It’s no secret that TV by appointment is giving way to over-the-top (OTT)-centric preferences. Frost & Sullivan’s research numbers corroborate this trend on many fronts, and we also see
continued expansion of online video offerings
from websites and via apps, both by pay TV service providers and directly by broadcasters.
Against this backdrop, we see recent service
offerings available in the market, such as Hulu
Live, You Tube Live, and FOX making all of their
primetime programming available live to all
U.S. markets. Hulu is now nearly a decade old,
and broadcasters like CBS, NBC, and ABC have
offered OTT streaming for some time now, as
have HBO and ESPN. Content is often free for
pay TV subscribers after user name and password authentication; monthly fees for standalone consumption are nominal. And still, no
OTT provider has yet to figure out how to achieve
service and monetization parity across traditional broadcasts.
FOX has found some success because it allows local affiliates to control advertising and
branding of channels. All of FOX’s primetime
entertainment, rather than select shows, is
streamed live. Two hundred and ten regional
U.S. markets are covered, as opposed to more
select coverage with other broadcasters. Consequently, FOX boasts that nearly all pay TV
households in the U.S. can now view FOX channels online via their streaming media devices,
smart TVs, and tablets.
This is in stark contrast to the ongoing trend
of disintermediation, in which broadcasters
seek to go directly to end consumers, bypass-
ing the pay TV service providers. This second
difference, in terms of monetization and brand-
ing, holds the promise of solving one of the
most vexing challenges with OTT today, which
is monetization. Targeted ads and usage fees
have thus far fallen short of their promise. Pro-
grammers, service providers, and broadcasters
have all been challenged to maintain their busi-
ness brands in a market where consumers often
confer loyalty to specific shows, specific talent,
or select social media destinations more than
channels or service providers. By managing to
cooperatively partner with affiliates on adver-
tising and branding and thereby avoiding con-
flict and competition, FOX may perhaps have
found a win-win middle ground.
This is, of course, easier said than done, and
much will depend on the quality of experience
and inventory of ads that will be delivered. The
third difference appears to be that this will truly be live-streamed content, in contrast to other
offerings in which episodes are made available
for on-demand viewing concurrently with or at
a short delay after the conventional broadcast
goes live. While this technological difference
is significant and noteworthy to infrastructure
vendors, I’m also of the opinion that everyday
users should neither care about this distinction
nor become aware of it.
Which brings us to the flip side of these ser-
Why Haven’t OTT Services
vices, a view that sheds light on the many short-
comings of the OTT ecosystem today. FOX is not
currently providing sports content through this
framework. Sports continues to be provided
through a separate app and presumably a sep-
arate set of agreements. Viewers, even pay TV
subscribers, continue to be subject to the dis-
parity and lack of consistency in content access
across types of content, channels, resolutions,
regions, and, in some cases, device support.
Service levels can vary dramatically by loca-
tion, even for the same user. Service provider
apps and destinations offer overlapping content
with broadcaster apps and destinations, with
online video services often joining in the same
fray. Users are left to figure out the nuances of
true live streaming, catch-up TV, cloud DVR,
and video on demand, all of which should ideal-
ly simply be “TV on any screen.”
Even a decade after Netflix and Hulu first be-
gan to stream content, no one has fully figured
out how to achieve service and monetization
parity across traditional and online broadcasts.
Until they make things less confusing to users,
monetization will still be a long ways off.
Solved the Monetization Problem?
Dan Rayburn ( email@example.com) is executive vice president
of Streaming Media. He blogs at blog.streamingmedia.com.
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