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FIVE SMART TACTICS FOR OTT SUCCESS:Launch and Build Your Internet TV Brand
©2016 Brightcove, Inc. All Rights Reserved. 2
FIVE SMART TACTICS FOR OTT SUCCESS
The OTT video market is still nascent
and can seem complex and competitive.
But it is also the largest global media
opportunity in decades, so taking a wait-
and-see approach is not a viable option
for content brands. Traditional broadcast
and cable have proven that TV is the most
influential medium for building brands and
driving commerce. Today, OTT technologies
are delivering the power of TV with the
agility and scale of the global internet.
From entertainment studios with compelling
films for a targeted audience; to a radio
broadcast station with a stable of digital
talent; to a regional newsroom looking to
launch a mobile-first video destination, this
new era of video offers a twofold promise.
First, media companies can extend existing
content to new audiences; and second,
they can deepen audience engagement
with new content and video experiences.
Diving deep into the highly competitive OTT
landscape without the right planning risks
wasting time and money. This whitepaper
outlines five smart tactics that will give
brand owners the confidence and authority
to prepare a successful OTT offering:
1. Clearly define a unique content strategy.
2. Build toward maximum business model agility.
3. Design a distribution roadmap across platforms and screen sizes.
4. Adapt TV marketing tactics to find, nurture, and build your OTT audience.
5. Design, launch and refine your video offering and technology solution in a single, iterative effort.
2:17 11:19
©2016 Brightcove, Inc. All Rights Reserved. 3
The OTT Era of TelevisionRealNetworks released one of the first
streaming platforms in 19971. A decade later,
in 2008, Netflix announced Watch Instantly
and launched the service with about 1,000
titles2. Soon, the rapid growth of iTunes and
Netflix made it clear that a successful video
service could be delivered ‘over-the-top’ of
the public internet, rather than through the
expensive, closed networks of broadcasters,
telecom and satellite providers and cable
operators.
Today, OTT innovation is powering
the third era of TV. Video platform advances,
adaptive formats, delivery network
enhancements, connected streaming devices,
and monetization technology have brought
IP video closer to its explosive potential, both
as a consumer experience and as a business
model.
Prescient media brands have been investing
in OTT for well over a decade. MLB.tv
launched in the spring of 2003, offering
a full season of streaming for $79.95 and
signing up over 100,000 subscribers3. In the
United Kingdom, the BBC’s iPlayer launched
in December of 20074. Hulu followed suit in
2008, differentiating itself from Netflix by
its ad-supported business model5. In 2011,
Amazon rebranded its streaming offer as
Amazon Instant Video. Since then, they have
bundled tens of thousands of titles into the
Amazon Prime subscription offer, creating
a juggernaut in the subscription video-on-
demand market6.
Today, there are hundreds of mass market
and special interest OTT services in all
categories. Parks Associates tracked 33 OTT
service launches in 2015 alone. In addition
to major launches like HBO Now, SlingTV
and Go90, niche services like VidAngel
(family-friendly versions of movies and TV)
and XiveTV (high-quality documentaries)
leveraged clever programming strategies to
gain beachheads in OTT.
OTT service usage has increased as well.
By the end of 2015, 58% of U.S. broadband
households used at least one OTT video
service on a monthly basis. More than 25%
used two or more OTT services monthly.
While definitive usage numbers for each
service do not exist, market research
provides some insight into take rates7.
©2016 Brightcove, Inc. All Rights Reserved. 4
PERCENTAGE OF RESPONDENTS WATCHING EACH SERVICE ON A WEEKLY BASIS:
Netflix (streaming only)
My cable TV provider’s online video service
Amazon Instant Video
Hulu Plus
HBO Go
Online premium sports package (MLB.TV, NFL Mobile)
HBO Now
iTunes
CBS All Access
Vudu
Google Play
Sling TV
Altman, Vilandrie & Co online survey of 3,461 respondents. Percentage of
respondents watching that service on a weekly basis.
13%
11%
11%
7%
6%
6%
4%
4%
3%
3%
3%
36%
A recent survey conducted by Altman, Vilandrie & Company details the percentage of
respondents who use the major services on a weekly basis.
