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Norwegians Are Biggest OTT Spenders: NRK's Distribution ChiefLONDON -- OTTtv World Summit -- The Nordics are extremely advanced OTT markets, according to Bjarne Andre Mykleburst, head of distribution at Norwegian national broadcaster NRK. Broadcasters like NRK must develop new strategies to follow migrating viewers to OTT platforms, while competing with global OTT competitors increasingly challenging for audiences in European markets. "We are going from linear to OTT, but also offering linear over OTT," said Mykleburst, speaking at the OTTtv World Summit in London on Wednesday. He said that NRK services were now available on a variety of devices, including Chromecast, Apple TV, gaming consoles, smart TVs and various digital terrestrial and pay-TV set-top boxes. Norwegians spend more on OTT than any other country in the world, he said, and in fact four out of the top five OTT spending countries (by average household spend) are in the Nordic region. The US, at second, is the only non-Nordic country to make the top five. Twenty-five percent of Norwegians use OTT video every day, and with NRK's service offered free to consumers, it has seen dramatic shifts in platform preference in recent years. In 2012 81.2% of programming viewed was via traditional means (over-the-air broadcasts or pay-TV services), and 6.6% was streamed over the Internet. In just three years, traditional distribution dropped to 71.9% while streaming rose to 22%. And among 15- to 29-year-olds, only 51% of viewing is now via traditional means, while 40% is via streaming. Streaming volumes are growing 50% to 60% every year. Netflix Inc. (Nasdaq: NFLX) is the dominant OTT provider in the country, with about 34% of the market. TV2 Sumo, HBO Nordics, Viaplay are also present, and Amazon is expected to enter the market soon. NRK is actually keeping pace with Netflix in terms of viewership but obviously it's a different kind of service that is free to stream. Still, keeping up with the threat of Netflix is an important issue for a number of European broadcasters now, and also local OTT players. (See Maxdome's Lange on Keeping Up With the Netflixes.) Mykleburst also looked at the shift in terms of content genres, saying that scripted drama viewership was especially affected on traditional channels as viewership was moving rapidly to OTT. This could be also a function of growing binge-watching behaviors, not possible on linear channels. Other forms of entertainment programming were also shifting to OTT, while sports viewership on traditional platforms went up and down depending on sporting events at the time. News viewership was comparatively stable though. Viewing device preferences had also shifted. In 2014, the PC accounted for 66% of long-form (dramas, documentaries etc.) streaming video viewership for NRK viewers, with 4% on mobile, 11% on TVs and 19% on tablets. This year, it's still 4% on mobile, 17% on tablets, 42% on PCs, but 36% on TVs (with the growing adoption of smartTVs and OTT set-tops). In fact, there's even more interest in getting the content back on to the TV, with 80% keen to do so. Apart from smart TVs, Apple TV and PlayStation are very popular devices for streaming NRK content, with 70% of Norwegians households having an Apple TV. As a side note, Mykleburst pointed out that Roku is not available in Norway. Drama was particularly important for a content company, said Mykleburst, but was also becoming increasingly expensive. There was constant pressure from viewers to make it more expensive, more spectacular. Mykleburst pointed out that investment in original content was growing dramatically, with Disney spending $11.9 billion this year, Netflix spending $4.9 billion, Amazon at $2.6 billion and HBO at $2 billion. But NRK is in a smaller market, with only 2.6 million households -- trying to keep up with Netflix, which has a global base of 86 million plus subscribers to fund production, is a sizeable challenge. NRK is focusing on local content, and has also invested in developing children's programming. NRK Super is a channel dedicated to children's programming and is being offered via streaming platforms as well. However, the device preferences for this programming is very different from other genres: TV-based viewing is very limited, with tablets accounting for nearly two-thirds of viewing. NRK has offered the same content previously, but decided to create a new online portal and brand for the service. It also developed a new UI, which was very simple and tailored for children's services. Simply taking these steps, while still offering the same content, resulted in a five to seven times increase in viewership within weeks. NRK had also developed a new online show called Skam or "Shame", a series aimed at teenagers, about teenagers growing up in Norway. Not only has it received critical acclaim, it has become the most seen Internet-based show for NRK ever. While quite gritty and real, critics have said that it offers valuable lessons for teenagers in a digital age and has themes that older viewers can also relate to. The show has been seen by 100% of 15- to 16-year-olds in Norway. Even for a small country with a limited population, that's quite an accomplishment. NRK has also developed an extensive social media program for the series, offering short five-minute clips and character profiles that the cast members update frequently on Facebook and Instagram, allowing this generation to involve themselves with the characters and plotlines in the ways they prefer. But Mykleburst also cautions that 70% of viewing is still linear, though he acknowledges that can also now be online. Still, broadcast remains important, even as viewing is shifting. So rather than look at one platform or the other, broadcasters must now take a "total TV" perspective on viewership. Old rating, reach and measurement processes must be forgotten, and a more holistic measurement approach must be adopted, he urged. — Aditya Kishore, Practice Leader, Video Transformation, Telco Transformation |
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Orange has been one of the leading proponents of SDN and NFV. In this Telco Transformation radio show, Orange's John Isch provides some perspective on his company's NFV/SDN journey.
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