2024 Outlook: The Evolving Video Business

Last year we witnessed major changes in the video entertainment industry.  We saw all the major services adding advertising tiers to their lineup.  FAST channels viewership grew quickly and with it, increasing ad revenue.  And in perhaps the biggest technological shift no one was expecting, Generative AI crashed on the scene.  And the world will never be the same.

What does all this mean for 2024?  For starters, advances will accelerate.  The power of AI will permeate everything we make and do and advances will come faster and more cheaply than ever before.  And as the ad industry grows more comfortable with streaming ads, and content owners becoming more dependent on ad revenue sources, we’ll see more ads and more ad supported service tiers.  Let’s take a closer look at 3 major trends and how they impact broadband operators offering video services.

Super Aggregation

App bundles are the modern channel bundle. Predictably, the initial phase of acquiring subscribers is over and now focus is on churn and content cost reductions.  Everyone knows that bundles can lower churn while offering some price relief for consumers.  And everyone knows that operators offer some of the lowest cost distribution channels for video content.  This fact is especially relevant as apps seek to grow their ad tier user base.  Today’s operators, once thought candidates for extinction in the early days of the app streaming explosion, are once again able to be the universal aggregators: content, consumers, advertisers.  Operators, especially internationally, can exploit the power of the central billing services in areas with established mobile payment systems and lower credit card usage. 

Generative AI

Generative AI has a big role to play in video entertainment. AI can be front and center in the user experience.  Its human-like interactions can create a more engaging and immersive experience for the user, which can ultimately lead to higher retention rates.  With AI’s ability to pull in any information from just about any source, users can “create their own adventures” when exploring information while watching their favorite content. Behind the scenes, AI can also help operators create more efficient workflows, troubleshoot issues and monitor systems which can lead to cost savings and increased productivity. Overall, Generative AI is a powerful tool that can help operators stay ahead of the curve in the ever-changing world of video entertainment.

FAST

LG and Samsung have demonstrated how willing people are to watch free TV after cutting the cord.   Incorporating FAST as a free entry-level tier to a premium service is a natural approach operators can take to monetize all of their customers.  With FAST you have a way to appeal to 100% of your broadband customers to upgrade, or as a minimum, generate ad impressions for “free” revenue.

 

 

2024 will see a lot of changes brought on by AI, advertising spending and some market consolidation.  But operators still have a familiar role they can play by leveraging their broadband customer base and central billing services.  This unique combination gives them natural bundling capabilities to offer consumers a simpler and ultimately more affordable way to access their favorite content.