©2016 Brightcove, Inc. All Rights Reserved. 5
A Crowded Space: Is There a Bullish Case?Given the potential for OTT, it is not surprising to find a flurry of activity in the market. The OTT
market is expected to generate an estimated consumer paid revenue of $15.6 billion globally
through 2018. Yet, this represents just 4% of worldwide pay TV revenue, suggesting plenty of room
for growth9. Ad-based revenue for OTT services will also grow. Magna Global tracked a 38% YOY
increase in 2015 global digital video ad spend to $15.4 billion10.
These factors contribute to the positive business case for launching an OTT service. However,
it is clear that diligent execution against a strong plan is also critical. You can increase your
odds of carving out a successful position in the OTT market by implementing these five tactics:
1 Clearly define a unique content strategy.
2 Build toward maximum business model agility.
3 Design a distribution roadmap across platforms and screen sizes.
4 Adapt TV marketing tactics to find, nurture, and build your OTT audience.
5 Design, launch and refine your video offering and technology solution in a single, iterative effort.
Let’s walk through each one.
©2016 Brightcove, Inc. All Rights Reserved. 6
Great content makes the medium of video even more powerful. Thus, it is essential to have a focused, compelling programming strategy as the foundation for an OTT launch.
Here are some questions to consider:
• Which genre(s) of content
do you plan to offer?
• Describe your target audience
in detail. When and why do
they watch your videos?
• How much content will you offer?
How frequently will it be refreshed?
• What is your budget? What is your
targeted production value?
• Will you offer a catalog of licensed
shows? Originals? Will you offer live
and/or video-on-demand content?
A hallmark of the pay TV era was the
dramatic increase in the number of channels
and genres that could appeal more deeply
to smaller audiences. Digital video has
amplified that trend. Today, content creators
are producing shows of all stripes, each
one with a creative vision that appeals to a
specific audience.
While some shows may broaden their appeal
and grow a diversified following over time,
others can find success as coveted niche
offerings. This speaks to a key advantage
of OTT over broadcast TV. It is possible,
or perhaps necessary, for your content to
appeal more deeply to a narrower audience
than is economically viable in the traditional
TV model.
Also, note that your OTT content strategy
does not need to be constrained to a linear
schedule or a single device. Indeed, one
compelling aspect of OTT is that your
content strategy may provide opportunities
to attract audiences across two or three
diverse viewing behaviors. For example,
if you have a catalog of dramas worthy of
binge-viewing on a big screen TV, your
OTT service might also offer viewers the
opportunity to snack on short-form mobile
videos in a promotional run-up to a new
release.
1: CLEARLY DEFINE A UNIQUE CONTENT STRATEGY
©2016 Brightcove, Inc. All Rights Reserved. 7
Executing Your Content Strategy
Capturing and retaining audience engagement is no small feat. Here are three tips:
1. NURTURE A HEALTHY PROGRAMMING LIFECYCLE. Utilize “tent pole content” (i.e. compelling,
high-production value content that will appeal
to mass audiences) as audience growth driver;
seasonal shows to build momentum; and more
frequently produced, everyday content to
maintain relevance with fickle attention spans.
2. ESTABLISH GOOD PRODUCTION HABITS.
Get good at multi-purposing and versioning
of content. Whether this pertains to content
rights or original productions, videos of
different lengths and formats are powerful
assets in multi-platform media. Some
content may translate well across platforms,
other assets may require a comprehensive
reinvention for specific platforms.
3. LEVERAGE THE LONG-TAIL OF TALENT.
Due to advances in camera technology and
content creation tools, it is easier than ever to
produce great content. Thousands of talented
video creators globally can help
you create content. For example, the
Tastemade OTT service has scaled with
contributions from over 5,000 creators around
the globe.
CASE EXAMPLE:
How Acorn TV Leveraged a Focused Content Strategy.
Brightcove customer RLJ
Entertainment is a premier
independent entertainment studio
offering niche SVOD channels,
including Acorn TV. From its launch
in 2011, Acorn TV has been laser
focused on viewers that love British
TV mysteries and dramas, curating
some of the most popular titles in
the genre, including Poirot, Foyle’s
War, Doc Martin, and Miss Fisher’s
Murder Mysteries. In 2015, Acorn TV
premiered the final three episodes
of its franchise, Poirot, starring
David Suchet, including the Emmy-
nominated finale ‘Curtain,’ resulting in
a major boost to subscriber growth.
