The State of Multiscreen Video 2013
In 2012, streaming media was all about multiscreen delivery. If given the preference, viewers would rather watch online video on their mobile devices or their big screen TVs than on their computers. No one expects computer viewing to go away, but the growth for 2013 will certainly be in the living room as streaming video becomes more like broadcast TV.
We gained a new term in 2012 to describe what we were seeing: "co-viewing." At the 2012 Streaming Media West conference in Los Angeles, keynote speaker Brandon DiMassa, senior vice president for business development at TV Guide Digital, unveiled surprising results from a company survey.
"Almost 50 percent of our users are telling us that they're doing something that is now being called co-viewing. There's one person who has a remote control watching television, another person with a different device in the room streaming something else on their iPad, their iPhone," DiMassa said.
Looking back, a few key stories defined the multi-screen experience for 2012 and promise to lead the way in 2013.
The Rise of Netflix
While plenty of naysayers were willing to count Netflix out following its well-publicized missteps in the fall of 2011, the subscription video service proved that it wouldn't go down that easily. In fact, the company had a banner year, announcing significant content deals, growing its subscriber base, and expanding into new territory.
Netflix started the year off strong by expanding into the United Kingdom and Ireland in January 2012. It also announced that in the fourth quarter of 2011, it streamed 2 billion hours of video.
"We were thrilled to deliver more than two billion hours of TV shows and movies across 45 countries in the fourth quarter," said Netflix's co-founder and CEO Reed Hastings. "Netflix delights members by giving them choice, convenience, and control over the entertainment they love for an incredibly low price."
Many in the industry could see that, while Netflix had stumbled, it was far from down. While it had experienced a subscriber loss following its fall 2011 price hike and corporate spinoff (remember Qwikster?), it was still healthy. Here's how Jim Funk, senior vice president of product management for Roku, put it at the 2011 Streaming Media West conference.
"To put it in perspective, they had 25 million, they still have 24-something, so they're still a phenomenal success. It wasn't like they went to 12. Given how much they changed their pricing structure, it was actually a modest loss, in that regard, which I think is a tribute to he fact that they don't have a direct competitor today in that segment," Funk said.
What Netflix needs to keep those subscribers happy is fresh content, especially new releases. The company satisfied these needs by making deals with The Weinstein Co. and Disney.
From its perspective, Netflix is able to chart the fracturing of the device market. It knows better than anyone that people are watching TV shows and movies on more devices than ever.
"We see people using more and more devices to stream on. Obviously the game consoles are the leaders, but we see people using more mobile devices for streaming," said Joris Evers, Netflix's director of global corporate communications. They're using Android and iOS devices, he said, and are using Netflix apps to turn their devices into remote controls for television viewing.
While the mobile device market is healthy, Evers says the connected TV market has a long way to go.
"The performance of smart TVs can definitely be a lot better," Evers noted. "Creating apps can be a challenge, and accessing content can be tough for viewers."
A Multitude of Devices Continues to Grow
Trying to keep track of the number of video-enabled devices became a full-time job in 2012, and the number might just continue to grow in 2013 before the market finally stabilizes and contracts. With no clear leader and no certainty that viewers will warm up to the connected TV experience, device-makers keep launching new and slightly different set-top boxes.
At the beginning of the year, industry-watchers thought Google TV might finally break out. Its 2011 launch hadn't gone nearly as well as hoped, owing to a bloated price tag (compared to simpler set-top boxes) and a confusing user experience. When all viewers really want is a simple way to stream TV shows and movies, and a low price to do it, is there room for Google TV? LG and Sony thought so. Both announced that they would be unveiling Google TV devices in 2012, although their efforts were limited. Sony announced a networked media player with backlit keyboard remote and a Google TV Blu-ray Player. LG announced two connected TVs with Google TV built-in. Neither made a great splash in the market, and Google TV fans must be feeling both lonely and worried. Will the Google TV platform survive 2013? Will it finally make an impact? While Google has the cash reserves to fund Google TV until it catches on, the company also knows when to pull the plug on a product that isn't working.
2012 saw several developments in the set-top box market, especially in the $100-and-under area. Roku brought its compact boxes to Canada in April, giving Canadians easy living room access to Netflix, but not Hulu, which still isn't available there.
"We have a simple formula for our best-selling streaming players: provide access to a ton of entertainment at a low price, while maintaining a best-in-class streaming experience," said Chuck Seiber, vice president of global marketing for Roku. "We've set the same high bar for ourselves with the launch of our players today in Canada."
While set-top boxes were for the more tech-savvy in 2011, 2012 saw their use expand.
It's important to think ahead when preparing content for different screens in different environments. Read on for best practices from experts.