Amidst the gloom of a global pandemic, the rapid growth of OTT subscriptions has sounded a rare positive note: it is estimated that global revenues for the sector will grow by an unprecedented 55% in 2020, according to Videomind.
Traditional pay-TV and broadcast subscriptions are falling away, particularly in the U.S. Therefore, it would be easy to reach the conclusion that Covid-19 stay-at-home orders have accelerated our arrival at the tipping point where on demand and OTT become the dominant models for video entertainment consumption.
The truth, however, is that the road ahead for OTT brands in an increasingly crowded and competitive market remains uncertain and fraught with challenges. Some of which come in the form of:
- Unknown post-lockdown churn with continual changing global circumstances
- Potential slowing of subscriber growth as the world returns to a sense of normal
- Raised expectations in line with what customers have grown accustomed
- Change as the only constant, with the ability to adapt quickly to meet continuously shifting needs
Opportunity from uncertainty
The net result is that subscriber acquisition is likely to be more important than ever in 2021. And the fact is that subscribers themselves will represent a more demanding, constantly moving target.
Our recent OTT playbook explores the opportunities for OTT brands to experiment and innovate at every stage of the subscriber acquisition journey. To succeed, brands need the ability to innovate, experiment and adapt quickly. This capacity has long been held back by everything from a lack of customer insight and inflexible business models to monolithic technology platforms that set limits on the pace of innovation.
However, that is starting to change.
Broad customer insight
No-one yet knows whether the pandemic-era spike in new subscribers will be temporary or convert into long term loyal customers. Subscriber growth– be it short or long term – offers clear financial benefits. However, it also offers something potentially more valuable and enduring: insight.
It seems that recent subscribers were drawn from every section of society, not just the traditional heartland of the 18-35s. In fact, some of the most significant growth was among older age groups, with around a third (32%) of 55-64-year olds and 15% of over-65s using subscription streaming services, according to Ofcom.
What’s more, it would be a mistake to assume those demographic changes are entirely transient. Research from EY found that 19% of households agreeing that the pandemic has irrevocably changed their viewing habits.
As a result, OTT brands could attract and engage a much broader cross section of society, accompanied by diverse needs and behaviors. So, success will depend on understanding and adapting to a broader set of demands.
The good news, for those brands able to convert data into action, is that subscriber growth during 2020 has provided the basis for hugely valuable customer data. Interrogating that data, to understand customer needs and behaviors can be the basis for multi-faceted, adaptable and, above all, effective subscriber acquisition strategies.
Agile, flexible subscriber management
The brands best poised to act on that insight, and the ability to keep pace with a constantly moving subscriber sweet spot, will have a significant advantage. The scale of that advantage will depend how far along the digital transformation journey they have traveled.
Those still wrestling with monolithic legacy systems will struggle to keep pace with change. Siloed data will hamper customer insight. And complex systems requiring technical resource will limit the ability to innovate, adapt and experiment in response to change.
On the other hand, a new breed of fully integrated cloud subscriber management platforms will provide forward thinking brands with all the flexibility and agility they need – and at lower cost. These will allow OTT brands to innovate and experiment in every aspect of the subscriber acquisition journey. This will take hours rather than months, without the need for technical skills. These factors offer a critical competitive advantage in the months and years to come, as we all adapt to a new reality.
Experiment and innovate
In the post-pandemic world, there can be no standing still. OTT brands will need to constantly experiment and innovate in every element of the subscriber acquisition journey in response to diverse customer needs and rapidly changing behaviors, coupled with a demand for greater flexibility and choice.