Q&A With Technicolor's Mark Turner: Over-the-Top Providers Poised to Reap Rewards From New Video Technologies, But Challenges Remain

Mark Turner, Vice President, Partnership Relations and Business Development at Technicolor

Higher Dynamic Range (HDR), wider color gamut and 4K UHD are terms well entrenched in the lexicon of advanced video technologies.  But what challenges and opportunities do these game-changing capabilities pose for Over-The-Top (OTT) providers?  We recently caught up with Mark Turner, Vice President, Partnership Relations and Business Development at Technicolor to discuss the challenges and opportunities facing OTT providers now.

What challenges do OTT providers face as they grapple with the impact of adopting new video technologies today?

Turner: There has been a lot of confusion about higher dynamic range and wider color spaces because these are completely new technologies for distribution, for consumers, and for content creators. That’s why we need to work together to determine a common way of describing these technologies to everyone in the value chain.  All of these technologies need to be resolved and presented to the market in a rational manner in the next few months and years.[subscribe_reminder]

Specifically, what do OTT providers need to know about the impact new technologies like Higher Dynamic Range (HDR) and Wider Color Gamut (WCG) will have on their business model?

Turner: HDR and WCG are going to have a huge impact on consumers -- and therefore on the economics of the OTT business -- globally for the next few years. These technologies will change the viewing environment and have tremendous impact on what consumers are watching and where they’re watching it.  And OTT providers have to be ahead of that curve.

OTT providers live in an Internet-driven world, as new video technologies, device types, app development formats and upgrades in the Internet infrastructure emerge.  What are the biggest challenges for OTT providers now?

Turner: If you’re an OTT provider, you already have a challenge because you’re coming on an unmanaged network, dealing with variable bandwidths and very different devices.  People are watching on everything from a cell phone through a tablet to a big-screen TV -- and you have to deliver to all those different environments. Any change is therefore a challenge.  We’re talking about changing the picture, the most fundamental part of what you’re streaming.

What is the good news for OTT providers?

Turner: The good news about being an OTT provider is ---you have a lot of choice. The down side is--- you have a lot of choice.  Our prediction at Technicolor is enhancements like Higher Dynamic Range, Wider Color Gamut – they’re going to come a lot faster than 4K did, because they’re a lot more impactful for consumers.  When a consumer sees it, they’re going to be very attracted to the image and they’re going to expect it on a lot more content.

What about the impact of standards?

Turner: OTT providers don’t have to worry about broadcast standards, which vary from region to region.  They define their apps, they write their apps, they deliver over the internet where there are fewer rules, and they do all their own encoding and delivery.  They are the only end-to-end ecosystem that does not have to rely on any standards body to tell them how they have to deliver, when they have to deliver by, what they have to change in their infrastructure.  They control their own destiny.

Given the wide range of choices that they have, what do OTT providers need to know when they move forward with these technologies in their business strategy?

Turner: If you’re an OTT provider, we’ve already established these things are going to move fast. The question is how do you make the decision of when to leap -- and which of these technologies do you adopt?  The good news is your consumers are going to tell you.  You’re going to know that consumers are more attracted to a certain kind of content that has a higher dynamic range, a wider color space or is somehow more impactful because you can see that they are watching for longer, they’re turning off less, they are transacting more often for that content when they see that it’s available in a new video technology.  Those are your key metrics.   OTT providers live by metrics, so you’re going to know what is impactful for your business line much faster than anyone in the broadcast world or Pay TV world.   That’s the good news.

What’s the bad news?

Turner: The bad news is that they have a lot of work to do and can’t be certain about which technology to pick.  At Technicolor, we can help with that, we can do consumer research, we can try different technologies out on different pieces of content, see what is resonating, and then do some joint work with OTT providers.  This work is important, because whatever we do to the content, we must remember that much of it is going to last for the next 50 or 60 years so. If you’re shooting content now, you need to assume that the world is going to keep moving on – and shoot and prepare for that world.

Do OTT providers’ investments in technology pose a barrier to adoption of HDR?

Turner: It’s not a big investment that needs to be made all at one time. You can test the water with small, incremental steps.  You can try one season of a TV show in HDR and see what happens to the numbers.  Do the same thing with a few movies. I’d actually recommend going back and picking a few similar titles out of the library – from similar time periods, shot on similar film stock, re-grade those in HDR, put them out and see which ones do better.  Then you have to ask: Can you actually see the difference in viewership or transaction numbers when you improve the viewing quality?  Based on the answer to that question, you can form a business case to go back and choose which ones to do from the library.

It sounds like OTT viewership data is like a harbinger that the rest of the industry can learn from.

Turner: Yes, OTTs are a harbinger for the rest of the industry.  OTT providers can explore these innovations with incremental investments in HDR and Wider Color Gamut and feel their way as they go. Once OTT goes out first without the standards to inhibit them, we can use that to feature back what is going to be the most impactful type of content.  Does HDR lend itself to a particular type of movie? Is it the big, expensive, colorful blockbusters or is it more impactful for horror movies and black and white movies? We don’t know until we get it in front of millions of consumers and OTTs can help us understand what really attractive consumers are.