The New Battleground for Video Services Connected Apps

Connected Apps: The New Battleground for Video Services

A Parks Associates Whitepaper Developed for Connected Apps: The New Battleground for Video Services

Importantly, the increased attention on apps is not unique on apps is not unique attention the increased Importantly, a a particular Rather, to of video industry group players. their improve to variety see apps as a way of companies with consumers. business and interaction Video apps on connected devices are again playing a key role a key again playing apps on connected devices role are Video video entertainment. landscape of digital in the competitive Video Industry Players Video Providers Pay-TV OTT Video Services Broadcasters Networks Cable Media / Publishers OTT services are maturing, competition is intensifying, and players are looking to looking are to and players OTT is intensifying, competition services maturing, are particular to and tailor experiences their reach audiences. maximize The Ongoing Push into Connected Device Apps Device Connected into Ongoing Push The In a real sense, the OTTIn sense, video industry a real its roots. to is returning Internet-connected was its near ubiquityIn across part value proposition its early days, platforms. of Netflix’s Netflix Nintendo or your 3DS portable computer on your a movie watch game player, to wanted Whether you Netflix app on your the TV having places that pay did not. Eventually, in content access to – providing was there connected device CE device makers success. was seen by as critical retail to getting the business up and running, upon the market, has centered entered their focus have new players As and viability in a differentiation can provide and business model that user experience, with the content, on connected devices was secondary market. Presence survival crowded to the issue due to also a thorny and of connected and constant evolution CE devices. fragmentation Connected Apps: The New New New The The Apps: Apps: Connected Connected Battleground for Video Services Services Video Video for for Battleground Battleground All rights reserved | www.parksassociates.com | © Parks Associates will helpbroadcasters remain accessibleand relevant to consumers. withgreateradvertisers exposure. As habitsandpreferred viewing apps device connected platforms viewing shift, Broadcastersthrough appsto device maximize pay-TV useconnected services. theiraudiencereach andprovide Broadcast and includessomeofthemostwidelywatched accessibleover-the-air content inany market, TV Broadcasters innovator.market asaor viewers withoutthecompetitionpresent onmore service crowded alsopositionstheOTT platforms. It to acquire subscribers service allows topay-TV anOTT industry.rivals prior Having device anapponaconnected playersLeading appsasanarea see connected ofcompetitive OTT advantageandaway to stay aheadofthe Services VideoOTT areother unmanageddevices farlesscommon. iscommonlyavailable oncomputers, andtablets,Everywhere operator smartphones, streaming videoappson set-top coverage box, andhometelevision. andtouch pointsbeyond themanagednetwork, service Though TV success reliesto reach uponanability consumersacross allscreens. Video appsletoperators expandpay-TV Many pay-TV providers were initiallyslow to redefine theirvideobusiness, now butthey realize thattheirfuture Pay-TV Providers as fullseasonsof38 “throwback” series. oftherelaunch ofitsredesigned aspart app, filmseries aswelloriginal short U.S. broadcaster ABCannouncedinJulythatitwould bereleasing seven video service before theendof2016.video service AT&T DIRECTV-branded hasannouncedthatitwilllaunch amobile-only, in 2015.Go90, U.S. operator andmediacompany service, Verizon launchedamobile-only andsmart to Roku ComcastTVs. onlyrecently expandeditsappsupport offers theU.S. anappfor streaming Charter In mediaplayers. Roku market, also support a wide variety of connected devices. ofconnected awide variety also support Rakuten’s like platforms, ofdevice otherservices variety Wuaki.TV While Netflixhasbeenagloballeaderindeveloping appsfor a

