Media is an ever-evolving industry. The past century has seen families go from gathering around the radio, to watching one of a handful of TV channels, to accessing almost anything they want in vast streaming content libraries with the click of a button. This is great for consumers who now have more choice and better overall user experiences. But traditional broadcasters have to work hard to keep up with the constantly changing demands of today’s media consumer. We had a chat with Andy McLennan, Product Manager at STV, to get his perspective on forging a future in an increasingly competitive market, the importance of combining the right teams with the right tools, and the secrets to achieving long-lasting growth.
Andy McLennan | Interview
Andy is a data-driven project manager whose career has spanned the energy, media, and entertainment industries. He started his career as a Business Analyst at Scottish Power where he spent six years, eventually becoming a Sales & Performance Manager. In 2007, Andy moved to New York to work as a Senior Inventory Analyst at MTV and a year later, he joined Time Inc. as Senior Manager in their Digital Ad Operations department.
Despite having been promoted to Director of Programmatic Solutions and Yield at Time Inc., Andy decided to return to Scotland in 2013 to take up a position as a full-time Dad: an experience that he describes as “by far the most rewarding job of my career”. In June 2014, Andy joined STV to become their Product Manager (Data), and he’s spent the past 6 years leading the data-driven arm of their business and growing STV’s digital channels.
Can you first tell us a little bit more about your company and its goals?
UK commercial public service broadcaster, STVis Scotland’s home of news and entertainment, serving audiences with quality content on air, online, and on-demand. Our ultimate goal is to be the go-to entertainment destination for Scotland’s 5 million inhabitants.
I’m specifically focused on the STV Player, which is home to the STV broadcast schedule and an ever-increasing number of of STV Player exclusive and acquired programmes such as popular dramas The Bridge and Janet King. It’s a BVoD (broadcaster video-on-demand) service where revenue is driven by paid advertising. This revenue is then fed back into the company to produce or acquire future content and enhance the Digital product to improve user experience.
So how does STV stand out in such a competitive landscape?
Sure, it’s an incredibly competitive marketplace, and the rise of global players like Netflix, Amazon Prime, etc. brings its challenges. We realised early on that competing directly would be a mistake—we focused on creating our own space and providing our own unique offering which is free and universally available in the UK. However, viewers increasingly expect to have a Netflix-like ad-free experience. The compromise is that our free service is ad-funded, rather than a subscription model and it is noticeable that the younger demographic are less keen on ads, but still expect the best experience. We need to be incredibly smart about how we compete going forward – but it’s important to note that we do have a very distinct place in this market.
Consumer expectations have gone through the roof across every industry. People are more demanding than ever. They expect things to be instantly available without any hitches— if there’s even the most minor disturbance, they’ll go elsewhere.
We’ve come up with a four-pronged approach to help us remain competitive:
- Use data to understand our users – We’ve moved away from the old school “dump data into a database” approach. Nowadays, we have a 360-degree single customer view and only ingest the data pertinent to product improvement. We know who our individual viewers are, how long they watch things for, what they might care about, and what devices and platforms they use.
- Experience – We make a massive effort to ensure that we provide a seamless cross-channel experience. We need to be clever when it comes to personalisation and recommendations. For example, if they’ve watched something before or started watching it before then lapsing, we shouldn’t recommend it to them again.
- Content – The data that we collect guides our decisions on which shows we should acquire for the Player going forward. Our audience is quite unique, so while we host all Network and regional content from our broadcast channel, with dramas a real driver for our digital audiences, we can also provide some pretty niche content that’s targeted to our viewers’ preferences. We work hand-in-hand with the marketing teams to target promotion to viewers across multiple channels who might be interested in the new shows that we’re acquiring.
- Recommendations – We are starting to provide better first recommendations and end-of-play recommendations (this is key as the moment people finish a show, they start looking for another one to watch). For instance, a lot of viewers start watching STV for the soaps but then drop off to watch different content later at night—so we try and grab their attention as soon as possible and keep them on the platform.
You mentioned the importance of your data strategy. What does this look like in practice?
Before I get into the details, I want to point out that our data strategy works so well due to the make-up of our digital team. We have about 40 people and the team includes engineers, designers, data scientists, analysts, marketers, and more. Having such a diverse team has been great at eliminating silos—we all work together to put our data into action and make sure that we’re making the most of it at all times. The senior management team spent a lot of time building a culture and creating a team mentality, and it’s certainly paid off in the long run for Digital.
Our top-level approach is to use data to better understand our audiences, to find out what content resonates with them, to understand their online behaviour, and to then put these insights into action. If we do this correctly, we’ll attract more users, who will come back to our platform more often, and spend longer watching our content. This then helps our commercial arm to fulfil their clients’ advertising objectives—so it’s a win-win situation.
In recent years, we invested a lot of time, money, and effort creating our digital data layer. It’s become more and more apparent over the past few years that clean, reliable, and timely data (and analysis) is the key to improvement.
We now have a whole host of cutting-edge tools (such as Kafka, Spark, Athena, Databricks, and Tableau) to process and analyse our data and drive actionable insights across the wider business. In the past, broadcasters relied upon very general , high-level data (x number of people tuned in to watch this show versus y for another show) but we can maximize our understanding of viewer behavior in the digital space. Today, we have a wealth of data that provides detail at a granular level so we can truly understand what makes each individual viewer tick. Plus, the number of different devices that any one individual uses on a regular basis has skyrocketed, so it’s crucial that we have a rock-solid setup in place to make the most out of all these data points. The available data has helped inform engagement improvements through features like end-of-play recommendations and push notifications.
In your opinion, what’s the secret to achieving long-lasting digital growth?
Ah, this is a tough one! I think quite a few stars need to align if you’re going to keep growing at a constant rate. As we all know, content is King—this is especially true in broadcasting and digital streaming. We’re confident that our content offering is diverse and high quality, and it’s always growing, which is so important. However, on top of that, effective and targeted marketing is just as vital in bringing in the viewers. Your content might be fantastic, but if nobody knows about it then it counts for nothing. The quality of service needs to be extremely robust, otherwise users might choose to look elsewhere. It’s imperative that the user journey is as intuitive and streamlined as possible. If viewers have to jump through hoops to watch their favourite show, they’ll quickly tire of your platform and find an alternative. And we work tirelessly to ensure that doesn’t happen. Our strategy is to attract more viewers, watching more programmes for longer – and it’s working. Our Player is accelerating rapidly with online viewing up 84% year on year, so we must be doing something right.
The future of traditional media
How can traditional broadcasters compete with newer and more agile competitors?
- Meet customers where they are
These days, content consumption no longer takes place solely in living rooms or kitchens. The advent of mobile phones, tablets, and laptops means that viewers can now watch content at all times of the day, no matter where they are. Traditional media companies need to offer ways for viewers to watch content while at home or on the go.
- Redefine the way they offer content
With the rise of Netflix and other streaming services, modern viewers are becoming more impatient and expect to be able to binge-watch their favourite shows. Data shows that 58% of all 18 – 29-year-olds watch all episodes in a season in one fell swoop, compared to 28% of those over the age of 55.
This means that traditional methods— broadcasting one episode per week—may be actively turning younger generations away from certain media outlets. To turn the tide and attract more younger consumers, broadcasters may need to completely reimagine the way they offer content and begin uploading entire seasons at once.
- Leverage advertising to its fullest extent
Advertising is a double-edged sword. On one hand, consumers say that they’re turned off by too many adverts—and with the average person seeing around 4,000 – 10,000 adverts per day, that’s understandable. On the other hand, TV ads perform consistently well when it comes to measuring sources of brand discovery.
So advertisers won’t stop pumping money into traditional media outlets. In fact, with 70% of UK- and US-based internet users saying that they’re more concerned about their online privacy than they were a mere year ago, it seems there’s a growing distrust with how our online data is being used. Personalised ads are great in theory, but in practice, they sometimes come across as quite creepy.
So what does this mean for traditional broadcasters? Well, in the wake of growing data privacy concerns and legislation like the GDPR, companies may end up pouring more advertising money into traditional channels as opposed to online. If this does happen, broadcasters need to make the most of this revenue to produce or purchase better content than their competitors.
If they succeed, they could throw the marketplace open for many years to come.
This goes to show that no matter which industry you’re in, how much it’s changed in recent years, or how many new competitors you have to contend with, there’s always a way to stay relevant. Embracing change doesn’t mean you have to ditch your roots—it just means you need to be smarter about how you operate.