September welcomes one of the busiest calendar events for us here at Magine Pro and the entire OTT industry, IBC. The annual event has long been considered the leading go-to exhibition and conference for media, entertainment, and technology and as such, attracts industry professionals from all over the world.
This year marked our fourth year exhibiting in Content Everywhere hall 14 and was arguably one of the busiest we’ve seen. Without doubt, there were more buyers present than years previous, with a noticeable increase in production houses, smaller ISP’s and Telco’s all looking to go OTT for the first time. Not too surprising. In our post-IBC 2018 blog, we reflected on how the OTT takeover was looming, and how telcos could move into the OTT market by either vertical integration or through partnerships. Check out our reflections on last year’s event here.
This year, the impact of OTT services dominated most discussions at IBC2019. There were panel sessions dedicated to monetization models, niche content, and how streaming is driving a golden era of content creation. It certainly raised some interesting questions around how new market entrants could compete against big brands with much bigger budgets. A popular opinion being that new entrants would need to offer services tailored to niche interests and content. On the Magine Pro stand, we demoed a few of our partners who offer just that. If you missed it, check our experience page to learn more about niche services such as PassionFlix Docsville and True Royalty.
User engagement has been a nascent trend in the OTT space this year. Likely driven by SVOD user fatigue and competition, we’ve seen more content owners looking for innovative ways to monetize and engage their users. Many now want to focus on customer loyalty, engagement, and differentiation in the user experience around content. This also explains why recommendation tools (although not new) were a popular talking point at IBC2019.
We also noticed more interest and focus on analytics and business tools, as operators look to move on from just having OTT, to now successfully monetizing. There was also an uplift in SVOD and live event offerings, alongside traditional AVOD, and subscription and advertising led linear.
But, more important things you might have missed from Magine Pro were our live product demo’s on the stand, including demos of the Magine Pro Console. If you didn’t get a chance to stop by, you can find out more about our products here or download our white paper. Get in touch if you would like to learn more or try a demo.
With OTT being a hot topic at IBC2019, it’s no surprise that hall 14 will be expanding at next year’s event as organisers increase capacity for more vendors by adding hall 5. It seems the OTT takeover is no longer looming, it has arrived!
We’re heading to the SportsPro OTT Summit next month. If you’re attending and would like to meet with a member of the Magine Pro team get in touch!
2018 was an exciting year for the OTT industry. We saw a lot of positive developments, most of which we encountered firsthand at IBC2018 in September. Check out our post where we summarised our findings and reflected on the event, here. Now that we’re heading into the second full working week of January, we’re all starting to wonder what could be on the horizon.
In this post, we’re laying it out there and sharing our top OTT industry predictions 2019 (with a few expected additions of course). Reach out and let us know your thoughts and whether you think we’ve missed something vital.
Service shut downs and consolidations
In 2018 we started to see more OTT services consolidate or shut down entirely. This was largely due to market saturation, as the OTT industry grew so rapidly in the early days. Over the next year though, it’s likely we will see more of this affecting both smaller niche players and big incumbents, as the pressure to maintain sustainable and competitive OTT businesses increases.
In fact in 2018, WarnerMedia, for example, shut down its two-year-old indie and classic cinema streaming service FilmStruck not long after closing its Korean streaming service, DramaFever. WarnerMedia’s CEO John Stankey had announced only a few months prior to the closures though that the WarnerMedia division of AT&T has plans to launch a new ad-supported video streaming service by the end of 2019. We’re expecting the new service to launch in the fourth quarter and combine HBO (which AT&T picked up in its takeover of Time Warner in 2018) with other WarnerMedia brands including, Warner Bros, Turner, Cartoon Network and more.
New players from the big brands
We are also expecting to see Disney launch their much-hyped direct-to-consumer service later this year (the result of their acquisition of BamTech). It will certainly be interesting to see how well it’s received and the market uptake. We’re already wondering whether there’s going to be a Disney OR Netflix scenario. Or if subscribers will be willing to opt-in and subscribe to both.
It’s also not too far fetched to expect Apple to launch their secretive yet expected streaming service later this year. We’re curious to see if they’ve managed to secure content partnerships that to date others haven’t been able to. It’s also going to be interesting to see Apple’s interpretation of the best UI/UX and find out whether they are able to truly revolutionize the TV experience. Stay tuned!
Partnerships with Telcos & Operators
This year, we think we’re also likely to see more Telcos and Operators move out of the own-operated OTT space and begin partnering with existing and better established OTT players. In the last year, the increased customer value propositions enabled through partnerships have become more apparent, so it’s likely Telcos and Operators will be less inclined to view OTT Players as a threat going forward. Our former Head of Commercial Operations, Fredrik Engdahl spoke on the subject at IBC 2018. Check out the video of his talk here.
