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InContext / An inside look at the business of digital content

OTT is disrupting the way we consume media—for good. Here’s what content owners need to know

May 14, 2019 | By Jon Shalowitz, CEO—LiftIgniter @jonshalowitz

When was the last time you channel-surfed to figure out what to watch?

It’s probably been a few years, right? But less than a decade ago, almost everyone watched live TV—either cable or network broadcast. Then in 2007, Netflix launched its streaming service and AppleTV was released, catalyzing a major shift in how we watch TV. Hulu and Amazon also launched streaming services, and a number of other smart TVs were released, including Roku and Amazon Fire.

By 2017, 28% of US adults cited streaming services as their main method of watching TV.  And that percentage jumps to 61% for consumers aged 18-29.

The technical term for these increasingly popular services is Over The Top (OTT). With OTT, content providers distribute streaming media as a standalone product directly to viewers over the internet, in turn bypassing telecommunications, multichannel television, and broadcast television platforms that traditionally mediate such content. A recent study predicts that global streaming subscriptions will surge to 333.2 million by 2019.

This new world order will likely cause a major turn away from traditional broadcast TV.

While traditional TV providers face physical network limitations, OTT opens the door to reach a global audience wherever an adequate internet connection exists. This will both decentralize content recommendations and democratize content, allowing content providers to reach previously untapped markets. But it’s not without its challenges—and the traditional program menu is chief among them.

Here’s how OTT is impacting the way content providers deliver media to their customers:

Today, both providers and consumers have more content options than ever before.

Once upon a time, the only way to get to consumers was through that one pipe coming into their homes. No more. Today, there’s no longer a stranglehold on network connections, which means content providers have more delivery options than they know what to do with.   

Thus, all those innovative services and content aggregation companies—like Netflix and Hulu—were born.

Open access has allowed for content aggregation companies or new content delivery companies to provide whatever content they please to massive audiences. And skyrocketing connection speeds are only intensifying this trend.

In particular, 5G—or the fifth generation of cellular mobile communications—promises faster speeds, a more stable connection, lower latency, the ability to connect even more devices to the network, as well as reduced costs and energy consumption. In terms of speed, 5G technology intends to be 10 times faster than 4G. Ever faster mobile speeds are changing what real-time means. It’s also made it easier for content providers to reach audiences.

And content providers aren’t the only ones with more options. The OTT revolution gives consumers more choices than ever, too. Instead of just subscribing to Comcast or basic cable, consumers now have access to any number of OTT services. They can also watch on multiple devices, whether it’s Apple TV, Roku, or their smartphone.

In my house, we’re heavy users of AppleTV. But we also use YouTube TV, ESPN+, and Bleacher Report (to get all my Champions League soccer matches). And HBO, of course, because we have to watch Game Of Thrones.

Traditional economic theory says that choice is always better for the consumer and will lead to pricing efficiencies. However all of these options can be more than a little overwhelming—which is something the industry needs to think about in this new OTT world order.  

Content owners need a better technological solution—but there are no easy answers.

In the past, it was a big deal for the service providers to figure out how you were going to design the program menu. Even the smallest changes to the design can have a major impact on the user experience.

But what’s a user to do when there are 17 services and they need to figure out which to watch?

This is one of the biggest challenges for content owners in the OTT era. There are so many different independent streaming services people regularly use, and consumers don’t want to have to sit down and click on 17 different top menus in order to figure out what to watch.

After all, watching TV is supposed to be a relaxing experience.

As we enter this new world order, content providers need to figure out a user-friendly menu where consumers can easily toggle between streaming services. There’s no one recipe. However, one option is to have the various content services pick up on user intent/interest based on their actions in the moment. At my predictive analytics company, Liftigniter, we provide a lot of the building blocks to do this. But it’s going to require more than just some really good tech from a startup.    

Rather, it’s going to require the industry to pull together to devise a solution.

Regardless of how this all shakes out, the primary goal for the user should be twofold: price efficiency and a user-friendly personalized experience. After all, the OTT revolution is all about democratization and relevance.

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