OTT IS the future — Are you ready?

“Which way did they go? How many were there? How fast were they going? I must find them; I am their leader.” – Unknown This apochryphal quote always ellicits a smile when I read it. The idea that a leader is struggling to catch up to the group they are supposed to be guiding is a little ridiculous and belies the concept of “leadership”. Yet in many ways, this seems to accurately describe the current state of strategic OTT development for major media brands and niche content holders equally. OTT video consumption is growing, a change in audience behavior which will have a lasting impact on the economics of both traditional linear TV and advertising models; of that, there is no doubt. But how companies are approaching the challenge of this audience shift is varied and complex. Some, like AMC, are taking careful, tentative steps, addressing niche audiences which may be underserved by their mainstream programing and carefully reserving “A” level content.

In July, AMC’s parent company, AMC Networks, launched Shudder, a subscription video service dedicated to fans of horror films and TV shows…it’s the company’s second OTT product after the documentary-focused SundanceNow Doc Club, …

Other major entertainment brands, such as HBO, CBS and Turner Broadcasting are jumping in with both feet, obviously see it differently. Their broad OTT channel rollouts appear intended to enable the capture of an audience which can’t/won’t/isn’t accessing their content (and delivering audience eyeballs/revenue) through traditional cable channels and subscriptions.

The move is in the opposite direction of how AMC’s counterparts HBO and Showtime are approaching streaming services that go directly to subscribers — and make an end-run around cable distributors. HBO made a big leap in April with the launch of HBO Now, which provides full access to the network’s entire catalog of films and TV shows. A couple of months later, Showtime followed suit with its own subscription-based service, which it also calls Showtime. AMC, on the other hand, is not offering any of its critically acclaimed TV series — “Breaking Bad,” “Mad Men” and even the zombie hit “The Walking Dead” — on its streaming services.

Audiences are embracing OTT. The numbers provide proof — in the last year, the quantity of OTT video nearly doubled from 3.6 hours/week to 6.9/week, and is expected to triple again by 2020.

It’s clear viewership is rapidly evolving, and today’s consumers are demanding content when they want, where they want, and on the device they want. For content providers, OTT represents potential for revenue growth…”

A significant opportunity. Yet the conclusion to that last sentence is key. “…but that starts with a strategy for attracting and engaging this growing audience.” Strategy is key. An OTT initiative can’t just take viewers from one delivery channel and shift them to another. OTT should augment and expand the audience. AMC is aiming at the underserved niche audience; HBO and friends is aiming at those which don’t subscribe via cable (as well as those who do, but who want mobility). Each is addressing a specific are where their business can be successfully augmented. Industry leaders ARE beginning to shift from a reactionary mode to a proactive one. ESPN, for example, is considered by analysts to be pursuing the growing OTT audience when it chose to make programming available on Sling TV. As you consider your OTT strategy, consider how your new initiative will…

1) Expand your audience, adding members which may not have previously had the capability or intent to access

2) Increasing quantity of content served. An stand-alone delivery channel can assist with one of the toughest nuts of the digital content age — discovery. If you serve a niche audience, focusing your audience on your concentrated, curated content library is efficiency for them and for you.

2) Engage your audience. The age of “build it and they will come” is long past. How will your service excite, inspire and interest your audience — and keep them coming back?

Online TV and video advertising is the key driver in the OTT sector, recording revenues of $6.0 billion in 2012, up from $2.4 billion in 2010. Source:
Online TV and video advertising is the key driver in the OTT sector, recording revenues of $6.0 billion in 2012, up from $2.4 billion in 2010. Source:

4) Monetize your (growing) audience. AVOD, SVOD, TVOD, DTO — how will you deliver value to your audience?

The conversations which we here at Giant have had with prospective clients seeking OTT solutions acknowledge both the urgency and the opportunity. Niche content owners such as anime distributors and importers, in particular, see an opportunity to strengthen their relationship with their audience and improve their business in the process. Does it make sense for every content owner or distributor to have own OTT channel? Such broad statements are rarely, if ever, true. But as the OTT ecosystem allows greater choice, greater access and greater convenience, owners and distributors may need to become active in the OTT space as a matter of survival: to head off competitors, lay claim to a niche, or streamline and optimize their business. Developing your strategy, building an OTT channel or service, delivering an exemplary experience — we’re here to help.  

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