Sometimes what seems to make good business sense can have horrible repercussions on an OTT video business. In this webinar Gene Hoffman, CEO of Vindicia, and Bob Terzotis, EVP of Mather Economics, discuss 4 prime examples of the mistakes an OVP can make, and how to fix them.
Our first topic of discussion is “Don’t train your customers to steal your OTT content.” Mr. Hoffman says that regional content licensing policies can lead some people to look to illegal sites to watch the content they seek. Game of Thrones has consistently been one of the most pirated TV shows in the world. When the new season is released in the US, many people around the world simply can’t wait until it is provided by the licensee in their region. For example, in Australia 32% of Game of Thrones viewership was due to piracy in 2015.
According to Mr. Hoffman, delays in releasing in-demand content in other regions is like saying to your international viewers:
“Yes, I know you want to pay for it, but I’m not going to let you. In fact, what I’m going to do is train you on how exactly to find that show minutes after its aired in a seedy dark alley of the Internet”
Mr. Terzotis suggests that this is an opportunity for content providers like HBO to use a price skimming strategy. In those regions where the latest release is far behind the US release, The most engaged, most interested viewer is also most likely to pay a very high price to watch the content the moment it is available. Later you can lower the price as the latest season becomes more broadly available in the region.
Mr. Hoffman agrees that this strategy is a good one. He also says this is an opportunity to work with the content license holder in that region. Since the best fans will likely find a way to steal it before it is legally available anyway, why not work with the regional license holder to make it available at a high price and split the revenue. Though this approach may not yield a huge amount of revenue, and may not be very scalable, it could still be worth doing. Mr. Hoffman says it changes the conversation with consumer:
“What you fundamentally shift is the consumer is now making a choice to go ‘I could pay for it or steal it.’ A very different conversation to ‘I can’t watch it at all.’”
Mr. Hoffman and Mr. Terzoris also discuss the following topics in the webinar:
- How setting subscription payments too low can wipe out your profits,
- Why making it easy for a customer to leave increases the chances they will come back
- The difference between good and bad revenue.
Chapter 1: Introducing Vindicia and Mather Economics (2:00)
Chapter 2: The state of SVOD (3:20)
Chapter 3: Don’t train your customers to steal your content (9:30)
Chapter 4: Standard pricing policies can wipe out your profits (19:10)
Chapter 5: Make it easy to leave (30:10)
Chapter 6: The difference between good and bad revenue (37:20)
Chapter 7: Q&A (56:00)