Connected Apps: The New Battleground for Video Services

The Economist, National Geographic, and Spiegel are a few publishers publishers a few and Spiegel are National Geographic, Economist, The extend apps to their reach. video-related leveraging that are The common thread among these need cases is availability versus versus these need cases is availability among thread common The greater environment, In competitive competition. an increasingly capture to chance a greater a player gives and exposure reach and revenues. attention Discovery subscription launched its new Dplay OTT services video streaming Eurosport Player company’s the in 2015, adding it to consumers European to OTT service, video 50 global markets. in over which is available With the decline of the print media industry, publishers have adopted video in a bid to provide value to value to provide to video in a bid adopted the decline of the print publishers have industry, media With publishers and news media competing not only are advertisers So, modern appeal to consumers. and to of viewers. the attention for competing with other video options also increasingly they are with each other, another element of apps), provides climbing popularityThe streaming of social media apps (including live and new media Publishers competition, particularly content. time sensitive news media that often provide for Media / Publishers are adding connected devices app support in order to reach consumers broadly and quickly, wherever they they wherever and quickly, adding connected devices consumers broadly app supportare reach to in order in their day. are Cable Networks Cable In direct-to-consumer often from constrained networks the past, cable their relationships interaction due to were allowing connections build Networks viewing their apps to audience, leverage to now providers. with pay-TV and target their content Networks match apps to tailor their and brand awareness. viewership grow them to interactivity video access and networks Cable apps streamed blending leverage also that engages fans. audience, direct-to-consumer own launch their to OTT in order video services. All rights reserved | www.parksassociates.com | © Parks Associates Consumer Use ofApps helped unlock the TV forhelped unlockthe videoonthebiggestscreen consumerseagerto getInternet-delivered intheirhome. TV The hype ofGoogle’s around thearrival Chromecast for andApple in2013,alongwithstrong Roku marketing TV, platforms. to iOSandAndroidConsumers delivery mobile service have to support come videoservices OTT to expect consequently, onlinevideoservices. appsfor device ofconnected Changes inconsumptionreveal consumersand, theincreasing importance Use ofConnected Devices to Watch Programming andMoviesTV 50% 25% 0% Tablet U.S. Broadband HouseholdsinSpeci edCountries U.K. Germany Smartphone France Spain Internet-connected TV Internet-connected © Parks Associates Connected Apps: The New Battleground for Video Services 30% ibers and © Parks Associates © Parks subscribers of Hulu subscr of Netflix OTT Video OTT Video Service Network / Cable Broadcast TVPay Provider 37% 28% signed for up their subscription a through connected device. 20% second second 10% U.S. Broadband Households Broadband U.S. 0% Player App Player Smart TV App Weekly Connected App Use, by Video Source, to Watch a TV Program a Watch to Source, Video by Use, App Connected Weekly Streaming Media Streaming Game Console App Console Game transactional, and subscription options in an effort to find the right mix that and subscriptiontransactional, in an effort options find the right mix that to revenues. substantial will unlock consistent, Several services are now relying on blended approaches, offering ad-based, ad-based, offering on blended approaches, services relying Several now are Connected device apps have become an important an important become apps have device Connected of video services. monetization channel for OTT video services continue to lead pay-TV providers, broadcasters, and cable cable and broadcasters, providers, OTT services video pay-TV lead to continue the television. to content deliver networks in use of connected apps to This finding shows connected apps are the connected finding shows apps are This selling OTT channel for video services. most effective Approximately one-half OTTApproximately of current video service the service transacted through subscriptions were website. provider’s one-quarterOver of subscriptions were app, device a connected through purchased media players, including apps on streaming TVs. and connected game consoles, Among U.S. Broadband Households: Broadband U.S. Among All rights reserved | www.parksassociates.com | © Parks Associates Which Apps Matter lead inworldwide adoption. remains shareRoku themarket leaderintheU.S., withApple maintaining a TV launchappsfor optto streaming quickly media players. video services Many OTT ontheirtelevision. are purchased videoservices typically by consumerswantingto watch OTT ofthefastestOne growing categories ofconnected CEdevices isstreaming mediaplayers. more viaappsthatAndroid owners. device owners thatiOSdevice tend oftheplatform to andthefact spendstability Apple’s prioritize same time, someservices iOSappsdueto thegreater and tabletapps. While Android andiOSappsare released often atthe are smartphone videoservices Generally, by OTT thefirstappssupported is amore complicated question. for apps. device connected consider support Which appsmatter, however, toof creating appshasdeclinedoveriteasierfor time, services making channelfor revenues. subscription an important At thesametime, thecost Connected device matter appsclearly to consumers Method ofSubscribingto OTTMethod Video Service Website OTT OTT Video SubscriptionsHeldby U.S. Service Subscribers Mobile / Mobile Tablet App andhave become Other Connected Other Device App © Parks Associates Other Method Other connected platforms.connected owners ofother TV- than video services more onsubscription media players spend ofstreamingOwners These platforms These Home Entertainment Device Ownership (2009-2016) U.S. Broadband Households

Q1/2009 Q1/2010 Q1/2011 Q1/2012 Q1/2013 Q1/2014 Q1/2015 Q1/2016

75%

50%

25%

0% Smart TV DVR Blu-ray Player Streaming Media Players Gaming Console

Smart TVs are also gaining in penetration. The idea of offering an app on the TV itself attracts many video services to this platform. Samsung boasts strong global penetration of its smart TVs and offers a robust developer support program for its Tizen operating system. LG Electronics, Vizio, Sony, and several manufacturers from China are eager to gain share as well, using Android, WebOS, FirefoxOS, and Roku software as the basis for their smart TV platforms. Some smart TV makers have launched their own apps, offering transactional services for 4K content to help foster the growth of their 4K TVs.

