14 September, 2017
What traditional TV broadcasters can gain from offering OTT video
If Internet based services like WhatsApp and Skype can disrupt cellular network providers, surely OTT video can do the same for traditional TV broadcasters. Is it time for broadcasters to panic and rapidly formulate plans to retain market share and protect their bottom line? Of course, broadcasters need to respond to this evolution of video content, but rather than seeing OTT video as a threat, it should be considered an to deliver a better service to customers and grow their business alongside their other offerings.
So, with that in mind, what can traditional TV broadcasters gain by offering OTT video alongside their existing services?
OTT’s accessibility is giving TV viewers greater power over what they watch and when—and the market is growing quickly
OTT video made up 10% of the total US video industry in 2014, according to Boston Consulting Group (BCG). This figure is set to double to 20% by 2018, equivalent to $30 billion. The sector is streets ahead of traditional broadcast TV in terms of growth: one has only to look at the popularity of services like Netflix or Amazon Prime Video to see how popular OTT video has become among viewers. Why? The widespread availability of WiFi and mobile networks has shifted power away from broadcasters into the hands and devices of the viewers. It’s available anywhere (as long as there’s Internet connectivity) and anytime, and there’s far greater choice. Compare this to traditional TV where one is bound by schedules, ad breaks, hardware and the limits of your home.
There’s still time for broadcasters to use OTT video as an opportunity to attract and retain viewers
Before you start panicking, Moody’s Investor Services predict that for the next three years, cable providers are still positioned strongly against OTT video. Thanks to the fact that many cable companies provide broadband services and that competition is limited, broadcasters still have time to jump on the OTT video opportunity and profit from it. The key is to improve how you reach subscribers, give them engaging experiences and monitor how they respond to your services with the right analytics.
OTT video can enhance traditional TV viewership and boost revenue
It’s not a matter of offering viewers either OTT video or traditional broadcast TV. In fact, OTT video actually boosts traditional broadcast TV viewership. How? By airing old seasons of series on OTT video, you generate interest in the show and excitement ahead of the release of the new seasons, which will, of course, be shown on broadcast TV. Likewise, newer episodes can drive viewers to catch up on old ones through OTT video. In fact, the popular wrestling show WWE witnessed a 45% increase in TV viewership after launching OTT video. Revenue for both OTT video and traditional TV have increased over the three year period between 2013 and 2016, yet traditional TV still comes out on top - for now.
There’s more room for innovation within TV distribution thanks to OTT video
What OTT video has really done for the television and film industries is break down the strategic, economic and national barriers that have challenged the distribution of TV. OTT video, therefore, creates opportunities for broadcasters to grow by removing some of the obstacles limiting innovation. How you innovate and adapt to this new viewer trend will depend on the type of content you distribute, catalogue size and what your viewers want from the service. One thing is for sure: the omni-channel approach is the future of broadcasting. Offer viewers a diverse viewing experience and be seen as an innovator that understands and delivers what their customers want.
For more information on what the OTT services market will look like in the next three to five years, download our ebook.