To keep pace with changing viewing habits, broadcasters and content creators are relooking at their business models to ensure that it embraces OTT holistically
By Pradeep Suvarna
The writing has been on the wall for a while now – the viewing habits of audiences has been changing and they are increasingly shifting to digital platforms. While initially many pooh-paahed thinking that only the younger generation was part of this transition to non-linear domains, there is increasing evidence that it is happening across various genres of viewers.
Broadcasters have understood that they have to stop pretending that Over The Top (OTT) is not a threat to their traditional media and they have to embrace it, either by integrating it into their existing business models or buliding new ones to envelop it. While many got into this space as an experiment some years ago, they are now paying more attention to it.
Vishal Maheshwari, country head, Viu India gave the example of a recently introduced OTT brand, which has assumed its third avatar, within the last four years, while other broadcasters are continually reinventing their offerings. “This is indicative of growing seriousness about the OTT space. On the content front, broadcasters are also getting a lot more experimental. The ability to win IPL came down, to a large extent, to the fact that the broadcaster had a Video-On-Demand (VOD) platform. Undoubtedly, from a category investment and from a content investment point of view, OTT is certainly changing the entertainment landscape in India and therefore, everyone in this space, which includes broadcasters, have to adapt,” he added.
Akul Tripathi, programming and content head of EPIC TV noted that OTT has certainly impacted the way content is being consumed and has been the key factor in the alternative it provides from family viewing habits. “It has made TV viewing more personal and also provides an alternative choice in the majority single TV homes. Broadcasters have been quick to adapt to this change by launching their own OTT platforms as catch-up as well as leveraging content that can be consumed over linear as well as digital platforms,” he stated.
While there is a lot of interest and noise around OTT, what ultimately matters is how broadcasters and content creators can monetise these digital offerings. To be able to do this, some have started using data analytics to scrutinise the information in their entire media ecosystem, right from how the content is downloaded till the way it is consumed by viewers. Others are deploying artificial intelligence with features like facial recognition, scene detection and subtitle extraction to help them in this endeavour. This is to help them better understand the content, the format and the device that viewers prefer, so that they can create compelling content for them based on this informaiton.
A LEVEL PLAYING FIELD
According to a projection by Strategy Analytics’ Brice Longos, the Indian OTT video revenue is expected to grow at a staggering 30% CAGR to reach $2 billion in 2022 as compared to $529 million in 2017. Some factors that are propelling this growth include faster broadband speeds, reduced data costs, availabilty of smartphones as well as increased content options to choose from.
Mobile data prices are currently at an all-time low as telecom operators battle to retain their customers, which in turn has made video consumption very inexpensive. Secondly, these telecom companies are making 4G networks available at every nook and corner of the corner of the country, making the video viewing experience very TV-like. At the same time, India has witnessed mass adoption of low-cost smartphones with good display quality.
Maheshwari added that the final driver is that players like Viu and others are investing in creating quality and relevant content for the millennials in local languages. “Our finding is that millennials, whether in urban or rural areas, want to consume the content they want, when they want it and where they want it and don’t want their viewing behaviour to be dictated by the person with the TV remote control. These aspects have helped drive OTT penetration in urban areas and this is now expanding very rapidly into the rural areas of India as well,” he noted.
Uday Sodhi, executive VP and head of digital business at Sony Pictures Networks India pointed out that early on the company saw the opportunity for catch-up television content and realised that would be a huge driver for consumption. “According to the 2011 census, 75% of urban population is already on the internet, compared to 32% of rural population. We felt that there is high demand for content in regional markets and this clearly indicates that the next wave of internet users will come from rural markets. Currently, 22% of our viewership comes from the Indian heartland and we see this number growing rapidly over the next couple of 3 years. We aim to create more original content and localise it,” he emphasised.
Tripathi too believed that the catchment area for OTT is not just the urban market, but the rural towns as well. “Competitive smartphone pricing, enhanced internet penetration and data speed has given an impetus to the overall OTT consumption across India. While we may continue to argue that this is an urban phenomenon, popular research suggests that almost 75% of new internet users are from rural India and hence early adoption trends can be seen building in these geographies as well,” he stated.
