By Lee Min-hyung
The rapid rise of online content platforms is blurring the boundary between the electronics and content industries, leading heads of the latter giving keynote speeches at the Consumer Electronics Show (CES) 2016 in Las Vegas, next month, sources said Thursday.
“There are specific types of content to be compatible with each electronic device, but few have made investments in this area,” said an industry source. “This comes as the Internet of Things (IoT) is connecting traditional electronics devices with Internet services such as content streaming platforms.”
At the upcoming electronics fair, two of the content industry leaders ― Robert Kyncl, chief business officer at YouTube, and Netflix CEO Reed Hastings ― will deliver speeches on growing trends in the industry.
This has gained the spotlight, as the CES, as the name implies, has been traditionally regarded as a show for electronics companies. But with the rise of the IoT and converged-IT platforms, more IT and content platform operators are seeking more ties to expand their revenue sources.
“Each device, such as a television or refrigerator, requires a specific type of content streaming system,” the source said. “That’s why leaders of the content industry will participate in the electronics exhibition, and seek more partnership with IT companies.”
He used the example of a refrigerator with a food content system as such a partnership.
“Let’s say there’s a refrigerator with a screen. In this case, we don’t need a huge size display, but only require a small screen listing the food in the refrigerator,” he said.
The global content industry is expanding at a rapid pace, with the number of YouTube visitors across the globe increasing by 40 percent each year. The local market is also growing fast, with YouTube viewing time growing 110 percent in the first quarter of 2015, compared to a year ago.
“The value for the content industry depends on whether advertisers increase their investment in it,” the source said. “For now, more advertisers realize the importance of digital content. We have doubled our expectations for sales from advertisers for next year, compared to a year ago.”
Another source said the television industry will see stagnant growth due to the upward trend of the content industry.
“The content market will grow even bigger in the next few years, while the market portion of the television industry will remain sluggish or even smaller due to fierce attacks from content operators,” he said. “This is because more and more mobile devices are now replacing the role of what television has done before.”
He said the rise of the multi-channel network business will also help the content industry grow faster.
“Growing numbers of companies in the content industry are seeking to diversify their businesses via active mergers and acquisitions (M&As),” he said. “Given that the industry is still in its infancy globally, growth momentum will continue and this will be a serious threat to other business sectors.”