To Win At OTT, Think Programming
Over the long term, local over-the-top services will need to double down on the quality of programming they serve up. Why? Because competition is going to intensify, and it won’t come just from other local stations’ streamed channels or national players, but newspapers and digital as well.
Those were just some of the predictions that came to light during a NewsTechForum session Tuesday that focused on OTT channels created by local TV broadcasters. But there was also plenty of discussion about how the environment has changed so far, and the progress that stations have made.
“This was the year that OTT tipped. For the first time we saw more time-shifted viewing than linear. I see it as a shift that’s as big as the shift to mobile,” said Frank Mungeam, the Knight professor of TV news innovation at Arizona State University’s Cronkite School of Journalism.
That’s a primary reason why broadcasters who are still hesitant about diving into the OTT “pool” should prepare to jump in, he opined. “The default for viewers, when they come home in the evening, is watching OTT. The biggest threat today is that the audience starts with Netflix; they aren’t in the live video space. So it’s the oldest rule: you need to fish where the fish are,” added Mungeam, who was vice president of digital audience engagement at Tegna until recently.
Ian Stinson, Cox Media Group’s executive director, digital audience and product, predicted that the work that stations are doing to build out their OTT business could make the transition to ATSC 3.0 a little easier. “It will give us a chance to understand different workflows, certain technologies, and how we might monetize those audiences,” he said.
Other panelists predicted changes ahead as well. “We work with not only broadcasters but newspapers. One of our customers is in Madison, Wis. — Madison.com is the newspaper. And they’re launching an OTT channel,” said Derek Gebler, VP of broadcast and video at TownNews, which provides a variety of streaming and content management solutions.
“There are going to be other players in this space that were never there before — newspapers and pure digital. It’s going to become crowded. And they’re going to be delivering niche content that doesn’t just appeal at the local level, but they’ll be targeting a national audience,” Gebler added.
It all comes back to the content, according to Mungeam. “We can have all kinds of great delivery, and the technology can get better, but it could expose the weakness of our underlying content.
“We have to start by working backwards from the audience, understanding what this new ecosystem is and the quality of some of the programming that we’re competing with on Netflix and Hulu,” Mungeam added.
“Over the long term, these platforms are going to have to offer personalized content, and they’ll also have to have personalized ads as well,” said Stinson. “DAI [dynamic ad insertion] has to be the path moving forward.”
While all of that has yet to play out, some advertisers are sold on the local OTT proposition today. Stinson said that local streamed channels are attracting CPM rates of at least $8 to $20, and it goes up from there. Jeff Benninghoff, VP and GM of WWSB of Tampa-St. Petersburg, Fla., added: “$20 to $30 sounds about right.”
The ad pricing for the streamed WWSB channel differs from that of the broadcast station’s rate card, in terms of which dayparts command a higher price than others, Benninghoff noted.
“What we discovered was that the audience on our OTT platform does not mirror the audience on our main platform,” Benninghoff said. “When we’re in prime, I repeat our [early evening] newscasts, and it turns out to have the higher rating. So we changed our pricing so it’s higher in prime and lower in certain other dayparts.”
Benninghoff gave some details about how he lures advertisers to the OTT channel. When doing a pitch, he sometimes pulls out a Fire or Roku streaming stick and helps the client install it at their facility. That way they can see firsthand what the WWSB OTT service is all about. Installation is key. “If you just give the stick to them, they’ll stick it in their desk and they’ll never see it,” he said.
Despite the progress, stations are experiencing some OTT pain points on the technology side. “If you’re getting syndicated content, there can be friction in integrating all the different providers on the CMS side,” said Gebler.
“TownNews’s CMS is ingesting content from all over the place. We’re leveraging that engine that’s already doing that [work] and pushing it out to OTT as well. Once we’ve integrated it, it’s less hard to do for the next person who comes down the line.”
“The biggest issue I have with technology is probably me,” said Benninghoff. “I’m the GM, so typically I run in, throw the grenade, walk out and let other people figure it out. I want the technology to be more than we have right now. I’ve been trying to get our existing platform upgraded so that it’s much more.”
Here is the link to a video of this session: https://www.youtube.com/watch?v=Hw5NHxMBBBg
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