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Thriving in Today's Exploding OTT Marketplace May 2016 An eBook from the editors of FierceCable Thriving In Today’s Exploding OTT Marketplace White-Hot OTT Market Set to 2 Take Off in 2016 6 Sponsored Content: Comcast Article Title Goes Here 7 Let the Post-Netflix Era Begin: Programmers Dive Head-First into Direct-to-Consumer Streaming 10 Sponsored Content: How Comic-Con HQ is Taking Content Direct-to-Consumer with Video-on-Demand Channel 11 Pay TV Faces the OTT Technology Learning Curve 17 Pathways to Monetization Thank you to our sponsors: share: share: An eBook from the editors of FierceCable White-Hot OTT Market Set to Take Off in 2016 By Gigi Sukin n2 White-Hot OTT Market Set to Take Off in 2016 n6 Sponsored Content: Comcast Article Title Goes Here n7 Let the Post- Netflix Era Begin: Programmers Dive Head-First into In 1982, John Hendricks built the Discovery Channel to IP TV and away from the wire?’ The next question is, Direct-to-Consumer into a documentary empire thanks to the advent of the ‘who pays for TV when TV is free?’” Streaming cable revolution. His niche, nonfiction, fit well into the Hendricks appraised the shifting tide and a little milieu of genre-based networks like HBO, which featured n10 Sponsored Content: programming for movie buffs, and ESPN, which sated more than a year ago brought the nonfiction genre How Comic-Con HQ is sports fanatics. online with CuriosityStream, a subscription video-on- Taking Content Direct- demand (SVOD) service that offers unlimited ad-free to-Consumer with But today the confines of the household are virtually documentary-style programming for $2.99 to $9.99 a Video-on-Demand meaningless for viewing consumers. Instead, whatever, month, depending on image resolution. Channel whenever and wherever are the expectations set for video “People are willing to pay fairly for content as long as entertainment consumption. n11 Pay TV Faces the OTT they are not interrupted by ads,” says Peter North, COO Technology Learning “What’s old is new again,” says Howard Horowitz, of CuriosityStream. “Being ad-free presents a competitive Curve president of Horowitz Research, a multichannel research advantage. You’re unfettered from typical television firm. “Thirty years ago we asked the question, ‘What scheduling. For a film that’s 50 to 60 minutes long, 100 does programmed cable television look like, migrating percent of that is content, carefully produced. You don’t n17 Pathways to from broadcast to cable?’ Now, we’re working with clients have to create ad breaks every seven minutes, and you’re Monetization who are asking, ‘What does TV look like migrating over no longer constricted to a 30 to 60 minute timeline.” Thriving In Today’s Exploding OTT Marketplace // May 2016 share: An eBook from the editors of FierceCable CuriosityStream is just one of seemingly countless licensing agreements for content.” Issues of copyright options for consumers who want to “cut the cord.” management, legacy relationships and delivery tactics play into the shakeout in the new world of television. The OTT Power Shift Starting with YouTube in 2005, according to Horowitz, n2 White-Hot OTT over-the-top (OTT) services fused the worlds of Market Set to Take Off “We are starting to see the changes in 2016 television and digital video, delivering content over the in viewing behavior (be it device internet without requiring a subscription to traditional or types of content) that allows for cable or satellite pay-TV services like Comcast or Time power-shifts to occur within the n6 Sponsored Content: Warner Cable. By 2007, Netflix made an aggressive play Comcast Article Title market, and everyone is competing to stake Goes Here to invest in digital distribution of film and television, their claim.” rather than resting on its mail-rental service as a singular business strategy. Years later, “they’re still leading the MICHAEL INOUYE, PRINCIPAL ANALYST, ABI RESEARCH n7 Let the Post- pack and doubling down on original content to sustain Netflix Era Begin: and differentiate themselves,” Horowitz says of Netflix. Programmers Dive “These relationships give program providers and Head-First into “We are starting to see the changes in viewing behavior Direct-to-Consumer operators a lot of control over the consumer,” Horowitz Streaming (be it device or types of content) that allows for power- says. “ shifts to occur within the market, and everyone is competing to stake their claim,” says Michael Inouye, a The market has quickly become crowded, with giants n10 Sponsored Content: principal analyst with ABI Research, a technology market like Hulu and Dish Network’s Sling TV, which offers a How Comic-Con HQ is intelligence company. $20-a-month package that includes channels like ESPN Taking Content Direct- to-Consumer with and counts more than 600,000 subscribers. Long gone are the days of limited channels or viewers Video-on-Demand conditioned to plan around program schedules. OTT “I