How To Survive Growing OTT Competition

The looming threat of over-the-top content distribution is making top-tier — and precisely targeted — programming a crucial component of broadcasters staying afloat in the face of mounting challenges to the existing business model, industry leaders say.

“It comes down to what you’re shooting down the pipe,” says Adam Symson, Scripps’ SVP and chief digital officer, adding that while fancy delivery systems and the like may attract viewers, “the product still has to pay off.”

“The companies that decide to invest in the product within the product are the companies that are going to end up with a profitable brand and profitable business to be in,” he says.

Symson’s remarks were part of a panel discussion on whether technology is changing TV’s business model held Monday at the NAB Show in Las Vegas.

Panelists from different segments of the TV industry — business development, hardware and software providers and ad sales specialists — agreed, saying broadcasters need to step up their use of audience data to create programming people want to watch.

“Knowing the data and having a direct relationship with customers is key to surviving the next couple of years,” says Jay Samit, the CEO of SeaChange, which provides broadcasters, and cable companies, with the tools to provide OTT content — and monetize it through ads.  Being in the throes of doing so now is also important, as “the earlier you get into a changing environment” the more equipped you are to handle it, he says.

Panelists also agreed that it’s incumbent upon TV providers, both broadcasters and cable companies, to “embrace” viewers regardless of on which platform they consume content if they want to maintain audiences.

“If you look at the market today, it’s easy to say we’re losing our customers, but the reality is we’re not losing them,” says Michael Atkin, president of Broadview Software. “The customers are fragmenting onto platforms to consume content. To be successful today you have to embrace that.”

Getting them tune in, however, is another story.

Tom Rosenstein, who does business development for the Tevo-owned company Digitalsmiths (it offers a video discovery platform), says with so much competition for viewers out there, “it’s really important to differentiate yourself by offering a personalized service to the user.”

Using data, content providers — both TV stations and cable channels — have the ability to target consumers and direct them programming and the like that fits their profile, he says.

“The key, we believe, is that you really have to service the user with not only something they want to watch, but something they … may want to buy,” Rosenstein says.

Symson agrees. He says creating that connection with viewers will be an essential means of keeping them hooked in light of so many other viewing options.

“We’re asking consumers to actually show their loyalty in a much more substantial way than sitting through a 30-second spot,” he says. “At the end of the day, it’s about whether they see a direct-to-consumer relationship.”

“What you’re going to see changing is bringing context to content,” Samit says.

Panelists said they also expect OTT distribution to have spillover effects on cable and satellite operators as well, who they predict will have to either unravel, or at least make more flexible, bundling to offset competition from services that offer other ways to get content, like streaming.

Symson, says, however, that he’s not too worried about the way things will ultimately play out. While broadcast groups continue to build OTT services to reach young viewers, he says he believes that traditional broadcast TV has a leg up on other media, even with the millennial-age crowd.

“It’s free,” he says, adding that young viewers are looking for content that is not going to cause them to open their wallets.

“Things look rosy for broadcasters in that way.”

Read TVNewscheck’s other NAB Show digital coverage here. Find our full convention coverage here.