OTT Beyond Borders
As more and more OTT services enter the market and existing services position themselves to expand their reach, they're all arguably pursuing audiences that are fundamentally different from those targeted by broadcast and cable in that traditional regional and national boundaries no longer apply. The opportunity to realise an OTT market without borders, truly global in scope, is a tantalisingly attainable goal today, but licensing limitations, differences in device preferences, and delivery hurdles need to be overcome in order to make global OTT a reality.
In this article, we provide a snapshot of the current state of global OTT by asking experts from both the US and international markets to discuss how they have expanded their reach in spite of these often formidable challenges.
Planning for Global Reach
Reaching for a global OTT audience isn't as simple as making your service available in other parts of the globe (as if that, in itself, were anywhere near as simple as it sounds). It also means planning for a "one world" market by adopting a content strategy and adapting your content as necessary to make it accessible to viewers outside the market in which you initially launched your service.
"Now when content creators plan their content, it's important for them to plan for the world as one market," says Rajesh Nair, VP of business development and content acquisition at free streaming service DistroTV. "That's equally true for broadcasters, publishers, and streamers. We are already seeing that happening with the Netflixes of the world, where we see, say, a Spanish series get popular that we might never have even been exposed to a few years back. That access builds audiences irrespective of territory. Now we, as humans, are connecting with content and stories across the globe. That is a very exciting paradigm shift, and OTT is enabling it, because content is coming to you on your devices where you are, rather than you having to follow the content."
Disney Streaming comprises the OTT arm of one of the biggest global content brands on the planet. According to Rebekah Mueller, Disney Streaming's senior director of product, "We made a really conscious choice when we were supporting, for example, new languages to make them available globally. So if we have languages available for a piece of content, we allow our customers to experience that around the world. If you speak French-Canadian and you're in Quebec, you're covered. If you speak French-Canadian in Germany or Argentina or whatever, you can experience it as well. So we really try to bring our capabilities at a global standpoint, and we think of English and the United States as just one country and one language of many that we support."
Launching for International Markets
Beyond making content available in different languages, there are many strategic approaches, legal requirements, issues around device support, and more that OTT services need to consider when preparing to launch in new international markets. Mueller describes these considerations as "architectural decisions" that are fundamental to building a successful international launch—even for a brand as established as Disney.
"What I mostly tell folks when they are thinking about taking a domestic product—whatever country that product may originate from—and trying to take it outside of that country is that they need to support things that are hidden within products that you already use. And you don't realize because you've had them for every product that you've experienced for the most part. How people use payments, for example—there are different legal requirements for payments or content or content ratings. There are different devices that people use and different penetration of devices for streaming in different countries, different language support. We're coming to Japan this fall, and Japanese is a meaning-based language. That means core, fundamental changes to how search works or how the language displays. But most people don't realize these things because you experienced the products that you have."
Mueller adds that after a product or service launches in a new international market, "We know we're successful when we don't feel any friction in the product, and it's just seamless. Success is providing an experience so seamless you don't realize where it originated from."
According to Emily Powers, EVP and head of BritBox North America, a BBC- and ITV-backed subscription service dedicated to bringing premium British TV content to markets outside the UK, a key part of any international expansion is determining which elements of that expansion should be managed centrally and which aspects require localisation. "You need localized languages. You need your editorial team to be able to merchandise differently in different territories. You may have different types of plans available, whether they're monthly or annual or different promotions," she notes.
BritBox North America is a BBC- and ITVbacked subscription service that's dedicated to bringing premium British TV content to markets outside the UK.
But Powers says it's also critical for OTT services to leverage core strengths and maintain a degree of unity and brand identity across the product as it establishes itself in disparate markets. "You want to be able to produce a single app with one set of underlying code that can be populated in any territory that you're launching in. You might have additional layers or different integrations. But you don't want to be creating 10 different apps that all live on Apple TV or all live on a Samsung, just in different territories. So it's very much about trying to figure out what can be done centrally and then what elements need that localization."
Building Local Marketing Teams
When OTT services plan to establish a presence in a new international market, one key step is building a team on the ground in that new market, with staffers who speak the language and appreciate cultural nuances. This is critically important when it comes to ensuring that marketing efforts are tailored to connect with the local audience.
"Marketing is a really interesting area, because there's a lot of synergy when you think about buying digital media, which is something that can be done globally very easily," says Powers. "However, you always need that local expertise with the audience to find the best medium to reach them, how to talk to them, the messaging nuances, and spelling. We debate that all the time: How much of our marketing and media buying can we do globally? If you want to do things like TV buying, out-of-home advertising, radio, that's something that really needs to happen with boots on the ground, someone who's there and is in the market firsthand. But it's a constant discussion about how we can take advantage of where a lot of the media is being purchased on digital platforms that are global to begin with, leveraging the ability to push buttons in a Facebook ads manager versus also having that media on market-specific platforms."
"We are in a privileged position because we deal with content partners from these markets, and it is in their interest as well to ensure that audiences consume their content," says Nair. "So a big part of our marketing strategy is to work very closely with our content partners. We have close to 200 live channels, and we have very close relationships with them. Because we have a service that sits on 4,000 websites, generating about a billion views, with nearly 250 million unique users every month, we use that platform to our advantage to push digital TV.
Indian and Southeast Asian content on DistroTV
"But some marketing efforts—particularly those that accompany launches in new areas—require relying on other resources to reach and grow the audience, and that means our core marketing team works out of San Francisco. And in the UK, because we are launching a bundle primarily for South Asians, a press release is going out next week. So now we are looking to our marketing agency in the UK to look after our non-digital activities, like outreach and radio and TV."