While Blu-ray player adoption has cooled, these devices are often made by the same manufacturers as smart TVs. As a result, the apps for these devices tend to be closely related to those of the manufacturer’s smart TV app.

Among the devices that allow televisions to access online video, game consoles have the © Parks Associates © Parks highest penetration in connected households but are currently in decline.

Over 50% of U.S. broadband households own one or more gaming consoles.

While Microsoft and Sony are the leading console makers, each has two platforms (one new generation and one older generation) that are deeply entrenched in the market, All rights reserved | www.parksassociates.com | All rights reserved | www.parksassociates.com with each platform requiring its own app. Thus, video services face creating four separate apps to cover the game console marketplace. Connected Apps: The New Battleground for Video Services Success Factors Success success for Planned Stability and reliability Data-driven decisions Emphasis on easy Promotion Nothing slows the momentum of a serviceNothing slows app. so much as a problematic quite Apps must be designed in a way that they that they in a way Apps must be designed market to can be brought quickly and easily keep to up order in maintained and updated audience. a changing with the competition and Not only does it impact those who download the app, it will produce negative ratings and reviews online and in app app in and online reviews and ratings negative produce will it impactit app, does the only Not download who those been resolved. have issues may hindering after adoption even any stores, Stability and reliability the that consumers use, on all of the devices and screens While services and revenues seek viewers eager to are app simply must work. In all aspects eliminating software addition to bugs, of the service to on the app need interface, or advertising. systems and payment video and audio quality, meet consumer expectations, including A quality app experience brings together content, interface, discovery, and A quality app experience interface, and brings content, together discovery, platform. app of the target the strengths for suited are business models that audience is a criticalplanning an effective in step core Understanding the apps over Several to servicesapp experience. their approach adapted have of their learned about the viewingtime as they habits and preferences have platforms. users on differing Several factors impact of video service the success apps: success for Planned Competing Effectively on ConnectedApps on Effectively Competing All rights reserved | www.parksassociates.com | © Parks Associates in order to benoticedanddownloaded from thedevice’s appstore. competitors devices, are onconnected they oftechniques attempt leveraging to outperform avariety As services andpromote needto theirappsto market generate ofthe app, awarenessBeyond thefunction services anduse. Promotion first time. worldwide, CEdevices of connected more andmore consumersare for accessingonlinevideoontheir the TV minimize userdecisionsandgetconsumersto interesting content quickly. With theincreasing penetration andpersonalizationcapabilitiesto implementations. Easyappsleverage intuitive Everywhere interfaces some TV The bestappsare easyfor consumersto use, includingeasyauthentication,anissuethathasbeenachallenge for Emphasis oneasy able to dosoaswell. do appsneedto bedesigned to capture suchdata,thesystems usedto deploy andmanagetheappsneedto be customers’ accordingly, andadapttheservice experience anessentialelementinremaining competitive. Notonly to understandtheir andconsumptionbehaviors allows services dataoncontentCollecting performance Data-driven decisions • • of theirapp. optionsincludeproviding userswithspecialbonusesorincentivesOther for tweets, likes,ratings, andreviews results inusersearches intheappstore. are paying for services placementintheappstoreSome orare employing SEOtechniques to produce better broad exposure andongoinguse. to achieving apps, device connected is important even thosewhomay notbeaccustomed to using easyfor theexperience allconsumers,Making