In March 2016, Acorn TV revealed
it had reached over 240,000 paid
subscribers, a 100% increase in year-
over-year subscribers11.
“INSTEAD OF TRYING TO BE ALL THINGS TO ALL PEOPLE, WE CAREFULLY CURATE RICH AND DEEP CONTENT OFFERINGS THAT SERVE DEDICATED NICHE AUDIENCES. OUR ACQUISITION AND PROGRAMMING STRATEGY KEEPS CHURN LOW AND CUSTOMER REFERRALS CONTRIBUTE TO OUR HIGH CONVERSION RATE.”
-Titus Bicknell, CDO & EVP, Operations for RLJ Entertainment on Acorn’s content strategy
©2016 Brightcove, Inc. All Rights Reserved. 8
Media businesses have thrived using a mixture of free, ad-based subscription and transactional business models. Business model flexibility is also critical in the OTT ecosystem.
Netflix, Hulu and Amazon all used distinct,
innovative consumer models that drove
adoption of their multiscreen TV services.
Hulu launched as a free, ad-supported
service available on the PC. The ability
to stream to connected TVs was one of
their first upgrades. A choose-your-own
ad format improved user experience and
changed the ad sales process. More recently,
a “No Commercials” tier was added to give
viewers even more control and choice on
their ad exposure.
As media companies have done throughout
history, OTT services will likely need to
experiment with a blend of business models.
The following table provides an overview of the
different pricing strategies for consideration:
MODEL DRIVERS QUESTIONS
FREE, BRANDED
CONTENT.
Brands fund unique content opportunities in
order to earn mindshare.
Is there a sufficient amount of
compelling content endemic to
the sponsoring brand?
FREE, AD-BASED
BUSINESS.
TV ad budgets shifting to online. Ability
to programmatically buy a targeted TV
audience. Broadcast quality ad delivery using
server-side insertion.
Will the service have sufficient
audience scale to attract
sufficiently large media buyers?
TRANSACTION,
LIVE PPV OR
DOWNLOAD.
Unique, exclusive VOD or live event content
can command up to $60+ on a per-view basis
in the pay TV ecosystem. The convenience of
portability for premium long-form content is
also a driver.
Is there a sufficient amount
of purchase urgency on the
content itself? Is the purchase
process friction free?
FREEMIUM AND
SUBSCRIPTION
VIDEO-ON-
DEMAND SERVICES.
Draw in subscribers with great content, and
package a subset of that content for free in
order to get viewers hooked.
Is there a sufficiently sized
catalog of content? Do titles
have sufficient production
value?
2: BUILD TOWARD MAXIMUM BUSINESS MODEL AGILITY
©2016 Brightcove, Inc. All Rights Reserved. 9
CASE EXAMPLE:
DramaFever, Leveraging Business Model Flexibility
DramaFever, a leading online network
for primetime shows from around
the world, started in 2009 with 10
Korean drama series. Today, over
70 international content suppliers
provide tens of thousands of content
hours for their subscribers.
DramaFever has mastered two
critical skills in digital media.
1. The ability to balance content
syndication with its own
channel-building effort.
2. The ability to balance ad-supported
revenue with paid-subscriber fees.
When the service first launched, the
company focused on syndicating
content to platforms like Hulu,
YouTube and iTunes. Those efforts
have helped accumulate a monthly
viewership of 21 million12.
At the same time, DramaFever has also
established its own platform with a paid
subscription model12. In June 2015, they
rolled out an advanced subscription
back end which enabled the company
to create innovative offers13.
There is still a free, ad-supported
version available on the PC. But there
is also a $0.99 per month option,
billed annually at a rate of $11.88,
that is viewable on TVs with ads and
grants access to exclusive titles. At
the $4.99 tier, ads are removed and
subscribers can also “cast” programs
from a mobile phone to Chromecast
and Airplay devices. Finally, for $9.99
a month, subscribers can download
and watch titles offline, a great option
for fans of DramaFever who may have
active air travel schedules, for example.
