At the CASBAA Convention in Macau, China earlier this month, OTT was a central theme in nearly every presentation. It is clear that OTT is now well established as a must have for content owners and PayTV operators in Asia. However, for the companies who are constructing the right business model for OTT services, it means interacting with the paying public directly for the first time. Let’s face it - the viewing and purchase behaviour in the OTT world is vastly different compared to the linear broadcasting world.
To find out exactly how different, we partnered with YouGov, a market research and data analytics company, to survey 1,000 consumers in Singapore and Hong Kong to gain insights into their OTT viewing habits, adoption motivators, and barriers.
One question that was posed to respondents was if they would consider paying for an online streaming service in the next three months. Seventy percent of those surveyed said no while 23 percent were undecided. Only seven percent said yes.
If 70 percent of potential customers have no intention on paying for a streaming service, one reason could be that the value has not been marketed or communicated well enough to drive interest and conversions. Even though most OTT services go to market with free offers, never underestimate how a compelling content library, personalised offers, and being flexible around bundling can move the needle. The survey findings also indicated that while free trials and promotions drive acquisition, it is the mobile viewing experience and content library that drive retention.
Content is THE Retention Strategy
For content providers, understanding which content is most engaging to subscribers is critical to managing churn. It is more than just counting views. Content consumption combined with user data enables content management teams to make decisions about which content is delivering the stickiness to help retain customers. One head of content at a media company illustrated the issue most clearly to me during a conversation at the CASBAA event, sharing that he receives hundreds of thousands of clips every weekend from his content providers, and he has no idea how to prioritise and serve that content to his viewers.
Unlike PayTV services in the region, anchor or marquee content is often a big draw for OTT services. This puts the pressure on content acquisition budgets especially as Netflix plans to spend $8 billion on content in 2018.
Social Recommendations Drives Awareness and Acquisition
When asked about what motivates users to sign up for video streaming services, one-fifth of consumers from Singapore and Hong Kong cited that peer or social recommendations were strong factors.
Social media is an important channel for awareness and acquisition. Platforms that encourage users to share their experiences on social media can drive down acquisition costs. Social recommendations can carry a lot of weight and influence for acquisitions as well as retention. OTT companies need to think about designing offers that carry social capital with them in order to convert potential customers from subscribers to fans.
More Takeaways from CASBAA
Anti-piracy and content protection was another major theme at the CASBAA Convention. With many of the CASBAA members joining the Coalition Against Piracy, it shows the growing complexity of this issue in Asia. To give it context, illegal or pirate set top boxes can be easily purchased in malls across Asia today. The sellers of these boxes are the prime target for this coalition to bring down. The coalition’s initiative is especially critical when in some cases, where not only illegal set top boxes being blatantly sold online, but users of these boxes are actually paying a subscription fee to these services, fuelling revenues on the black market.
Finding a regular place at the CASBAA Convention is e-Sports, which was just starting to become a discussion topic at a few of the CASBAA events earlier this year. The eSports market is immense. In 2017, the audience was greater than 300 million and generated up nearly $700 million in revenues. Thai operator True Visions and Riot Games (owned by Tencent) dedicated an entire speaking session to eSports, an emerging yet incomprehensible phenomenon. It will be interesting to watch how this content finds its way into the mix of sport and entertainment platforms.
The opportunity in India was another big topic. Viacom18 CEO, Sudhanshu Vats, keynoted and other senior Indian officials also presented on the country developments around OTT. There are 30 OTT players currently operating in the market, serving 96 million subscribers. Since the launch of Reliance Jio, the LTE mobile network operator who introduced low cost data plans from as low as USD $2 per month, data prices have fallen by 48%, fuelling a 9x jump in data consumption. It is understandable then why Indians spend 45% of their time (28hrs) per week on mobile phones consuming entertainment and news content.
To find out more about our insights on the state of OTT in Asia, contact Greg Armshaw.