded offerings were a particularly hot topic at this year’s show. It is clear that an increasing number of video providers are investigating new ways to monetize their video services. Meanwhile, OMDIA has created a report looking at the advertising landscape and how it is reshaping the TV and video industry. At Accedo, we certainly also had a lot of discussions around AVOD models and the introduction of additional ad-funded tiers. We have seen this trend begin to emerge over recent months, fuelled mainly by macroeconomic uncertainty caused by major global events. Some of the big players, such as Netflix and Disney, have already announced the introduction of ad-funded tiers to supplement their existing subscription offerings.
So how can video providers of all sizes adapt to this new landscape and determine what is the best approach for their particular service? The right business model will depend largely on a number of factors, including specific target audience, geographic location and content type. For some businesses, a fully ad-funded approach will give the best return on investment while for others, SVOD might still work well. However, a growing number of businesses seem to be considering a hybrid approach to monetization. There are three main ways of doing this:
- Adding AVOD as a separate tier alongside the SVOD tier.
- Offer a main SVOD tier alongside a lower tier which includes both subscription and advertising.
- Introduce some advertising into the main subscription service.
Regardless of the approach, delivering both advertising and subscription will enable video providers to capture as much of the market as possible while ensuring they can effectively monetize their services.
At the same time, a shift in monetization model means that video providers need to adapt their focus. For example, pure SVOD services tend to rely on big budget content to attract subscribers, whereas for AVOD, the focus is on shows with acceptable ad breaks and longevity to keep viewers coming back. AVOD services also need to ensure they are using data effectively to push recommendations to viewers and keep them engaged.
Lastly, there is certainly a level of added complexity that comes with offering multiple tiers within one video service. From early 2023, Accedo One™ will enable support for multiple levels of monetization, enabling any video service provider to launch effective hybrid business models, supporting both subscription and advertising in one video service.
2. Becoming more sustainable
There was certainly an increased focus on sustainability at this year’s IBC, which was great to see. There were a number of discussions throughout the event including a panel in the Content Everywhere zone where our VP Strategy and Business Development, Bleuenn Le Goffic, discussed environmental sustainability and the cloud’s contribution to tackling climate change. It is undoubtedly important that everyone in the industry acknowledges the impact that they are having on the environment and works together to reduce that impact. For many video providers, who may only just set out on that journey, it can be difficult to know where to begin.
The key to becoming more sustainable lies in taking the help on offer while also furthering widescale collaboration across the video industry. Organizations like Science Based Targets initiative (SBTi) and albert offer a really good starting point by helping businesses assess and then reduce their impact. Beyond that, it is clear that the industry needs to work together, share ideas, and help each other in becoming more sustainable across the board.
At Accedo, we recently launched a sustainability initiative which aims to support our partners and customers in their journey towards becoming more sustainable. We passionately believe that we all have a role to play here and are encouraged that other players are recognizing that as well.
3. Understanding the metaverse
At previous years’ IBCs there has been a certain amount of discussion and excitement around XR; however, the number of tangible launches has remained very limited. This year, we saw a number of talks and even some show floor demonstrations around the metaverse and the role it can play for the video service industry going forward. We also witnessed some interesting developments from telcos working to create and launch their own metaverses – a trend we expect to see more of with the arrival of new devices from Meta and Apple in the coming months.
Overall, there is general agreement that the metaverse will be central to the future of human interaction. At Accedo, we believe that video has a huge role to play in defining the metaverse, developing the first user cases, and attracting users to dip their toes into this world.
With video service providers increasingly looking to differentiate their offerings, the metaverse can also be key to enabling them to deliver something compelling for viewers. However, integrating the metaverse into the video environment means understanding some key technologies that are fundamental and adapting your approach. As with any innovative technology, it is important that it adds value rather than being added for the sake of it. Our Solutions Strategist & XR Lead, José Somolinos outlined seven key metaverse technologies and gave his view on how video companies should approach them in a recent article for TVB Europe Magazine.
The metaverse and the technologies needed to enable it are evolving fast. At Accedo, we are tracking this movement carefully to understand the opportunity for video. We are also working with a number of video providers to discover the potential of their brand in the metaverse and beyond.
These trends are just a few examples of the current issues that video providers are looking to address right now. At Accedo, we have always placed great importance on monitoring new technology that we think will change the way video is consumed. To find out how we can help to support you in your journey towards a world-class video experience, please get in touch.