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Feb 15, 2013

Trends for content owners in 2013: OTT platforms opening floodgates

Ansley Kilgore

Trend 3: OTT platforms open the floodgates for new content providers
As cable channels watch their audiences dwindle, new opportunities are arising for over-the-top (OTT) platforms. The economics of this shift threaten traditional distribution models as well as the content providers that support them. As OTT pure-plays look to fill the void left by the demise of media giants such as Viacom, more nimble content providers that don’t rely on existing cable or network distribution for the bulk of their revenue could benefit greatly.

Five Trends to Watch for Content Owners in 2013.
Trend 1: Online privacy concerns
Trend 2: The rise of the multi-tablet household

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Feb 8, 2013

Trends for content owners in 2013: the rise of the multi-tablet household

Ansley Kilgore

Trend 2: The rise of the multi-tablet household
Content owners are now faced with the challenge of providing an optimal user experience for a variety of devices, including tablets. As the number of multi-tablet households increases, customers are using them in different ways – smaller devices are more likely to be used for eBook reading, mobile-as-Web browsing, email and photo sharing, while their larger 10-inch counterparts may work better for browsing full versions of websites, reviewing presentations or watching full-length video. How will digital publishers meet the demand for content that is quick to load, always available and optimized for a myriad of devices?

To learn more, download our white paper, Five Trends to Watch for Content Owners in 2013.

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Sep 18, 2012

Five trends to watch for content owners in 2013: Part two

Ansley Kilgore

Five trends to watch for content owners in 2013If you are just joining us, this is week two in a five-part series on trends for content owners in 2013. Last week I discussed how privacy concerns are threatening content consumption and preference sharing and how content owners are responding. Let’s get started with number two on the list: the rise of the multi-tablet household.

The rise of the multi-tablet household

Total tablet unit shipments rose an astounding 246% to 64 million in 2011 according to Bank of America Merrill Lynch equity research.* With an average selling price of around $500, this market generated $32 billion in revenue for retailers, device manufacturers and component suppliers. Analysts predict tablet shipments will reach 94 million by the end of 2012. According to Deloitte Consulting, growth in this still nascent market will be supported by households buying their second or third tablet. By the end of 2012, almost 5% of tablets will be owned by individuals or households that already own a tablet.

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Beyond the fact that consumers are rapidly adopting tablet versions of their favorite magazines, games and other online content, tablet versions of online and print content are also giving publishers greater flexibility in their pricing models. In May 2011, The New Yorker launched its tablet version for $59 a year, simultaneously raising its print subscription by 77% to $69 per year. Condé Nast is also leveraging the advent of its tablet version to increase subscription pricing. Condé Nast CEO, Charles H. Townsend, said in 2010 that the company had been too “overtly dependent on advertising as the turbine that runs [its business].” Given that digital advertising has traditionally been sold at lower price points than print, the ability to raise subscription fees has become critical for some publishers.

Many publishers have duly noted that consumers are using tablets primarily for content consumption (e.g., browsing websites, reading news, playing online games) rather than content creation (e.g., writing blogs, posting videos, creating spreadsheet models). A recent Morgan Stanley AlphaWise survey of 8,200 consumers across the US, UK, France, Germany, China and Japan supports this assertion, revealing that content creation usage is much lower on tablets than on traditional PCs. In fact, tablet usage appears to be driving reductions in time spent on PCs for key content consumption tasks, but not for content creation actions.

To add another wrinkle, consumers use different types of tablets differently. Smaller devices are likely to be used differently than their 10-inch counterparts due to reduced processing power and mobility. Smaller devices may be used more frequently for eBook reading, mobile-as-Web browsing, email and photo sharing on-the-go. However, smaller tablets may be less useful for browsing full versions of websites, reviewing emails or presentations, analyzing data in spreadsheets or watching full-length video.

How are content owners responding?

From a customer perspective, it’s all about experience and convenience. They’re looking for content that is quick to load, always available and optimized for all of their devices. Digital publishers are turning to content delivery networks with multi-device transmuxing to help optimize single files for consumption through a wide variety of venues including Apple iPhone and iPad, Flash, Android and Silverlight devices. Content owners are also “tiering” titles across infrastructure platforms. New content with highly uncertain demand patterns is increasingly being launched in a public cloud environment. Should demand take off quickly, compute and storage resources are turned up in minutes to address increased traffic, and virtual servers that carry unsuccessful titles are quickly decommissioned to avoid unnecessary costs. Assets that have predictable demand patterns can reside in a physical server environment, either via colocation or managed hosting to avoid the bursting premiums inherent in almost every pure public cloud model. The payoff for successful tablet content strategy implementation can be huge. After years of low-margin, advertiser-supported revenue models, consumers are beginning to embrace online subscription pricing models. This increased acceptance is due in large part to the fact that tablets allow a portable, easy-to-view, highly-customizable medium for content consumption. With stickier customers and more subscription pricing power, multi-device content initiatives can pay for themselves in a few weeks.

