Gokul K
Anjana Devi
Listen to this articleA lot has been written about the decline of TV and the rise of OTT.
But how fast is the decline? The US pay-TV lost a total of about 900000 subs in Q3 2023 alone and research suggests that pay TV customers in the US will fall by less than six million over the next five years
This is huge! Broadcasters always predicted Television’s decline but they never thought it would be this quick.
There are various factors for this shift: Unlike traditional TV schedules that dictate when viewers can watch specific programs, on-demand content allows viewers to watch what they want, when they want. This flexibility has become a significant factor in audience preferences.
With fast and reliable internet at home, streaming high-quality content has become smooth and hassle-free.
Also, more people are using mobile devices and high-speed internet, which makes streaming content easier and more popular.
Smartphones and tablets allow viewers to watch shows and movies on the go, which is something traditional TV can't compete with.
Changes in how people watch content and improvements in technology are transforming the media landscape. With more people preferring on-demand content, using mobile devices, and accessing high-speed internet, traditional TV is becoming less relevant.
What are broadcasters doing during these changing times? They are launching their OTT service to stay relevant
The Changing Media Landscape
Usage of mobile phones and smart TV devices has grown exponentially
More people are using mobile devices and high-speed internet, which makes streaming content easier and more popular. Smartphones and tablets allow viewers to watch shows and movies on the go, which is something traditional TV can't compete with.
Over the past few years, traffic on mobile and smart TV devices has grown significantly.
Let’s talk numbers. Globally, average mobile data usage per smartphone is set to rise from 21 GB in 2023 to 56 GB in 2029.
At the same time, Smart TV’s household penetration is projected to grow from 11.5% in 2013 to 32% in 2019.
In fact, video streaming will make up 91% of global internet traffiic (let that sink in)
It’s clear that users are spending a higher amount of time on the internet watching videos. Broadcasters are launching their OTT service to ensure they have a part of the ever-growing pie.
At the same time, television’s usage is on the decline
In the fourth quarter of 2023, DirectTV video subscribers numbered around 11.3 million in the United States. In the face of the increasing dominance and success of streaming services, traditional TV has been left behind, a phenomenon not only in the U.S. but throughout North America.
For the first time in the history of television, advertisers are spending more money on digital than traditional TV.
The writing is on the wall: TV is on the decline and OTT is on the rise. Broadcasters are launching their OTT service to stay relevant, tap into the growing OTT market and attract customers.
Benefits of Moving to OTT for Broadcasters
1. Ability to Build a Direct Relationship With Users
As a broadcaster, you are dependent on cable and DTH platforms for distribution. What if you could cut out the middleman and directly reach your fans?
Yes, you can do that with OTT. Users just need a device and an internet connection to watch your content anywhere - be it on the web, mobile or Smart TV.
Since you are not dependent on a middleman, you get paid from your users directly. You can simply integrate a payment gateway and receive the money directly in your bank account.
With OTT, you also get better insights about your users. What are their likes and dislikes, watch history, location, gender, devices they use and much more. This data can be used by the editorial team to create relevant videos and increase engagement. Using recommendation algorithms, you get to recommend videos personally to each user at scale.
The insights can also be used by the sales team in getting campaigns with higher CPM rates.
2. Lower Cost
Setting up a TV channel is expensive. You need to pay uplinking and downlinking charges, carriage fees, content delivery fees, distribution fee and more. These costs add up to hundreds of thousands of dollars every month.
There are additional downlinking and carriage charges if you want to broadcast to new geography.
But with OTT, you don’t need to pay any of these charges. The cost of launching and managing a multi-device OTT service is very low when compared to the cost of launching and maintaining a Cable TV channel.
Setting up an OTT service is cost-effective. You already have the infrastructure and resources to produce content. You can use your existing content to get started with OTT.
If you plan to use SaaS platforms like Ventuno to launch your OTT apps, there are only 2 types of additional costs:
- Fixed cost - Monthly platform fee
- Variable cost - streaming, storage, and encoding costs, depending on consumption.
