It is becoming increasingly clear that there are severe limitations on the subscription VOD model. New data from Paywizard shows that 45% of Europeans have access to a SVOD service. However, just 12% have access to more than one. While the biggest providers continue to dominate smaller providers struggle to find their audience.
One of the solutions to this problem is to adopt and combine different business models. At IBC 2017 I moderated a panel entitled OTT Business Trends, Tools and Opportunities. I asked the panel of experts if they could share some of the innovations in business models that they see in the market. Here’s what they had to say.
Sometimes more is better
Bhavesh Vaghela is CEO of Paywizard; a SaaS-software business focused on supporting Pay-TV operators to grow their business. He sees his customers moving to embrace multiple business models.
“Customers are merging multiple business models together. So, we’ve seen a freemium plus pay-per-view plus subscription. We’ve been playing around with those models depending on the type of customer. We see a trend of where OTT organizations are trying multiple business models.”
For example, in the UK, as in the US, boxing is finding a new audience through online. Traditional broadcasters are negotiating for boxing league and individual fight rights and then delivering them online as pay-per-view events.
Targeting ads in broadcast channels
Without the ability to target ads, broadcast television could be missing out on much higher ad revenues. However, there could be an opportunity to fix that, according to Sebastian Busse, smartclip’s Director of International Addressable TV. Smartclip deploys proprietary, custom-developed technology to distribute video advertising across all platforms and devices, controlled by ad servers.
“A broadcaster can replace an existing ad with a more targeted ad. For example, Proctor and Gamble have a lot of products for females and males. They can now choose on which devices they can deliver a male or female shampoo. They can do this on-demand and in the broadcast stream on a platform like HbbTV.”
A connected TV platform is required for this approach. In the US, there is no standard platform for the connected TV, but Europe has adopted the HbbTV standard~. Having a standard connected platform means a single ad-insertion platform, as described by Mr. Busse, can work across many different television brands. HbbTV is widely deployed in Europe. In markets like Spain, Germany, and Switzerland 70+% of homes have an HbbTV. In the Netherlands and France, penetration has reached 40%.
Reinventing the game-show format
Nearly 85% of US consumers surf the web and connect on social media while watching television. With such a large base of connected television viewers, there is an opportunity to create new more engaging TV experiences.
Iago Soto Mata is Co-Founder and Chief Marketing Officer at Quobis, a company specializing in the delivery of carrier-class unified communication solutions. He suggests that traditional television show formats can be modernized by throwing out the on-screen talent and bringing in the audience.
Why it matters
Online television services can no longer rely on just one business model.
They need to combine and innovate business models to optimize the value of the content they provide.
~ HbbTV – hybrid broadband TV is a browser-based platform for television that allows broadcasters to combine over-the-air broadcast TV with online video to create a unified experience.