OTT IS HERE TO STAY: A battle looms. Who will survive?
In 2019, the world of “over-the-top” TV (OTT) — and more generally, streaming video over the Internet — put a stake in the ground: OTT is here to stay. 2020 promises to be the year of consolidation.
With the advent of OTT, numerous professionals and niche suppliers (ourselves included) have joined the vendor pool in pitching various services and products to those entertainment companies on the forefront of this brave new world of video entertainment. At times, it may have felt as if we had been banished to preach in the desert (most notably between 2008 and 2012). Then there was a period (2013- 2018) when we vied for the attention of those few brave companies who had unequivocally bet on OTT services, companies generally coming from the worlds of broadcast, Pay TV, Cable, and Satellite TV.
Most recently, major content producers have boldly joined the video streaming party. Using OTT technologies, they are now positioned to go directly to the end user, without having to depend on traditional cable, broadcasting, or telecommunications players to distribute their content.
The battle lines have been drawn, and major players from traditional markets are taking their positions on the field: broadcasters such as CBS; Telcos like AT&T and Telefónica; cable operators like Comcast; and producers like Disney and HBO. The crowded field is further complicated by the well-entrenched “upstarts” who forged the way early on: Netflix, Hulu, and Amazon.
The list of contenders does not stop there. Device manufacturers like Apple and Huawei and social media platforms like Facebook, Youtube, and Tiktok are plotting how they can walk away with a portion of the spoils of this international foray.
I believe a reason for the explosion of interest in the world of OTT and content streaming lies in the fact that there is now an obvious mainstream market.
Previously, watching content on-demand on a device like a tablet was the domain of a very few: our five-year-old children watching Pocoyo on an iPad, for example. In contrast, today people of all ages from around the world are consuming vast quantities of content of all types on every kind of connected device: Smart TVs, sticks, tablets, smartphones, game consoles, STB (set top boxes), watches, etc.
It is now a reality to see our 80-year-old parents or grandparents watching Netflix on a tablet. This is a radical shift in TV consumption habits and confirms that the OTT industry has made the leap from a viewer base of a few early adopters to the mass market.
The real question then is: Who will earn the end user’s entertainment time, and how?
What are the success criteria for this competitive, ever-changing market mired in innovation?
I believe there are two fundamental pillars that will differentiate success in the market: Brand strategy and the effective use of big data in order to be able to navigate a highly changing environment.
Extrapolating this example to the world of video, it would be very difficult to compete with anyone using this approach, meeting customer demand in the shortest time possible. Delighting the customer, as quickly as possible and at an affordable price. This is key to creating successful services. To do so we have to become companies that are 100% data driven.
Obviously, just as in the world of fashion, there are premium brands with different approaches. Christian Dior, Hermes, and Prada all decide to compete on a different level with substantially higher prices for a better-quality product, and without such demanding time-to-market requirements.
Specialists also emerge: those companies that dedicate themselves to one, niche product, Levis for blue jeans or Havaianas flip-flops, for example.
In short and as Michael Porter details in his book Competitive Advantage: Creating and Sustaining Superior Performance there are 3 strategies: cost leadership, differentiation, and niche focus. I don’t think the world of video has to be any different. Any player that steps into the market must choose one of these strategies and play to the death for its competitive advantage.
If you are a business in the world of video and entertainment, first you must decide if you are going to be the new Zara, the new Prada, or the new Levis. Later, everything else will follow. Once you launch your service, the key will be in understanding what each customer wants, when and where he or she wants it, and at what price you can offer it to deliver it before anyone else. None of this is possible if you aren’t the king of Big Data.
If you liked this post you may also like reading our post about the 7 top moments in streaming: https://www.jumptvs.com/the-year-in-ott-top-7-moments-in-streaming/