AVOD to mature
Advertising (AVOD) models for OTT are also likely to mature this year and become much more feasible for new and existing OTT Players. John Stankey, CEO of WarnerMedia, said himself at their November investor event, “Consumers clearly like the breadth of content that is available today. They like the choice. And a lot of that choice comes on the back of ad-supported models,” But added, “Things have to change [with ad models]” and suggested that less intrusive and more targeted ads are the way forward if AVOD is to really become a serious standalone model for OTT players in future. We couldn’t agree more.
Planning to build your own OTT service now or in the new year? Check out our top 5 content strategy tips that can help you prepare for launch:
1. Get to know your target audience
Identifying your target audience may not be an obvious content strategy tip, but it’s important nonetheless. Before you should even begin to consider creating content or securing rights to some, get to know your audience. Understanding your key demographic’s interests and viewing habits will help you create a much stronger content strategy. It can inform decisions regarding the type of content you should invest in, when and what time to release it and the best marketing channels to promote through.
2. Offer Unique content
Subscribers are signing up to more than just one OTT service these days as their appetite for high-quality and original content increases. In fact, Digital TV Europe’s 2018 annual survey revealed 62.9% of respondents agreed original content that’s not available elsewhere is the most compelling reason to sign up to an OTT service in the first place.
To attract potential subscribers, offer content they won’t find as easily elsewhere. We’ve seen this work particularly well with our own partners, Passionflix which provides exclusive and original romantic content and True Royalty, an SVOD service dedicated to premium royalty related content.
3. Be original
You don’t have to produce your own content for it to be original. Secure rights to original content with content owners instead. Try exploring markets that are often overlooked, such as local or regional content for expats and niche sports content that’s not being widely distributed. Don’t rule out purchasing the rights for older content that can be digitized either. Our partner FlixOlé is home to Spanish cinema and features new as well as classic movies that are particularly popular with their subscribers.
4. Promote your content
No matter how great your content offering, if it isn’t easy to discover, you won’t see the viewing figures you expect. To get a good return on your content investment, carefully consider how and where you promote it, both in and outside of your service.
Our partners are able to promote new and old content in their Magine Pro Pioneer and Premium services wherever and whenever they like. Our templated OTT solutions can be customized via the Console, enabling them to independently curate featured content on the start page and even content categories.
Promoting content outside of the service is equally as important. Create an engaging communication strategy that maximizes your marketing channels and don’t overlook SEO. Content metadata that is SEO optimized is a great way to boost awareness and traffic. Potential customers, for example, could find your service simply by searching online for a particular TV show or movie.
5. Keep things fresh
Even those that launch with a large library of content should refresh their service at regular intervals. Updating your service with new content not only encourages user engagement but also helps to reduce churn. Frequent changes give users a reason to return regularly. But that doesn’t necessarily mean you need to invest in new content. Promoting older content that has previously been overlooked is a great way to refresh the look and feel of your OTT service without incurring any additional costs. Magine Pro partners can do this independently using the Console, which gives them control over content positioning within their service.
Want more advice and support on your OTT content strategy? Get in touch with the Magine Pro team and find out how we can help. You can also download our latest white paper – Turn your Content into Cash to learn more. And check out our branded OTT solutions and services here.
Today’s viewers can enjoy a wide variety new digital video-on-demand and live TV services on a range of different platforms. At MaginePro, we enable content owners and service providers to effectively engage their viewers by offering a series of customizable UX templates that meet their business needs and user expectations. Our templated solutions are designed to provide the best possible experience for both sides.
In this post, we walk through some aspects of our design systems and cover how finding the ‘sweet spot’ enables us to define the template platform UI to meet our partner’s requirements and user needs.
User Behaviour & Content Discovery
User experience and behaviour differs considerably between linear TV and VOD services.
Linear TV services, for example, are low friction as users get instant access to live content; only needing to interact when actively choosing to change channels. As live TV events have a start and end point it’s crucial that users can find what they want to watch as quickly and as easily as possible. Finding content on a video-on-demand service doesn’t require the same level of urgency, but browsing a big library of content without any context can be overwhelming. Video-on-demand services require more interaction as users need to browse the content catalog in order to find what they want to watch.
At Magine Pro, we focus on building platforms that make it easy for all users to discover content that appeals to them. For example, linear TV service users can catch up on missed live shows such as sports events (when supported by content rights) and create a personal list of their favorite channels, making them easier to locate after signing in. Catch up and VOD content is also presented in modules (movies/genres/series etc), enabling users to interact and explore further details such as trailers, synopsis, and cast etc. This gives the user a deeper understanding of the content and allows them to make an informed decision when selecting something to watch. Curated recommendations on the start page, and recommendations based on previous viewing preferences, also make it easier for new and returning users to discover great content.
At Magine Pro, we frame every design problem in a job story, focusing on the triggering event or situation, the motivation and goal, and the intended outcome:
As an example:
“When there’s an interesting live sports event, I want to find it quickly, so I can watch it from start to end.” – Service user
Breaking this down there are three parts we need to consider:
- “When there’s an interesting live sports event” – This is the situation, it describes when this happens.
