TV operators need to start acting like software companies. Today.

September 22, 2017

Software companies are conquering the media industry. There’s Google, Amazon, Facebook, Twitter, YouTube, Snapchat, Hulu – and they all target their customers with their own unique offering, whether it’s to have people communicate in real time, share moments and experiences, or stay informed on the go.

Or entertain. With digital technology advancing by the minute and mobile devices being smarter than ever, customers are becoming used to having the content they want at their fingertips. From a replay of last night’s game to the latest episode of their favorite show, users want to have access to it anywhere and anytime.

The TV industry is a key focus for many of these companies. And when you look at the innovations of recent years, they have mostly come from large software companies. The traditional TV operators have been largely unable to adapt to the new market dynamics and are lagging behind. While they may have been dominant for the last decade, they are now trying – and struggling – to compete with the Netflixes of our day.

The innovators keep innovating

Keeping up with the main innovators in the industry is a challenge for TV operators. It becomes even more tricky when those innovators start (or simply continue?) to innovate as they go along. Many of today’s software giants are looking to get an increasing share in the TV industry.

While Netflix, Hulu and Amazon Prime may be the usual suspects, Facebook, Youtube and Snapchat are joining the race. Facebook recently announced its Watch platform, which will push shows and live events from publishers like Condé Nast Entertainment and NASA.

Youtube, in turn, has been focused on rolling out its Youtube TV platform, which offers live local feeds from broadcasters like ABC, NBC and CBS and more. Snapchat, too, is experimenting with TV-style video by producing short-form shows and pairing up with celebrities like comedian Conan O’Brien.

The fact that software companies are constantly on the look-out for ways to attract new customers and innovate, puts increasing pressure on traditional players to move faster. In fact, what TV operators really need is to start innovating much faster, more like their digital rivals.

New market dynamics, old ways

The question is, essentially, why do TV operators have such a hard time innovating. Put bluntly: The market is changing very rapidly, but they don’t. To stay competitive, they need to be quick on their feet, adapting to what their customers want, and to what the market dictates. In other words, they need to become agile.

This is, of course, not to say that TV operators are not trying to innovate. Many are riding the on-demand video wave by testing and implementing new ways of content viewing and distribution – from introducing replay features to developing apps for people to follow their favorite programs on the go. The challenge is not getting legacy organizations to create new things per se, but getting them to do it in a flexible way.

Say, a TV operator wants to develop a new OTT platform or app. Instead of outsourcing the work – which most of them now do, they should start thinking about building their own team of developers. This would not only give them control over the product, but would allow them to make small and quick releases and gain feedback sooner. Put it out there and make iterations along the way.

This is exactly what digitally native businesses do right: They do quick releases, collect feedback and, if necessary, tweak their offering on the go. To illustrate: While Netflix updates their app roughly four times per month, the average TV operator does so four times per six months. The difference is significant and it’s not to be underestimated.

Agility & innovation

TV operators have a unique position in the market. They have agreements with many broadcasters for high-quality content and they have existing relationships with millions of households. In order to leverage this position, agility and innovation is key. They need to build development teams that can drive innovation from within their organizations. They need to become more flexible and nimble. To test products as they’re being developed and not once they’re completely done. To work with customers on developing exactly what they want, need and are willing to pay for.

In other words, TV operators need to become more like software companies. Not tomorrow or the day after. Now.

Published by Roland Sars

CEO. Genuine entrepreneur. Ambitious, driven by business growth. Hockey and chess player.