The best part with OTT is there is no cost involved in making your content available across the globe - you can reach users all over the world.
3. Additional Ways to Monetize Content
OTT gives you an additional way to monetize your content. You can charge your subscribers, run advertisements or monetize with the hybrid model.
If you plan to run ads, you can get ad-tags from programmatic and direct advertisers and deploy them in your ad-server. Ventuno’s platform has an inbuilt ad server to manage all your ads in one place.
If you plan to charge subscribers, you can integrate your preferred payment gateway with your service and get paid directly. Ventuno gives you a simple dashboard to manage all your payments.
OTT revenue from both advertising and subscription is booming.
Subscription revenue (SVOD) is expected to grow from $25 billion in 2017 to $69 billion in 2023. During the same period, Advertising revenue (AVOD) is expected to grow from $20 billion to $47 billion.
Combining ads, subscriptions, and transactional video-on-demand (TVOD) allows you to tap into multiple income sources rather than relying on a single method.
Different viewers have different preferences when it comes to paying for content. Some may prefer an ad-supported free service, while others might be willing to pay for an ad-free experience or specific premium content. By offering various monetization options, you can cater to a broader audience and meet their diverse needs.
Offering different subscription tiers that include various combinations of ad-supported and ad-free content, premium features, and exclusive access to TVOD events allows you to cater to different budget levels and viewer preferences.
By leveraging a hybrid monetization model, you can maximize your revenue potential, cater to a diverse audience, and create a sustainable business model that adapts to changing viewer preferences and market trends.
4. Provide Valueadd Service With Catchup TV and VOD
One of the primary reasons viewers are drawn to OTT platforms is the convenience and flexibility they offer. With catch-up TV and VOD content, viewers can watch missed episodes of their favorite shows or discover new content without being restricted by a broadcast schedule. This flexibility is particularly appealing to those with busy lifestyles who cannot always tune in during the original broadcast time.
Providing catch-up TV and VOD options significantly enhances viewer satisfaction. When viewers know they can watch content at their convenience, they are more likely to remain loyal to your platform. This leads to higher user retention rates and positive word-of-mouth recommendations, which can attract new subscribers.
Catch-up TV and VOD services extend the lifespan of your content. Episodes that may only be aired once on traditional TV can continue to generate views and engagement long after their initial broadcast. This prolonged availability ensures that your content remains relevant and accessible, providing ongoing value to viewers.
Catch-up TV and VOD content can attract a broader audience, including those who may have missed the original airing of a show or who prefer to binge-watch series.
Providing different viewing options will help you reach a larger audience and appeal to a wider demographics.
5. Data-Driven Insights
OTT platforms collect and analyze data on how viewers interact with their content. This includes what they watch, how long they watch, and when they stop watching.
You can gain a deep understanding of your audience's preferences and habits. By seeing which shows and movies are most popular, you can make informed decisions about future content.
Data on viewer preferences helps in creating content that resonates with the audience.
Also, you can make better deals with advertisers as they can reach specific demographics with precision, increasing the effectiveness of their campaigns.
6. Enhanced User Experience
One of the biggest advantages of OTT platforms is their compatibility with multiple devices. Viewers can start watching a show on their smart TV at home, continue on their smartphone during their commute, and finish on their tablets in bed.
This is because OTT platforms remember where viewers left off, so they can easily switch devices without losing their place.
Moreover, viewers can participate in real-time chats, discussing the content with others during live events or streams. This interaction makes viewing more engaging and fun.
There is no doubt that personalized content recommendations, multi-device accessibility, and interactive features increase viewer engagement and satisfaction, and so improve loyalty.
Steps to Transition to OTT
The transition to OTT may seem daunting, but with the right strategy, it is achievable and very rewarding. Hereis what you can do to take the shift to OTT.
