THE TWIN ENGINES OF DIGITAL VIDEO BUSINESS GROWTH
By James Weeks, Accenture Digital Video
Once upon a time, exploring friends’ bookshelves was a fast track to understanding them. These days, you’d learn more from their digital video playlists … if you could see them.
From binge-watching box sets on demand, to chuckling at snippets served up on social media, to voting for our favorite reality TV character we are all consuming more video in every part of our lives. As our media consumption becomes ever more digital, however, the “bookshelf view” we once gave to friends and visitors will belong to someone else: the providers who serve up those videos.
How they … whether broadcasters, Pay-TV or digital video disrupters … choose to use this unprecedented insight to get closer to their customers will drive the future of their businesses. Personalized products, contextualized services and recommendations based on that insight can make customers more engaged, revenues higher and brands "stickier".
Video and associated services have the potential to reveal our likes, dislikes, interests and more. The more a company anticipates needs and answers them before they're even expressed, the less likely a customer is to churn. To gain this understanding, companies must be capable of not just harvesting viewing data across multiple platforms, but of turning it into insight about individual users. Insight that is not just actionable, but acted upon: to target advertising, build more engaging products and commission content.
Whether a broadcaster or a Pay-TV company, the organizations that have brought us our networks and videos have typically only known us via TV Ratings or as households. They sell to an address; the name on the bill might not even be the main consumer of the service.
To master the levels of individual identity and profile management needed for personalization, service providers must change.
While clever technology is required to identify, track and analyze individuals, success here will be about change management more than IT. Shifting a world view from household to individual requires a re-examination of the whole business, down to the legacy systems and processes, and the organizational structures that the support the old way of doing things. Much of the data needed to build a big picture is already collected, but lives in isolated silos in different departments.
Business functions that rarely speak to each other today will need to become close partners. Driven by consolidated data and a new awareness of the customer, functions as diverse as technology, sales, marketing, product development, customer care, finance, etc. can create cross-business initiatives. These agile, responsive teams … sharing one customer view … will lead to segmentation models founded on identity, so that every product and service has a ready-made audience.
We're seeing obvious first steps in viewing recommendations. Once an individual viewer is known, the system can put forward the best options for his or her taste. A personalized interface starts building a warmer, more intimate relationship between the individual and the service. The BBC with its myBBC revolution and Comcast Xfinity X1 are leading their markets with innovations here.
Two individuals watching together? The data could deliver a list of viewing likely to appeal to both, ending a long tradition of "date night" debates. Getting more sophisticated, parents could control access times or types of content for children. Careful analysis will reveal who's most likely to be watching what, when … ending the days of advertising funeral plans to 12-year-olds and skateboard parks to grandparents. The owners of this information will be masters of their destiny.
While the opportunities are vast, service providers will have to move fast, because digital disrupters like Amazon, Facebook and Google have already built their businesses on individual relationships.
They don't, however, control the access point to the house. They generally have weaker billing relationships, less content, a shorter history and lower levels of trust with the customer. (Though Amazon is challenging strongly in the first two.) Established service providers still have an advantage, if they move quickly.
By shifting their market view from household to individual, the companies that bring us digital video are turning their world view on its head. That's the kind of radical shift that drives radical innovation. Just ask Thomas Edison. Without a similar leap of thought, the world might just have ended up with better and better candles.