As the world increasingly moves to OTT streaming of media on the biggest screens in the house, the landscape itself is undergoing some interesting evolution. It is no surprise that video streaming has exceeded all other forms of media in terms of the user base. The triple benefits of better service, a higher number of users, and better internet penetration mean that the domain will continue marching ahead to newer heights of success.
1 – The rise of innovative content monetization models
The US alone saw more than 120 million OTT users by the end of 2017. With the increasing user base, the way providers monetize content will also see an upheaval. Users are increasingly going for a subscription-based model to access videos on demand. Netflix and Amazon prime are the prime examples that promote this type of monetization. However, we will also see some traction in electronic sell-through and digital rental of OTT services. The ad-based video access service sector will more or less remain consistent with numbers of 2018.
In fact, out of the different types of monetization models available for media technology solutions, people are spending more on subscription-based models. It is no surprise that conventional media houses that already have a vast repository of content are shifting to this new form of monetization to earn better from their existing content library and increase the user base. This action will help them stay relevant in a highly competitive landscape that is subject to changes regularly.
2 – Content creation and distribution will undergo a significant change
The growth of OTT compelled providers to look at newer ways to prevent attrition and keep users hooked with excellent quality content. The emphasis is more on creating content that is a niche to their own platforms. No wonder we see a lot of ‘Amazon Prime Originals’ or ‘Netflix Originals’. A good example is Disney which pulled out its content from Netflix and Hulu to strengthen the base of its new OTT platform, Disney+.
Even from a content distribution perspective, changes are happening. There are two key reasons to compel providers to go for such moves – either to differentiate themselves from others or to step into a newer market space where they do not have a presence. As a result, we see quite a few M&A deals happening across the board. So we have T-Mobile partnering up with Netflix, and Disney’s acquisition of 21st Century Fox. To get a sense of the degree of action happening on the OTT front, we see that between 2011 and 2017, as many as 332 deals happened between traditional operators and OTT platforms. This number certainly shows that consolidation and strategic partnerships are changing the ecosystem. As a result of these actions, the consumer is turning out to be the ultimate winner. These advantages also denote the emphasis on local preferences. So, we have Disney getting all of Star India’s assets, including its hugely popular OTT platform, Hotstar. Even Shaw Communications from Canada is now offering its users a chance to access Netflix on its own integrated platform.
3 – OTT and its influence on politics
Political advertising on OTT platforms is expected to increase significantly. This trend is primarily due to the upcoming 2020 Elections in the US. Be it precision targeting or frequency management, the advantages for political candidates from OTT advertising is too good to ignore. These benefits help campaign managers to prevent overexposure or underexposure to ads. This step is done with the help of initiatives like frequency capping.
More and more campaigns will factor in OTT as a part of their media mix. It is not only cost-effective than most of the other forms of advertising, but its outreach and ability make a personalized connection and is phenomenal. In addition, to the simpler targeting characteristics like geography or demographics, OTTs have the power to deliver micro-level targeting like viewing trends and psychographic data. Such an improved degree of targeting is sure to provide incredible outcomes when presented to the intended audience.
These were a few exciting trends that we need to be on the lookout for as we step into the new decade. Stay tuned as we keep you posted of the stirring changes that impact the media technology solutions landscape.
I am a blogger, typically dealing with imaginative and futuristic concepts of advanced science and technology.
Author's Score 2.3
Up Votes 19
Down Votes 0
Voted on 9 articles
Comments on Three exciting trends that dominate the OTT industry in 2020 and beyond