2018 wrapped up as a fascinating year for OTT TV in Asia, with global content owners, PayTV operators, and OTT players all ramping up their direct-to-consumer OTT offerings. In a game-changing move, Disney acquired Fox mid year, and announced plans to launch its own OTT service, Disney+, in 2019/2020. HOOQ, a highly sophisticated Netflix-like, multi-country OTT streaming service backed by Sony Pictures Television, Warner Media, and SingTel continued their aggressive moves in the Asia and India regions, and recently launched 50 free channels in Indonesia. HBO GO Asia expanded its footprint with a launch in Indonesia, adding to its portfolio of OTT services in Singapore, the Philippines, and Hong Kong.
As content owners and PayTV operators launch — or even revamp — their direct-to-consumer OTT TV services, it’s an ongoing race to establish a business model that includes the right content, pricing, and user experience. Here’s my take on the top six trends that will shape OTT TV in Asia and India this year.
1. Focus on the viewing customer
While previous years have been dominated by conversations about tech or monetisation, 2019 will be dominated by a focus on the customer and enabling their access to great content. Disney’s Kevin Mayer puts this succinctly in a recent interview: “Having a better relationship with our consumer puts us in control of our own destiny.”
2. Enabling access on every device
Consumption trends are plotting a chart upward and to the right. Not all of this consumption is sensitive to copyright ownership, but it’s clear that video viewers have multiple devices and an internet connection, which facilitates increasing consumption. However there’s a great deal of friction preventing these viewers from watching the content they want or even being offered the option of paying for the content they watch.
3. Consumers want flexible payment options
According to our OTT research, consumers have varying views across the region about whether they’re willing and happy to pay with their time (through watching advertising) or their money (subscriptions). In 2019, we’ll see platforms using their understanding of their consumers’ preferred content to deliver premium experiences. Business model choices also need to be flexible for the consumer. In India and Asia, OTT providers could take a cue from the FMCG marketing playbook by offering sachet pricing. OTT TV providers can also offer small, low-priced subscription plans that are valid for a weekend or a week. The aim here is to enable users to sample the content and eventually convert the consumer into a more long-term subscriber.
4. Does OTT advertising remove friction?
Advertising paying for TV content is a contract the viewer is already familiar with. The benefit for the viewer is that they ‘pay’ with their attention. And they should receive more relevant, well-targeted ads than they would on a broadcast channel.
Because of its highly targeted nature, ease of measurement, and tendency to have higher ad completion rates, OTT advertising is opening up new revenue streams for OTT TV providers — while also offering a highly engaging environment for brands. For advertisers, who tend to go where their audiences are, OTT TV is a beautiful mix of engaging content and addressability. It’s encouraging that agencies are seeing ad rates hit a plateau in the traditional, linear channels, while CMOs are excited by the high viewability of OTT TV services.
5. The content viewing experience guides OTT strategy
According to Brightcove's OTT TV research with YouGov, trials and promotions tend to drive users to sign up for OTT services, but it’s the content itself that drives retention. We see many OTT providers not just investing in content, but also making their content work harder with content discovery and recommendation features. The research also sheds light on the importance of accessing content on mobile, which forces OTT providers to consider how their mobile OTT app could or should enhance the viewing experience. Features like offline download, which allows users to watch content when they’re not on wifi or a mobile network, and video continuity, which allows users to continue where they left off or ‘travel’ in between devices, remain desirable. All of these features are designed to increase stickiness to the service, as they allow for increased view times and encourage binge-watching habits.
6. PayTV operators experiment with OTT solutions
Asia Pacific PayTV annual growth is slowly grinding to a two percent compound annual growth rate — from 267 million subscribers in 2018 to 288 million subscribers by 2023. Such low growth means that PayTV operators need to adapt to changing viewer habits by exploring the extension of their PayTV service to OTT TV services. Skinny bundles are an emerging product offering in Asia, with HOOQ launching skinny bundles in Indonesia that are targeted to tap into the 90 percent of Indonesia’s population who do not already access PayTV services. These kind of content offerings acknowledge the difference between the buffet of the PayTV mega bundle and the a la carte personal choice of OTT TV. Understanding the context-driven difference in consumer preferences will allow PayTV operators to thrive in the OTT space.
Finding success in OTT TV services ultimately comes down to the viewing customer. For any global regional broadcaster or direct-to-consumer OTT service to thrive in this highly competitive environment, they must offer the desired elements to consumers.
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