Although the growth of over-the-top (OTT) is nothing to shake a stick at, it pales in comparison with the amount of viewership garnered by broadcast television. In fact,
according to Nielsen, it’s a 5-to- 1 consumption
ratio: For every single hour of OT T viewed each
day, the average consumer also views 5 hours
of broadcast television. And with all the revenue tied up in broadcast, it’s no wonder that
OTT services are hemorrhaging money as they
try to grow their subscriber bases.
So, why is this the case? Why haven’t more
people cut the cord and started to use OTT services (like PlayStation Vue, Direc TV Now, Sling
TV, Hulu, You Tube TV, etc.) to get their content?
Let’s face it, the value proposition of OTT far
exceeds that of regular TV. Anytime, anywhere
access. Multidevice consumption. Cloud-based
DVR and replay features. Personalized content
discovery. The list goes on and on.
Answering the “Why aren’t more people subscribing?” question, though, isn’t that easy.
At the September face-to-face meeting of the
Streaming Video Alliance in Amsterdam, Chris
van der Linden, the director of quality & product operations at Liberty Global, presented four
pillars of any OT T service: awareness, usability,
relevance, and quality. As I thought about these
four pillars, and how Liberty Global had, according to van der Linden, addressed them in
the latest version of its Horizon TV OTT service, I began to think that these four pillars
represent the fundamental challenges facing
the adoption of OTT as a whole.
The first, awareness, is obvious. If people
don’t know an OTT service exists, they aren’t
going to subscribe to it. This is especially difficult for niche content players that may not
have the marketing dollars to continually bombard consumers with messaging in specific geographies. Liberty Global, in fact, experiences
this directly—the company acknowledges having a different reach (percent of active subscribers divided by the total available population of subscribers) in individual geographic
areas. In some cases, a country may have 5%
reach, while in another it might have 30%. Unless consumers know about a service, they will
never consider adoption and replacement of
The second is usability. Right now, many
OT T providers are trying to figure out the best
way to showcase content in order to help users navigate their services. Although we don’t
want to acknowledge it, presentation counts
for a lot in our attitudes toward a service. For
example, picture two gas stations across the
street from each other. One is dimly lit, has
trash scattered around, peeling paint, etc. The
other is bright and shiny with lots of lighting.
Which would you choose?
The third challenge is relevance. Whether
you want to agree with it or not, content is king.
Just look at the recent AT&T announcement
to acquire Time Warner (following in the footsteps of Comcast’s acquisition of NBCUniversal
and Verizon’s acquisition of Yahoo). Having the
right content that appeals to users is critical because, without that, why would consumers frequent the service? Although Netflix is at the
top of the OT T heap, it, too, suffers from content
woes. People often complain that, once they’ve
binged-watched their favorite shows, there’s
not much left to watch.
Finally, there’s quality. In order for OT T services to truly rival broadcast television, they
must “just work.” Consumers want the same,
consistent experience they get from linear
broadcast TV in their OTT services. No buffer.
No jitter. No artifacting. But in order to do that,
OTT providers must invest heavily in the experience, which is a combination of quality of service (network metrics and key performance indicators) and human perception. Just because
operations may say, “Hey, we are 99.999% up,”
doesn’t mean that the experience meets consumer expectations. The rift between perception and operation must be bridged.
If the people who manage OT T services truly want to displace broadcast TV and drive subscriber growth, they must embrace these four
challenges and work toward resolving them.
Failing against any of them is certain to relegate a service to the mediocrity in which OTT
The Four Problems Facing OTT
Jason Thibeault is the executive director of the Streaming Video
Alliance. Follow him on Twitter @_jasonthibeault.
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