Top 10 digital media predictions for 2017

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Top 10 digital media predictions for 2017

It’s that time of the season again. Here are my Top 10 predictions for digital media in 2017.

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(1) We will see all-out war in the world of premium video

We will see all-out war in the world of premium video, as both massive new entrants like AT&T’s DirecTV Now — and SVOD services like Hulu — become virtual MVPDs that, like Sling TV and Sony PlayStation Vue, offer live channels to compete head-on with the actual MVPDs (the traditional big cable and satellite TV guys).

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(2) Challenges emerge to Netflix’s dominance in the world

Netflix’s overall dominance in the world of premium OTT video will be challenged like never before, as seemingly docile competitors like Hulu beat it to this virtual MVPD expansion, as global competitors take out China and other territories before it, and as pure-play content-only monetizing business models fight to compete against an increasingly aggressive array of industry behemoths that can use content as marketing (Amazon and Apple, anyone?). Whereas Netflix’s 2016 ended with a performance bang, these sobering realities begin to hit home in 2017.

 

 

Related bonus prediction — The artificial platform distinction between short-form and long-form content will begin to disappear (much like the “MCN” moniker disappeared in 2016), as duration no longer serves as a proxy for quality. Good storytelling is good storytelling, period. And, good stories are told in however long it takes to tell them.
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(3) Personalization will become a central campaign in this OTT battle royale

Personalization will become a central campaign in this increasingly crowded OTT battle royale. Our “television” experiences will begin to shift from one-to-many (broadcast) to one-to-one (personalized).  Content is king, of course. But, even if a content pool is compelling and deep, it means nothing to consumers if they can’t find what they want in it.

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(4) Mega M&A will rule the day

Consider this the “AT&T Effect,” as the titans of both technology (platforms) and content (creators) react to the $85 billion acquisition of Time Warner.  Verizon is already rumored to be eyeing CBS.  And, Netflix’s long-term vulnerability means that active discussions will take place in 2017 to buy it (Disney already was rumored to be interested in 2016). Don’t be surprised if one of the usual suspects is that potential buyer (Apple, Amazon, Facebook, Google/YouTube, Verizon), or even some less usual suspects (such as massive international player Alibaba).

Related bonus prediction — the pace of smaller (yet still strategically significant) digital-first media M&A will accelerate, as well. Traditional media’s increasing multi-platform urgency will cause several of them to focus like never before on those remaining digital-first video companies that are category leaders.  Tastemade and Jukin’ Media are leading contenders.

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(5) The streaming music market also consolidates further

The streaming music market also consolidates further, as the “big box” multi-monetizing digital retailers (Apple, Amazon, Google/YouTube) increasingly use music as “loss leaders” and squeeze out the hopes of the remaining independents that monetize only the music itself — and are nowhere near long-term profitability because of it (Spotify, Pandora, Napster, Deezer, Slacker and a host of others). M&A of the pure-play services will increasingly become an end-game here.

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(6) The distinction between media companies and advertisers blurs

Every brand can be a media company, because ultimately each brand tells stories. It’s just a question of how effective and engaging they are, and to what degree (Red Bull takes it furthest). More and more brands will go direct-to-consumer with their own branded content/content marketing that entertains in its own right (remember Dollar Shave Club, and its video that ultimately led to a $1 billion pay day this past year?). And, much like virtual MVPDs increasingly focus on personalization, brands will do the same across multiple touchpoints. Chatbots will increasingly rule the day, but wearables and beacon technology will also help here.
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(7) VR & AR will maintain a slightly lower profile in 2017

AR and VR technology will evolve significantly, and the live content that brings that technology to life will begin to reveal itself in tantalizing new ways. Media companies, brands and VCs will increasingly pour money into the content development side of the VR and AR space.

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(8) e-sports’ relentless march forward will accelerate

e-sports’ relentless march forward will accelerate too, as relatable e-thletes (see what I did there?) raise their profiles into the commercial mainstream via advertisers hungry to reach their rabid social followings. Brands will divert significantly more resources to this new “space” which, in turn, will increasingly challenge the traditional sports market.

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(9) The power of data becomes increasingly clear and critical

Bloated legacy data platforms — that face disruption by significantly lower-priced and more efficient new ones — will act to take out those threats (case in point, Salesforce buying data management platform Krux for $700 million late 2016).

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(10) International markets become an even greater battleground

This will occur as the largest digital media players both inside and outside the U.S. increasingly encroach on each other’s home turf in this borderless world (China’s LeEco anyone? Although that one faces increasing challenges as the year ends).

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