Same same, but different
S06E10: Game of Streams (Same same, but different)
Our Media Solution Specialist, Magnus Svensson, is sharing his reflections on the online streaming industry in this post. This is part of a monthly series so make sure to follow us here if you do not want to miss an episode.
The shift in how TV is consumed continues to accelerate. Comcast reported in their Q3 2022 earnings a loss of 561 000 pay TV customers compared to 382 000 in the same period last year. Charter reported a loss of 204 000 pay-TV customers, compared with a loss of 121 000 in the year-ago period.
And we see a similar trend also in Europe and the Nordics. For the group 15–64-year-old in Sweden traditional TV viewing has declined 11% during January to September 2022 compared to the same period 2021. During June to August the loss was even as high as 18%.
While subscribers abandon traditional pay TV, streaming services continue to gain a bigger share of the viewing time and the TV consumption. Streaming platforms accounted for 36.9 percent of all US TV viewing in September, up nearly twofull points from 35 percent in August, according to Nielsen ranking.
This does not mean that linear TV viewing is declining, but the way that it is distributed and consumed. For the first time, Nielsen also featured a free, ad-supported streaming TV, or FAST, service claiming a full share point, Paramount Global’s Pluto TV accounted for 1 percent of all US TV viewing in September.
Ad-supported or not, linear viewing is still an attractive way of consuming video. It could be in the form of an ad-supported FAST channel or a curated playlist with a mix of live and on-demand channels. Or even personalized playlists based on the viewers’ interests and viewing patterns.
However, the increased competition means that the creation and distribution of the playlists must be as efficient as possible. To quote David Zaslav, President, and CEO of Warner Bros. Discovery, you need to invest more money in content and reduce the cost of everything else. You need to cut the cost to distribute the content and spend more on creating great content.
The traditional way or the new way
Linear TV is usually referred to as the traditional way of distributing television. That means a curated, encoded channel distributed by cable, satellite, or over the air. With streaming technology, it could be done in a very similar way, curate, encode and distribute over the public internet. This is how many of today’s FAST channels are created.
Linear TV, FAST, or playlists can however be done much more efficiently if you use the technology provided by streaming. Unless the content is actually live, the likelihood that the content already exists transcoded into a format suited for internet delivery is very high. Content owners and streaming distributors usually store all videos in an origin storage, transcoded and ready to be distributed on demand. All you need in order to distribute the same content in a linear way is a new playlist (a media presentation description in MPEG-DASH or an index file in HLS (HTTP Live Streaming)). The curation, the way that the channel is put together, can be done either by channel editors or automatically based on rules. But the transcoding part can be limited to live content as the rest is already prepared.
With this, you could save additional transcoding and the new playlist can be created only when needed. You will save on cost and carbon footprint at the same time as you get much more flexibility. Not going through the normal transcoding pipeline, you can create a personalized playlist and the distribution cost will be equal to viewing on demand.
So linear TV viewing can be done more efficiently with online streaming distribution and by that cut costs.
To watch out for the coming months…
Netflix with ads, the “Basic with ads” tier, will launch on the 3rd of November. It will be interesting to see how the new option will be received. In Netflix in contrast to Disney, which will launch its ad tier later this year, the current subscribers will need to make an active choice to select the new ad-funded tier.
Magnus Svensson is a Media Solution Specialist and partner at Eyevinn Technology. Eyevinn Technology is the leading independent consulting company specializing in video technology and media distribution.
Follow me on Twitter (@svensson00) and LinkedIn for regular updates and news.
