From print to digital
The fundamental challenge the media industry is facing is that their readers are moving from print to digital—and so are the ad dollars. The medium must change for continued success and video will play an important part, in concert with a strategy to address mobile, web and OTT platforms.
Ad dollars in the digital space are mainly concentrated in a duopoly controlled by Facebook and Google. Although one could argue that Google and Facebook are just another pair of platforms like mobile and OTT, a publisher still has to ask itself if it wants to partner or compete for ad dollars. It may make more sense for some publishers to build YouTube and Facebook pages to share the revenue flow that’s concentrated to these platforms. For other publishers, a customized strategy with its own OTT could be an option.
Video is Where It’s At
The common denominator with OTT and all of these other platforms is video. Viewers overwhelmingly prefer video, and most publishers have adapted their strategies accordingly. They are now faced with an expensive production process to share their story along with new ad formats to capitalize on their investments. An investment in data is essential to understand their viewers’ behaviors. This combined investment in video production and analytics when revenue is scarce is turning analog dollars to digital dimes.
Building an audience on an OTT service has its challenges too. The industry suffers the same pain points the mobile industry did a decade ago, when there were several different operating systems like UIQ, Symbian, PalmOs, Java, and Windows Mobile. The Apple and Google app platforms soon dominated the industry and the rest vanished. Interestingly, Apple and Google are relatively new to the OTT space with Apple TV and Android TV. Roku, Samsung, and Vewd are the veterans continuing to grow larger market presences. Most publishers have already taken on the biggest investment involved in the move to video—video production and hosting —so the investment in building an OTT experience is minimal. And for the unfamiliar, there are OTT app generators that can create an OTT experience at a low cost, allowing publishers to focus on programming instead of app creation.
Viewers overwhelmingly prefer video, and most publishers have adapted their strategies accordingly
Programming Makes the Experience
The challenge in building a great OTT experience lies in programming the video catalogue to grow viewership. Initially, you’ll have viewers watching one video a month and you want to rapidly move them to viewing one video a week and then several videos a day. Therein lies the hockey stick we are looking for when it comes to revenue. Like most other digital platforms, it’s important to not only build an audience, but to keep it. Print and digital consumers are different. The print audience are loyal long-time readers while the digital audience are short-term video viewers. Building a loyalty to the digital medium has a completely new set of challenges.
The fact is, we need to recognize the TV screen as a different user experience than mobile or any other platform. Viewers are used to programming guides and channel switching to make their viewing decisions—not basing those decisions on a logo or an image. The OTT platforms and applications need to come alive when the viewer has made their decision with auto-play features so the content automatically starts without any lag-time. The tactic of “never stop playing” needs to be adopted and a user experience created around that.
Many media outlets have built up catalogues of evergreen content and other “still relevant” video material and often make the mistake of publishing everything at once. Rather than publishing their catalogues of content at once, content providers need to be more strategic in portioning out content to viewers to keep them coming back for more. On-demand services would do well to follow the lead of broadcasters to find a programming strategy that works. For example, broadcasters have a standard schedule of when news airs each day. People know they can find local news at 5:00 p.m. or 6:00 p.m. every night of the week. If publishers want to compete with broadcasters, then programming with regular time slots for their on-demand news or sports is a good start to keep viewers loyal to their OTT experience.
Similarly, they can learn from the approach of magazine publishers. Monthly publishers launch videos relevant to and timed with the print edition of their magazine, like Conde Nast does in the U.S. with its digital versions of GQ, Vogue, and Wired. Linking video material to print or other platforms can bring more eyes to every platform. OTT programming can also benefit from what used to be known as “VJs,” the personalities or hosts commenting on each video clip, either within a news show or between shows. The important thing to remember is to always keep playing videos. Let the viewer make an active choice to stop viewing and not an active choice to continue viewing.
Video on Demand ROI – Which Way to Choose?
There are two fundamental business models that can apply: subscriptions, often referred to as SVOD (Subscription Video on Demand) or AVOD (Advertising Video On Demand). A third model around transactions is also an option, which is more relevant for an OTT service renting or selling movies, TV series, or a big live event like a boxing match or concert. From what we have seen, it’s very difficult to get consumers to accept an SVOD-based service unless the offer has a clear content proposition around TV series, movies, sports, or concerts. That said, the industry is young and still experimenting. When it comes to ads on an OTT service, there are a couple of different formats to consider.
Using a sponsorship (“Presented by…”) to introduce a video clip is clean and not too intrusive to the viewer, and they are quite accustomed to that experience from traditional TV shows. Another format is showing video ads before, between or in the middle of a clip. The balancing act here is around the timing of the ad. It just doesn’t work to have a 30-second ad run before a 60-second clip. We have seen many publishers adopt a strategy where the first clip has no ads, with the first ad is between the first and second videos to avoid high churn rates. The key here is to have a close eye on analytics to watch where viewers drop off. We have not seen much success from banner pop-up ads. They are perceived as intrusive for the viewer and difficult for the advertiser to get viewers to take action on the banner like they would on web and mobile.
Video is a Must for Success – and OTT Can Help
The print media industry is facing a crossroads. A digital strategy with video as its core is crucial for future success, and OTT should be one of the platforms used for building long-term revenue streams. The investment in an OTT experience is small in relation to the investment already made in producing the video content. Long-term success comes from finding a platform partner that can help the publisher navigate the different OTT platforms and creating an always-playing experience. Programming the content catalogue is key to gain viewers and keep them viewing. Ads are probably the most viable revenue-producing tool.
One final note that is often forgotten: once you have your OTT experience set up, with a great user experience, broadcaster-style programming and ads, don’t forget to give it the same marketing push outside the platform as you would with any other publication. Cross-promotion is an ideal tool to encourage platform adoption and success.
Long-term success comes from finding a platform partner that can help the publisher navigate the different OTT platforms and creating an always-playing experience.