Does OTT make sense for smaller broadcasters and media organisations? 

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SCREEN AFRICA EXCLUSIVE: Over-the-Top (OTT) services are now well and truly in the mainstream of broadcast operations. It isn’t just big national/international broadcasters that are investing heavily in OTT provision. Many smaller organisations are launching OTT services – but are the business issues facing all broadcasters the same. In this article, I look at the big OTT picture and asks when smaller or regional broadcasting channels decide to shift to OTT, what are some aspects they should keep in mind with the technology implementation?

What impacts the cost of OTT services?One of the great benefits of an OTT strategy is that the costs associated with a successful channel launch can often be minimised through the use of cloud and social media channel origination and delivery services. Social media is often times a great tool for creating awareness around a broadcaster’s brand, entice new viewers to their programme offerings and affordably distribute content to a broad audience. Cloud solutions provide the programmer with the ability to rapidly try out new delivery approaches, different promotions and novel programming line-ups to entice a broader audience. Whether as second screen experiences or as a premium channel, social media and cloud origination can dramatically cut up front investment costs and enable rapid development of an internet scale audience. While OTT delivery costs often scale with the size of the audience, novel approaches provide a path to testing and validating audience response to your programming and marketing efforts without the need for very large initial investments. It’s not uncommon for programmers and broadcasters to leverage cloud services and social media to develop the audience, and once established, look to pull ownership of the end user experience, video hosting, ad trafficking and content rights enforcement in-house. While this can increase costs, it can enable the programmer unique audience insights and new monetisation opportunities.

As mentioned, cloud service offerings can deliver value by scaling out much of the technology investment typically associated with new content channel launches. However, it’s not uncommon for there to be requirements that may benefit from investment in on-premises “accelerated” processing appliances and private cloud deployments that are optimised for fast content turn around and processing of large libraries without the overhead associated with moving large files in and out of cloud service offerings. Ensuring that the technology stack supports the optimum mix of on-premises, private and public cloud deployment options can be essential to launching a new channel and supporting growth and scale.

Another factor a new OTT service requires at launch is a differentiation strategy; focusing on premium features like quality (4K, HDR, Premium Audio, etc…), library size or exclusivity, content localisation and others enhancements designed to entice subscribers or broader audience engagement. While content transcoding for the OTT marketplace may seem to benefit from commodity transcoding services, the overall business drivers will often require very sophisticated tools to implement those differentiators at scale. Choosing technology partners who offer premium capabilities in a deployment model that makes sense for the business is a critical element to a successful channel launch.

What’s a prudent ROI for OTT implementation and its success rate?  

Return on investment (ROI) may vary depending on the business model for the OTT implementation. Advertising based programming, subscription services, and transaction oriented OTT channels will each have different approaches to garnering audience share and optimising costs. A common thread for ensuring ROI across platforms is to have good visibility in to what features of the OTT service are delivering the most “bang for the buck”. It’s very important to not only deliver a differentiated experience, but to also measure how the audience experience is being received. Actionable analytics that enable you to dynamically monitor video and network quality all the way down to the player is an essential component of successful OTT channels.

Programming delivered over-the-top enables the broadcaster unprecedented capabilities to interact and entice a direct audience. Being able to understand and rapidly react to production and distribution problems that are impacting audience engagement are critical. An abundance of indexes that measure the overall Quality of Experience being delivered, in multiple geographies and across delivery networks combined with a rich set of analytics that describe how audience engagement varied with those performance indexes enables smart investment with the production and delivery solutions that are most benefiting your audience. Investment in QoS/QoE monitoring ensures that a new channel launch excites the audience while providing almost immediate ROI in the form of service optimisations that can dramatically reduce operational expenses.

Boost audiences by targeting specific viewers 

For broadcasters, it’s essential to reach increased numbers of viewers while optimising costs. Audience reach can be delivered in a number of ways. Many OTT services are increasingly leveraging live programming to entice new viewers. Delivering a live experience while blasting real-time highlights out to your social media followers is a highly cost effective way to create brand and programme awareness. Compelling editorial metadata enriches the content, creating relevance and searchability that, when missing, can be very frustrating and lead to a poor viewer experience.

Metadata driven content discovery also lends itself to audience engagement.  An extensive VOD library is only a differentiator if you can direct your viewer to content that engages them. By continuously investing in and enriching the metadata around the library you can create interesting ways to dynamically package and promote licensed programming. An emerging tool in the metadata enrichment domain is machine learning services that include offerings like speech-to-text, OCR and other pattern-based algorithms to pull out more descriptive information that can be used to create relevance and relatedness within your library.

Interactivity is increasingly used to attract viewers and elevate brand awareness. Curating an active community around your premium programming can deliver an intensely loyal fan-base and multiply your marketing efforts. Interactive second screen experiences, behind the scenes features and social media events create excitement, awareness and engagement with your audience. A rich community experience is rapidly becoming a cost effective and compelling way to grow audiences and open new potential revenue streams within the existing channel.

Is OTT distribution too expensive for smaller broadcasters – the need for agility in your OTT strategy?Some smaller regional broadcasters shy away from OTT platforms because the incremental cost for every stream keeps increasing prohibitively, while the reach gets narrowed to limited viewers. Is this reality?

This is one of the great challenges with effectively launching a direct-to-consumer OTT channel. Nobody wants to scale a business that is losing money, and there are risks associated with launching OTT services that are compounded by the dynamic nature of the OTT marketplace today.

Traditional broadcast mediums typically offered a set capital investment. Once made, only marginal costs were incurred as the audience size scaled. However, the traditional model offered very limited direct consumer interaction and little to no direct targeting and personalisation.

Advertisers are dramatically increasing their investments in digital video advertising and seeing the benefits of creative targeting and campaign management, paying higher average CPMs (price per thousand views) and delivering greater volumes of ad content.

Paid sponsorship is another way to offset costs. It’s unlikely that the number of minutes an average viewer spends watching video each day grows much moving forward, but a growing percentage of overall viewers are spending an increasing amount of their video viewing time in OTT and social media video platforms. The risk to not having an OTT strategy is irrelevance as the audience and advertisers shift to OTT consumption. Because of the increased audience acquisition costs associated with OTT, broadcasters are increasingly looking to increase ROI in the areas that they control, and chief among these is operational efficiency. Implementing flexible technology solutions that automate production and dynamically apply service and delivery cost optimisations ensures maximum ROI through operational efficiency.

Can intelligent tools and data analytics help map audience viewing habits?  

Is OTT no more than a means of recycling old and poor performing content as some commentators suggest? Premium OTT providers that offer “web series” content would likely disagree. These providers are investing billions of dollars in new content development and many would argue that some of the most compelling content exists today in the form of these OTT offerings.

Having said that, the “long tail” of the web creates an incentive for low budget, low quality content to proliferate and there are many examples of poor quality libraries filled with unsuccessful films and TV shows. Niche content owners now have a vehicle for reaching their audience that they’ve never had before, and you see that some of the most successful small-scale OTT channels often offer something unique in their programming mix to entice a loyal and devoted fan base.

To conclude, the single most important investment that an OTT channel operator has to make is licensing and rights deals. No amount of technology investment will entice viewers to tune in if the underlying content library is unpopular and of poor quality. However, if you have not invested in an agile OTT technology strategy, then all the content in the world will not make your OTT business successful.

OTT represents a fantastic commercial opportunity to many sorts of media and broadcast organisations. Just like all new business start-ups, it requires careful planning and an agile business plan.

Written by Ken Haren, solutions engineering manager, Telestream

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