The Future of Content, Part III: Live Content
How the decline of live viewing interplays with the rise of live streaming, and what it means for brands
In the two previous installments, we laid out our analysis of emerging content owners and new content formats. The U.S. entertainment industry is going through enormous changes with the rise of three groups of media owners as the behavioral gap between Intentional Media (content consumed on a big screen as appointment viewing) and Interstitial Media (content consumed on the go with mobile devices) takes shape.
To conclude our trilogy on the future of U.S. content industry, this week we turn our attention to live content to examine where it fits in the grand scheme of the media futures, and how the shifting viewer behaviors around live content consumption will influence the restructuring of the U.S. media landscape.
Live Viewing vs. Live Content
Before we get into the rise of live streaming and how it will impact the future of live content, we first need to address the distinction between “live viewing” and “live content,” two concepts that are easily conflated. Live viewing is, by definition, the act of watching something as it airs (usually on TV, but increasingly so on live-streaming channels as well). It is a concept created and popularized by the TV industry before time-shifted viewing becomes technologically possible. Live viewing, for the most part, is not about watching live content. Instead, the content that we watch live tend to be pre-produced, and therefore bears no particular urgency for watching, which is why so many of us have embraced time-shifted viewing for non-live content.
In contrast, live content, which are usually cultural events, live competitions, and news coverage that are broadcast live as they happen, demands live viewing because they are usually result-driven live events full of suspense and drama. Live content could be watched in non-live, but the utmost value of live content for viewers typically comes from watching it unfold live and becoming part of a collective witness to a cultural event of their interests. Live content tends to be unscripted, although some scripted content, despite not technically being live content, are deemed worthy of live viewing, (which now means “viewing upon first availability” when you factor in the digital channels,) thanks to their popularity and/or suspenseful nature.
The rise of live-streaming channels, however, have broadened the scope of live content to include some niche events that traditionally would not warrant live broadcasts. For gamers, watching a high-quality duel between two top-class esports teams is a competitive event that deserves to be watched live, therefore making esports matches live content the same way NFL games are for football fans. As an even further departure from the traditional definition of live content, fans of a particular celebrity or social influencer would treat any live video that star broadcasts on social media as must-see-live content as well, however mundane and uneventful that actual content may be. These are the type of live content that was not deemed worthy for live broadcast by the media gatekeepers before, but are now made available via digital channels for live viewing. Ultimately, all sorts of content can now qualify as live content, and whether they warrant live viewing is up to the viewers to decide.
The Decline of Live Viewing
As a significant amount of U.S. households continues to cut the cord at an accelerating rate and bid goodbye to the 24/7 programming model, a decoupling of live and non-live content is starting to take shape. Live viewership for TV has been in decline for roughly two decades now, starting with the popularization of DVRs in the early 2000s that introduced the idea of time-shifted viewing to U.S. households, and now exacerbated by a slew of new SVOD service and digital video channels. In 2001, a hit TV show like Friends averaged over 20 million live viewers, but any network TV show that can come close to 10 million in live viewership would be considered a big hit. The age of “must-see live TV” is long gone, as more and more non-live content becomes less worthy of live viewing in the increasingly fragmented media landscape.
Certain media categories, such as sports events, breaking news coverage, and awards shows, still command a live audience, but they are increasingly in the minority. At a time when breaking news footage can be easily found online, awards show ratings continue to dive, and live sports TV starts to unravel, the structural decline of live viewing is quickly approaching a point of no return for the TV industry. It won’t be too long before content delivery gets completely split in half, with on-demand OTT services taking over all the non-live content while live-streaming services taking care of all live content, leaving little for the conventional TV model to hang on to.
Now, some would argue that there will always be a place for the kind of passive channel-surfing consumption model that TV facilitate with its 24/7 programming model. Sometimes, viewers do not know specifically what they want to watch, or they are simply in need of some background noise. While that is true, especially for viewers of the older generations, such a TV-like viewing experience is being replicated on digital video channels as well. Most recently, Instagram launches the IGTV app to offer mobile users a TV-like viewing experience with a mix of live and non-live video content. Viewers can simply launch the app and flip through channels to find something they’d like to watch. Unlike TV, the content you encounter on IGTV will be tailored to your interests, based on the people you follow and the content you liked.