Planning and Strategy
Before making the leap to OTT, it’s essential to take stock of your current content and audience.
Identify what content you already have and determine what can be transitioned to OTT. Assess the quality, format, and relevance of your existing content.
Then, understand who your current audience is and what they want. Gather data on their viewing habits, preferences, and demographics to inform your OTT strategy.
Conducting Market Research
Study your competitors who have already made the transition to OTT. Learn from their successes and challenges.
Keep track of changes in how viewers consume content. Are they shifting towards mobile devices, preferring shorter content, or increasingly valuing interactive features?
Analyze demographic data such as age, gender, location, income level, and education to understand who your audience is. Then identify underserved or new markets that are potential growth
For example, regions with increasing internet penetration but limited OTT options might be ripe for entry.
Look for content gaps in the market that you could fill. For example, if there is a high demand for local content but limited supply, producing or acquiring local content could be a strategic move.
Research different pricing models (subscription, freemium, pay-per-view) to see what works best in your target market.
Also, compare prices between competitors to determine what value they offer at those price points.
Setting Clear Goals for OTT Transition
Setting clear, well-defined objectives is the first step in transitioning to OTT. These objectives will guide your strategy and help you measure success. Your goal can be anything such as increasing viewership, expanding reach, or boosting revenue.
While it’s important to aim, you must also focus on immediate, actionable targets such as launching the OTT platform, acquiring initial subscribers, or releasing your first batch of content.
Then plan for the next phase of growth, such as expanding your content library, improving user experience, or increasing marketing efforts.
Be prepared to adjust your goals based on performance data and market changes. Flexibility is key to adapting to new challenges and opportunities.
Once you have started achieving these goals you can go bigger by aiming to become a leading OTT provider in your niche, achieving significant market penetration, or diversifying revenue streams.
Use insights gained from monitoring and feedback to continuously improve your content, user experience, and overall strategy.
Evaluating OTT platforms based on features, pricing, scalability
Chose an OTT platform that excels in features, pricing, and scalability, making it an excellent choice for you to seamlessly transition to OTT
Your OTT platform provider must have a robust CMS, multiple monetization options, detailed analytics to help you understand your audience and optimize your content strategy.
Their pricing structure is clear and competitive, ensuring you get the best value for your investment.
Make sure you choose an OTT platform built with scalability in mind, so that they can handle large audiences and extensive content libraries without compromising on performance.
Most importantly, choose a platform like Ventuno that gives you excellent customer support, helping you navigate any challenges during your transition and growth.
Content management
Clearly plan and decide whether to acquire content from third parties or produce original content.
If you are planning to create new content make sure it aligns with your brand and audience preferences.
Also, schedule regular content updates to maintain viewer interest.
Marketing and Promotion
Use email campaigns to inform your audience about new releases, and push notifications special offers, and updates.
Share trailers and promotional videos in YouTube and other social media channels where your audiences are.
Create online forums or social media groups where viewers can discuss your content.
FAQ
On-demand series, movies, live events, and niche content tailored to specific audience interests are best suited for OTT platforms due to their flexibility and viewer engagement potential.
You need a robust OTT platform like Ventuno, which offers content management, multi-device support, monetization options, and advanced analytics for effective OTT delivery.
Market your OTT service using social media campaigns, email marketing, influencer partnerships, and interactive features to engage viewers and build a community around your content.
Track and measure success using detailed analytics provided by your OTT platform, monitoring KPIs such as subscriber growth, engagement metrics, churn rate, content performance, and revenue metrics.
Wrapping up
OTT is the future of TV. Viewers prefer OTT over traditional TV and are ditching cable faster than expected.
Cord-cutting has become a real concern for broadcasters as the adoption of OTT among users has been really fast. OTT has become essential for their survival and it is in their best interest to launch their streaming service sooner than later. What are your thoughts on this article? Add your comments below or reach out to me at info@ventunotech.com if you would like to talk!
Looking to launch your streaming app?
