In Broadcast - June 2018 - 24

24

www.inbroadcast.com | Vol: 8 - Issue 6 | June 2018

InForm

Three Predictions
for OTT Video in 2018
We are in the midst of the largest shift to the television industry in decades, writes Anant Khanolkar,
Channel Sales, Verizon Digital Media Services...

T

hat shift seems to call for the
death of video advertising and
the rise of subscription revenue, but
the problem is that actual numbers
don't really back that up. New research
published by Parks Associates found
that users are actually dropping their
OTT video streaming services at an
unprecedented rate: 50% of OTT
subscribers end up cancelling. In the
long term, that's an unsustainable level
of churn.
As the production costs of content
continue to rise, content owners
must increase revenue and reduce
the endless cycle of signing up and
cancelling. Otherwise, they won't be
able to grow and stay profitable.
Luckily, a solution is already in
sight. By connecting with their users
directly, OTT service providers have
the ability to unlock a treasure trove of
data beyond old-school broadcasters'
wildest dreams. That data is key to
building sticky, massively monetisable
streaming video that solves the
churn problem for good. Here are
my three predictions for how this
transformation will shape OTT video in
2018.

solutions is also incredibly fragmented,
so that users might need to subscribe
to five or six different streaming
services to see all their favourite
shows. Who wants to keep track of all
those different subscription fees?
In this climate, a return to adsupported content seems likely.
There's no question that advertising
will have a big play here as online
video ad values rise due to their
dynamically targeted nature. Right
now, prime time broadcast TV ads
command prices in the hundreds of
thousands, dwarfing OTT ad spend by
comparison. But as audiences continue
to migrate to OTT video, so will the
money - it just has to. Advertisers
want to be where the audiences are,
and content owners want to earn
the highest revenue per ad spot
for bringing that audience to the
advertiser. Ad revenues at major cable
networks are already declining as of
2017, while video ad spend has grown
67% since 2015. I predict that we'll be
seeing a major rise toward parity for
OTT and broadcast ad prices in 2018,
with actual parity being reached within
a few years.

Ads Will Get More Valuable
In a way, it's no surprise that OTT
service providers are facing high
levels of churn. Satellite and cable TV
providers have infrastructure literally
wired into each customer's house,
which makes it much harder to shift
between services, if the consumer
even has choice at all in their area.
By contrast, unsubscribing from a
streaming service takes a mere click of
a button. The landscape of OTT video

Data Will Drive New Shows
It's no secret that the OTT video
content pipeline today is highly
fragmented, and no one is taking
full advantage of the data at their
fingertips. However, that especially
goes for players on the production side
of the video ecosystem.
At least on the distribution side,
broadcasters
and
OTT
service
providers mine rich user data to
target advertising and optimise video

Data on user engagement will
become more prevalent

A return to ad-supported
content seems likely

delivery, among other things. But
data on content performance and
user engagement usually remains
siloed away from content creators,
who rarely know where their content
is being used, how it's performing or
what ad revenue it's generating.
In 2018, that's about to change.
Aided
by
end-to-end
content
intelligence
platforms,
content
creators will start to utilise that data to
create "stickier", more engaging OTT
video content. For example, if a film
editor knew that a particular clip from
a trailer performed extremely well on
social media, they could edit more of
that particular scene into the movie
itself. Video content optimised in this
way will in turn generate more stable
and predictable content creation,
lowering the risk inherent in creating
new content.
A Return to Scheduling
In today's age of ubiquitous videoon-demand (VOD), actually waiting
for a show to come on might seem
archaic. But believe it or not, linear TV
has never gone away. It is, however,
changing and being updated in an
agile, streamlined way. In the near

future, we'll see OTT service providers
start to use data and artificial
intelligence to create schedules of
linear content personalised to each
user, incorporating both live video
and VOD. This never-ending stream
of OTT video would be optimised to
prolong viewing. Whether its end
goal is to serve more ads or to drive
more subscriptions, scheduling will
help alleviate the effects of churn by
grabbing and keeping viewer attention.
In 2018, the OTT solutions industry
is due for a reckoning. Given that
50% churn rate, streaming video
services won't be able to survive off
subscription-based models much
longer. However, by tapping into the
power of data, the savviest content
creators, broadcasters and OTT
service providers will be able to turn
this transition into an opportunity to
improve their OTT video programming
and bolster ad revenue. And, with
stickier, more engaging, highly
personalised content streaming to
their living rooms, viewers will benefit
too.
Visit us at BroadcastAsia 2018 to
learn more about our fully integrated
platform.

Linear TV has never
gone away


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Table of Contents for the Digital Edition of In Broadcast - June 2018

Contents
In Broadcast - June 2018 - Intro
In Broadcast - June 2018 - Cover1
In Broadcast - June 2018 - Cover2
In Broadcast - June 2018 - Contents
In Broadcast - June 2018 - 4
In Broadcast - June 2018 - 5
In Broadcast - June 2018 - 6
In Broadcast - June 2018 - 7
In Broadcast - June 2018 - 8
In Broadcast - June 2018 - 9
In Broadcast - June 2018 - 10
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In Broadcast - June 2018 - 26
In Broadcast - June 2018 - 27
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In Broadcast - June 2018 - 67
In Broadcast - June 2018 - 68
In Broadcast - June 2018 - 69
In Broadcast - June 2018 - 70
In Broadcast - June 2018 - Cover3
In Broadcast - June 2018 - Cover4
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http://www.nxtbook.com/nxtbooks/lesommet/inbroadcast_APAC02
http://www.nxtbook.com/nxteu/lesommet/inbroadcast_201512
http://www.nxtbook.com/nxteu/lesommet/inbroadcast_201511
http://www.nxtbook.com/nxteu/lesommet/inbroadcast_CCW15expo
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http://www.nxtbook.com/nxtbooks/lesommet/inbroadcast_APAC01
http://www.nxtbook.com/nxteu/lesommet/inbroadcast_201509
http://europe.nxtbook.com/nxteu/lesommet/inbroadcast_IBC2015
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http://europe.nxtbook.com/nxteu/lesommet/inbroadcast_BROADCASTASIA2015
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http://europe.nxtbook.com/nxteu/lesommet/inbroadcast_NABSHOW2015
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