The New Normal
Ever since most of the world went into varying degrees of isolation in March, hardly a day goes by without a new research report touting how much more time people are spending watching OTT services, chatting on Zoom, or using online video for work or school. That’s great news for our industry—or is it?
On a recent episode of the SM Advanced Forum webcast, MediaMelon's Simon Orme discussed the downside: "For many companies, [that increased viewership] will just result in an increase in cost if it’s the existing subscriber base …. unless behavior changes for the longer term and some percent decide this is so good that I’m going to permanently change my way of viewing, and I’m a new subscriber."
Orme pointed out that, despite the drastic increase in content and the number of services available, the total amount of TV that people watch hasn't really changed much between the days when there were four channels and today’s hundreds of channels. So once people go back to work and back to school, television viewing hours are likely to drop, although perhaps not to pre-COVID-19 levels. A large number of people who switched to working from home during the pandemic are likely to stay there, and they’ll continue to watch more video.
More notably, videoconferencing and online learning platforms that emphasize video will almost certainly see a long-term increase in use. Business travel will take years to return to its pre-pandemic levels (if it ever does), the live music and sports industries are going to be forever changed, and now that everyone has experienced the power of video for work and learning, there’s no going back.
So what does that mean for our industry? It means that services that were getting by on razor-thin margins are going to have to find ways to generate more revenue and reduce costs on video encoding and delivery, all while improving the customer experience for viewers who are going to demand ever-higher-quality video in every aspect of their lives. It's a tall order, but I know many of the people reading this are working on the solutions right now.