Yesterday was the 3:rd annual Nordic Media Summit in Copenhagen, gathering CXOs and managers from video-on-demand players and streaming services, bringing about some interesting speakers like Richard Tanner, Senior Video Producer at The New York Times and Richard Kastelein (@expathos), Founder and Partner at Agora Media Group.
The latter of which brought us these interesting statistics:
- 86% of US consumers use Internet & TV simultaniously.
- 44% of all tablet usage is while watching TV.
- 72% of UK viewers under 25 comment on programs via social networks.
- 62% of viewers pick up their phone as soon as TV breaks for commercial.
The presence of Peter Ekelund, Chairman of HBO Nordic, had all the others speakers standing in attention and got the audience panties in a twist (not actually panties because I counted about ten women in the room). He opened with his keynote with “Winter is coming”, the truth in which was echoed by the nervous laughter from competitors in the audience.
Speaking of HBO, one thing that struck me during the day was that subscription on demand (SVOD) has become the default business model for packaging not only series but movies (meaning as many movies as possible for a fixed monthly price). When I asked the panel of speakers if this is a legacy from broadcasters or if they’d actually done research that imply this is how users want to consume film, a crushing silence followed suggesting that the latter isn’t necessarily the case.
An SVOD model makes sense for series, where the story is distributed over a season or more and often times consumed in bulk. But a story told in a movie is compressed to the space of two hours, not a commitment one makes every day.
While Netflix and Lovefilm have both recruited an army of monthly subscribers, we have to consider that these companies started as DVD rentals where the gain was having a few flicks sent home from an order list of titles you wanted to see. The digital was just an add-on to that business model. And both Netflix and Amazon are spending millions on developing recommendation systems guiding the users, who still just care about finding that small percentage of movies that they want to see.
I think we’re gonna see studios selling their product directly to consumers in the coming years, thereby taking back control of the packaging of their product. Possibly even pushing the break on all-you-can eat subscription models and trying for higher margins on transactional VOD and electronic sell through (EST). As always, the question is where the consumer will be when that day comes.