Content recommendations to reach 75% of US pay TV homes

February 26, 2014 10.20 Europe/London By Robert Briel

Family TV on iPadConsumer exposure to advanced recommendations engines will grow to reach 75% of pay TV households on multiscreen services and 55% on set-top boxes within North America by 2018, up from 20% and 10% in 2013, respectively.

This significant growth is driven by today’s highly competitive viewer landscape for pay TV and OTT operators, according to ABI Research. At the core of this are search, recommendation and discovery technologies that rely heavily on rich metadata as well as user analysis and learning.

Recent acquisitions have highlighted that the current break between metadata providers (TMS, Rovi and RedBee), search, recommendation and discovery engines (DigitalSmiths, Think Analytics, Jinni, Gravity) and guide/ middleware providers (Cisco-NDS, Nagra, Arris, Ericsson-Mediaroom) is largely un-natural.

Bringing the data and the algorithms closer together, as well as bringing the data and presentation closer together, can result in more efficient and better experiences. This research provides critical insight into the dynamics around search, recommendation and discovery and metadata markets, how technologies are forcing business model changes, and how quickly we can anticipate customers being given improved recommendation-driven experiences.

“TiVo’s acquisition of recommendation specialist Digitalsmiths is indicative of the tight relationship between guides, metadata, and recommendations. We expect further consolidation moving forward as recommendations move from a wish-list item to a must-have in today’s competitive environment,” said ABI Research practice director Sam Rosen.

“Consumers whose experience is upgraded by comprehensive recommendation implementations routinely show better business metrics, including lower churn, increased ARPU, engagement with new types of content, and engagement with VOD platforms.”