Big Data is Making a Big Impact on the Satellite Industry
Increased competition from Over-the-Top (OTT) Subscription Video on Demand (SVOD) providers such as Netflix and Amazon Prime is posing significant challenges for satellite operators. Moreover, the vast amount of choice that consumers have in terms of pay-TV offerings puts pressure on operators to lower the price of their service.
Despite these issues, the satellite industry is growing. Dataxis found that between Q2 2016 and Q2 2017, the Direct-to-Home (DTH) satellite broadcasting market grew by 7 million subscribers from 238 million to 245 million compared with cable, which fell by roughly the same amount. One asset satellite can use to remain viable is Big Data. Operators have used Artificial Intelligence (AI) — more specifically, machine learning — to predict and analyze data for years, helping them better address different market segments and create more tailored subscription packages. With the explosion of OTT and multiscreen services, operators can collect an increased volume, variety and velocity of viewership data from multiple connected devices.
While big data opens up new opportunities for satellite operators, changes are on the horizon. General Data Privacy Regulation (GDPR) will come into effect across the European Union (EU) in 2018, making the extraction of actionable insights from TV operators’ viewership data both increasingly appealing (e.g., as a way to reduce reliance on third-party data for targeting) and increasingly challenging (e.g., more stringent due to regulations). With GDPR there are new obligations. Consent from consumers is absolutely mandatory, and operators are required to make their subscribers aware of the data collected at all steps of the process. GDPR has the potential to impact more than just European pay-TV audiences. In fact, it’s anticipated to act as a template for legislation in other parts of the world.
So how hard will it be to collect data once GDPR is passed? While consumers are used to providing data on the internet, it’s usually for free services such as social media. Subscribers may be more reluctant to pay a satellite operator who already charges a monthly subscription with that information. On the other hand, satellite operators have been in business for quite some time; therefore, they are generally trusted by subscribers and may have an easier time getting subscriber approval to collect data compared with OTT service providers, who are newer entrants to the pay-TV market.
When it comes to leveraging Big Data, there are several different approaches that satellite operators can take. AI-aided content acquisition, scheduling, and distribution tools that leverage “content efficiency prediction” models are seeing increased popularity. In particular, content acquisition strategies can be built upon predictive models and Return on Investment (ROI) analysis. These models differ from traditional recommendation models in that they consider segments of viewers, as opposed to specific viewers (or households). At the core of such models is a vector representation of content items and a content similarity function. Various methods exist with regards to content vector representations, including endogenous and exogenous, which can lead to significant cost savings or additional service revenues for operators.
AI models have the ability to learn, hence making recommendation and content efficiency more accurate, especially over time. In today’s connected world, operators need to be dynamic and adapt quick to changes. AI allows operators to rely on algorithm dynamicity to continuously improve their service offering and adjust to consumer behaviors.
What does the future hold in store for satellite operators and Big Data? Big Data algorithms are evolving. Over the last few years we’ve seen major improvements in the AI domain with traditional models being combined with deep learning and machine learning. We’ve also seen interaction of computing power and access to data (connectivity/database). In this case, the full power of AI is enabled by CPU power, better algorithms, and access to large databases in real time.
The convergence of these elements is providing a new paradigm for market and consumer analysis. Data has always been a part of the satellite business, but what is changing now is that the reaction to behaviors is becoming close to real time. Old methods of analyzing behavior could have a months-long lag, after which, for customers looking to leave a service, the matter may already have been decided.
Ultimately, these advancements are helping satellite operators worldwide better exploit Big Data to understand their audiences in a more meaningful way (that is, to deliver targeted content) and open up new monetization schemes, especially related to targeted advertising.
Chem Assayag is the Executive Vice President of Sales and Business Development at Viaccess-Orca, a leading global solutions provider of OTT and TV platforms, content protection, and advanced data solutions for a personalized TV experience.