Over-the-top TV: A direct hit

A shift towards OTT viewing has resulted in success for SVOD services such as Netflix and Amazon Video, and has led to powerful sports brands such as NBA and MLB developing their own Direct to Consumer (D2C) propositions. We discuss the rise of OTT and the opportunities it presents.

Television has evolved rapidly in recent years. The latest technologies available to both consumers and content owners mean programming can be enjoyed anywhere, at any time and on all kinds of devices.

This shift towards connected, over-the-top (OTT) television has plenty of high-profile success stories. Netflix alone is now used in more than six million UK households, while Amazon Video and Sky’s Now TV services also boast sizeable – and fast-growing – user-bases.

The rewards on offer extend far beyond the companies pushing big-money boxsets and blockbusters, however; OTT TV presents a huge opportunity for content owners of all kinds to distribute their programming directly to consumers, monetising it alongside traditional revenue streams.

Going direct

The rising availability and speeds of broadband have helped to create a thriving OTT market with a diverse range of IP-delivered video services. Consumers now have more choice than ever, but they’re not the only ones benefiting from this newfound flexibility.

Content owners and rights holders can now reach their audiences directly, wherever they are and whenever necessary. They can bypass the conventional networks and service providers that once offered the only real routes into consumer households.

With this entry barrier removed - or at the very least lowered - new services are easier to set up and operate. The benefits of going direct aren’t limited to new entrants either; established broadcasters can now better respond to their audiences’ expectations, distributing in ways and at costs that suit all involved.

Levelling the playing field

Limitations around the type of content have also been lifted as a result. For programming to be distributed through traditional means – be it satellite, cable or terrestrial – it needed a big enough audience. For TV networks, it wasn’t justifiable to broadcast niche content that might only appeal to a small section of their paying customers; so, for rights holders, it often wasn’t even possible. This often resulted in content, such as matches between less well-known teams, not being monetised – and effectively going to waste. But with OTT removing the filter between source and consumer, that’s no longer an issue.

For content owners, this opens two new opportunities. They can now target their offerings better than ever before, providing TV services that truly meet their audiences’ needs; better still, they can monetise these services accordingly. From one-off pay-per-view events and ad-funded content to subscription services like those offered by movie streaming platforms and some sports rightsholders, there are various chances to generate additional revenue.

A Premier League football club, for instance, can broadcast coverage of its pre-season friendlies to a relatively small group of die-hard fans who are more than ready to pay for access, before switching to traditional broadcast for in-season matches. An e-sports team can give its followers the chance to watch tournaments as they happen, wherever they’re happening, and then charge appropriately.

Territory is another consideration. As an example, Italian football is hugely popular in Italy and can justifiably be broadcast through traditional channels across the country, but it also appeals to expat football fans based elsewhere in the world – many of whom will be willing to pay. By going direct to consumers, the rights holder – whether it’s the league or an individual club – can monetise its content easily.

Competition or complement?

Focus only on the biggest players - SVOD services like Netflix and Amazon, for instance – and you could argue that OTT is in direct competition with its traditional counterparts. The conventional networks see this emerging market as a threat to their dominance, which is why most embrace rather than fight it. Look at the bigger picture, however, and you’ll see that OTT is as powerful a tool to these traditional broadcasters as it is to the market’s new entrants.

OTT television can be used to complement a linear offering to give consumers the things they crave most: flexibility, choice and convenience. While linear channels do all the heavy lifting needed for day-to-day wide-reach programming, IP allows for cost-effective one-off broadcasts and the distribution of more niche content. From major sporting events with global audiences to political debates appealing only to those in a single part of the UK – it’s all possible.

This new way of distributing content certainly has its own place, meaning it needn’t take away from existing methods. It’s for this reason that it offers such significant rewards for both conventional broadcasters and independent content owners.

What’s the catch?

Delivering high-quality, reliable OTT content in a user-friendly, efficient and cost-effective way is more complex a process than uploading a YouTube video or streaming via a social media platform. For example, you would need to consider encoding, encryption and customer management, and it requires a specific set of tools – such as infrastructure, technology and software. And, while these tools are available to content owners, using them effectively requires certain skills and understanding, and the resources to manage them effectively. It’s not always cost-efficient to ensure everyone within the business has this necessary knowledge.

Arqiva proudly helps its customers overcome these obstacles so they can capitalise on the opportunities OTT TV presents. We simplify everything by bringing it all under one roof, taking care of it all as part of a single package. Suddenly a process which was originally very complex becomes extremely simple. And, with so much experience and knowledge behind us, who better to have as your trusted OTT partner in an ever-changing world?