"For millennials especially, there is no 1st or 2nd screen, there is only the screen-of-convenience."
by Stu Jacob, Founder of Jacob Entertainment
GNB Editor's Note: Stu Jacob is Founder of Jacob Entertainment and was Lead Partner, Media & Entertainment, Strategy & Digital Transformation, at IBM. The opinions here are his. Reproduced with the author's permission. Stu Jacob on LinkedIn
(GNB) - The way it used to be is no more. Especially in how we consume TV. Consider this: Consumer behavior today is mostly focused on renting and subscriptions, not owning. For example, don’t buy a car, just take out a subscription to BMW or Volvo and get the car of your choice each month; don’t own a phone, just buy a monthly subscription plan and get all the data you need together with the phone of your choice to use for only for as long as the subscription is maintained. In other words, don’t delay, no need to plan, get what you want today with easily affordable monthly payments, instant gratification in our on-demand world. When shopping for products or services, there is now a breakdown in the decision-making process, a process that helps us as consumers make more informed choices, to think of what we really want and develop brand loyalty. We lose much of the glue with products and services that is a big part of the overall value-proposition. This is now especially true of content and its delivery platforms, since you can get anything, anywhere, anytime you want. Customers, viewers, audiences are now loyal to the viewing product or piece of content, but not to the format of its availability or how it is distributed. This hurts service providers, distributors, and content aggregators/generators. Since Netfilx is available everywhere, consumers will spin in/out of any convenient and in-the-moment distribution platform, as long as it provides Netflix.
Platform providers, like cable operators, DirecTV Now, Sling and others, are all experiencing huge churn because customers no longer seem to attach value to the platform: all they long for is the lowest price for the content they actually want to watch. It used to be that the glue to stop spin and churn was cable TV, where the consumer had few options, content was plentiful, and it was all tied to unique hardware. Technology changed all that and in a hurry. Now, with one phone call you can switch providers and plans, from skinny bundle to skinny bundle. What do consumers care most about, especially millennials? Lowest price. OTT providers may claim that their content is unique. True, not all skinny bundles are the same, but they sure look like it to consumers, which helps explain the churn, and it would take a lot of work to tell them apart in any “common sense” way. Presently, the key industry driver is to build a loyal customer base based on flexible skinny bundles charged at a low price. But how do all the OTT providers of skinny bundles, the aggregators of streaming content, and even the traditional players that are launching their own OTT bundles compete in a time of super-fragmentation of the TV/Movie/Content industry? Easy to state the problem, though tough to solve, but there are new players that are inventing some very cool and innovative ways of doing business. The holy grail is new forms of engagement. These new forms of engagement involve how to use our screen and its real estate to better promote consumer engagement with the programming they are watching at that moment. This the brings us to the point of 1stversus 2ndscreen comparison. Some industry insiders say that 2ndscreen engagement has been tried and failed. And they would be absolutely right. But this argument misses today’s reality: today’s relationship between screens is not the same as 10 or 15 years ago. For millennials especially, there is no 1st or 2ndscreen, there is only the screen-of-convenience. Whoever really understands this and can deploy relevant tech will be creating new loyalty incentives, new advertising revenues, and new fun for consumers.