By Paul Erickson, Founder and Principal, Erickson Strategy and Insights

With attendance at the recent NAB Show back up at over 70% of pre-pandemic levels, it feels like the industry is back in force and back in earnest. It’s good to see this reinvigoration, and it was great to catch up with my many friends and colleagues at the show and to take the pulse of the industry.

Here are some of the hot topics that were evident across panels and conversations, that I think will influence discussions and strategies on various levels throughout the year:

1) Optimizing monetization strategies and focusing on profitability

We’re in a period of financial pressure for the industry and economic pressure for consumers – it is imperative for media companies to improve profitability, monetization, and revenue optimization. With more limited budgets, companies need to maximize revenue generation from existing content and from a more limited influx of new content. They are also going through a process of understanding how best to leverage free ad-supported offerings, and how to upsell/transition those audiences from free to paid/premium. There are many other examples, but this season, the main overarching themes will be on profitability, efficiency, revenue generation, and revenue optimization. Vendors and solution providers focusing on helping services and content owners earn more, with the same or less content budget, with more efficiency and speed, will drive the most value within the streaming industry’s current state of need.

2) Maximizing and leveraging the power of Connected TV

The Connected TV (CTV)/Smart TV is of increasing importance in consumer households, as it has quickly become the most significant aggregation point for content consumption in the connected home. It has thus also become the most important point of consumption to leverage and take advantage of – it is the gateway of user interaction, and a rich trove of valuable user data.

The result is considerable momentum behind maximizing CTV advertising performance as well as user engagement, via the higher level of personalization that is possible with the increased available data. There is also continuing growth in the market power of streaming platform owners such as Roku, Google, Amazon, Samsung, LG, and Vizio in the realms of advertising and measurement, due to the significance of that data – and their control of the platform at that aggregation point of household entertainment consumption. 

3) FAST is hot – effectively leveraging it is hotter

Free ad-supported TV (FAST) services and channels are the topic du jour, but are in some ways already yesterday’s topic. It’s no surprise that “free” appeals to consumers, and is growing in appeal as consumers’ economic concerns increase. The real point of discussion is now how best to make the most of that FAST momentum – not just in terms of audience-building, but also in terms of revenue generation and optimization.

Maximizing content revenue is crucial for services and content owners that need to increase return on existing or limited content investment, especially at a time when content budgets are constrained or being reduced. These parties will find considerable value in solutions that optimize their content ROI via smarter advertising, higher sustained engagement, and intelligent licensing of that content to other parties when warranted. FAST services offer multiple ways for content owners to extend/expand the revenue generation of new content, and reinvigorate revenue generation from older, legacy content in their libraries. Understanding how to maximize conversion of viewers of FAST channels to paid versions of that service/channel, will also be a crucial capability for the year ahead.

The growth of FAST services is also bringing about evolution of some of the fundamental aspects of the proposition itself: the advertising and the experience. There is a constant drive for smarter adtech within FAST – better personalization and smarter contextual serving and delivery – while improving the traditional FAST experience with better personalization, faster/smarter UX and discovery, and improved integration within today’s super-aggregated user experiences. NAB Show 2023 had examples of this nexus, such as the partnership between Amagi, Accedo, and ThinkAnalytics. More will come, as the FAST experience is continuing to evolve.

4) Protecting and maximizing the value of live content

Live sports streaming is growing in popularity year-on-year, but it is also arguably the most challenging niche of the streaming world in terms of technical hurdles and piracy threats. The growing need to scale live events at low latency is adding to the complications of what is already a highly complex process. The ever-present challenges of delivering, protecting, and monetizing live content, particularly live sports, are crucial factors to address as companies seek to maximize the value of that increasingly expensive content. With many sports leagues and teams looking to go direct-to-consumer, the collective need to reliably deliver and protect live sports will only grow.

Understanding how best to go beyond simply the value of delivering that live content to the user, to fully leverage the live streaming experience for additional revenue generation possibilities (such as from advertising, engagement-driving added-value features/functionality, and more), will be a differentiating factor for many services as time goes by.

5) Cloud and AI/ML are now indispensable

I continue to hear more and more about the industry’s growing leverage of the cloud – particularly for workflows, remote production, and SaaS-based/SaaS-infused business models. This will only continue to grow, as the entertainment industry deepens its knowledge of and commitment to taking maximum advantage of cloud-based capabilities.

There is also an ever-growing infusion of AI and ML across a variety of purposes across media and entertainment tech. There are many common, fundamental advantages that are driving this, such as better efficiency, faster and smarter automation of processes, better understanding of customer behaviors (for prediction/monetization/personalization), discovery of patterns and causality previously unknown, higher levels of optimization, and more. The use cases discussed at the show where AI and ML are leveraged to drive higher content ROI, optimize revenues, and increase subscriber spending and retention, will be increasingly relevant to services and content owners in today’s financially-pressured streaming market environment.

These were some of the dominant trends that stood out to me at NAB Show 2023, among many also-important themes that were in the air at the show thanks to an industry that has been reinvigorated – but is now facing a different type of challenging environment. What is clear is that the innovation power of the M&E tech industry has now shifted towards the needs of today’s now-mature streaming industry – improvement, refinement, efficiency, optimization, and profitability. 

It’s always a pleasure meeting with some of the most interesting companies in media and entertainment technology to discuss the latest innovations that will drive the industry forward. I find these briefings and discussions to be invaluable for both parties. If you’d like to know more about how to get the most out of conversations with myself and other analysts, then I highly recommend you read Platform Communications’ latest report, ‘Why analyst relations is pivotal to business success,’ which you can download here.

See you at IBC!