"ESPN, for instance, made history, going after growing OTT audiences by making
their programming available on Sling TV. It's a bold move and an early
experiment in OTT, but it was necessary. ESPN saw the shift in viewing
behavior, and they reacted."
Yup. That's the way I see it too.
Bert
--------------------------------------------------
http://www.multichannel.com/blog/mcn-guest-blog/5-reasons-broadcasters-need-ott-strategy/392717
5 Reasons Broadcasters Need an OTT Strategy
Ecosystem is Maturing as OTT Audiences Grow
8/04/2015 12:30 PM
Author: JD Nyland
Will 2015 be the tipping point for over-the-top video (OTT)? Around the
industry, the answer is a resounding yes.
Erik Huggers, president and CEO of VEVO, recently predicted 2015 would be a
"break-out year" for the technology, and Park Associates, an online video
analysis firm, took it a step further, saying 2015 is "the year of OTT."
Clearly, the industry recognizes the shift consumers are making to over-the-top
video, and now they're hustling to put together solutions to keep up. Already
this year, big-name cable TV networks and content providers have jumped into
the fray, like Dish Network with Sling TV and HBO with HBO Now.
But what does this shift mean for broadcasters? Most importantly, it means it's
time to develop an OTT strategy. The ecosystem is maturing as the OTT audience
continues to grow. Advertisers recognize the shift and they're following
viewers to these platforms.
In 2015, OTT video is showing no signs of slowing down; the writing is on the
wall. Here are five reasons why:
1. Viewership is going there with or without you
OTT viewership is growing exponentially as consumers want to enhance their
viewing experience across devices, like Apple TV, Roku, Xbox One, PlayStation 4
and Google Chromecast. According to Nielsen, in 2014, consumers spent 3.6 hours
per week watching OTT video; this year, that viewership is expected to nearly
double to 6.9 hours per week. By 2020, Nielsen predicts that viewers will spend
almost 19 hours per week watching video delivered via an OTT device.
It's clear viewership is rapidly evolving, and today's consumers are demanding
content when they want, where they want, and on the device they want. For
content providers, OTT represents potential for revenue growth, but that starts
with a strategy for attracting and engaging this growing audience.
2. Advertisers Are Following Viewers to OTT Platforms
According to a recent study from The Diffusion Group, the OTT share of overall
TV ad sales will grow swiftly over the next five years. By 2020, Diffusion
predicts that OTT advertising will capture nearly half - about $40 billion - of
the overall $85 billion market in TV advertising. One reason is that ad
engagement is growing. Currently, about three ads are shown during a typical
30-minute OTT video, and that's expected to jump to about 5 in 2020. Plus,
viewers are watching more ads on startup, more than two on average. Advertisers
are adjusting and "following the eyeballs" as advertising becomes
entertainment. The latest GEICO ad is a great example.
3. The OTT ecosystem is maturing
The growth in OTT video is being driven, in part, by the maturing ecosystem.
Now, viewers have multiple options to choose from to watch their favorite TV
shows, movies and live sporting events. This creates two challenges for content
providers: Viewers expect a near-perfect user-experience, as they're growing
accustomed to OTT video; and the growing number of platforms is fracturing the
audience. In other words, audiences are going to become more niche, and they're
going to seek out the content they want to consume and choose to view it on the
devices they prefer. Content providers will need to think about where they
deliver their content and the types of audiences they want to reach.
4. OTT Competition is Heating Up
TV networks and cable providers are entering the OTT market in mass, and it's
creating tons of competition. Just in the last 12 months, HBO Go, CBS All
Access, Turner Broadcasting and Sling TV have developed their own platforms or
have made their content available over-the-top. This rush to OTT isn't going to
slow down. Verizon recently said they're prepping an OTT release with
Awesomeness TV and DreamWorks TV. Other networks and providers are right on
their heels. Providers must differentiate, and in that regard, "Content is
King." Netflix, Amazon, and Yahoo have all earned critical praise for their
original programming, and that's helped differentiate their OTT services and
attract audiences.
5. Viewers Demand a Seamless Experience
An OTT strategy must be an all-platform strategy. Viewers expect content on
their preferred platforms, whether it's a smartphone, a tablet, game console,
or smart TV, and they're bouncing between devices, sometimes in the middle of a
program. Developing a strategy for the multiscreen viewer is critical to
driving engagement, and the experience must be seamless. Engagement drops off
quickly when streaming performance issues arise, and right now, engagement and
brand loyalty are critical to winning the OTT war. When it comes down to it,
independent of the device, the experience must be engaging and consistent.
Developing a Strategy Now Is Critical for Long-term Success
TV is moving to digital. Publishers and broadcasters now have more ways to
reach and engage new audiences, and OTT is quickly becoming a viable solution
in the marketplace. But success comes down to strategy. Providers cannot
cannibalize their audiences; they must use a strategy that attracts and builds
new audiences.
ESPN, for instance, made history, going after growing OTT audiences by making
their programming available on Sling TV. It's a bold move and an early
experiment in OTT, but it was necessary. ESPN saw the shift in viewing
behavior, and they reacted. Now is the time to strategize and experiment.
Viewers demand content when they want it, where they want it, and on their
preferred device. Your strategy must address those needs. What are your plans
for OTT?
About the author: As director of product management for Adobe Analytics, JD
Nyland leads a team of professionals that guide the development of the leading
analytics platform for enterprises in the world. Nyland is responsible for the
product strategy for Adobe Analytics, including mobile and video capabilities.
- See more at:
http://www.multichannel.com/blog/mcn-guest-blog/5-reasons-broadcasters-need-ott-strategy/392717#sthash.zw122Jt3.dpuf
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