Feb 24, 2022
Over-the-top (OTT) is a medium where customer is king and content rules. The pandemic served as a catalyst for greater OTT adoption, driving home this truth stronger than ever. OTT channels exploded, providing many hours of entertainment at home, and on any device. As the global pandemic took hold in 2020, 36% of consumers say it was a direct driver of them taking out a new OTT subscription.
Propelled by the widespread distribution enabled by OTT, companies are in a race, pursuing content in various ways – generating their own content or turning aggregators, working with small creative houses to produce short films, increasing localization of content, or crowdsourcing.
However, today, to develop a platform and enable OTT is only completing the first lap. The market is crowded with players, big and small, jostling for a toehold. Today’s empowered consumers crave engagement, which means, providers need to build targeted content that will reel in customers and keep them hooked over time. To be a marathoner, the OTT provider needs to be able to both engage and retain.
The empowered consumer is spoilt for choice – avoiding both app fatigue and subscription fatigue will be important. This approach is backed by a 2020 Deloitte survey of US consumers – their reason for choosing a particular brand of service seemed to indicate a preference for both a broad range of shows & movies, and content not available elsewhere.
OTT providers can look to win the war for viewers through a number of ways including:
Irrespective of the specific genre or direction, the OTT provider chooses to follow, the mandate is clear – shape engaging content experiences for the consumer. The provider can’t become complacent but needs to be ready with a roadmap for retention as well. By investing in technology to build content, engage and elevate consumer experiences, they stand a better chance to gain the elusive competitive edge.
The instant global success of OTT as a medium, and is a turning point and milestone in the history of entertainment and broadcasting technologies. There is no other medium that allows a wider potential reach, yet puts the audience in charge. With digital re-shaping the way we interact with each other and how we entertain ourselves, the success of OTT is only the beginning for this medium. From training to gaming to keeping in touch with family, the potential is limited only by imagination.
CX/UX/Personalization: Machine Learning and Artificial Intelligence power up algorithms and predictive analytics to identify consumer behavior, viewing patterns, preferences etc. and tailor the user/customer experience down to the individual consumer. These technologies are already helping the biggest in the business, such as Netflix, Amazon Prime, Hulu, offer unique experiences through product or content recommendations that are most relevant to that individual.
Becoming more ‘immersive’ with 5G: As 5G becomes mainstream, increased bandwidth will support more immersive streaming services such as 4K video and Virtual Reality (VR). Newer applications supporting collaboration – beyond Web conferencing – will emerge as a result. By combining 5G with OTT services, the provider can ensure less buffering and faster streaming, and therefore, venture into 360°live streaming of events etc.
Online gaming: The increase in Smart TV viewing means that passive consumption needs to be supplemented by gamification engines, interactive live television, real-time polls and more – these can be implemented with the help of 5G that promises up to 10Gbps speed and faster response times. With near-zero lag, better connectivity and data speeds, the gaming experience can be truly enhanced.
Shared OTT experiences: consumers realized the importance of spending time with family/friends during the pandemic. This led to the success of events such as Netflix’s Teleparty and Amazon Prime’s Watch Party. Powered by high-speed internet technologies, such services – consumers staying apart, watch movies together on the same video chat, or stream simultaneously within their social networks – could soon become the norm.
Multi-device, multi-platform experience: Consumers can enjoy immersive experiences on different mobile platforms, switching between devices seamlessly – including iOS & Android mobile phones, iPad and Android tablet, Apple TV, Amazon Firestick, Roku or any Android-based smart TV.
The current monetization models of OTT are nascent, and as young as the medium and technology itself. Still stemming from traditional broadcasting roots advertising and subscription have been the existing models of revenue.
Advertising monetization vs subscription monetization: both models have their unique advantages. The nature/format of the content and the kind of technology investment can be deciding factors in the model that the provider chooses eventually.
The advertising monetization model enables free content with ads to consumers across multiple platforms such as connected TV, desktop, and mobile ecosystems. Here, finding new users is easier as it has in-built technology to targeting opportunities using more accurate data on user preferences. Providers can leverage predictive and prescriptive analytics using Artificial Intelligence and Machine Learning.
In contrast, providers might choose the subscription model if they are looking to gain long-term value by delivering consistent quality content such as those in the business of entertainment, health, eLearning etc. Investing in the right technology will help them implement security and encryption integrations that are necessary for this model.
With new applications such as gaming, television commerce, learning, event streaming and personal video conferencing, successful experiments in revenue models will spell the next level in maturity for the OTT industry.