Ericsson ConsumerLab 2017: Welcome to a new consumer reality (Part One)

The pace of change within the broadcast space has been underlined by the release of the eighth edition of Ericsson’s ConsumerLab TV and Media report. Based on quantitative data collected from 13 markets with approximately 20,000 online interviews, the report paints a picture of a consumer community that is embracing the future with a growing desire for immersive, on-demand content and greater mobility. For TV service providers, the report highlights the need to maintain a forward-looking strategy that addresses these rapidly changing viewing habits.

Key Findings

The report shows that time spent watching TV and video content has reached an all-time high of 30 hours a week, including active viewing of scheduled linear TV, live and on-demand internet services, downloaded and recorded content, as well as DVD and Blu-ray. Furthermore, close to 60 percent of viewers now prefer on-demand over scheduled linear TV viewing, an increase of around 50 percent since 2010. The rise in consumption is also matching a change in device preference. Mobile and linear may finally reach parity with the report predicting that 50 percent of all viewing will be done on a mobile screen in 2020, half of which will be on a smartphone alone.

TV Viewing And VR on The Incline

While the amount of TV the consumer watches is increasing, so is the appetite for immersive experiences through virtual and augmented reality. The analysis suggests that by 2020, one in three consumers will be virtual reality (VR) users. Although around one quarter of consumers are planning to get VR devices, cost is still an issue with the majority suggesting that headsets need to be cheaper and there should be more immersive content available. One of the most interesting insights was that a third of consumers would be more interested in VR if they could get a VR bundle from their TV provider.

Revenue Opportunities for Operators

For operators, this shift towards immersive viewing marks a major opportunity to create more revenue opportunities with new technology advances. Ericsson’s recent VR demo at IBC 2017 with TiledMedia and Sky, showed the potential of the VR medium to create more immersive consumer viewing experiences. Using an untethered VR headset, visitors to the stand were able to experience what it’s like to be in the center of the sporting action, complemented with a traditional broadcast view. The demonstration used Viewport-Adaptive streaming technology which harnesses Ericsson’s industry-leading HEVC software encoding technology and Tiledmedia’s innovative ClearVR tiled streaming technology to optimize the video quality to bandwidth ratio.

Embracing a Move to IP and Cloud

With the ConsumerLab report signaling a shift to mobility, on-demand and immersive viewing, it also raises the underlying trend that will power the changes taking place within the media landscape – namely IP and the cloud. Both will be crucial to capitalizing on some of the changes happening now, and innovating for where TV might be heading in the future.

The move to IP has been an ongoing journey for the entire industry over the last decade. Although a lot of legacy technology still remains, the rise of the IP-native over-the-top service providers has highlighted the huge benefits of this model. The ability to serve content across a diverse range of IP connected devices, from TVs to screens in cars, has also proven a compelling reason to embrace change and align the business model to the market opportunity.

The capacity to deliver the level of service and expected features within such a highly competitive and rapidly moving market has proven a major challenge for even the most well-resourced operators. From back-end systems able to on-board and manage subscribers all the way through to the apps and platforms able to securely deliver high value UHD content; the concept of the cloud is proving its value as an agile and powerful resource. Cloud moves businesses away from front loaded capacity to a more predictable growth model which with the uncertainty in the market, is a welcome change for both established players and start-ups trying to break into new markets.

Capitalizing on the Growth of TV Viewership

To capitalize on the growth in TV viewership, operators need technologies that deliver against the viewer’s growing demand for TV content on their terms and embrace IP and the cloud. For example, Ericsson Video Storage and Processing Platform (VSPP) provides a unified solution for multi-screen distribution including: cloud DVR, live, on-demand, and time/place-shifted TV services offering better performance, reduced latency, and much lower CAPEX and TCO. Such technology is integral to addressing the growing demand from consumers for greater control and flexibility with how they access video content.

Over the course of a series of blogs, we will examine some of the key trends unearthed by the ConsumerLab TV & Media report, taking a deeper dive into VR, mobility, the growth of the TV Anywhere generation and content discovery. Through addressing these themes in more detail, we will demonstrate how through technology, service providers can gain a competitive advantage and build differentiated and valued services for viewers now and in the future.

By Mark Russell, Chief Technology Officer and Head of Strategy, Ericsson Media Solutions