Deloitte Purchase Foreshadows Hyper-Personalized Sports Broadcasts
Deloitte Consulting recently announced the acquisition of a company called National TeleConsultants (NTC), a company that builds, maintains and modernizes broadcast, streaming and OTT media delivery. The news didn’t draw a lot of attention, but Michael Vovk (managing director, Deloitte Technology, Media and Telecom) says it as an important milestone in the evolution toward hyper-personalized live sports broadcasts. He expects such a delivery strategy to take hold “en masse over the two to four years” as broadcasters and media companies leverage engineering developments and cloud technology to drive revenue, boost engagement and reduce churn.
JWS’ Take: Industry insiders—including Mike Schabel (CEO, Kiswe)—are convinced that personalization will increase eyeballs and viewer minutes and serve as a differentiator for broadcasters in an increasingly crowded market. It will also allow them to optimize inventory ad rates.
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So it is logical to wonder why there isn’t a single broadcaster currently serving up multiple versions of highly customized live sports content. The short answer: Several are trying (including TelevisaUnivision), and many others are considering it. “It’s opening up like wildfire, and the reason is because [these broadcasters] now have the ability to live in the cloud,” Vovk said.
Thanks to the emergence of live-streaming technology and set-top boxes, broadcasters and media companies have access to a wealth of direct-to-consumer viewership information. But to use that data in developing a hyper-personalized, monetizable, live-action content experience, it must be combined with a variety of other digital data sets collected on the consumer (think: demographic info, buying patterns, preferences) within a system that has the analytical capabilities necessary to mine the data (like Google’s or Amazon’s robust data analytics platforms).
Up until two years ago, broadcast latency challenges prevented broadcasters from being able to leverage those cloud-based solutions. And the costs of building the AI and machine learning engine needed to crunch data on-premises were prohibitive. While broadcasters had access to the data, converting it into a highly personalized, monetizable, live web broadcast was often not practical.
NTC has since participated in the engineering effort to solve these latency issues by helping broadcasters to move significant parts of their delivery chains to the cloud (think: camera to cloud functionality as opposed to relaying data from a camera to a production truck before ultimately sending it to the cloud). Vovk explained, “If [a company can] collect all of this data from an end customer in the cloud, [it] can use the data analytics engine, [also] in the cloud, to churn the data and figure out how [it] wants to sell directly to a customer” in real time during a live broadcast.
Deloitte Consulting already had cloud and “data analytics capabilities, [and] the revenue-generating ideation of how [it was] going to [bring customers to the cloud],” Vovk said. But the NTC acquisition gives the company “the engineering capability to actually build the thing.” Deloitte is believed to be the only firm capable of offering broadcasters a true “turnkey solution” to deliver and monetize hyper-personalized live content.
”Turnkey” does not mean quick. Vovk said the high-level engineering required to power a broadcaster’s personalized, live content will take 12 to 24 months.
In the wake of the Deloitte Consulting-NTC tie-up, Vovk said a number of traditional linear broadcasters, OTT players and app-based streamers have reached out. “Over 80% of all data transmission is going to be video in the next five years. So anybody who uses video, which is going to be all kinds of different industries, are going to want this sort of real-time analytics capability,” he explained.
That desire will be inspired by, as mentioned, personalization’s ability to help drive revenue, boost engagement and reduce churn. “If your favorite player is LeBron James, there are an infinite number of camera angles [a broadcaster in the cloud can serve up of him] during a game,” Vovk said. The presumption is that kind of custom experience would give a broadcaster an advantage over a competitor with a comparable broadcast product. In fact, Vovk believes there may even be fans willing to pay for it.
New revenues from existing content and existing subscribers will enable customer segmentation. Advertisers and sponsors will spend more for spots if they know their message is going to reach a targeted demo and that the customer is likely to buy the things they sell.
The ability to segment the customer base should also allow a broadcaster to sell local and regional ads on national broadcasts. Opening up the pool of prospective advertisers can only drive up ad revenues.
If broadcasters are making multiple versions of content for traditional paid-TV distribution, one must focus on selling higher-cost ad spots. But Schabel notes that “much of the motivation for [personalized live broadcasts] is around leveraging the digital platforms, which allow for the integration of other monetization schemes: pay-per-view, e-commerce, sports betting, sponsorships, etc… This broader monetization perimeter is ultimately what will create the profitable incremental funding that supports the ‘consumer choice’ pathways for enjoying more personalized broadcasts.”
As Schabel noted, operating in the cloud would help position a broadcaster to capitalize on the anticipated micro-betting trend. “What you’re going to see is set-top boxes or technology in place that enables the viewer to place an immediate bet during a game,” Vovk said. That’s not possibile if latency is an issue. FWIW, Vovk suggested there are talks ongoing between broadcasters and sportsbook operators that would enable the functionality.
While Vovk would not put a number on the financial upside associated with the delivery strategy, he believes it’s “extremely significant.”
Cost is likely to be among the holdups preventing a broadcaster or media company from making the move to the cloud. But Vovk sees all the M&A taking place in the media and entertainment ecosystem and believes it will be a catalyst for change. Two companies coming together tends to result in some extra capital floating around, money that can be spent on large-scale transformations to reinvent the business.
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