“AS THE NUMBER OF NICHE CHANNELS GROWS IN OUR ECOSYSTEM, OUR PRIMARY GOAL IS TO TRANSITION FROM A CONTENT DISTRIBUTION PLATFORM TO A CONTENT MARKETING PLATFORM, WHERE OUR BRAND, ALONG WITH OUR CONTENT, TRANSCEND TECHNOLOGY AND MEAN SOMETHING SPECIAL TO OUR USERS.”
Suk Park, DramaFever Co-Founder and President
©2016 Brightcove, Inc. All Rights Reserved. 10
For the past decade, video and TV insiders have been speculating about how many different screen sizes viewers would regularly watch. While the biggest screen is still where a majority of traditional TV viewing hours takes place, in the OTT landscape, there are three additional screens that require attention.
Each screen presents users with a different viewing environment. While all types of content are watched on every device, each screen also has a special role in the consumer’s overall video experience. Media owners need to expose their content assets in creative ways across this four screen canvas to drive loyalty and engagement and should aim to find a way to program these experiences efficiently and scalably.
The Four Screen Experiences Defined:
TV - THE BIG SCREEN
Notwithstanding the rapid uptake of
desktop and mobile video viewing, the
original, and biggest screen (the TV) is still
the source of the largest pool of revenue
and value in the video market. While not
every OTT service has enough compelling
content to drive premium, immersive and
“lean-back” viewing experiences, this
traditional TV watching experience will
continue to be a core driver of value for OTT
offers. 95% of ad views on TV connected
OTT devices are within TV-style live or long-
form content, indicating the lean-back value
of the big screen14.
SMARTPHONE - THE FIRST SCREEN
While smartphones are often used for
viewing long-form content, they generate
63% of their ad views on top of short-form
content14. But smartphones are also critical
for finding content, sharing it, even creating
it. Tune-in notifications and social sharing
targeted at mobile devices are an accepted
best practice at media companies. From
there, one more click on the smartphone
remote and compelling content can be cast
to the nearest connected screen.
3: DESIGN A DISTRIBUTION ROADMAP ACROSS PLATFORMS AND SCREEN SIZES
©2016 Brightcove, Inc. All Rights Reserved. 11
TABLET - THE PORTABLE SCREEN
The tablet has proven to be exceptionally
attractive for “lean-back,” TV-style
experiences. 69% of ad views on tablets are
within live or long-form content14. That gives
the tablet a powerful position within the
four-screen landscape. While the tablet is
ideal for personalized viewing experiences,
it can also be watched with a friend or
family member. And while the tablet has
smartphone features that make it ideal for
finding, buying and sharing content, it also
enables a more relaxed, lean back viewing
experience that can draw audiences into
premium, immersive TV content. A recent
Digitalsmiths report revealed that among
respondents who own an iPad or tablet,
37.1% watch video on their device, and 90%
of those do so on a weekly basis. The top
content genres they watch are premium
movies, TV shows, and previews/trailers of
movies and TV shows15.
PC - THE VERSATILE SCREEN
Notwithstanding its reputation as a more
“lean-forward,” active usage environment,
the desktop/laptop still drives significant
video viewing. 40% of all ads viewed within
video content were seen on a desktop or
laptop computer, according to Freewheel14.
Notably, the PC environment is well suited
to all content lengths, with 26% of ad views
within live content, 38% within content
longer than 20 minutes, and 36% within
content shorter than 20 minutes14. Most
leading web video brands with OTT service
platforms, including YouTube, started
out with strong browser-based video
experiences that they continue to nurture.
Mapping out a comprehensive four-screen distribution strategy that takes advantage
of the particular strengths of each
screen will provide your OTT brand with
additional spark at launch.
©2016 Brightcove, Inc. All Rights Reserved. 12
Pay TV distribution provides programmers a level of “built-in” audience. In the OTT model, viewers need to be engaged by marketing across a range of channels and messaging touchpoints.
Digital, mobile and TV platforms will help build awareness. However, alternative outlets, including eCommerce, catalog and other physical channels can also be instrumental in driving growth.
Here are five tactics from traditional TV marketing operations that have been embraced by OTT providers:
ON-AIR PROMOTION
For linear TV, on-air promos remain one
of the most valuable tactics for driving
viewership. Many local broadcasters have
successfully utilized onscreen talent call-
outs to drive App downloads. Similarly,
successful YouTube channels often utilize
in-video clickable links to cross-promote
other videos and channels. And some OTT
services have established YouTube barker
channels to promote new services.