Given such viewing experience can easily be recreated and bettered by digital channels, it is not unreasonable to declare that TV has technically lost its last raison d’être. The aforementioned decoupling of live and non-live content will only accelerate its irrelevance. Of course, the TV industry still stands today and is not going away any time soon, thanks to a mature two-sided market value chain it has built with mass advertisers and content producers that prop up each other, but it cannot forever delay the inevitable collapse of their business model as consumer attention continues to migrate to streaming platforms.
To their credits, most TV networks have been experimenting with direct-to-consumer streaming services. Unfortunately, without the cable companies as the content bundler, it will be difficult for each network to convert all the viewers they have into streaming subscribers. Most of them still lag behind the digital-native players, as they typically focus on putting non-live content on streaming services for time-shifted viewing without making enough efforts to build out their live-streaming platforms. This leaves a space for tech companies to come in with their own live streaming services and content and take over, as the following chart collaborates.
The Rise of Live Streaming
Streaming is the future of video content, and live streaming will make up for a very valuable part of that growing market thanks to the immediacy and real-time connection it enables. According to research from consulting firm Magid, many U.S. consumers have embraced watching live streaming video. In fact, nearly half (48%) of US internet users surveyed in June 2017 said they watched live content via streaming channels at least once a week. And about a quarter (23%) said they watch live streaming content at least once a day. That number will likely to see continued growth, as more live streaming services become available with more live content to offer.
The rise of live streaming is a global phenomenon. Esports live streams will reach about 380 million global viewers this year. Indian streaming video service Hotstar recently set a new world record for online streaming with 8.26 million concurrent viewers. China, in particular, got a head start on live streaming, with consumers and marketers quick to respond as many live-streaming platforms, such as Momo, Yizhibo, Meipai, and Huajiao, take off. The number of live streaming viewers in the country hit an estimated 344 million in 2016, amounting to 47.1% of internet users. Naturally, brands have jumped on board as 37% of marketers in China intend to invest in live streaming as part of their content marketing strategy this year.
Make no mistake, live streaming is not simply the live TV experience delivered over the internet. It is far more flexible and accommodating to interactive features, thanks to its digital nature. Digital overlays and pauses and rewinds are easily achievable to deliver a more enjoyable and informative experience. For example, Amazon Prime Video’s X-Ray feature would provide viewers with additional information about actors and music featured in a certain scene in real time for scripted content. It seems safe to assume that we shouldn’t be that far away from getting the same contextual layovers for live broadcasts, perhaps activated with an AR layer.
Looking ahead, the imminent arrival of 5G services will only further propel live streaming. With faster, more reliable mobile connectivity, more HD video content would become ready for live streams on mobile devices, making it a far more essential part of the Interstitial Media experience than it is today.
Looking at the diversity of live content that live-streaming brings, it is interesting to find traditional live content like sports and newscasts are consumed alongside with live video from friends and family, YouTube creators, and social influencers. This speaks to another strength of the live streaming over traditional live TV, as it mixes the collectively important live events with personally relevant niche live content, offering the viewers a place to catch both types of content in one place.
However, the tech platform owners also understand that the most valuable live content is still largely controlled by media companies and TV networks. In order to further drive the growth of live streaming viewer, they will need to continue to build out the platforms while acquiring live-viewing-worthy content to attract a broader range of audiences. To their credits, the major tech platform owners have recognized the importance of sports content to build out their live-streaming products, as evidenced by Facebook, Amazon, and Twitter all investing heavily in scoring live streaming rights of major sports events.
The Case for Digital Co-Viewing
Co-viewing, aka group viewing, denotes the collective act of live or time-shifted viewing among a group of people. Interestingly, one underrated implication of the shift towards digital channels for video consumption is the loss of co-viewing experience for non-live content. More and more people are watching by themselves instead of sharing the viewing with family and friends. According to research by Cluster, 48% of viewers now prefer to watch their favorite shows alone. Multiple other pieces of research also found similar results that confirm the rise of solo-viewing, largely thanks to the rise of binge-watching and time-shifted viewing options. In fact, it has become such a prevailing issue among couples that the New York Times published a whole piece dissecting the phenomenon. “In modern-day romance,” the author muses, “resisting the impulse to binge so that you may watch with a lover is the new equivalent of meeting the parents or sharing a sober kiss.”
