Releasing the Keytrends 2016: Entering the Age of Experience

As the world continues to change, industry players are strategically venturing into digital technology with more experience under their belt. And with this experience comes the awareness that another experience, the User Experience, needs to lead content creation and distribution today. The User Experience is what’s driving the ever-growing connection and interdependence between content and technology.

These words of welcome introduce ENTERING THE AGE OF EXPERIENCE, our 4th edition, analyzing trends in the screen-based and content industries.

Once again this year, our approach to trends analysis is not about using futurology or trying to make any specific predictions. As we did in previous reports, we focus on the major trends, those that – as tectonic shifts – have been behind the groundswells for several years already and continue to evolve, accelerate and change our industry in fundamental ways on a permanent basis.

We have identified 6 of those key trends. Together, they form the analytical framework we use to prepare each of our report. The report’s dashboard also provides an update on a selection of data and statistics to better understand the Canadian user experience in the digital environment. Finally, the report concludes with a summary of the challenges and opportunities the trends present for professionals in content production and distribution.

Below, you will find a summary/excerpts of what grabbed our attention this year. The full report can be downloaded for free.

- Catalina Briceno director Industry & Market Trends, Canada Media Fund

1- ALWAYS ON: The “All-Smart Things” World Is on Our Doorstep

“By 2020, more than 5 billion people will be connected, not to mention 50 billion things.’’ 

– World Economic Forum, 2015

The next phase of hyperconnectivity lies in the Internet of Things (IoT). This worldwide market will affect every industry, with investment estimated at of more than US$6 trillion or more over the next 5 years.

IoT is the cornerstone of the announced synergy between the web, the ever growing number of connected screens, and the plethora of other digital devices capable of collecting, processing and exchanging user data.  It may be the key to the entertainment and content sector’s long-pursued ambition of a seamless all-platform user experience – one that is much more tailored to the tastes and preferences of individual consumers, thanks to better harnessing of the power of Big Data. The report focuses in particular on the new forms audiovisual and content creation take in IoT land.

2- SCREEN CONVERGENCE: Mobile, mobile, mobile…

“Mobile is not a subset of the internet anymore, that you use only if you’re waiting for a coffee or don’t have a PC in front of you – it’s becoming the main way that people use the internet.” 

-  Benedict Evans, analyst, Andreessen Horowitz, September 2015

Telecommunications services that enable cost-efficient mobile data will be key to continued growth for mobile video consumption in the future.

The growing popularity of video consumption on mobile devices presents the Canadian content industry with many opportunities…but not without challenges. Some of the challenges have been discussed in previous Keytrends reports (effective content curation and personalization, the growing fatigue and shortening attention span of digital consumers). As content providers tackle those issues, the telecommunications industry is faced with another challenge spurred by the increased consumption of mobile video: the soaring demand for wireless data, and the rising cost to consumers.

3- TRANSMEDIA: Virtual Reality and Augmented Reality Take Off

“The VR headset, like the smartphone, is an eminently portable and mobile device. So we can expect VR, much like TV before it, to jump on the ‘Content Everywhere’ bandwagon.’’ 

- Trends Report "Entering the Age of Experience", CMF, 2016

After years of research and development, virtual reality (VR) and augmented reality (AR) technology are finally poised to enjoy wide release in the consumer market. Technology giants are aggressively entering the arena, releasing devices at prices consumers can now afford. But where does VR and AR content currently stand?

Some analysts forecast that AR devices may play a role similar to mobile phones. They could be effective platforms for streaming existing formats of TV and film content in the future, either in 2D or 3D. On the other hand, VR may bring about completely new forms of immersive long-form content and games.

4- THE POWER OF MANY: Is the Generational Gap Materializing?

So far, TV consumption indicators have been maintained despite the many upheavals brought on by the digital revolution. In general, TV consumption habits (viewing hours and content appreciation) have been maintained in the population at large and cord-cutting – if it, in fact, exists – remains an altogether marginal phenomenon in the television economy in the eyes of most analysts.

But do these indicators apply to everyone? Isn’t it time to recognize that there is a generational divide in the content ecosystem? We always knew that Millennials and Generation Z had very different habits in terms of media consumption, but these indicators no longer deceive and the industry should really take note of what strategies need to be adopted to serve this dual clientele.

5- MONETIZATION: Fragmentation and Challenges on the Advertising Model

The monetization of digital content continues its journey towards greater maturity. But in this move to more established business models, the industry is going through a phase characterized by exploration, fragmentation and the hybridization of revenue models. In a digital economy known for its very low cost of entry or even free access, revenue models continue to develop in other parts of the value chain.

The report gives other examples including monetization of user engagement, the growing importance of hyper-distribution and content syndication, and the integration of ‘buy now’ features in social media (examples like Pinterest, Twitter, and Facebook) in this age of impulse buying.

The advertising model, has also experienced strong aftershocks, including the rise of AdBlockers that forced industry stakeholders, including the Interactive Advertising Bureau, to roll out programs to deal with the issue in recent months. Analysts are also advising content providers to leverage various strategies to counter the effects of ad blocking.

6- THE BIG AND THE AGILE: Big TV and Big Tech Dominate, Yet Niches Could Be the Next Frontier

Traditional TV players have demonstrated that together they have extraordinary strength: both Silicon Valley behemoths and legacy TV giants are now deeply engaged in the online video space, facing off in an uneasy mix of competition and coopetition. The next strategy in the war of global platforms? Embrace diversity, to anchor in a localized approach and niche.

While the Alphas of Tech and TV battle each other, smaller progressive players are finding ways to connect with audiences, as indicated in our previous trends report. In the case of these new incumbents, ‘mining the digital niche’ is proving to be a viable business model. Whereas reports forecast that niche channels struggling to gain broad audiences will be the most likely to fall victim to the current disruption of the traditional TV market, the niche appears to be an opportunity to be seized in the digital wilderness.

But the giants are watching – and once again adapting. As industry giants rush in to seize opportunities in these emerging markets, will we witness the emergence of more diverse, localized content offerings to offset the trend towards a narrowing of cultural preferences?

Catalina Briceño
Renowned for her outstanding communication and engagement skills, for the past 20 years, Catalina Briceño has helped companies in the media and cultural sectors develop and deploy digital transformation, innovation, and diversification initiatives. Among her main accomplishments, she contributed to the growth and the international success for Têtes à claques (Salambo Productions) and founded and managed the Canada Media Fund’s Industry & Market Trends department (2010-2018). As a visiting professor at UQAM’s École des médias, she today shares her passion for industry and market trends and forward thinking on the future of television and media with her students and industry colleagues.
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