Panelists at CCW 2015 say that for broadcasters to make the most of OTT, which will be a necessity for survival, they must have compelling content that will garner viewers so they can sell that aggregated reach to advertisers.
Stations Need Content, Reach To Win At OTT
Already a roughly $9 billion a year business, over-the-top video is positioned for such rapid growth that the industry’s annual global revenue could reach $30 billion a year by 2020.
“The market right now is exploding,” said John Cartoux, an FTI Consulting managing director who specializes in media and technology.
Speaking as part of an OTT panel discussion Thursday at the Content & Communications World conference in New York, Cartoux said the top three OTT video providers, Netflix, Hulu and Amazon Prime, together have roughly 90% of U.S. subscriptions.
However, Cartoux said, he anticipates OTT providers that don’t yet have big pieces of the market, but are backed by big TV companies or content owners — CBS All Access, for instance — will rise in popularity and stature. “Their chances of making it are higher down the road,” he said.
Panelist said they also expect to see a proliferation of OTT channels driven by niche or, say, geographically oriented content.
“There are certain categories people are very passionate about, and the winning combination is to provide content and community,” said Seung Bak, CEO and co-founder of DramaFever, which streams Asian-produced video with subtitles.
All of which is a challenge to local broadcasters, who are trying to carve their own place in the space to stay competitive.
“We need to keep pace with what’s happening with OTT,” said Anne Schelle, managing director Pearl TV, the consortium of large TV groups.
Deborah McDermott, SVP-COO of Media General, said her company, along with the ABC O&Os, Hearst Television, Cox Media Group and Raycom Media, are trying to do that with NewsON.
The digital venture aggregates local newscasts from around the country and offers them on an ad-supported basis to consumers so they can watch on mobile devices or connected TVs.
Launched earlier this month, the app already is gaining traction on multiple platforms, McDermott said. Half of the 50,000 NewsOn downloads during its first week came from Roku streaming boxes, she said.
How that translates into making money, however, has yet to be seen. The free service doesn’t have advertisers yet. McDermott said she sees the app’s real value in adding to participating broadcasters’ overall viewer numbers.
“The most important thing for us to be able to monetize the reach, to be able to blend our audiences in newscast so we can have aggregated reach that we can sell,” she said. “That’s where we think there will be some good monetization.”
On top of that, broadcasters getting into alternative distribution need to be diligent in formatting content to play well on various platforms. “Our goal is to extend our brand and to create content that will feed that and monetize that,” McDermott said.
Schelle said broadcasters will have even more options in the near future with the adoption of the new ATSC 3.0 broadcast standard, which will give them greater flexibility in delivering content to different kinds of devices.
That also will give rise to cross-platform audience measurement, which will boost broadcasters’ ability to monetize that viewership, she said.
“Broadcasters really have to take the lead on that,” she said.
McDermott said she expects the OTT business — and local broadcasters’ role in it — to change rapidly over the next few years, to the point where it could bring dramatic change to how business today is done.
However, her ultimate goal is focused, she said. “We’d like to have as much content out there as possible, but we want to monetize it,” she said. “We don’t want to just give the content away.”
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