AT THE FOREFRONT
As the audiences start dictating the terms of viewership – gradually shifting from appointment viewing to watching content anytime, anywhere and on any platform – broadcasters are doing their best to ensure they are ready to meet their needs. While traditional companies are well-positioned to make this transition, smaller or regional broadcasting channels often face some challenges when they decide to shift to OTT.
These companies, therefore need to know that they can opt for make or buy options. Nivedita Nouvel, VP, marketing for Broadpeak advised mid-sized broadcasters to pursue the local cache approach, using their own caching servers within the area of the operator’s infrastructure that attracts the biggest part of their traffic. “Other broadcasters can choose a CDN-as-a-service approach, ideally using several CDNs simultaneously — and a CDN selector to manage them — to prevent dependence on a single provider. In all cases, broadcasters should control the origin server and, from the start, implement an analytics solution,” she said.
Another key aspect that tier two and three broadcasters should keep in mind is the requirement for end-to-end OTT ecosystem integration. Olivier Karra, director of OTT and IPTV solutions at Harmonic believed that one of the safest approaches when transitioning to OTT is pre-integrated ecosystems. “Typical ecosystem components include DRM for content protection, CMS for non-linear applications and ad management for monetisation. Having a pre-integrated ecosystem will secure the deployment from a timing standpoint and will ensure service interoperability without any hidden integration fees. In parallel, from a platform implementation standpoint, one way to avoid being trapped into complex infrastructure questions, increasingly IT-driven decisions and dependency to constantly changing technology is to consider deploying an end-to-end media processing SaaS solution,” he added.
Another technological challenge of service migration to OTT is that of scalability. Hence, when smaller regional broadcasters upgrade themselves to a digital platform, Abhishek Sood, product director, APAC, Accedo suggested that they to do away with legacy, inflexible technological platforms and components on which their current services are built, and replace it with robust front-end and back-end solutions that can able to handle traffic which OTT brings along. “Hence, with OTT, one needs to carefully design the overall service architecture and back-end platform components to ensure scalability and flexibility,” he pointed out.
Sometimes, smaller broadcasters prefer to supplement their own websites with a ‘watch live’ tab for free-to-view linear TV and radio channels, with geo-blocking and/or content replacement to comply with content rights. In fact, Frédéric Torasso, product manager, TV Everywhere OTT Video at Globecast has noticed that free-to-view video replay assets are hosted on cheap or free Online Video Platforms (OVPs) such as YouTube, then integrated into their web sites at almost no cost. “When it comes to monetisation, paid subscription or ad-supported content – through ad servers – are the most dominant models. Integration with a Paywall-as-a-service is fast and easy; providing necessary features such as user registration, business offer selection, payment and customer care. Live-to-clip tools are also a must-have solution in order to easily repurpose full-length content on the various replay platforms or edited highlights on social media,” he recommended.
In the OTT environment, technology implementation can be complex, because the ecosystem is fragmented and technologies are always evolving. According to Ludo Rubin, director, product marketing of Viaccess-Orca, integration and customisation are key challenges, as broadcasters, big or small, may not be well equipped to handle third-party integration (i.e., payment, TV applications, DRM, CDN, devices) or customise the user experience. “A solution that offers full agility and flexibility at low risk is a must. Broadcasters need to find an experienced partner that can help them navigate the technical complexities, as well as discuss the different options and the trade-offs. Modular, cloud-based solutions that provide a seamless, customisable user experience are the most suitable solutions for today’s broadcasters,” he opined.
While broadcasters are investing in OTT technology, they are keeping an eye on the likely success rate of its implementation. After all, while viewers keep expecting quality content consistently, providing good quality of experience across various devices combined with a rich set of services and relevant content comes at a cost – sometimes a high one. So how can broadcasters estimate the ROI of their technology implementation and rate of monetisation?
According to Ludo Rubin, director, product marketing, Viaccess-Orca, monetization is faster for well-established broadcasters, while it can take a few years for niche broadcasters to be successful (in term of revenues, customer satisfaction, monthly active users). It all depends on the business model chosen, in particular whether the OTT service is available free with advertising or a pay-TV offering like Subscription Video on Demand (SVOD).
