June 17, 2015

Leanback 2.0 – The Answer To OTT Monetisation?

German multiscreen specialist 3 Screen Solutions (3SS) – which counts Kabel Deutschland, Telefonica and Swisscom amongst its customers – believes that a personalised channel concept it calls ‘Leanback 2.0’ is the key to monetizing the OTT sector, claiming interest from a leading German broadcasting group.

The rationale for Leanback 2.0 is straightforward: fragmentation of offers means that content discovery in hybrid broadcast/IP environments is currently both difficult and slow, and acts as a damper on monetisation.

3SS managing director Kai-Christian Borchers points out that even on those platforms which are currently the most advanced in terms of how they combine linear TV with on-demand IP-based video services on a single user interface, not all the available content ‘silos’ can yet be searched through a single query.

Citing one of his own clients as an example, Borchers notes that “at least Swisscom has managed with [our support] to search through VOD and linear TV and catch-up TV and provide a list of content that is being displayed – but as a user I actually want to search through all available content.” This includes the OTT content typically available from a range of different video service apps residing in the ‘app store’, maintains Borchers.

The solution, he suggests, is “first of all making a seamless user interface to navigate all this and then, second, to build silo-agnostic recommendations that pull the relevant content out of every silo.”

Currently, says Borchers, hybrid search and recommendation engine systems are ‘blind’ in the sense that – even when they are looking at content from different silos – they are not aware that, say, the movie Wall Street shown as linear TV yesterday and now available on catch-up is the same as the one currently available on-demand via Maxdome. Because these are two different data-sets, they will be shown as two separate results or recommendations.

What is needed instead, says Borchers, is a system that will present a single result from all available silos – in this case the movie Wall Street – and let the viewer know when the different instances are available and on which of the different services.

The ultimate objective, however, is what Borchers dubs Leanback 2.0, which complements this approach by building “a linear channel out of all kinds of different content – which could be VOD, YouTube, OTT content, whatever, and just put it together as a ‘channel for me’.”

Such a ‘channel’ could be intelligently assembled on the basis of a profile matching a given viewer’s particular interests, Borchers suggests. For instance, if a viewer showed a preference for content about business and the economy, the ‘channel’ might schedule clips extracted from a news bulletin about the stock market and the G7 summit at 9 p.m., followed by a movie like Wall Street for late evening relaxation.

The result would be presented “as if it were your personal linear channel,” says Borchers. “But it’s coming out of different content silos and it is […] pre-assembled for you.” In effect, he says, “it’s creating a playlist out of the available content that is relevant for these specific topics. And then when you go into the system and say, ‘OK, please play the playlist ‘Economy and Business’, then it starts to run that playlist. And it is like a linear channel starting to run. […] I can skip content when I don’t like it, and the system should be smart enough to learn what I have skipped, therefore not propose it to me in the future. And I can continue watching, I can fast-forward, and I’m totally independent – but it still feels like a linear channel. It’s my personal channel.”

Borchers concedes there are many challenges to be overcome before Leanback 2.0 can become a reality. “The systems that are currently in the market can’t do that. You need to have a very smart backend system that’s collecting the data from different sources and smartly combining them, that’s one hurdle.”

For all that, Borchers maintains that while 3SS does not yet have such a product on the market (“we are not a product company,” he emphasises), it knows how to build it. “We have many components ready to deploy and know how to build the missing pieces,” he says.

Although such an all-encompassing search and discovery system would clearly benefit from being able to draw on the widest-possible range of OTT services, there is a limit to how many such incompatible services operators will take on, because of the sheer expense involved.

“For anybody who has a service – if it’s Netflix or if it’s YouTube or if it’s a much smaller one – they all need to deal with all these different technology environments, which makes it insanely expensive to maintain and to adjust. So this is rather the limiting factor of OTT services being present on all these platforms,” says Borchers. Nevertheless, he believes that the range of services that are typically running on hybrid platforms today “are already enough to fill the personal channel.”

Another hurdle is that the content aggregators who provide OTT services to broadcasters and operators do not want their offerings to be comparable: “So Netflix doesn’t have an interest in you seeing that this movie has been running on TV and is available in the catch-up library. Neither do most private broadcasters. Maybe this is a bit of a German view here, but they don’t want their client to be moving out of their world – they want to keep it in their own world.”

Connected to this is a legal issue. The system Borchers describes extracts meta-data from copyrighted material, and manipulates it. “Who does this content belong to, and am I allowed to mess around with it, yes or no, as a technical system?” asks Borchers.

Nevertheless, he claims, Leanback 2.0 has been presented to a leading German broadcasting group, who reacted with interest and thought it was worth further exploration, while acknowledging there were controversial aspects implied.

The biggest question-mark for Borchers, however, is how an advertising-based business model for a ‘Leanback 2.0 ‘channel’ might work in practice.

In theory, advertising sold against such a targeted concept would sell at a significant premium, making such OTT content significantly easier to monetise than at present. “But who will then be receiving the ad money?” wonders Borchers. “Is it going to be the box that is assembling it, is it going to be the content provider? Because, probably, if you don’t like something you are just going to skip it – so there are a lot of open questions for the advertising industry.”

Borchers suggests that one solution might be for web-type advertising to move to the TV screen, “with banner ads, with display ads, with all kinds of overlays. […] So it might no longer be the regular 30-second spot.”

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