This week I had the privilege to attended Mediatel’s Connect TV World Summit at the Royal College of Physicians in London. I’ve attended this event for many years, though it has been some years since I had the luxury of attending all the conference.

There were many newsworthy presentation and discussions at the event that have already been picked over by industry journalists. I wanted in this article to just dig into a handful of themes that emerged from the two days.

It is worth noting the excellent gender mix of the presenters and in the panels at the conference. While not at parity, it was the most female represented conferences I have ever been to. I don’t know if Mediatel worked at this or it just came naturally. It certainly generated a round of applause during one session. This led to some great presentations and panels.

The event certainly highlighted that the TV industry is in transition. But then let’s face it, it has been in transition and transformation for years and this is unlikely to ever stop, given the relentless drive of technology.

The Terminology Issue

One problem that this constant transition creates is a terminology issues. Discussions at the conference were sometimes difficult to follow, without some upfront agreement on terminology being used. Terms when first created, hopefully, have clear meaning for those who coined them, but as the industry shifts so can the meanings.

“Should the SVOD providers now be considered as Pay-TV providers?”

Should the SVOD (subscription video-on-demand) providers (e.g. Netflix and Amazon) now be considered as Pay-TV providers? They do, after all, provide TV and people pay them for it. This distinction is important if you want to talk about the decline or otherwise of the pay-TV industry.

What makes a pay-TV provider a virtual pay-TV provider and is the virtual distinction useful? The usual distinction is that virtual providers don’t own the infrastructure they operate over, but in Europe satellite TV providers (e.g. Sky, Canal+) don’t own their satellites, does this mean they have always been virtual.

Is OTT (over the top) TV a statement about the technology used or the business model of the provider?

The term skinny bundles is very popular at the moment. But, as a couple of speakers pointed out, European pay-TV fees are at the price point, or less, than US skinny bundles. So, are European pay-TV packages already skinny?

I like Ivan Verbesselt’s, from NAGRA, term post OTT. This is a point, in the near future, when the distinctions between pay-TV, skinny, OTT, and virtual are no longer important. But maybe we are already there, given Netflix is the largest subscription TV service in the world, with only China Telecom’s IPTV service anywhere close.

Before we get carried away by Netflix’s impressive numbers. Disney, NBCUniversal, Fox and AT&T all spend more that Netflix on programming. Though that does include sports rights. If you think sport skews things too much, keep in mind that NBCUniversal spent $10.2 billion on non-sports programming compared to Netflix’s $6.2 billion.

A new acronym for me, was SLIN, used by Tony Gunnarsson from Ovum. This term was used to cover new OTT pay-TV services with a linear TV proposition, as distinct from a SVOD service. It was the first time I’ve heard it and I missed the moment it was spelled out. I’m guessing it stands for subscription linear internet network. Example SLINs in the US are: Sling with 2.21 million subscribers, DirecTV Now with 1.2 million and Hulu LiveTV with 450,000.

People also can’t agree of the acronym to use for the internet tech giants. The options being: FAAG, FANG, FAANG and FAAAN. The variation depends on whether you are calling Google by its group name Alphabet, if you group all the companies beginning with “A” together and if you consider Netflix a tech giant.

ESports is a thing but it is the Super-Fans that matter

Apparently Esport is a thing, with a huge fan base that is being monetized. We heard about this from Jette Nygaard-Andersen from MTG and Torsten Haux from ESL. Though we also heard from others that making money from them is not always easy. For those who don’t know Esports is people playing computer games in front of large audiences, we are talking arenas, big trophies and lots of confetti.

Esports has an audience of 386 million today, with prize money adding up to $274 million for top five games and is forecast to generate $1.5 billion in revenues in 2020.  These numbers are not too surprising when you take into account that there 2.2 billion gamers out there and the gaming business was worth $116 billion in 2017 with 10.7% YoY growth.

Esports were presented alongside talks about wrestling (WWE) and horse riding (Horse and Country) which illustrated a common point about super-fans. Technology enables media companies to bring together global audiences to create critical mass and then provide them an immersive experience.  There is also a path from social media to OTT channels, even to traditional linear TV, to take viewers on a journey from casual interest to super-fan. Facebook Watch has become an important part of this journey for some of the networks.

Super Aggregation is the future

A much used term, across the conference, was super aggregation. This is where a TV service provider not only aggregates channels together but also multiple video services. Think Sky adding Netflix to their service. Though just aggregating services together is not enough, the aggregation needs to be meaningful: meaningful aggregation. This means not just providing access to the services from different providers, but integrating them together with unified discovery, including search and recommendations.

Other quick points

• No one talked about ultra-high definition (UHD), high-dynamic range (HDR) or high frame rate (HFR). I couldn’t decide if this was because they are assumed or are irrelevant to how the future of the TV business is shaped.
• Voice interfaces are likely to be key to the evolution of the TV, but the decline in Siri usage (15% last year) is a word of caution.
• Disney is gearing up to make a big move against Netflix when its supply deal expires next year.
• TV Advertising is about to go through a major transition, but more on this in a follow up article.
• GDPR is an opportunity to build an authentic relationship with viewers.

Main takeaway: Organisational Transformation

There is an acceptance that there has been some major shift in the TV industry driven by the entrance of the tech giants, with more to come. Reacting to this requires not just the adoption of technology, but also organisation transformation. This was highlighted in the very well attended breakfast session on the second day, which included an excellent presentation on organisational agility from Daniel Hesselbarth, who was, until recently, the Head of Innovation and Transformation at Unitymedia.

To be ready to compete with the FAANGs (e.g. Netflix and Amazon) incumbent players need to look at how their organisation and their leadership need to evolve to be more Agile and Lean. Something I touch upon in my previous article.

Being agile means putting the customer at the heart of what you do and creating a network of small cross functional teams.

Agility is easier for the likes of Netflix, who do just one thing and one thing well, but not impossible for complex multi-service providers.