Check back for trend three next week as I explore how over-the-top (OTT) pure plays like Netflix and Hulu are changing the content consumption landscape.

*2012- The year ahead: Year of the tablet shakeout; December 2011

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Sep 14, 2012

Five trends to watch for content owners in 2013

Ansley Kilgore

Five Trends to Watch for Content Owners in 2013We live in the age of information with anything you need to know literally at your fingertips via smartphone, tablet, laptop and more. With content accessible on a multitude of different devices and available on demand, content producers must stay ahead of the trends to make sure their media is at the ready in any form. Accomplishing this means putting the necessary IT Infrastructure in place to back it up. Over the next few weeks, I’ll explore five trends for content owners and how to support them. Let’s get started with number one: online privacy concerns threaten online content consumption and preference sharing.

Online privacy concerns threaten content consumption and preference sharing

What do unscented lotions, calcium and zinc supplements, large purses and bright-colored area rugs have in common? Sometime in the early 2000’s, statisticians at Target figured out that pregnant women tend to buy these items much more frequently than the shopping population in general. Like most large retailers, Target collects massive amounts of data on customer visits to its website and brick and mortar stores. “If you use a credit card or a coupon, or fill out a survey, or mail in a refund, or call the customer help line, or open an e-mail we’ve sent you, or visit our website, we’ll record it and link it to your Guest ID,” Andrew Pole, Group Manager at Target recently told the New York Times. “We want to know everything we can.” By deftly placing advertisements for diapers, cribs, car seats and infant formula in front of shoppers that are likely shopping for a new baby, Target has effectively beat its competitors to the punch and made millions.

The problem is, consumers increasingly see these tactics as not only invasive, but also downright creepy. In 2011, TRUSTe published a survey covering consumer privacy attitudes toward online behavioral advertising. In it, 94% of consumers said they considered online privacy important. Fifty-three percent said that it was an issue that they “thought about often.”

In a March 2012 report by PEW Research, two thirds of Internet users surveyed viewed online targeted advertising negatively. In the UK, where privacy issues and loss of personal data have been in the headlines, the percentage of consumers willing to have browsing activity monitored in order to receive targeted advertising has dropped dramatically, from 20% in 2009 to just 5% in 2010.

To add to consumers’ concerns about sharing personal data, security breach incidents are on the rise. In January, Amazon disclosed that hackers had cracked its customer database to steal some 24 million customer records. More than six million LinkedIn passwords were hacked and posted to a bulletin board in June. Justifiably, credit card and identify theft are consistently ranked among the top privacy concerns for online users. For 12 straight years, identity theft has ranked at the top of the US Federal Trade Commission’s annual list of top consumer complaints.

How are content owners responding?

Digital publishers that collect behavioral data from customers’ Internet usage, location data and other demographic information are addressing privacy concerns by providing clear opt-out control to consumers. Providing easy access to an information-collection preference on your site as well as links to external opt-out channels like the Digital Advertising Alliance’s (DAA) Self- Regulatory Program for Online Behavioral Advertising and the privacychoice.org opt-out network, builds consumer trust which drives content use and ultimately increases revenue. In fact, the TRUSTe survey revealed that more than half of consumers surveyed said they would be more likely to click through and buy from an advertiser or publisher that provides the option to opt out of online tracking and/or behavioral advertising.

Content owners are also working harder to protect sensitive customer data from theft, starting with their enterprise hosting infrastructure. Enterprises are putting controls in place to keep credit card information and personal information fully-separated from less sensitive data. They are also auditing their infrastructure vendors to determine whether they have proper data security certifications like PCI, SOC 2 and European Safe Harbor. At a more granular level, enterprises are looking closely at whether credit card numbers, email addresses, usernames and passwords are being properly encrypted while at rest and in flight. The LinkedIn hack clearly demonstrated the need for comprehensive encryption (e.g., hashing and salting) of customer data. Content owners, publishers and distributors are increasingly realizing that attention to online privacy details will keep them on good terms with their customers and help their online presence thrive.

Watch Drew McBath, Sr. Director, Product and Strategic Marketing at Internap, discuss how content owners are responding to online privacy concerns.

 

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