Connected Apps: The New Battleground for Video Services BroadwayHD believes believes BroadwayHD decisions, allowing BroadwayHD to expand its service expand to BroadwayHD allowing decisions, the needs of consumers that were meet availability to its content. for highly likely pay to is working the company create with Ooyala to Today, and iOS devices rather than Android for apps native those platforms. for upon mobile browsers relying existing apps, BroadwayHD’s Ooyala developed monetization approach hybrid supports the service’s (transactional cloud- and subscription) and is providing content and management, analytics, based content with BroadwayHD apps will provide native The delivery. for support DRM, which is contractually required for partnerssome of its content better it to but also allows apps will also The popular content. its most protect the serviceallow support to Chromecast. subscribers. to only available apps are service’s The either to prompted the app are who download Those a subscription account. BroadwayHD create or to login its AppleTV to available app (already is adding a feature an purchase on Roku) users to that will prompt one. have account if they do not already New services must generate revenue quickly in order to New services quickly to revenue must generate in order She She User acquisition and conversion is critical. and conversion acquisition User that good content is what drives repeat use of a good service. The company designed its interface designed company be similar The to use of a good service. is what drives repeat that good content art of poster sliding rows The options and the app store. that users experience in Apple’s the look and feel to and then getting out of the way. quickly content simple, desired capabilities are guiding consumers to search and app visitor BroadwayHD’s is key. customers paying and converting to visitors long term viability, achieve first in its UI, working is displayed most popular content service’s The of accounts. on creation experience focus help drive sales. to like stores an endcap in retail The user interface should be consistent, simple and meet customer expectations. simple and meet customer user interface should be consistent, The • • Loves Me. Loves access offers BroadwayHD In its website, addition to than a rather via web-browser on mobile platforms consumers that want to For app. mobile dedicated the on their biggest in-home screen, theater watch serviceTV, and Chromecast supports Roku, Apple media players. streaming support, browser first launched with web BroadwayHD market. the easiest path to However, which provided base quickly customer expressed growing the service’s on content BroadwayHD’s in watching interest This TVs, particularlyTV. connected via Roku or Apple was importantfeedback in the fledgling company’s While many video services focus on TV programming, TV video servicesWhile many on programming, focus access viewers offers or sports,movies BroadwayHD streaming live including productions, theater-based to Tony of productions or behind-the-scenes looks at the Awards. OTTThe video service launched in October and 2015 claims a library and 150 full-length stage plays of over access to unlimited Subscribers can receive musicals. on-demand library $14.99 per month. for the service’s access to An annual subscription of $169.99 provides on-demand Alternatively, content. theater and live a particular access to users can purchase on-demand $9.99. for events $7.99 and live production for was the first OTT BroadwayHD video service stream to doing so on June 30th with the show, Broadway a live production of Company’s Theater Roundabout Executives at BroadwayHD suggest that their experience world: taught them valuable lessons about the video app at BroadwayHD Executives Case Study:Case BroadwayHD All rights reserved | www.parksassociates.com | © Parks Associates The Future for Competition onConnected Apps partnerships withCEmakers. partnerships nichesandto engageinuniquemarketing to suitparticular their experience andservice Viacom’s Noggin and Verizon’s Go90. This strategy to adapt willallow theseservices CEplatforms. including are services, particular Some already offering mobile-specific websites, agrowing willopttoexclusively offer numberofservices their on willcontinue to competeWhile videoservices large across OTT allplatforms including source for live video, allowing viewers accessto events orprogramming inreal-time regardless oftheirlocation. to generate awareness andviewership. thatappsare willhelpsetconsumerexpectations ago-toThese efforts heavily promoting livestreaming andare covering popularevents, suchasaward shows andNFLgames, inorder thesetechnologiesLive, are thecompaniesbacking placinglarge betsonlive, video. app-based These players are While many consumersare aboutlivestreaming onlynow learning appssuchas Twitter’s Periscope andFacebook competition over few thenext years. Given current trends, appsarena willgainincreased thevideoservices attention and and expectations aboutlive content apps.and expectations onconnected Popularity inlivestreaming willdriveincreased interest An increasing number of OTT services willgoappfirst. services An increasing numberofOTT Your Apps - Powered by Ooyala Ooyala helps meet the growing demand for OTT apps by offering both an out-of-the-box OTT app development and delivery solution for the most common use cases, as well as custom application development services through Ooyala’s Professional Services Group when there is a need to tailor offerings to more specific business needs.

Ooyala AppStudio, the company’s out-of-the-box offering, makes it easy for companies to deliver content seamlessly across smartphones and tablets, web browsers, and popular OTT devices including Apple TV, Roku, Amazon Fire TV, and Google Chromecast.

Pre-integrated with best of breed products from Ooyala and its partners — it includes everything from video and application content management systems, subscriber management, monetization, analytics, personalization, and application builder — all hosted in the cloud. In particular, it works together with Ooyala’s core video publishing and management solution, Ooyala Backlot, and its award-winning Ooyala IQ solution for measuring content performance and consumption trends.