Kenneth Haren, solutions marketing manager at Telestream added that the monetisation could vary depending on the business model for the OTT implementation as advertising, subscription, and transaction-oriented OTT channels each have different approaches to garnering audience share and optimising costs. “A common thread for ensuring ROI across platforms is to have good visibility in to what features of the OTT service are delivering the most ‘bang for the buck’. It is very important to not only deliver a differentiated experience, but to also be able to measure how the audience experience is being received. Actionable analytics that enable you to dynamically monitor video and network quality all the way down to the player is an essential component of successful OTT channels.
James Devonshire, product manager, media management at Globecast too agreed that ROI is best obtained through data intelligence and/or monetization to cover the OTT video platform and delivery costs: content preparation, CDN delivery to audiences, back-end service platforms, front-end apps and web players, audience statistics and content metrics. “Data intelligence in the Internet domain has proved to be very business effective. Knowing your viewer’s profile precisely, including their location, taste and usage habits helps the broadcaster to sell TV ad inventories and further distribute their channel to new TV platforms around the world. Interaction with the audience brings more knowledge, feedback and engagement, fueling the content strategy for future productions,” he emphatically stated.
Nivedita Nouvel, VP, Marketing, Broadpeak:Broadcasters can estimate ROI for their OTT implementation using one of two main models: pay TV or ad-based. The ad-based model is more compelling, thanks to targeted ads that allow the broadcater to increase the revenue per user. Many factors contribute to the success of the service: quality of content, quality of service, marketing of the service, and content freshness. These factors need to be monitored carefully through complete analytics serving all teams — operations in assessing the solution providers, support in performing troubleshooting, and marketing for evaluating the take-off of services and the impact of marketing policies.
KEEPING VIEWERS HOOKED
While attracting viewers on non-linear platforms is relatively easy, retaining them is another matter altogether. In an era of binge-watching, once a show is over, viewers want something else they can watch and they are unwilling to wait for days or weeks – like the good old days of TV viewing – unless it is something as popular as The Game Of Thrones.
Many OTT services are increasingly leveraging live programming to entice new viewers. Delivering a live experience while blasting real-time highlights out to social media followers creating awareness around the event is a great way to generate interest.
According to Haren metadata-driven content discovery also lends itself to audience engagement. “An extensive VOD library is only a differentiator if you can direct your viewer to content that engages them. By continuously investing in and enriching the metadata around the library creates interesting ways to dynamically package and promote licensed programming. An emerging tool in the metadata enrichment domain is machine learning services that include offerings like speech-to-text, OCR and other pattern based algorithms to pull out more descriptive information that can be used to create relevance and relatedness within your library,” he said.
To boost weekly audience reach by targeting the right viewers, Devonshire felt that both traditional and digital marketing campaigns are effective tools. In his opinion, self-promotion through TV channels combined with targeted digital campaigns on social media bring awareness and viewer fulfillment. Additional solutions, such as in-app user preferences regarding content and personalities, combined with notifications, bring more viewing and user satisfaction.
Karra added that there are several ways to achieve such a goal based upon the type of OTT delivery solution being used and the tools available. “In general, most powerful technologies nowadays rely upon analytics to map the level of interest and expectation of an audience versus a specific type of content or content sequence,” he said.
According to Rubin TV analytics tools can be used to gain actionable insights on audiences, content, devices and revenues. “Explicit search and usage analysis, as well as predictive analytics technologies, are essential for automating and optimizing content acquisition and user experience while mapping these data with TV audiences. VO is one of the only providers of advanced analytics and monetization capabilities,” he noted.
Creating the right content for one’s users depends upon understanding and defining the target audience. For that, Sood said that various third-party analytics tools in the market can help identify the target audience, markets they are present, their likes/dislikes and uptake of specific content types etc. “A careful study of such details and output will help in defining the content strategy. Dip stick analysis through tools like A/B testing can also prove to be very helpful in knowing the real uptake of certain content genres, UI/UX methodologies and pricing. All this go a long way in defining the success of an OTT service,” he added.
Like Tripathi aptly summed up ‘entertainment on-demand’ as a category will certainly grow and will be the discerning factor for the media and entertainment industry. Whether it is television content on OTT platforms, or originals, movies or music, the time and medium for consuming content will be decided by the consumer.