- “I want to find it quickly” – This revolves around the motivation and why the user wants to do this.
- “So I can watch it from start to end” – Users expected outcome and what we need to focus planning and design around to deliver.
Job stories give us context and enable us to focus more on user motivations. Having a clear picture of user behaviour and needs also prevents us from implementing unnecessary features that reduce the usability of the product. We work closely with our partners to assess the impact and only implement agreed features that don’t add complexity to the template or create friction for the user.
Finding the Sweet Spot
Video-on-demand services enable users to browse and consume a vast content catalog with great discovery features, such as recommendations and related content to boot. Because of this, providers and viewers are drawn more to building and using VOD over linear TV services. At Magine Pro, however, we believe there is a sweet spot nestled between traditional linear TV services and full-scale VOD services. We combine the simple, elegant user interface of traditional linear TV with the power of choice found in VOD, creating a richer experience for users.
Our design approach is focused on creating true value for users and service providers. We leverage our experience and understanding of good UX to build products that successfully fulfill our partner’s needs and provide exceptional experiences for viewers around the world.
Digital TV Europe’s recent survey found Subscription video-on-demand (SVOD) came out as the top choice of business model for OTT services. No surprise there, given that SVOD is indeed a great monetization model and often the go to-monetization model for any new OTT venture as it ensures a steady recurring revenue and lock-in effect on users. And you can’t complain about market forecasts either, as by 2022 the European SVOD market is expected to nearly double, and more than 450 million global SVOD subscriptions are expected.
In addition, SVOD makes it possible to receive parts of your monthly revenue with no relating costs. Data collected from our partner SVOD services show that only 60 to 70% of paying subscribers are active monthly users, meaning that four out of ten paying subscribers never accessed or used the OTT service in a given month. This means users are paying a subscription fee without actually using the service, a scenario all too familiar to anyone with a rolling gym subscription. Although short-term this could be considered free revenue, the long-term risk is that those non-active users will eventually churn and opt-out of the service altogether. The premise of getting revenue with no associated support or streaming costs might sound alluring but to achieve real long-term success, the objective should always be to strive for engaged rather than inactive subscribers.
Make sure no money is left on the table
In the same OTT survey, advertising-supported video-on-demand (AVOD) was considered a less promising business model for OTT services in terms of its potential to deliver value to the service provider. Understandable, as sustaining revenue through advertising only can be complex and challenging, but it doesn’t need to be. Today, AVOD should be considered a complementary strategy to an SVOD or Transaction-supported video-on-demand (TVOD) business model.
Incorporating an AVOD-model ensures you leave no money on the table. Monetizing through ads means you can offer limited free content to users that are hesitant to pay a subscription or transaction fee upfront. The strategy then would be to push to convert these free users to paying subscribers through upsell activities, increasing your average revenue per user (ARPU) and the customer lifetime value. In an ever more competitive market, using an ad-supported freemium model will also help with marketing efforts as you’ll be able to attract and onboard new users who want to try the service for free first. You can still monetize through ads as you convert them to paying users.
Even though AVOD doesn’t offer the same steady revenue stream or the same level of ARPU as SVOD, you shouldn’t overlook the revenue opportunities from video ads. Case in point, according to research by MonetizePros.com, YouTube’s cost per thousand impressions (CPM) range from $18 to $24 depending on the type of ad shown and Hulu’s average CPM can be as high as $28. Looking at connected Smart TVs, a rough average is around $25 per video ad CPM. You can’t ignore these CPM levels and sources of revenue.
The increasing interest from marketers for OTT as an ad channel is also easy to understand. Viewers are spending more and more of their time watching OTT video compared to traditional TV media. According to eMarketer, 7 in 10 Americans are now consuming ad-supported OTT videos regularly, and this is expected to grow considerably in the coming years.
Another advantage of using OTT as a platform for video advertising is that it enables you to capture rich viewer data, resulting in much better targeting of relevant video ads. CBS All Access, in fact, reduced their video ad inventory (and cost) for OTT content by 25% as they were able to target audiences much more efficiently based on the detailed viewing data collected.
AVOD, coming to an OTT screen near you
We’re still only in the early phase of the shift and uptake of video ad spending for OTT video. Research by MTM and SpotX showed that at the end of 2017, 30% of all video advertising was spent on OTT services. And it’s projected that video advertising delivered over the internet to TV screens will be worth more than €825 million by 2020, with compound aggregate growth rates (CAGR) between 20 to 80% in European countries.
At Magine Pro, we believe the secret to a successful OTT business lies in a business model that combines SVOD, TVOD, and AVOD whenever possible. As part of our video solutions, we offer SVOD, TVOD, and AVOD business models, either separately or combined in an OTT service. The Magine Pro platform is also pre-integrated to SpotX ad server, enabling our partners to generate ad revenue by direct deal and programmatic advertising, and extensive ad campaign management. Essentially making it extremely easy for new OTT services to start monetizing through AVOD from launch as efficiently as possible.