Ooyala AppStudio contains advanced UI templates and a powerful drag-n-drop interface to easily configure layouts, schedule content, and manage apps. Apps and web experiences can be easily matched to any brand look and feel for consistency and to drive awareness and recognition. Companies can also update any app UX without the need to re-build or re-certify the app, or for consumers to re-download the app.

Ooyala’s industry-leading analytics and reporting dashboard, Ooyala IQ, provides real-time insights to make business decisions and transform the layout and behavior of apps in minutes. It offers a 360-degree view of content performance and viewer engagement on all devices, allowing companies to make real-time content and UX decisions in Ooyala AppStudio without changing a line of code.

Further, Ooyala AppStudio is pre-integrated with Ooyala Pulse and other major ad serving platforms to maximize monetization of every video asset.

For custom application needs, Ooyala’s Professional Services Group can help build bespoke applications and/or integrate with existing components or systems, affording you the flexibility needed to best suit your needs.

For more information: www.ooyala.com

About Ooyala Ooyala is a US-based subsidiary of global telecommunications and IT services company Telstra. Ooyala’s comprehensive suite of offerings includes one of the world’s largest premium video platforms, a leading ad serving and programmatic platform and media logistics solution. Built with superior analytics capabilities for advanced business intelligence and a strong commitment to customers’ success, Ooyala’s industry-leading end-to-end solutions help large-scale broadcasters, operators, media companies, enterprises, and brands build more engaged and more profitable audiences, and monetize video and TV with personalized, interactive experiences across any screen. ESPN, Univision, NBCUniversal, Star India of 21st Century FOX, Sky Sports (U.K.), ITV Studios (U.K.), RTL Group (Germany), M6 (France), TV4 (Sweden), Mediaset (Spain), America Television (Peru), and Media Prima (Malaysia): these are just a few of the hundreds of broadcasters and media companies who choose Ooyala. Headquartered in Silicon Valley, Ooyala has offices in New York, Dallas, London, Chennai, Stockholm, Sydney, Tokyo, Singapore, Cologne, Madrid, Paris and Guadalajara, and sales operations in many other countries across the globe. All rights reserved | www.parksassociates.com | © Parks Associates INDUSTRY: EXPERTISE For more information, visitparksassociates.com systems andsecurity. consumerapps, consumerelectronics, advancedadvertising, energyservices, management,andhomecontrol support digital health,mobileapplicationsandservices, andtelevision services, gaming, Internet homenetworks, The company’s of digital and mediaandplatforms, includestheInternet entertainment expertise Things (IoT), subscriptions. ences, andannualservice studies, consumer research, custom primary reports, research,ups through market workshops, executive confer Founded in1986,Parks Associates creates research capitalfor companiesranging from Fortune 500to smallstart- company specializinginemerging consumer technology andservices. products Parks Associates isaninternationally recognized research market andconsulting responsibility for any inadvertent errors. foranyinadvertent responsibility United States ofAmerica. of this book may be reproduced,No part in any form or by any means, from in writing without permission the publisher. Printed in the ATTRIBUTION—Authored by Brett Sappington. Published by Parks Associates. ©Parks Associates, Dallas, Texas reserved. 75248.Allrights DISCLAIMER Middleware, Technical Services Support Boxes, Gateways, Residential Electronic Program Guides, Video Search andRecommendation, Video Metadata, Set-top Cloud-basedConsumer Multiscreen Services, Services, Broadband Value-added Services, Services, DTT), Baylor University. MBA from of the University Texas at Austin and a BA in physics with a concentration in high-tech from marketing Twitter ID:@BrettsView Brett asananalyst,executive hasspentover manager, 18years intheindustry andentrepreneur. forceserators andthemarket affecting theirbusinesses. — Parks Associates has made every reasonable effort to ensure that all information in this report iscorrect. to ensure We thatallinformationinthisreport Parks reasonable effort assumeno hasmadeevery Associates and broadband services. His personalresearch His focusesand broadband and trends services. ontheactivities amongop television inworldwide Brett isan expert services. media, videogaming, andtechnical support digital media, OTT, research services, cloud team, includingaccessandentertainment services As asenior director ofresearch atParks Associates, Brett Sappington leadsParks Associates Brett Sappington, About The Author International Digital Living International Trends, Television cable, (IPTV, satellite/DTH, Services terrestrial/ Senior Director ofResearch, ParksSenior Associates or contact usat972.490.1113 or contact / [email protected] Brett holdsan - - INTERNATIONAL RESEARCH FIRM ResearchResearch && AnalysisAnalysis for Digital Living Technologies

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