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Talking about the future of the industry with Howard Kitto, Non-Executive Director for StreamUK

StreamUK has appointed Howard Kitto as Non-Executive Director to advise on technical strategy. Previously, Howard was the CTO for global sports media company, Perform, where he helped grow them to a £200m business and took the company through its IPO.

Howard’s made a name for himself in the industry by finding ways to bridge the gap between the complex and ever changing state of technology, where rising expectations and shifting business requirements are the norm. Howard’s also a regular speaker at high profile events including Streaming Media’s summits.

This week, we spoke to Howard to hear his views on the future of online video.

 

Howard’s background

 

First of all – welcome aboard Howard! We’re incredibly excited to have you on board and to learn from your expertise. Can you first introduce yourself?

For over 15 years I’ve worked with some amazing teams to build exciting digital video services, including Perform’s massive ePlayer network and Watch and Bet networks, Racing UK, Fox Soccer, and TennisTV. Early on in my career, I was also the Technical Project Manager for the Football League’s digital media services. For these services, I’ve always sought to find the perfect blend of creativity and practicality, with a relentless focus on the customer experience.

I’m also the CTO for Depop (which has nothing at all to do with streaming media!) Depop is a social marketplace app that enables users to buy and sell products to each other. What makes Depop unique from something like Etsy, though, is the user experience and social network integration. Similar to Instagram, users can snap an image of what they want to sell and upload it to a rolling feed. Buyers see products from sellers that they follow, can like and comment, then purchase products directly from the feed. It’s a delightfully simple user experience (backed by some serious VC capital, which doesn’t hurt!)

 

On industry growth

 

You’re clearly a specialist in sports streaming, which is booming. For example, Adobe Digital Index’s report found that the number of users watching sports video streams are up 640% year on year. How should sports teams adapt their video platforms to meet the growing desire?

There are two aspects to that question, really. Consumers want a high-quality, fast and efficient service, with access to both live and on demand content. By focusing on this need, businesses need to make the streaming service as intuitive as picking up a remote and connecting to the platform they want, instantly. Digital platforms can enhance the core video experience with rich ‘wrap around’ content such as statistics, player profiles and social features. This has to be done in a way that adds value and doesn’t get in the way of the excitement of the sport itself.

But then there’s all the key technical points we need to talk about to make this happen. Providers need to invest in technologies that make, like scalable bitrates, real-time immersive data and social experiences with second screen integration.

Internet delivered or OTT video services are not yet close to being the mainstream way for consumers to access sports video. However, the internet will surely become the primary place for video content as the ‘YouTube generation’ (my children!) grow older and gain disposable income. Not having the building blocks in place could put providers at a real competitive disadvantage.

 

On streaming and the customer experience

 

We work with the GAA and RTE to stream Gaelic games globally. We’ve helped them reach 150 countries with their matches now – which is phenomenal for the sport, and opens them up to a whole new range of fans. They’re now expanding their support to streaming the Gaelic Games in Boston, USA. Do you see the same opportunities for any other niche sports to develop their fan base?

The current solutions satisfy the early adopters and hardcore fans of niche sports, but my slightly controversial view is that the mainstream consumer options are not ready (yet).

At the moment there are some great internet sports video services that are mainly used when you can’t get to a TV, but most fans enjoy watching sports at home on a comfy sofa, with beer and snacks at hand. They’re not willing to do the leg work required to bring streaming media into the living room because it is too complicated. This is why broadcast televisions’ ease of access ensures it still rules the roost for sports today.

As online video providers, how do we bridge this gap? I think we’re looking for a technology to start aggregating these sports platforms into a single interface straight to the 60 inch, 4k screen in your living room. Smart TVs haven’t been developed enough to give a clean, intuitive experience, and that’s reflected in their market share. There are a huge range of set top boxes or streaming sticks to bring online media into the lounge but it’s not at all straightforward to get the live sport that you want onto them outside of walled gardens like Sky’s Now TV

I’m sure this will happen – there’s a huge gap in the market as more people see benefits of online media and cut out cable, satellite or broadcast television (called cord cutters). The product I’ve seen that is most similar to what I’m describing is Sonos. Whether you have a subscription with Spotify, Rdio or Google Play, Sonos puts all your content services and purchases into one interface that directly controls the consumer device (in this case an audio player). The system actually aggregates 28 platforms into a simple piece of kit.

For the same reasons, we need a consumer friendly way to graze a range of OTT services that leaves the content provider in control of the rights and the customer relationship. Nobody has mastered this yet, and it should be a strategic aim for the big streaming devices like Chromecast, AppleTV and Roku. Developers of video platforms should keep an open mind to supporting multiple devices to ensure their clients’ long term security.

 

On monetization

 

How do you see the evolution of monetization models in sports streaming? With video set to dominate internet traffic (Cisco forecast that 69% of consumer traffic will be video by 2017), more users are willing to pay for their content through streaming. Will we see more subscription based, one off costs or advertising funded models?

There are so many different ways that sports content can be monetized online, ranging from free-to-air by the BBC bundled with a TV subscription (e.g. SKY), regular subscription like Tennis TV, pay per view or funded by gambling. The many variables that can lead to the correct choice of model including rights agreements, the end users’ choice of device and the nature of the competition.  I think we’ll see standardisation, if one consumer device becomes dominant, but until then we’ll see even more flexible models.

The sports entertainment business, WWE, is willing to give away its entire catalogue of 3,000+ hours of content for $10 a month. There’s a large enough audience that it makes sense for them. On the other hand, GAAGO has a smaller, more passionate group of fans who are willing to pay per game or sign up to receive complete access.

What I will say, however, is that the path to monetization should be fair for the customer and the value should be clear. I think customers will see straight through abstract paywalls or offers that do not make sense. Streaming media is already a lot cheaper than traditional television packages, and newcomers will have to be competitive with their pricing, particularly for subscription services where customers are unwilling to make multiple accounts. I’m interested to see how the big broadcasters like ESPN, Canal+ and HBO will adapt their pricing models to compete with platforms like Netflix, Amazon and Hulu.

 

 

On the proliferation of streaming video

 

Outside of sports streaming, do you anticipate opportunities in other market segments?

Sure. I believe there are very few organisations that can’t use video to their advantage, to be honest.

Education is a growing market. Sites like Khan Academy and lynda.com offer massive libraries of academic and business related content. More and more universities are signing up to offer MOOCs too (Massive Open Online Courses), but they’ve not quite cracked a way to turn them into a sustainable economic model.

The power that YouTubers hold is insane, especially in the gaming community. Yogscast are a group of British gamers who have created a following of over seven million subscribers. The potential for marketing, then, is huge, as these younger fans grow older, and I think we’ll see businesses engaging with these channels more.

Fashion shows are ripe for streaming, too. The ‘big four’ fashion weeks in London, Paris, New York and Milan are all streamed online, reaching huge audiences and offering interactive social experiences.

Even then, we’re just scratching the surface of what can be achieved. I’m excited to see what the future holds, as all current indications point to streaming becoming the dominant video technology, with technology improving and customers desiring on demand content with great variety.

 

Brilliant. Thank you for your time, Howard.