[opendtv] The Future Of OTT | c2meworld.com

From: Craig Birkmaier <craig@xxxxxxxxxxxxx>
To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
Date: Sat, 20 Dec 2014 08:29:54 -0500
Here is an interesting perspective on what is happening in Europe with OTT 
services.

Bert should read this twice and pay close attention. It does a very good job of 
identifying the opportunities and the barriers to success. Needless to say, the 
opportunities are FAR from infinite.

Regards
Craig


http://www.c2meworld.com/distributiondelivery/the-future-of-ott/

The Future Of OTT

Gene Hoffman, chairman and CEO of Vindicia, talks to TVBEurope about the 
predicted growth of VoD services, the power of Netflix, and the future of 
premium OTT in Europe.

What is the future of premium OTT?

Subscription OTT video on demand (VoD) services are increasing in advanced 
Western European markets. This is largely due to key market enablers that are 
in place across the region, including high levels of broadband penetration, 
access to connected devices, a willingness and ability to pay for content 
online, and supportive regulatory environments. Furthermore, technology costs 
have fallen significantly, enabling a wide range of providers to enter the 
market. However, despite the market’s predicted growth – £110 million in 2013 
rising to £390 million in 2017 in the UK alone – delivering services in a 
fragmented environment can be challenging.

For content providers, premium OTT is only one of various options for 
monetising video content. Indeed, other alternatives include transactional 
services, ad-supported content and bundled offerings such as TV Everywhere, 
provided as part of a membership package. The attractiveness of these business 
models varies widely for different categories of video content, from premium 
film and TV through to niche content, such as performing arts.

The power of Netflix

 Netflix’s entry into the European market has encouraged interest in premium 
OTT as a business model. Indeed, it is now present in 16 per cent of UK 
households and has attracted a new wave of investment and service launches by 
other international OTT providers, pay TV operators and broadcasters. Industry 
participants are subsequently spending growing amounts of money on marketing 
and promotion, driving consumer awareness and understanding. It’s inevitable 
that premium OTT services will experience rapid growth across the region.

However, despite this, there is an element of caution amongst industry leaders 
about the growth prospects for premium OTT providers targeting the mass market. 
The market’s barriers to entry remain high, with content licensing costs 
increasing quickly and subscriber acquisitions needing significant investment. 
As a result, scale is crucial and incumbency is powerful, meaning only larger 
established enterprises, such as Netflix and Amazon, are able to support 
sustained investment. With this is mind, experts are predicting that only a 
handful of major mass-market premium OTT services will gain significant scale 
in each market.

Niche OTT opportunities

By contrast, opportunities for specialist or niche premium offerings are 
becoming far more accessible, especially to providers with low-cost access to 
high-quality, unique or exclusive video content and a clearly defined, 
addressable customer base. It is believed by fellow OTT providers that 
specialist premium service providers, with the right mix of content, technology 
and marketing, should be able to attract a reasonable number of subscribers, 
especially if services can grow internationally. Their success will be based 
upon well thought out subscription offerings that target well-defined fan bases 
or are bundled with existing membership or loyalty programmes.

Going forward, the prospects for premium OTT in key European markets will 
depend upon the particular characteristics of each local market, including the 
size and wealth of the territory, and its ability to support strong domestic TV 
businesses capable of developing and delivering competitive OTT offerings. 
Indeed, European consumers have demonstrated an appetite for premium TV and 
film offerings, delivered on-demand to the device of their choice, and, in many 
markets, European businesses are poised and well-positioned to respond.

www.vindicia.com
[opendtv] The Future Of OTT | c2meworld.com

Other related posts:
