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An exciting year in Digital Content

Written by:   James McGurn, VP Digital Content, Worldpay,  4 Jan 2018

As we stream our 2017 swansong, we caught up with James McGurn, VP Digital Content, to get his thoughts on the year – and what to expect from 2018. It’s been an exciting 12 months across the Vertical.

1. What trends have you found most interesting in 2017?

As the price of Bitcoin continues to soar it would be remiss not to mention cryptocurrencies in the context of 2017. Whilst Bitcoin tends to dominate the headlines, other currencies such as Ethereum, Litecoin and Ripple have all had big years and varying degrees of success. It’s not only the currencies though, as with any high growth sector there are a number of associated services and propositions which also try to catch the wave – Cryptocurrency exchanges are forecast to generate upwards of $3bn in revenue by 2023, with numerous new exchanges emerging across the world. Despite the incredible growth across the sector, markets remain highly volatile and there are a number of open questions regarding the future regulatory environment.

Another interesting shift in 2017 was the news that revenue from social gaming overtook that of traditional video games for the first time in 2017 – although both segments continue to grow. The segment will grow from £32bn in 2016 to £55bn in 2021 – a CAGR of 11.9%. Traditional games will grow from £35bn in 2016 to £43bn in 2021 – a 4.4% CAGR. This is largely driven by the huge popularity of mobile-first games such as Candy Crush Saga - the most popular mobile game in the U.S. - which reached its fifth anniversary in November 2017 and has now topped a staggering 2.73 billion downloads. We also conducted research into The Connected Consumer - on how attitudes towards IoT devices differ across global markets.

"With the physical market continuing to decline, global Internet video revenue overtook it for the first time in 2017 and the gap will only continue to increase. Netflix is live in over 130 territories while Amazon launched its Prime Video platform in 200 countries."

Subscription-video-on-demand (SVOD) revenue hit £16bn in 2016, with global revenue expected to reach £27bn by 2021. The Internet video market is showing strong growth worldwide as home video shifts from the purchase and rental of DVDs, to the increasingly competitive over-the-top (OTT) market. With the physical market continuing to decline, global Internet video revenue overtook it for the first time in 2017 and the gap will only continue to increase. Global expansion was also a key trend, with the big international SVOD players launching across a number of markets globally. Netflix is live in over 130 territories while Amazon launched its Prime Video platform in 200 countries. HBO and Sky’s NOW TV platform are also being increasingly expansionist. Find out more in our latest Global Payments Report

2. What are you most looking forward to in 2018?

For Digital Content in 2018, it’s all about Intelligent Payments. We had a number of great products that went live in 2017, and have more coming next year. Our updated Account Updater and new Intelligent Account Verification service have both launched in the last few weeks, with our Intelligent Authentication Service – including a new Premium 3DS 2.0 product - and Intelligent Retries due in 2018. Each of these products have distinct benefits for our Digital Content customers and will form a part of our wider Intelligent Payments offer – these services are built on highly advanced machine-learning and the expertise of our data scientists. The combination of these technological and human capabilities will provide enhanced decision-making and better payment outcomes for our customers. This set of products will be particularly valuable for merchants who take recurring payments, helping them to optimise acceptance rates and increase revenue.

Our new Account Updater reduces complexity through automation, ensuring we keep the latest customer payment credentials, simplifying and enhancing their shopping experience, whilst improving merchant acceptance and retention. The service boasts full coverage (i.e. support for all card schemes & regions across gateways), is completely automated (i.e. merchant only has to opt in / opt out, no push or request), automated billing & reporting, support of tokens and is acquirer agnostic. We are also leveraging our relationships with the card schemes to ensure new territories are added to the service as and when they enrol in the Account Updater scheme.

"Revenue from social gaming overtook that of traditional video games for the first time in 2017 – although both segments continue to grow. Social gaming will grow from £32bn in 2016 to £55bn in 2021 – a CAGR of 11.9%."

Intelligent Account Verification is a dynamic, self-learning and adaptive service designed to increase the conversion of account verifications. A sophisticated ‘machine-learning’ program, it incorporates Artificial Intelligence (AI) into our decision-making capabilities. These capabilities are shaped by our unique real-time data collection and storage. Globally, in 2016 we processed 14.9 billion transactions, the data from which is held in our Enterprise Data Platform. This data gives us unique issuer insights, enabling us to tailor transactions to maximize acceptance and minimize risk. Intelligent Account Verification does this by selecting an amount that is most likely to be authorised, thereby optimising the verification process. Successful account verification ensures merchants won’t lose consumers and their lifetime value through card refusal.

Our new Intelligent Authentication Service is all about reducing fraud and maximising transaction success. This service is a significant upgrade on all existing 3DS offers, offering 3DS 2.0 and ensuring that we are set up to take advantage of the new Strong Consumer Authentication requirements posed by PSD2. This product will offer customers a broad range of 3DS options, from basic 3DS 2.0 compliance through to a managed, optimised Premium 3DS offer that is underpinned by machine learning to improve the shopper journey, remove false declines and reduce cart abandonment. 3DS 2.0 will bring a lot of benefits to both merchants and end customers – it is optimised for biometrics, removes static passwords, and can be used for in-app and digital wallet authentication – and we are excited to work with our customers to help them realise these benefits.

Finally, Intelligent Retries will provide merchants with the ability to reattempt declined transactions and recover otherwise lost revenue. The service is flexible and can be driven by Worldpay or the merchant - transactions are automatically retried based on Worldpay data and logic or the merchant can dictate which transactions to retry and when. The key benefit being the ability to increase acceptance rates and recover otherwise lost revenue by converting failed transactions. Machine learning means the underlying re-try logic continually optimizes as the data platform processes more and more transactions.

All in all a very exciting time in Digital Content with lots to look forward to over the coming year.

If you’d like to find out more about any of these topics, or just talk to us about how we can help you increase sales through offering the right seamless payment strategy across your markets, get in touch here:

Written by:   James McGurn, VP Digital Content, Worldpay,  4 Jan 2018