The State of Live Video 2019

“As an example, I’m an analyst and I know all of the services that offer channels. And it still took me an hour to go through and compare all of the ones, the options, and to figure out which ones had what I wanted. And I even knew where to look. So for average consumers, I think it’s going to be much more exploratory,” Sappington says. “I think that becomes a real challenge, because it’s not like everyone has infinite time to go test every option out there.”

To conquer that problem, live video services need to step up their efforts. They need to communicate the options available, and help people understand the differences in content, prices, and features. And the press needs to explain the range of options, as well, then make recommendations.

Streaming platforms like Roku make comparisons easier, since consumers can view a range of choices in one user interface. The market is maturing, Sappington adds, and that makes it easier to find information.

Don’t expect everyone who tries live services to cut the cord, though. One thing Parks Associates has discovered is that about a third of people that sign up for vMVPDs keep their traditional pay TV services. Sappington believes consumers are in the exploration phase now, and don’t want to stop their pay TV service until they’re sure they have a solid replacement.

Virtual multichannel program distributors like Hulu are gaining traction, but Parks Associates has discovered that about a third of the people who subscribe to them also keep their traditional pay TV services.

While sports viewing is growing online, esports viewing seems to be growing even faster. Sappington believes the area isn’t even close to peaking. Esports has two advantages over traditional sports. First, it’s international. Many of the games have an international appeal, and gamers in the U.S. might have just as much interest in watching a European esports match as Europeans would have in watching a U.S. match. Second, esports were designed from the start with online viewing in mind. While baseball and football have had to retrofit their equipment for online distribution, it was there from the start with esports.

Some esports live streams exceed the TV audiences for many cable shows, Sappington points out. They get in the neighborhood of 500,000 to a million viewers. That’s real scale that advertisers can do something with. Plus, these are still early days, with much more growth on the way.

“It’s just really getting started. One of the challenges in achieving a peak for esports is that it’s so volatile,” Sappington says. “Fortnite 18 months ago was a blip on the radar. It was not one of the popular games. It was marginal. It had just been launched and it was not a huge game by any stretch. Within a little over a year, it is massive to where you have elementary school children doing the Fortnite dances in the hallways of school. And you have new celebrities born out of that. There’s the leading celebrity Ninja, he reportedly clears half a million dollars a month in sponsorships, in advertising, and in a number of other ways. That’s within a year. So highly volatile.”

The Impact of 5G

One technology that’s going to make a huge difference to live video is 5G. Despite what vendors said at this year’s CES, 5G might not make a huge impact in 2019, but it certainly will in 2020 and beyond. According to Mark Peters, managing director with Accenture, 5G will have an impact on both the contribution side of the business and the distribution side. For contribution, he sees a few big advantages to 5G. It will offer producers higher bandwidth at a lower cost, and make streaming from ever-more-remote locations possible. It will be cheaper and more practical than sending a satellite truck and will offer easier access than bonded cellular. He imagines some interesting startups could grow out of that opportunity, perhaps by broadcasting lesser-known events and making them mainstream.

As 5G connectivity develops, looks for two new technologies—mobile edge computing (MEC) and network splicing—to gain importance. MEC will let distributors bring more computing resources to the edge. That will help with streams that involve non-cacheable data, such as personalized services, and could lead to innovative new products. Network splicing lets network operators allocate more bandwidth to different customers. With 4G, every user gets an equal share of bandwidth. But with 5G, operators can allocate bandwidth as needed, a feature they can productize and sell. Network splicing works seamlessly through the network without requiring customers to rely on any workarounds.

For distribution, 5G and other related technologies will usher in a new generation of streaming video, Peters believes. Experiences will be more exciting and more sticky, both during live events and after, encouraging viewers to keep watching. With robust 5G connections and MEC, publishers won’t be limited to a handset’s computing power. They’ll be able to create richly rendered experiences with all computing done in the network and then delivered to the handset. They’ll also be able to stream in higher resolutions with richer colors. The throughput of 5G will make it possible.

For home viewing, 5G will open up new choices in providers. While households now rely on a fixed line or satellite connection, they’ll soon be able to shop around for wireless 5G providers. The 5G hype will be strong in 2019, but major infrastructure upgrades will take a couple years. 5G access will begin to appear this year, but ubiquitous access is still a few years away. Likewise, in-car video experiences are also years away.

The New Viewing Paradigm

With all of these changes, it’s no wonder young people think of TV differently than do older generations. They don’t watch less, but they do watch in their own way. For them, TV is demand-driven and bite-sized. Understanding that new paradigm of TV viewing behavior and programming in a way that optimizes engagement will be a major push in 2019, Peters says.

“I think it’ll come through data-driven personalization, which is one of the hardest aspects of a digital platform to achieve, and certainly I’ve read some data which shows that data-driven personalization is highly desirable but challenging,” Peters says. “That could come through the complexities of adopting, for example, machine learning-based technologies to constantly change and react and apply programing. And, ‘programming’ could mean [something] as simple as recommending content or it could be the layout of a particular digital experience optimized for a particular user, which sounds great in theory but in reality is actually very difficult to implement, and very difficult to implement well so that it’s not annoying for a user who likes to feel that they know how to navigate an experience. So, I think we’ll see certainly the experimentation in this space that has been going on behind the scenes the past couple of years. I think we’ll start to see some of that rolling out in 2019.”

The success of live video comes down to two concepts that Accenture discusses often, Peters says: trust and purpose. Publishers will build trust with consumers by delivering on their promises and providing consistent quality. Building trust takes time, and consistency is key. As for purpose, that comes across in the values companies display and the products they offer. Peters sees this as important for live video providers as they build relationships with various affinity groups. By creating bonds with communities, providers get closer to their customers and show they can deliver a more differentiated service than traditional TV providers can. Creating strong bonds will be crucial for the live video providers of the future.

2019 will be a maturation year for live video, a time to grow new technologies and communicate what’s available to consumers. The whole experience of live TV is changing, and decisions made this year will shape the future of how we all experience live events.

[This article appears in the March 2019 issue of Streaming Media Magazine as "The State of Live Video."]

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