Monetizing OTT


Oliver Botti TV-Bay Magazine
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Competition in the TV arena is hotting-up for traditional broadcasters with even ESPN, a strong-hold of sports TV, seeing a reduction in subscriptions with the number of American homes paying to get the service declining by more than 12m since 2011. With Mintel reporting that the subscription video streaming market in the UK is due to exceed revenues of GBP 1 billion (EURO 1.37 billion) by 2019, and account for 38% of the total UK video market, traditional broadcasters clearly cannot afford to turn a blind eye.

Today's consumers demand to access a wide range of shows, flexible pricing and most of all, flexible viewing options. The traditional TV broadcast model has in fact been completely disrupted with consumers expecting to choose when to view their favourite shows and to do so from a range of devices. As we are now experiencing the third generation of OTT TV, let's take a look back at the previous generations of OTT TV development. The first generation was mainly focused on digital TV products aimed at offering existing clients added value in the form of web and mobile content. Although some broadcasters tried to monetise this stage of development, it mainly focused on creating loyalty and minimising customer churn. The key differentiator at this stage was providing a unified customer experience.

A second generation followed and in this phase broadcasters were no longer solely concerned with the loyalty of existing customers, but also with reaching out to a broader range of prospects. This type of offering becomes a product in and of itself with the marketing objective of increasing the customer base.

In the current third generation both traditional and sole OTT TV providers are faced with the important task of extracting significant value out of innovation. At Fincons Group we believe that this third generation of OTT TV focuses on four key pillars: omnichannel experience, multimodal interfaces, Social TV and Addressable TV Advertising. Omnichannel user experience revolves around acknowledging that the consumer looks at various screens throughout the day and the customer experience should be organic and changes to appearance or navigation across devices should be minimal.
Specifically, studies show that users usually watch TV with a 'second screen' in front of them: that of their tablet computer or smartphone. According to Ofcom the most popular activity while watching TV in the UK is using a mobile phone (70%) and more than half (54%) said they used the internet at the same time and globally, Nielsen reports that 47% of people visit social media while viewing making 'Social TV' an important factor for advertisers and broadcasters to address.

Multimodal interfaces, on the other hand, enable viewers to interact with their TV through sound such as their voice. By speaking basic key words such as 'The Walking Dead' could trigger a multimodal TV interface to offer a catch up of the episodes of the series.

One key element that broadcasters will have to work on, and that pure-OTT TV providers have so far outclassed them with, is customised pricing options. By allowing users to buy various types of subscriptions that cover different devices, combinations of devices, monthly or weekly contracts and even the ability to buy one film or live sport match, pure OTT TV providers have offered far more flexibility than traditional broadcasters. By honing in to this type of pricing modelling, which is based on e-commerce culture, even traditional broadcasters will be able to compete on even ground.

Finally, 'Addressable TV' profiling by region is a type of dynamic advertising over OTT TV that holds much potential for even more targeted profiling to each family member, for example, so that while parents view ads for exotic breaks abroad, their children see the latest bike or Frozen toy advert.

As the industry continues to evolve at a rapid pace it is vital to partner with a provider who is truly able to take the pulse of the market and stay ahead of innovation. Specifically, the next move for broadcasters is to provide viewers with added value by taking into account their preferences and by offering pricing plans tailored to their needs: data-driven TV is the next frontier the market is already working on.

  1. The Economist, ESPN is losing subscribers but it is still Disney's cash machine, May 6th 2017
  2. Mintel, Streaming Media UK, February 2015
  3. Ofcom, Attitudes to broadcast media
  4. Nielsen, Screen Wars, 2015


Tags: iss126 | ott | moentizing | fincons group | Oliver Botti
Contributing Author Oliver Botti

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