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Broadcasting in the OTT world

(Image credit: Image Credit: Picjumbo / Pexels)

The way we consume TV content has changed beyond recognition over the last decade.  The traditional model of broadcasting has been fundamentally disrupted by the rise of OTT apps and services accessed via high-speed internet-connected devices including smartphones and tablets, laptops, set-top boxes, gaming consoles and smart TVs.  As modern consumers, we’ve come to expect choice, flexibility and interactivity across multiple platforms; we want to watch our favourite shows anywhere and anytime. This trend is especially evident when it comes to the new digitally-savvy generation for whom OTT is the default mode of content delivery. Ofcom (opens in new tab) recently published data showing that 5-15 year olds in the UK are spending 15 hours online each week, which for the first time exceeds the amount of time they spend watching a TV set. 

To compound the challenge facing conventional broadcasters, telecom operators are partnering up with OTT providers to create compelling bundled content offers that are outside of monthly data allowances. It is clear that traditional players are under pressure to keep pace with the latest innovations or risk becoming irrelevant for the modern audience. We are now entering the third generation of OTT, which holds unparalleled technological and commercial potential for traditional and ‘native’ providers alike.   

The market has come a long way since the early first-generation days where providers were focused on offering digital content via web and mobile simply to add value to the existing customer experience. Few broadcasters won new customers with their digital offerings at this stage; the multi-screen culture was in its infancy and the priority was tackling the emerging need for consistency across platforms. The second generation saw OTT become a stand-alone offering that attracted a new breed of viewer and allowed providers to expand their customer base. So what developments specifically characterise the third generation?   

Based on our recent experience of working with broadcasters striving to stay ahead of the innovation curve, we have identified four key strands that are shaping the future of OTT. 

The omnichannel world 

UK households now own an average of 8.3 connected devices (opens in new tab), so it is no wonder that looking at various digital screens throughout the day has become an ingrained habit for many of us. As a consequence, our experience as customers is no longer defined by the interface of any one device, but by all platforms on which we consume content. Providing a coherent experience across platforms - and equally importantly, fluidity in navigating between them - creates a more organic experience, which in turn provides opportunities to market more effectively to customers and ultimately to boost loyalty.    

Social meets TV 

Recent research (opens in new tab) from Google shows that 93% of the under-25s, and 54% of the over-55s, go online on a smartphone or tablet while watching TV. This trend for ‘dual screening’, combined with ubiquitous use of social media, has led to the phenomenon of Social TV.   

The Brit Awards chalked up the highest number of tweets in one minute in 2016, with over 16,000 sent when Adele was announced as an award winner; and Eurovision topped the bill as the single most-tweeted programme of the year with 1.6 million.   

Technologies that support and encourage this desire for real-time interaction with TV, present a huge opportunity for broadcasters to promote their content among vast numbers of viewers. An example is the creation of programme-specific apps that tap into fans’ appetite for more in-depth and complementary content about specific characters or players, whilst furthering their overall interest and engagement with the original content.    

Go multi-modal   

At the forefront of innovation in the OTT market are multi-modal interfaces, based on advanced voice recognition technology. These allow consumers to speak key words that trigger the display of various viewing options and related content, such as previous episodes or scheduled broadcasts.   

Dynamic advertising 

OTT, the availability of interactive technologies and advanced data-driven marketing, are trends that are converging and redefining possibilities when it comes to advertising.  

Addressable TV advertising refers to technologies that allow advertisers to segment TV audiences by certain criteria – such as demographic, behavioural and geographic – and serve up relevant adverts and promotions. Targeted profiling can drill down to individual households or even family members, and engagement can be taken to the next level of sophistication by offering the capability of directly purchasing the product. This form of dynamic advertising is highly valuable to the content provider, enhances the value of their customers and could enable them to offer lower prices for those customers who agree to receive personalised adverts.   

In fact, customised pricing remains a major challenge for traditional broadcasters and an area in which they tend to lag the native OTT TV providers. It is the flexibility to pay for only what you want to watch, for a chosen timeframe on specific devices, that is spurring growth and popularity of OTT services. Flexible, customised pricing could be based on the purchase of single programmes or series, but more likely will be packages or subscriptions that include an element of addressable advertising as mentioned above. Premium options could include services where adverts are blocked out altogether.   

Traditional players – as well as pure OTT TV providers – are currently focused on seeking ways of embracing the best-practices that are emerging in the industry, from personalised advertising and social engagement to customised pricing. Leveraging Broadcast and Broadband convergence enabled by the HbbTV standard take off, and enhanced analytics on content consumption and user behaviour, broadcasters can now combine their investments in curated content with the effectiveness of on-demand services, to provide a branded personalised offer. The right strategic thinking now, guided by specialist consultants, will prevent broadcasters from losing further ground to OTT TV and enable them to turn the modern consumer demand for flexibility and choice to their advantage.   

Oliver Botti, Head of International Business Development and Innovation at Fincons Group 

Image Credit: Picjumbo / Pexels

Oliver Botti is the Head of International Business Development and Innovation at the Fincons Group.