Early December this year, OTT channel owners, digital retailers, content producers, service providers, and technology companies joined the OTT.X Pipeline conference to bring in their pieces of the puzzle that together shapes the OTT landscape.
At this insightful knowledge sharing session, OTT ecosystem stakeholders broke down the fundamental layers of digital video entertainment, highlighted upcoming trends, and outlined the direction where OTT and digital media are heading.
Here are several key insights from OTT.X Pipeline.
Video trends: OTT growth and churn
According to ParksAssociates, OTT services have seen churn rates increase from 35% in Q1 2019 to 41% in Q1 2020. However, with the pandemic bringing its adjustments to the whole digital media industry, overall OTT content consumption increased by 2020 end. A growing number of US households have tested the OTT waters by using more than 4 OTT services. As new streaming services enter the market, the importance of audience engagement and retention has become a cornerstone for service providers.
“Not only has the rate of subscription OTT services climbed, but the percentage of those subscribing to multiple services has also continued to escalate,”– Elizabeth Parks of Parks Associates said. “The rate of those who subscribed to four or more increased to more than 30%, a significant increase in just the last six months. We also see competition in partnership as the number of OTT video services in the US has more than doubled since 2014, reaching about 300 services. At the same time, the rate of closure services declines.”
As for a few other trends, there’s a big gap between OTT and traditional Pay-TV services. As of Q3 2020, 78% of US broadband households were subscribed to OTT services, while only 60% to Pay TV. This spike in subscription service uptake has further widened the gap between OTT and Pay-TV services.
Advanced opportunities for OTT channels marketing
Many leading services, however, aren’t facing any significant issues with growing and retaining their audiences. According to stats from eMarketer, by the end of this year, there will be 207.5M active OTT users across the US.
The growing audience has naturally caused growth in the OTT app sphere, and in particular, within the Roku ecosystem, with 46M active users as of Q3 2020. Allroll believes the key reasons for such a keen interest in Roku specifically relates to the platform’s investment in technology, their focus on monetizing their users, and the opportunities for content creators – by helping them launch and grow their own Roku channel. Hence, the number of apps on Roku has increased from about 1K apps in 2015 to over 6K in 2020.
“We do have a great amount of content inside the Roku ecosystem, and it’s been growing dramatically. Roku apparently identified that. Hence they’ve launched an aggregator that holds the entire content library. Everyone who’s becoming a part of this kind of Roku aggregator can access this vast experience. Here content creators can be visible and noticed by other customers who are using Roku, and can actually drive audiences to their channel, and that’s a great opportunity,”- commented Allroll representative Anna McMichael.
When it comes to increasing a channel’s audience and monetizing it, a channel owner’s top priority becomes the ability to customize budgets, access viewer data, and drive users who are already engaging with Roku. That’s what the Allroll platform offers content creators: helping them put acquisition, retention, and monetization into their strategies.
Content creators are seeking solutions that can let them monetize the full user funnel, map events inside the channel, track post-install activity, and get live reports. While more companies and channel owners have invested in analytics inside their channels, the majority still don’t have this capability. As a result, solutions that can help content creators get the most out of analytics, attribution, and marketing will be in great demand.
AVOD and SVOD’s place within the expanding OTT environment
Since the lockdown started in March, the role of SVOD and AVOD services have increased. SVOD as a category continues to trend through the roof as consumers continue to add subscriptions. AVODs are also having their time in the sun, as advertisers see them as a great way to reach out to new audiences.
In addition, COVID-19 has undoubtedly ushered in a new layer of disruption from the movie industry’s perspective, bringing in exclusive content previously accessible only in movie theatres, to OTT screens. Wonder Women 1984, Dune, and Suicide Squad, are just a few Warner Bros. premieres that will appear on HBO Max.
One of the key questions raised with premieres moving to the viewers’ living rooms is: Will it be a partial set of events under the lockdown or has the precedent now been set for other studios to follow? While the answer to that question is still uncertain, there are some reasonable predictions. Leading services, including Netflix, Amazon, and Disney, are going to expand their share of the online subscription video market by the end of 2021, which could account for over half of paid subscriptions and revenues globally.
The future of OTT media distribution and monetization
Along with the shifts in OTT content consumption, the future of media creation and distribution is expected to include cloud technology adoption, comprehensive security, and highly-adaptable software-defined workflows. As Craig Seidel from MovieLabs shared, “There will be no wall between media production for various purposes and screens, whether it’s movies or television, as it will become one thing aggregated in the cloud.”
We’ll also see more advertising and monetization opportunities, letting ecosystem participants benefit from new advancements and get the most out of OTT’s reach.