Search and recommendation is the most important and pressing issue for content providers and supporting players in the next year. If they want to make money, it has to get solved.
But even though companies are working on solutions, customers are in for a rough ride, and the video space--including pay TV and online--is going to get worse before it gets better.
Those were observations that executives from companies that provide OTT services, or support them, made at the second OTT Video Executive Summit. Organized by Trender Research, the biannual summit explored a number of over-the-top delivery and monetization concerns.
But questions about content discovery threaded through every panel.
How will search and recommendation (SAR) evolve? And will customers stick around as providers try to figure it out?
Fragments and silos
The problem is pretty well-known to both industry experts and anyone who has tried to find the last season of a TV series they really like. Online video content is fragmented, with movies, TV shows and other streaming content licensed or owned by a myriad of competing entities.
"Cord cutting today is a shiny, rainbow-laden, unicorn-infested world that's completely flawed," said Matt Smith, chief OTT evangelist at Anvato, in a panel on cord cutters. "Add (all these OTT channels) and you still can't watch NFL on Fox."
Developing software to tie together all those different OTT providers into one big interactive program guide (IPG) shouldn't be difficult. But it is--licensing issues aside, providers are locked into their own content silos. (Or you could call it a walled garden. Whatever you're comfortable with.)
The lines between some parts of the industry are starting to blur, but only just, and only with a bit of coercion in some cases: Disney got Amazon and Apple to agree to allow consumers to view their purchased Disney content on either service. And Amazon is rumored to be in talks to join the Ultraviolet consortium, a move that could see its content available outside its own apps, in a customer's Ultraviolet digital locker.
Likewise, the walls between TV Everywhere and pure-play OTT are crumbling a bit. Panelists noted that recent announcements by HBO, CBS and Showtime to offer pure-play OTT services in addition to their current TV Everywhere apps were exciting, but making sure they can monetize that content is driving them behind subscription walls.
"Premium content … costs a lot of money to produce," said Ziv Mor of RR Media, an Israel-based media services provider, in a morning panel. "These production costs need to be financed, sometimes ahead of time. That's why we see more of these subscription models… The money needs to come from somewhere."
James Norman, founder of GroupFlix, a crowd-sourced online content aggregator, corroborated the trend toward SVOD in a panel on OTT consumer behavior. "No one's going to allow me to have their content (cheaply or easily) … they're not in that business and the ecosystem doesn't work that way," he said. "The content cycle … is based on having their revenue ahead of time."
A prevalence of subscription-only models won't necessarily stop development of viable, cross-platform SAR, but it could limit which platforms are available to search.
The dark side of content discovery: piracy
Here's the thing: While vendors and OTT providers alike, from TiVo to Netflix to Amazon and beyond, have been struggling to figure out content recommendation, consumers are already frustrated and looking for their own search solutions.
The most common problem for viewers is trying to find the content they want to watch, but not knowing what OTT service it's on--if it's there at all.
During the summit, a consumer panel representing a cross-section of video viewers told attendees what their OTT experience was like. For even online-savvy younger participants, it's a struggle.
"Netflix has a broader range (of content) but there's always this gap between what's on Xfinity and what's on television," said Olivia Arnow, a 23-year-old recent college graduate who accesses television through her parents' Comcast account and subscribes to Netflix. "I don't know how to access (missing) seasons."
In college, she said, students filled that gap by finding the latest TV shows streaming illegally on Megavideo. But although that site is now defunct, "there are always other video sites available."
Akshay Bhardwaj, a freshman at George Washington University, said that friends tell him where to access content he can't find in legal venues--though he told attendees he's patient enough to wait for it to show up on Netflix.
That jibes with similar observations by industry analysts: Viewers would rather access online video content legally, but if content owners and distributors don't get it to them fast enough, they'll use any means necessary to access it on their schedule.
Smoothing out content discovery
No one-size-fits-all solution to search and recommendation is forthcoming anytime soon, but providers are working toward it.
Bill Mobley of FreeCast, which manages OTT content and offers consumer-facing services like Rabbit TV, said his company built its search and recommendation platform because there were "multiple types of content" viewers want to access. And unifying multiple services into one device isn't likely. "To make it searchable … you have to be above that, save all that into a software service."
Bernee Strom, CEO and co-founder of WebTuner, previewed her company's flagship product, a small-form-factor set-top box that offers a multitude of whole-home features and can integrate OTT offerings. It also includes a unified program guide so that users can find content from all their subscriptions--pay TV and OTT. "Our target is cable companies but we could make anyone in the world into a virtual cable company," she told attendees at the day's final panel session, which fittingly concentrated on search and recommendation.
Strom was part of Gemstar, the company that created the first electronic program guide. (Gemstar-TV Guide International was absorbed by Rovi in 2008). She told FierceOnlineVideo that that experience and knowledge, grounded in the television industry, provided WebTuner an edge over other content discovery offerings.
Whether it's a software or hardware solution that proves to be the killer app for content discovery, neither will supplant, for now, what's currently the best way for viewers to find video that interests them: word of mouth.
"Usually it's through a friend who will recommend a show," said Bhardwaj. "Apart from that, usually social media." That method was echoed by others on the consumer panel, who said TV series were often recommended by friends or family, either in person or on social media like Facebook.
After all is said and done, the ultimate killer app may just be the human factor.--Sam