PUBLICITY AND PERIODICALS
Promotional partnerships with
entertainment publications can help
generate buzz. For example, Crackle has
partnered with Entertainment Weekly on
multiple promotional tactics. Subscribers
to Crackle are offered four free issues
in connection with registration; and
Entertainment Weekly has promoted Crackle
on its digital platforms, including Facebook.
SOCIAL
Social networks like YouTube and Twitter
are playing an increasing role in building
buzz and driving tune-in for major media
brands like the NBA. Social apps and push
notifications on smartphones provide
compelling tune-in tactics for OTT services
as well, especially those with programming
strategies for debuting VOD content and
streaming live events.
4: ADAPT TV MARKETING TACTICS TO FIND, NURTURE, AND BUILD YOUR OTT AUDIENCE
©2016 Brightcove, Inc. All Rights Reserved. 13
TARGETED ADVERTISING
As addressable and programmatic TV
advertising systems mature, not only will
they help you monetize your service, but
they also should be seen as an effective
channel for driving viewership as well.
Buying ads via these new platforms can
enable you to drive awareness and tune in
among specific audiences.
One important promotional channel for
OTT services is on streaming platforms
themselves. For example, Roku provides
a rich set of advertising and promotional
capabilities, building these tools directly
into its OS. Content providers on the Roku
platform can promote their services to users
during new user signup, in the channel store,
on the device’s home page, and through
video ads. The Roku Ad Framework (RAF)
enables cross-promotion of channels and
shows – content providers can target
their audience with ads promoting new
programming or channels, allowing users to
click through and follow the promoted show
through Roku’s MyFeed feature or download
their channel from the Channel Store.
ECOMMERCE
Top media brands today, including the
new rising stars of OTT, often have a
merchandise or retail extension to their
marketing plans. Tying content with
merchandise boosts top-line revenue,
and also has a positive spillover effect
for brand awareness and affinity. A good
example of this is the DailyBurn online store,
where vitamins and other health-oriented
merchandise are sold.
CASE EXAMPLE:
DailyBurn: TV Ads, Digital, and eCommerce Together
The DailyBurn streaming service was launched in 2011 with a strong value proposition: DailyBurn is a low-cost video alternative to private training at the local gym.
They have executed smart retail partnerships, including participation in Amazon’s marketing launch of the Fire TV and the Apple launch of their brand new operating system for TV, tvOS. DailyBurn has also executed a targeted ad campaign on local cable TV, hitting key demographics, including exercise fans who are likely to pay for private training at the local gym.
The DailyBurn online store enables them to mesh eCommerce with their content operation. The results of these tactics working together are impressive.
DailyBurn is one of the most successful OTT services, ranking #1 in Health & Fitness and #93 Overall on Apple TV in downloads, and #12 Overall in gross revenue. DailyBurn is also the #1 app within Roku’s Fitness category. Most impressive, DailyBurn increased subscribers by 56% in 2015 to end the year at 105,000 subscribers16.
©2016 Brightcove, Inc. All Rights Reserved. 14
In the past, OTT services have taken quarters or years to design, build and launch.
First, a market-facing team outlines a vision
for the consumer offer. That drives product
requirements for a solution architect, who
then defines the functional blocks needed to
complete an end-to-end platform.
For each functional block, there are
multiple vendors that can fulfill the
specified requirements. It is rare for a tool
to provide all possible functionality, so
custom code may be needed, resulting
in multiple integration and engineering
efforts. The entire solution needs to be
well-documented, and typically specialized
resources need to be trained to maintain
and support it.
Unfortunately, these complexities make it
especially difficult to articulate roadmaps,
translating to a low level of flexibility and
business agility.
Brightcove pioneered the OVP category and
over the years we have partnered with some
of the world’s leading media companies to
launch successful OTT services. We have
seen up close the pressure-filled challenges
that organizations face to get to market
quickly or else risk losing out to competitors.