Perhaps the rise of Interstitial Media (aka “phone shows”) is also partly to blame for the loss of co-viewing experiences that typically dominates Intentional Media (aka “couch shows”). By nature of its consumption model, Interstitial Media content is meant for solo viewing, as they are meant to fill the gap in between activities. Therefore, it makes perfect sense that content consumed primarily on personal mobile devices should result in a primarily solo viewing experience. Even Intentional Media is not totally immune to the loss of co-viewing either. With content becoming more interactive and personalized, as we explored in the last week’s article, more couch shows will perhaps soon become increasingly unsuitable for group viewing.
The rise of live streaming may not be able to save co-viewing of non-live content, as that largely stems from shifting viewer behavior. However, it might just be what will save, and even enhance, the co-viewing experience for live content. Live streaming can expand the co-viewing scope from the group sitting on a couch or in a pub to the entire viewership of a live broadcast as they offer their real-time feedback. Most live-streaming channels offer a certain degree of live interactions via rolling comments and flowing hearts/likes, serving as part of the digital recreation of a co-viewing experience. Furthermore, the emergence of social VR experience, such as the one that Facebook has been working on, promises to offer even more immersive versions of digital co-viewing.
What It Means For Brands
Throughout the rise of live streaming and the decline of live viewing, the value of live content stays high. Live content of popular events are still the kind of premium content that brands typically chase after, given their ability to deliver a sized captivated audience for a collective experience that is perfect for increasing brand awareness and mind-share. And it is why TV is still such a major part of media buying for brands whose business model depends on mass advertising, despite the falling ratings. But with the way the U.S. media landscape is evolving and the decoupling of live content from non-live content, brands need to get used to the idea of reach audience at scale via live streaming instead of TV soon. The digital recreation of the co-viewing experience on live-streaming channels will help brands to deliver their messages to an audience in a way that mimics the way live TV works, but with more flexibility in targeting and driving CTA results.
In order to achieve that, however, the industry will need to first solve the measurement problem in live streaming, as video vendors struggle to measure ad impressions across streaming service given the complexity of the ecosystem and the lack of universal metrics. Last week, the Media Rating Council (MRC) released an updated version of its Digital Video Ad Impression Measurement Guidelines, which advises on server-side ad insertion (SSAI) and OTT platforms for the first time. The new guidelines specify that JavaScript or other APIs can be used to measure video ad impressions on OTT platforms and that the same standards for digital video ad measurements should be applied. How the industry will extend the implementation of these new guidelines to live streaming remains to be seen.
Beyond advertising on live content, live streaming also presents brands with an unprecedented channel to reach and engage with their target audiences in real time. As we saw in Chart 3, branded content makes up for about ten percent of total live streaming content. During the past three years or so, we have seen a myriad of brands — from McDonald’s to GE, from auto brands to fashion houses, and many, many others — experiment with hosting or sponsoring live streams to reach their audiences. Most recently, White Castle chose to hype its new Chicken Rings with a parody home shopping show on Facebook Live. The results of these live video campaigns vary, as they depend on whether the live content is eventful enough to actually draw an audience, as well as how brands promote their live content to viewers that are yet to get on those live-streaming platforms. Over time, we believe new creative tools will emerge that simultaneously lower the creation barrier in creating branded live content while driving up production values.
For entertainment brands and media companies, in particular, the rise of live streaming spells not only enormous opportunities for delivering content directly to consumers, but also substantial troubles in guarding paid content from pirated viewing. With the proliferation of live-streaming technology, content owners are no longer in total control over the distribution and consumption of their products. For example, recently a streamer on the live app Twitch who was pretending to be playing a video game actually live-streamed an entire broadcast to tens of thousands of viewers of a pay-per-view MMA fight. To preserve the value of their live content, media owners have few choices but to embrace live streaming to reach more live viewers and work with brands to figure out better ways to monetize live content.
Overall, the use of live streaming will only increase for brands over time as the audience keeps growing and best practices in organic use continue to emerge. We will likely see an increase in media partnerships and clear advertising options, especially with more and more social platforms like Instagram and Snapchat introducing mobile-based live streaming and developing partnerships to produce compelling live video content and test ad options. The rapidly growing esports sector also offers valuable lessons for media owners and brands looking to leverage live streaming to reach global audiences.
As the epitome of Intentional Media, quality live content will continue to be the crown jewel of the media industry, and it is up to all three groups of rising content owners, along with brand advertisers, to successfully transition it into the age of live streaming.
