Reaggregation versus siloing in 2022
Photo: Glenn Carstens-Peters
Video in 2022 is going to be shaped by several key trends. On the service side, consolidating the content appeal of subscription video on demand (SVOD) and advertising video on demand (AVOD) through effectively replicating traditional broadcast and linear TV offerings will be key. MIDiA defines these basic strategic content pillars, which are essential for providing a mainstream streaming TV consumer proposition, as G.O.L.F. (Genres, Originals, Library, and Formats). Last week, MIDiA’s ‘The key strategic drivers that will shape D2C video in 2022’ blog piece went into greater detail about how these different pillars will impact upon retaining mainstream consumers who are familiar with these offerings in broadcast and pay-TV. However, strengthening the appeal of direct-to-consumer (D2C) video services is the strategic part of 2022 planning that the video industry can directly control itself. What remains largely outside the control of these TV-content providers are the big macro trends that will shape how audiences engage with video in 2022. These macro factors divide into two key (and overlapping) macro trends: video reaggregation and video siloing.
Ever since Netflix pivoted into on-demand video streaming in 2007, the video landscape has been splintering. What was initially a streaming problem that hindered the mainstream appeal of SVOD to younger, cord-cutting-prone demographics who were keen to move away from expensive, contract-based and ad-burdened cable and satellite subscriptions, has now become a mainstream problem. In MIDiA’s forthcoming report, ‘Video discovery: the new streaming battleground’, the current failure of service-led search to resolve basic new content discovery requirements from D2C customers isdriectly attributable in part to service balkanisation. As a result, peer recommendations still dominate as the primary means of finding out about new TV shows on video services. SVOD uniquely sits on both subscriber data and viewing data (this should emphatically not be the case ), however, video balkanization alongside peak attention make this a work-around discovery necessity for streaming audiences.
Bringing all these fragmenting video strands back together has been the elephant in the proverbial room for video. This has become a business-critical issue since the lockdown of 20/21 normalised video streaming for TV consumption. The rise of the smart home entertainment ecosystem shows one way that technology can provide the necessary platform for bringing TV back together again via the smart TV. This dovetails into the next key macro trend that will shape TV accessibility in 2022: video siloing.
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The smart TV as a potential reaggregation enabler brings with it the inevitable risk to D2C of siloing (the smart TV’s OEMS and their branded partners will inevitably become de-facto gatekeepers, regulating directly or indirectly the ability of standalone streaming services to reach their audiences). While currently this does not appear to be an overt strategy, the risk remains, and in many ways could be the net-neutrality cause celebre of streaming TV in 2022 and beyond. A bigger potential risk resides in the siloing second-order implications of the mainstreaming of smart TVs – they become closed ecosystems replicating the walled gardens of the tech majors. If this comes to pass then the recent Apple versus Epic Games legal dispute could be a harbinger of similar access to audience battles as streaming services find themselves either confined to one siloed smart TV ecosystem that covers a minority of all viewers, or they will have to engage in time-consuming strategies to open up cross-platform audience engagement opportunities.
Neither reaggregation nor siloing will be resolved in 2022. However, the tremors will start to be clearly felt as the tectonic plates of consumer and tech-driven consolidation start to push up against the fragmented reality that is D2C video at the start of 2022.