As a result, we are pleased to introduce
Brightcove OTT Flow™ - powered by
Accedo, an innovative new solution
designed to help media and content
companies quickly and seamlessly launch
new OTT services. Brightcove OTT Flow
is a joint offering with Accedo, the leader
in multi-platform application design and
development. Accedo’s App Grid app
management console powers apps for many
of the world’s leading media brands and we
have tightly integrated Brightcove Video
Cloud with the App Grid framework to
create one easy workflow for our customers.
We have combined our industry-leading
video ingest, processing, storage, playout
and monetization with Accedo’s best-
in-class client app development so our
customers can launch world-class OTT
services quickly — and with the confidence
of both their product and finance teams.
That’s the formula for success in fast-moving
markets: launch a viable consumer offer and
solution together, and update both of them
over time as markets change.
5: DESIGN, LAUNCH AND REFINE YOUR VIDEO OFFERING AND TECHNOLOGY SOLUTION IN A SINGLE ITERATIVE EFFORT
©2016 Brightcove, Inc. All Rights Reserved. 15
Now, media companies can leverage best-in-breed technology and deep industry expertise from video platform leader Brightcove and UX pioneer Accedo to ensure OTT success.
Get to market faster with an out-of-the
box solution
Unlock new revenue streams and
monetize content via advertising or
subscription models
Extend audience reach and a consistent
UX across multiple platforms including
desktop, iOS, Android, Apple TV, and
Google Cast
Reduce costs by eliminating the need
for developer time and resources while
still delivering beautiful and performant
cross-platform video experiences
Leverage cloud technology for smooth
and seamless app updates
Receive ongoing customer support from
our global team
©2016 Brightcove, Inc. All Rights Reserved. 16
BRIGHTCOVE OTT FLOW POWERED BY ACCEDO: BOLD, SMART AND FAST
Brightcove’s new OTT Solution enables brands to launch OTT services fast and with an affordable model that is redefining the commercial playbook for bringing OTT services to market.
ABOUT BRIGHTCOVE
BRIGHTCOVE INC. (NASDAQ: BCOV), is a leading global provider of powerful cloud solutions for delivering and
monetizing video across connected devices.
© 2016 Brightcove Inc. All rights reserved.
Brightcove OTT Flow solves the most
pressing obstacle for media brands today:
executing a compelling, differentiated OTT
service offering without compromising ROI
or missing out on the wave of growth driven
by changes in viewing behaviors.
To learn more about Brightcove OTT Flow, visit brightcove.com/media.
©2016 Brightcove, Inc. All Rights Reserved. 17
1. Wikipedia entry for RealNetworks states streaming video technology was announced in 1997. Taken from the Web March 20, 2016.
2. The New York Times, Jan 16, 2007, “Netflix to Deliver Movies to the PC”
3. The Verge, August 4, 2015, “The Changeup: How Baseball’s Tech Team Built the Future of Television”
4. Total Telecom Online, October 20, 2008, “BBC and BSkyB announce iPlayer deal”
5. USA Today, March 11, 2008, “Hulu goes live with free TV shows, movies online”
6. Wikipedia entry for Amazon Video states that the service was renamed to Amazon Video-on-Demand on September 4, 2008.
7. ParksAssociates.com, November 17, 2015, “Parks Associates Announces Top 10 Subscription OTT Video Services in the U.S. Market”
8. Altman, Vilandrie & Company, October 15, 2015, “AV&Co Consumer Video Research,” online survey of 3,461 respondents
9. Deloitte Touche Tohmatsu Limited, “Television’s Business Model: Fit for a Digital World”, IBC Leader’s Summit September 2014
10. Magna Global, June 22, 2015, “Magna Global Forecasts Global Advertising Revenues”
11. RLJ Entertainment, Presentation at ROTH Conference, March 2016
12. Digiday.com, January 28, 2016, “DramaFever finds Latin America loves Korean soap operas”
13. Digiday.com, September 11, 2015, “How DramaFever gets people to pay for Korean soap operas”
14. Freewheel, Q4 2015, Freewheel Video Monetization Report
15. Digitalsmiths, Q4 2015, Video Trends Report: Consumer Behavior Across Pay-TV, VOD, PPV, OTT, Connected Devices, and Content Discovery
16. PR Newswire, Feb 2, 2016, “IAC Reports Q4 2015”
END NOTES