The OTT video ecosystem is continuing to shift and change. However, it has been around long enough for companies to learn how to optimize their position in the market. Here are five pieces of advice from industry veterans.
At the TV of Tomorrow Show in New York earlier this month I moderated a panel entitled The Emerging OTT Ecosystem and its Challenges. Five senior executives from the OTT video industry provided their perspective on how the industry is evolving. Here are some of their sage comments.
Reducing churn with the power of Now
I asked Soumya Sriraman, President of BritBox, what strategies she was using to reduce churn. Though she said BritBox has exceptionally low churn, she and her team recognized how important it is to keep customers using the service every day. She and the team asked themselves the question:
“What is it that keeps people coming back? And that’s how we came up with Now. It’s a subcategory within BritBox where you get shows a day after UK air. And it goes away in about a month because that was all we were able to license.”
Are niche SVOD services viable businesses?
While bigger SVOD services can and are making money, many doubt that smaller niche services ever will. I asked Bruce Tuchman, Investor and Advisor at Tuchman Global Ventures if he thought smaller SVOD services could be viable in the long-term. To answer the question, he took us back to when pay television was striving toward the 500-channel model:
“25 years ago, there was a certainty that niche TV channels couldn’t have a sustainable business model. We learned 20 years later that they have become incredibly valuable businesses…as more and more people migrate to streaming services there will be a rising tide of subscribers that will allow a lot of these niche SVOD services to become quite profitable and sustainable. I just don’t know if we are at that place right now.”
OTT, not TV, is the right place to launch a channel
Susanne Mei, GM People Entertainment Network at Time Inc., has just launched a new ad-supported online video service as part of the People Magazine brand. With such a strong brand, this channel could have been launched on cable TV systems. Ms. Mei was clear that was not where the real opportunity is today:
“10 years ago, we would have launched a cable network. We would have launched a People cable network or an SI network. That ship has sailed, it’s a really difficult business now. Now if you have a great brand, OTT is the opportunity.”
News still matters to vMVPDs
Steven Oh is Chief Business Office of The Young Turks. His team produces a news show that regularly attracts 200 million views. The company is also working on building out a 12-hour per day linear news channel. Mr. Oh has been talking with virtual MVPDs, and they tell him that news is one of the most important genres among users:
“One of the <vMVPD> operators that I am negotiating with now has informed me that news is a major driver of viewership on their platform. Among their 50 or so channels in their skinny bundle, news drives a third of their viewership.”
Subscriptions just the start of a profitable OTT business
One of the themes of the panel was just how challenging it is to make money with an OTT video service. Andy Le Cuyer, SVP of Programming at Dish Network/Sling TV, suggested two other ways that online video providers should look at to enhance the profitability of their service.
“The first thing is giving consumers other things that they can buy that are gross margin positive. The second piece is being smarter and more effective in ad monetization.”
Sling is allowing customers to subscribe to third-party SVOD services like Curiosity Stream through the platform. It is also using ad targeting to enhance the value of the advertising in the linear TV channels it provides.
Why it matters
The ecosystem for OTT video services is still shifting and changing.
However, participants have been in the market long enough to have discovered how to optimize their place in the distribution of OTT video.