Broadcasters and publishers need to embrace the new OTT delivery technologies.
Video consumption has changed. Over-the-top (OTT) technologies have made the TV just one screen among many. The new reality has brought multiple new platforms and devices to consumers, which means reaching the masses requires big investments in both video delivery and application development.
Changing Consumer Behaviour
The consumer viewing experience has shifted rapidly from a time when the only option was watching video content on one linear screen, in one fixed place, and at one scheduled time. Today, content offerings have expanded to multiple screens and are targeted to viewers in many places, on their schedules—and we are barreling towards a world of personalized viewing moments that are built for one, on any screen, at any time and in any way an individual viewer chooses. With this shift, audiences these days want to control their viewing experience and they want a world of complete choice. Indeed, a recent PwC study reports that video consumers “want more flexibility, freedom and convenience in when and how they consume their preferred content,” and see “no significant divide between digital and traditional media.”
Figure 1. For broadcasters in particular, mobile and tablet devices are getting a bigger share of the pie, likely impacted by increasing views from younger segments of the population, specifically Millennials.
The availability of OTT has enabled these changes in large part by converting content viewing times from appointment to on-demand, device preferences from linear to digital, and audience targets from mass to niche (and ultimately, to the individual). As technology has evolved, so too has the demand for information and entertainment to flow instantaneously. We are also seeing a growing trend whereby the first screen is no longer automatically the TV—it’s whichever screen is handy at a given time. That screen is now increasingly a mobile one; new research from Ooyala notes that more than half of all online video plays are expected to be on mobile devices before the end of this year.
Success for content providers in this new world order means delivering a video service that fully meets new consumer demands for a tailored, easy-to-use and engaging multi-screen experience.
Succeeding with a video service
Before the rise of OTT, operators had total control over the value chain of video delivery to the consumers. Once a consumer had selected an operator (if there even was a choice), the operator had basically no competition from other video services. Maintaining the consumer involved simply providing a good enough solution and making it hard to change service.
The market is currently undergoing rapid change, driven mainly by consumers, who are quickly adopting new OTT technology. Traditional pay TV providers now face stiff competition from OTT providers, some of which are further disrupting the value chain with direct-to-consumer offerings. Today, OTT is growing faster than traditional pay TV, and the consumer demand for OTT services and applications is higher than ever.
Figure 2. Screen size is being democratized by online video content. More than half (59%) of the time people spend watching video on tablets is spent with video 10 minutes long or longer. That’s the most of any device, trailed by connected TVs (43%), mobile phones (37%) and PCs (35%).
Following the rising consumer demand, we are witnessing the launch of a deluge of new services, all vying for traction from consumers. As it is difficult to foresee which solutions will succeed in the long-term, video providers are launching multiple offerings and solutions for their content catalogs, dressed in new differentiated brands. This activity has created an environment of fierce competition between solutions. Consumers are now exposed to a mass of video services, all available at their fingertips and with no long-term commitment. Many consumers are using multiple services at the same time, some of them even simultaneously, and churn is more frequent than ever.
It is clear that getting attention from consumers is now harder than ever. Furthermore, the device fragmentation and evolving technical value chain create a substantial challenge for video service providers that have historically been pure content companies, rather than tech companies.
The following five perspectives are important to securing a successful, modern video service:
4.Continuous Service Evolution
1. The Multiscreen Consumer
Given the new trend that “The first screen is no longer automatically the TV”, device-shifting is one of the main attributes of the Multi-screen Consumer, who will typically use multiple screens to consume video throughout the day. While still spending time viewing longer-form content on bigger screens, many users are consuming the majority of their online video on their mobile device. Multi-screen behavior is proving to be a real value-add for consumers, even helping to reduce churn. Therefore, we will see more and more services launching with this capability, making it all the more important.
2. Multi-platform Framework
Make sure you select software partners that have a proven track record of delivering true multi-platform solutions. This recommendation is true for both the client-side development, as well as the video delivery platform.
Personalization of content today focuses on two broad types: Demographic-based and 1-to-1. In the former, content is data- or editorial-driven, such as in customized home pages for different audience segments. Much of the industry’s focus today, however, is on 1-to-1 personalization, where content appealing to the individual user is shown and other content is hidden.
This customized approach is becoming critical to content providers. Ooyala’s Q1 2015 Video Index indicates that when a discovery engine recommends video content personalised for them, consumers will view the new video content as often as half of the time. Smart recommendations unlock a world of attractive content, and audiences will stick around to consume it— ultimately driving more revenue for the provider.
Figure 3. Viewers 14 to 25 watch more content on mobile devices than they do on traditional TVs. In 2013 mobile video made up just 9% of video plays. As of today, that year-over-year increase becomes an astounding 367%.
As broadcasters build their device personalization capabilities, it is important for them to look at all data holistically, connecting viewer watchlist with search and discovery functions behind the scenes. Viewers are demanding an integrated experience, where they can add their favorite content to their playlists across screens, and then receive targeted recommendations on additional content they may enjoy. Too often, this process is broken, and recommendations are either not linked or are duplicative to playlist content.
A true dynamic user experience can be achieved by personalization based on behavioral analysis from the user’s application usage, especially their recent usage. Using behavioral data will make the user experience more contextually relevant to the consumer at a specific time and place.
4. Continuous Evolution
The rapid technology evolution of the platforms in the OTT space has further applied pressure to video service providers. End-users of these platforms are used to frequently receiving updates and refinements to the user experience as well as underlying application optimization. Most service providers will not have a budget comparative to that of Netflixwith its 65 million subscribers, yet consumers still expect a great and continuously improved user experience during the lifetime of the service.
Analyzing application usage is at the core of continuous evolution, ensuring service providers can adapt and improve according to a number of factors, such as how the application is used, which features are used, how the consumer navigates throughout the application, which changes deliver the desired objectives, and the consumer engagement with specific content.
5. Application Lifecycle
Once a service provider decides to launch a multi-screen video service, there will soon be numerous application versions, application profiles, application updates for both native- and web-enabled devices.
Establishing an Efficient Application Lifecycle requires the service provider to secure a professional way of handling all application provisioning by using cloud solutions for dynamic application profiling and thus securing maximum application flexibility with limited costs.
In summary, companies should follow these steps for building a successful multi-screen video service in today’s consumer-driven, fragmented marketplace:
- Focus on the multi-screen consumer.
- Secure key suppliers with proven track record and multi-platform approach.
- Make sure to differentiate your service using personalization.
- Look to continuously improve your offering.
- Establish an efficient application lifecycle that can support growth for your service.
Finally, create a long-term vision and secure funding, processes and organization for achieving your goals. Do this and you will be well on your way to success in this new OTT world!
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