Deploying OTT: How Global Trends Could Impact Your Video Service
OTT is growing worldwide, but trends in viewing habits, monetization, and media workflows vary from region to region.
OTT is poised to become a nearly $65 billion market globally by 2021, and while each region of the globe is experiencing differences in how it's rolling out and how viewing habits are shifting, OTT is undoubtedly the future of video.
When we look at video activity across the Americas, Europe, and Asia-Pacific (APAC) regions, it's plain to see that OTT video and supporting technologies are being used in a variety of ways to drive revenue and audience engagement throughout the world. It's imperative that companies deploying their own OTT service be mindful of this; there is no one-size-fits-all, cookie cutter approach.
Leveraging evolving regional trends in mobile viewing, live streaming and video advertising, along with advanced technologies, will be a driving force behind the successful growth of any OTT service, anywhere.
Here are a few key developments we're seeing:
North America: Analytics
As audiences clamor increasingly for individualized, private TV experiences, the companies best able to deliver these experiences will lead in video.
In the U.S., 70% of viewers binge-watch TV shows—a core selling point of OTT and SVOD offerings. And in both the U.S. and Canada, Millennials outpace other generations for binge-watching behaviors. These findings suggest the level at which audiences (particularly younger ones) are willing to engage with video content, try recommended content, and stick with services that meet their specific, personal viewing demands.
OTT streaming providers are catching on. Hulu's on-demand service sees 75% of viewing driven by content recommendations. Netflix, a market leader and early catalyst for SVOD content binging, is known for its data-driven approach to selecting and analyzing content for its passionate audiences. For example, it determined that 70% of viewers were hooked after just two episodes of its breakout original series, Stranger Things.
Our own Ooyala Global Video Index has revealed that OTT viewing patterns vary considerably by the time of day, day of the week, device used, and business model employed. Identifying and understanding these variances can help content providers optimize their video and maximize revenue.
Undoubtedly, using data to curate personalized content and advertising will play a defining role in the future OTT landscape and ultimately separate the video winners from the losers.
Europe: Media Logistics
Today, industry demands for more content have surged, personalized video appetites have increased, and distribution outlets have multiplied.
In Europe, this rise has been dramatic: A report from the MAVISE database of the European Audiovisual Observatory noted that the European Union saw a nearly 50% increase in the number of TV channels between 2009 and 2015.
Mobile is fueling consumer hunger for OTT video in the region. As the Ooyala Q3 2016 Global Video Index report found, Europe leads the rest of the world in mobile video viewing, at 54% of views (versus 52% for the rest of the world). The Netherlands and Belgium have the highest percentage of mobile plays in the region (at 65% and 59% respectively), while Great Britain and Ireland are tops for mobile sports viewing (at 59% and 57% respectively) compared to the world's average of just under 50% for mobile sports viewing.
Media supply chain management—or in more modern terms, media logistics—has become an essential means for companies to keep up with these market changes around content production and consumption (and to stay ahead of future ones). For instance, Sky Sports in the U.K. uses media logistics to deliver hundreds of Premier League in-game clips and highlight packages for online and linear consumption to 40 international licensee partners, all in a matter of minutes.
Media logistics helps producers reduce complexity, gain visibility and improve efficiency as they create, produce, syndicate and fully monetize their OTT video content for every screen.
Latin America: Live Video
While on-demand video has enabled the OTT industry to scale, live video will make it soar. Online delivery is evolving to provide the same quality and experience of live TV broadcasts and is now serving as a core differentiator in crowded markets.
Latin America is just one region seeing a rapid uptick in live streaming content and interest, particularly with sports.
For example, América Móvil offered free live streams of the 2016 Rio Summer Olympics across Latin America via its Clarovideo OTT service. In Argentina, soccer clubs negotiate individual broadcast rights agreements; they've found that while linear TV broadcast deals have been diminishing, live streaming deals have become attractive and lucrative options. E-sports is also an area that is becoming very popular for live streaming; the top live game streaming platform, Twitch, has the highest reach in Latin and North America.
And in Brazil, Globo was the first broadcaster in its market to offer live and VOD content in an SVOD service.
They won't be the last. Many companies are harnessing the libraries, audiences and learnings they gained with their VOD services to launch live streaming for deeper OTT offerings and additional revenue across devices, and to stay ahead of their competition in the space.
Asia-Pacific: Ad Monetization
As audiences continue to shift away from linear TV, ad revenues have naturally followed.
In the Asia-Pacific region, digital video advertising is growing by leaps and bounds. Australia alone saw 75% growth in this sector between 2014 and 2015, compared to 27% in the U.S. Video is the fastest growing segment of Japan's display advertising market. And, eMarketer reported that India's digital video ad spending share rose from 12% in 2014 to 17% in 2015, at the expense of all other digital formats.
At the same time, ad blocking continues to grow; Australia has seen ad blocking rates of 18% among internet users. It's now a global problem everywhere -- and not just on desktops. According to a recent PageFair report, the APAC region is leading mobile ad blocking activity, with 36% of smartphone users blocking mobile ads; China has 159 million smartphone users with mobile ad-blocking browsers, while India and Indonesia have 122 million and 38 million, respectively. (In comparison, only about 2 million smartphone users in the U.S. have ad-blocking browsers for mobile devices.)
With all of this activity, the need for robust solutions like programmatic video, holistic advertising and ad re-insertion has increased rapidly and exponentially. Malaysia's Media Prima, for one, uses a holistic ad platform that integrates direct and programmatic trading into a single service; the company can track the success of all its ad campaigns in real-time, making on-the-fly adjustments to maximize yield.
Ad-tech offerings are helping companies more effectively manage, measure and monetize OTT video inventory across sales channels and screens, and build long-term strategies for the future.
As companies expand their vision of OTT, they must fine-tune their offerings to recognize market needs. It's clear that OTT will continue to grow in many ways and offer more opportunities for expanding audiences, content and revenue -- whether the needs are local, regional, global or all of the above.
[This is a vendor-contributed article. Streaming Media accepts contributed articles from vendors based solely on their value to our audience.]