think Sling TV has been a leader in betting on linear Channel video service providers have disrupted the “on-demand” television,” says Horowitz, adding that Comcast’s X1 model with personalized video experiences that platform serves as a stellar example of an “outstanding n11 Pay TV Faces the OTT consumers can watch whenever and wherever they like. ... large, legacy company stepping up to the plate,” to Technology Learning Some of the services charge customers a monthly fee compete. Curve while others are taking an ad-based approach (AVOD). As of March, AT&T announced it will start offering an n17 Pathways to “There are lots of factors at play,” says Horowitz. OTT, dish-free version of its DirecTV satellite service Monetization “One important thing is the structure of existing over the internet by the fourth quarter of 2016. The relationships—relationships to operators, contracts and specifics of the service remain unclear. Thriving In Today’s Exploding OTT Marketplace // May 2016 share: An eBook from the editors of FierceCable Targeting comedy enthusiasts, NBCUniversal Digital year that the new Star Trek TV series (coming 2017) Enterprises unveiled Seeso this January, a first-of-its- will air its premiere on the CBS Television Network but kind streaming comedy channel, free from ads, for subsequent first-run episodes will be available exclusively $3.99 a month. The SVOD service features classics like on CBS All Access, the streaming service. “All of this also Saturday Night Live and Monty Python alongside weekly pushes more content over general IP channels instead of n2 White-Hot OTT Market Set to Take Off programming, including more than 20 exclusive original the traditional distribution platforms,” he says. in 2016 series. It also delivers a search function so viewers can simultaneously watch and hunt for what to tune into Indeed, with streaming services, programs are no longer next. reliant on ratings for survival. “A lot of the content you n6 Sponsored Content: see on typical pay-TV is broadened for greater appeal,” Comcast Article Title “Big streaming services have created a paradox of choice- CuriosityStream’s North says. “But now, content doesn’t Goes Here -they’re great if you know exactly what you want to have to be one-size-fits-all.” watch, but if you’re in the middle of a binge, the search n7 Let the Post- can be nearly endless,” Evan Shapiro, executive VP of Pay-TV Operators Join Forces With Netflix Era Begin: NBCUniversal, said in a press release upon the launch of SVOD Programmers Dive Seeso. Integration is a concept many television experts are Head-First into Direct-to-Consumer discussing, referring to the incorporation of OTT into Streaming the pay-TV experience. For instance, Netflix and Hulu have been integrated into some Tier 2 cable operators’ “All these services will be more integrated 10 set-top boxes. Top-tier operators AT&T and Cablevision n Sponsored Content: with one search engine,” How Comic-Con HQ is also announced that Hulu would become another Taking Content Direct- HOWARD HOROWITZ, PRESIDENT, HOROWITZ RESEARCH “channel in the lineup,” according to Blackwell. to-Consumer with Video-on-Demand He says the question for traditional industry players is Channel whether to integrate existing SVOD services into their “OTT enables the creation of niche categories,” says lineup, or create a new service. That is made easier Jason Blackwell, director of Strategy Analytics’ Service thanks to cloud technology, which “evens the playing n11 Pay TV Faces the OTT field for some of the smaller operators to integrate and Technology Learning Provider Strategies service. “You can appeal to a certain Curve segment of the population without having to worry deploy new services without having to commit a lot of so much about necessarily the scale-of-operations or capital expenditure,” he says. subscribers needed to support things like infrastructure.” n17 Pathways to Blackwell says that in the U.S. market, many smaller cable Monetization ABI’s Inouye says there’s increasing interest in going operators—Atlantic Broadband and Suddenlink, for direct-to-consumers. For example, CBS announced last instance—have integrated Netflix into their services to Thriving In Today’s Exploding OTT Marketplace // May 2016 share: An eBook from the editors of FierceCable “quickly expand their video-on-demand library without Is Live TV Outdated? incurring additional cost. You haven’t seen that from For many traditional distributors looking to add an some of the larger operators—Comcast, Time Warner— over-the-top video component to their service packages, because they already have extensive content.” live or “linear” TV remains a missing piece. “Pay TV n2 White-Hot OTT operators have a real advantage there,” Blackwell says. “All these services will be more integrated with one Market Set to Take Off “[The industry’s] strength is in aggregation—something in 2016 search engine,” says Horowitz.
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