Content Dethroned: Consumer Experience is New King of OTT
Broadcast Pro Middle East | Insights | By Ron Downey
The dust may have settled on NAB, but the OTT sector is whipping up a storm. From VR to next-gen personalization, and from Android TV to previously unseen revenue streams, this year’s show in Vegas put four trends on the radar of content rights holders and broadcasters that will soon become the cornerstones of enhanced OTT offerings in 2018 and beyond.
What’s particularly interesting is that each trend has its hooks set firmly in the consumer experience, which was undoubtedly a main theme of the show this year. And it’s easy to see why. The reality is that TV has become an increasingly individual affair, creating an extra hurdle for content providers to overcome – after all, if a viewer isn’t watching TV with others, why should they be offered the same viewing experience, content, and promotions as everyone else?
For broadcasters, too, it’s becoming increasingly clear that taking personalization up a level is what will help to ensure the success of their OTT service in the future. Content has become ubiquitous and viewers now expect something more than simply a fully stocked asset library to warrant signing up on subscription, presenting both a challenge and an opportunity. Although the traditional one-size-fits-all approach to content delivery may have worked in 2017, it’s not going to fly any longer, and the next-level of personalization is set to be a multi-faceted affair.
So, for OTT players looking to bolster their bottom lines and tap into the latest market developments at a time when it can help them to stand out from the crowd, here are the four trends from NAB that should be front of mind and the reasons why.
Pushing the VR Envelope
VR and AR continue to dominate many conversations concerning the ‘future of television’, even though examples of mass implementation remain relatively thin on the ground. Sure, there have been a few examples of TV operators pushing the envelope since last year’s NAB, yet this is still very much experimental territory for the majority of players.
But that’s not to say that consumer appetite isn’t growing. Research indicates that revenue generated by the virtual reality industry will top $20 billion by 2020, while the augmented reality market is pegged to hit $61 billion in 2023.
This is why we’re working closely with some of our customers on designing and developing UX for these next-generation technologies. While it still may be some time before VR and AR hit the mainstream, the operators who come out on top will be the ones who begin future-proofing themselves today.
For the designers at Massive, one of the most interesting use cases for VR outside of gaming is sports – just think how much ‘stickier’ a brand experience you’d be able to provide by getting creative with the delivery of real-time game data, multiple camera angles, and communal viewing, all housed in a 360-degree experience.
New Revenue Opportunities on the Horizon
Although the subscription model is a tried and tested revenue driver for thousands of OTT services around the world, it does have a few flaws – including increasing customer acquisition costs, limited market headroom, and low initial price points. So, NAB offered a breath of fresh air to those operating in this space with the introduction of trusted, complimentary, and non-intrusive avenues through which to increase revenue.
The biggest one of these is what’s called a “sponsored UI” allowing brands to have ownership over a section of the OTT interface in exchange for an advertisement fee. It could be just one or two rails of content, or an entire reskin for a limited time across all devices.
Next-Gen User Experience
This is a big one. The majority of streaming services out there currently offer the same experience and design across their suite of apps. This happens regardless of who the viewer is, what their individual preferences are, or how they’ve interacted with the platform before, which brings us back to the issue with taking a one-size-fits-all approach.
No two viewers are the same. Sure, they may share certain characteristics that allow an OTT player to introduce demographic-based segmentation, but a level of differentiation still needs to be there. Take a new streaming service for example. Some will be first-time visitors who expect to see a curated snapshot of what’s available in the content library. Others will be die-hard thriller fans that want a personalized homepage tailored to their genre of choice.
Again, drawing parallels with the future of VR, this is a concept that’s particularly applicable to live sports. Sport is an area where some of the most exciting personalization options currently lie, thanks largely to the plethora of different sports fans out there. Each type of fan has different needs and expectations when it comes to service functionality and design, offering a tremendous opportunity to deliver a highly personalized experience that’ll help drive ARPU and reduce churn as a result.
The Rise of Android TV
Interest from TV operators in Android TV is at an all-time high following some high-profile triple and quad-play providers deploying solutions in the latter half of 2017. It makes sense – since rolling out its Android TV Operator Tier OS, Google has positioned itself much more favorably to customers who want to build their own UX on top of the open source Android framework.
The benefits are obvious. Faster time-to-market, quicker service and platform updates, and attractive ‘out-of-the-box’ features, like pre-integration with third-party apps and support for Google Assistant, amongst many others.
Sure, the presence of any rival, third-party apps, which cannot be excluded from the platform, could be considered a threat, but for many clients that we speak to, this threat is outweighed by the benefits of being seen as an aggregator that offers its customers a slew of popular video apps, combined with the traditional pay-TV offering.
This year’s NAB made clear that content is no longer king – the consumer experience has taken the throne. In order to stand out from an incredibly crowded and volatile marketplace, TV operators around the world are increasingly focused on moving away from templated, static applications and delivering an experience that is tailored to the end user’s personal interests, platform availability and payment choice.
But the video businesses that will come out on the top are the ones who can deliver all of the above, in real-time, without incurring significant engineering spend and contributing to the already significant cost of ownership associated with running an OTT service. Employing a centralized, front-end management console that can be operated by non-technical internal staff is what we feel is the answer to taking advantage of all of the opportunities presented by live sports, personalization and emerging platforms.
The post first appeared in Broadcast Pro Middle East.