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Five Stories to Watch at NAB 2017

During the upcoming NAB show in Las Vegas April 22-27, broadcasters will be focused on a number of strategic, technological and competitive challenges that need to be overcome to grow their businesses.

One of the biggest challenges is the need to make broadcast services more resilient to cyberattacks. Other challenges include the rising costs of creating content, delivering differentiated hyper-personalized services that employ data analytics, and developing strategies to improve advertising efficiencies with artificial intelligence. Here's a look at five stories to watch during the show.

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(1) Data Piracy Is the New Piracy
Concerns about data piracy and other cyberattacks are rising in many corporations. An Accenture survey of 2,000 enterprise security professionals finds that the average company experiences two-to-three successful targeted cyberattacks per month. Read Building Confidence: Facing the Cybersecurity Conundrum for more on the survey's results.

Broadcasters are facing these same issues  -- especially data theft attacks. In a separate Accenture survey of media and entertainment professionals, 77% of respondents indicated their companies experienced an attempted or successful theft or corruption of data by insiders during the previous year. One leading entertainment company experienced multiple attacks that breached nearly 77 million customer records, unpublished movies and confidential internal information. See The New Security Challenge: Are Media and Entertainment Companies Ready? for more information.

As broadcasters engage more directly with consumers, offer more personalized digital services and collaborate with communications companies, they acquire a new asset equally as valuable as content: extensive customer data. Their use of open and standards-based Internet Protocol networks allows them to tailor content to specific consumers' interests. But the interconnected nature of these networks and services creates more security risks.

The growing amount of consumer data broadcasters are collecting makes these databases more vulnerable targets for computer hackers looking to steal much more than the latest movie. And because all this information is being generated through digital channels and mobile devices, it’s much more accessible to hacking.

This problem is bound to get more serious because of the accumulation of more high-value data. Broadcasters are going to spend an increasing amount of money and energy to protect their companies, networks and customers from security breaches. Ensuring end-to-end security is no longer just an IT issue. Protecting customer privacy, critical infrastructure and brand value is a daily agenda item.

(2) Rising Costs to Create Content
A central revenue driver of the broadcasting industry is content. While a plethora of storylines about content will emerge at NAB, the most important could be the rising costs to create, acquire and distribute content.

From this year through 2020, the rate at which programmers' costs will increase to create, acquire and distribute content will accelerate twice as fast as their revenue, according to the “Future of Broadcasting VI” report. This could intensify pressure to change their business models to compete more effectively and to drive more rapid industry consolidation.

The research forecasts that content costs will increase from $100 billion this year to $136 billion in 2020, a 36 percent increase. By contrast, video revenue will increase from $184 billion this year to $217 billion in 2020, up only 18 percent.

To reduce costs and increase revenue, broadcasters will increasingly focus on ways to more efficiently manage their costs by selecting which content they will and will not produce, and delivering more personalized services to customers.

(3) Hyper-Focus on Hyper-Personalization
Consumers want broadcasters to increase the contextual and personal relevance of all content, including ads, to make every viewing experience engaging and meaningful. This is hyper-personalization.

One broadcaster taking a pioneering approach to hyper-personalization is the British Broadcast Company (BBC). In 2015, the BBC launched “myBBC,” a strategic platform to harness insight from audience interactions across the breadth of its digital properties. Empowering the BBC to build direct relationships with its audiences, the new platform has increased engagement and consumption, and underpins a new data-driven approach to its operations across key departments including content commissioning.

At NAB 2017 broadcasters will be hyper-focused on hyper-personalization because it’s an imperative for remaining competitive with digital natives, such as internet platform companies. Focusing on hyper-personalization is also an opportunity for them to reinvent themselves using data, delivering true personalization to every person in their audience while increasing their brand value, viewer satisfaction and revenue.

(4) Consolidating to Succeed
Consolidation of companies, platforms, services and technologies among telecommunications, media and entertainment companies will be an important NAB story. Consolidation is increasing because growth among many of these companies is either decreasing or flat, and low-cost digital natives are intensifying the competitive landscape with compelling video platforms, content, services and disruptive business models.

Standalone content providers are finding it challenging to compete with digital native platform providers that have larger scale, more customers and global content. As the media habits of consumers continue to shift and become more liquid, many broadcasters lack the resources to compete head-to-head with digital natives.

Related: Altice’s Dexter Goei to Keynote NAB

Through consolidation, however, communications, media and entertainment companies can create mutually beneficial opportunities. Content creators such as broadcasters can merge or collaborate with communications service providers that have the infrastructure pipes to deliver that content. Combining platforms, distribution, advertising, programming and customers will help them be more competitive.

(5) Getting Smarter About Artificial Intelligence
The advertising and broadcasting industries are confounded by an avalanche of disaggregated and unreliable data about consumers. To address this problem they are increasingly using machine learning -- the ability to program machines to learn from new data -- to improve targeting and reach of advertising. 

A type of artificial intelligence, machine learning enables advertisers to more accurately predict customer advertising preferences and serve them targeted ads more effectively. Processing large amounts of historical user data, the technology can predict users’ interests, behaviors, and purchasing actions with more precision.

Recently, M6 Publicite and M6 Web selected Accenture’s new advertising offering that uses artificial intelligence to more accurately predict customer advertising preferences and serve targeted ads more effectively. M6 Group is the largest private TV Group in France with major traditional TV channels such as M6, W9 and 6ter, as well as 6play, a free digital TV platform.

At NAB there will likely be storylines focused on the use of machine learning to improve advertising. Advertisers recognize its potential for focusing sales efforts and forecasting sales, as well as targeting messages with personalized and relevant content and increasing revenues.

Gavin Mann is a global managing director with Accenture’s broadcast business. Email him here.