Think Global, Ads Local
One of the challenges of globalising OTT services—particularly for AVOD-based services—is localising advertising in different markets. Does serving different nationalities require inserting different ads or simply translating the same ads into different languages?
"With respect to monetization, the ad plugging that we do is localized to that particular market," says Nair. Ad localisation, he notes, "is actually quite a minefield. It starts getting tricky because with each territory, based on the audience, the advertising requirements are different. When you plug into ad exchanges, that's kind of straightforward, but when you want to do localized advertising on the content partner channels, that gets a bit tricky."
As in most aspects of business expansion across different markets, it works best when strategic partnerships are in place. "We've got relationships with advertisers directly and [with] ad agencies, which is plug and play, and that's fine. But when we need our sales team to activate it, based on the content proposition," Nair continues, "there has to be customization for that particular content. So, for example, sports channels will attract advertisers that are looking for audiences that are high on adrenaline. It has to be invested into each market, so to speak. So as you scale up, those ad relationships are critical."
At DistroTV, he says, "Our strongest relationships are obviously in the U.S. and Canada, where we are predominantly focused. We're also building relationships in India, which is a very fragmented and complicated market, My advantage is being from there, so I understand that market quite strongly. But the challenges faced in the advertising elements are quite humongous, and we are a service predominantly funded by advertising, so a lot of our investments go into that area."
Over the Top, Across the Cultural Divide
BritBox is unique among the OTT services discussed in this article in that it's based outside the U.S. and was initially focussed on bringing content developed and produced elsewhere into the U.S. market. But Powers insists that the challenges BritBox has faced over its first 4 years have been no different from those of any growing business or other OTT services that are intent on attracting, growing, and serving their target audiences.
"When we launched in 2017, we thought it would be a service targeting a hyper-niche audience of Anglophiles and expats," Powers says. "But we found that the demand far exceeded just that very narrow audience. That was a little bit of a luxury. We didn't have a lot of hurdles in launching and growing the business because the demand for the content was so strong, but we went through all of the typical growing pains of a small startup. We had the backing of the BBC and ITV, but we had a small team of about five or 10 people launching the business in the early days. So I think all of our growing pains were more related to any small business launching and trying to be really scrappy and resourceful and growing much faster than we anticipated and less about bringing a new import into the country. We also needed to make sure that the technology, the content offering, and the level of investment that we had planned were enough to continue that growth and exceed if possible."
DistroTV's approach is somewhat different. The company regards its platform's primary value proposition as providing authentic multicultural content that appeals to specific underserved communities within the US "We have to be a differentiator in the market, and we are building multicultural audiences [that] consume our content," says Nair. "For example, there are about 15 million Hispanics in the U.S., but they cannot easily get content" with which they have a cultural affinity. Likewise, he says, "There are about 6 million Bangladeshis and Pakistanis who can't get South Asian content easily. So we plan around building these content niches and catering to them to get them on our service."
The need to deliver culturally relevant and resonant content is arguably heightened when it's being marketed in specific countries. But how important is it to offer content that is actually produced in the destination country, as opposed to simply being identified as having local appeal? Of course, the notion that certain movies, shows, and brands might have "universal" appeal and be promoted and presented as such varies from one OTT service to another, but any service making substantial investments in expanding into new territories must in some way either identify synergies or recognize tensions between global content and content of local origin.
"The debate between global and local is a very interesting one, because for audiences, affinity is becoming increasingly important," says Nair. "If I'm based in London and I'm producing an English documentary, I have to think, ‘When this is hosted in the U.S., or if it's hosted in Canada, or if it's hosted in Africa, how will that audience react to it?' Even though I'm producing content locally for the local markets, I have to think of those territories reacting, because, ultimately, the monetization comes from the audience engagement in those markets. It's kind of a hit-and-miss thing, but still it needs to be planned."
"Disney has both approaches," Mueller says. "Most folks don't realize this—although it's not insider information—but Pixar has localized versions. So in Zootopia, the newscaster is a koala in Australia, but it's a moose in Canada, because those animals make sense in those countries. Or imagine seeing kids playing in the background; they might be playing American football in the U.S., but soccer in most other countries. Those types of things are just hidden behind the scenes so that when people are engaging in the content, it makes sense for them culturally."
Localised newscasters in Pixar’s Zootopia
But it's not just about adapting existing content for local suitability; Disney Streaming also produces original content in other parts of the world with local and global audiences in mind. "Last November, we launched to the Caribbean, Central America, and South America," Mueller says, "We have a deep history of locally produced content from that team, and it resonates globally. One of the great examples is Violetta, which was an original from the Argentina team. And there are Violetta concerts in Europe, in Spanish, and people are singing along. So it's really awesome to see that resonating in different forms."
On the Tech Side
While hoping the same code works smoothly across all markets is generally the goal for OTT services going global, some technical hurdles inevitably arise to complicate that effort. Not surprisingly, particularly steep challenges confront OTT services that are expanding into still-emerging markets.
"One of the things that we've noticed a lot," says Carlos Morell, VP of sales for edge cloud service provider Zenlayer, "is that when you're going into one of these markets, companies with applications or services are trying to decouple parts of the application from the core so they can get that localization happening. And so what we've seen is them pushing it out to our infrastructure on the edge to get beyond what actual public cloud can do. Public clouds provide a great service, but they can't get all the way down into some areas because they're outside of that country or they're not quite that big. And so we've seen a lot of instances where it is one code, but the dependencies are able to make logical decisions on the edge because that compute power's there, and then they're still getting that content fed in.
"As a consumer," Morell continues, "I want something that pertains to me that I'm interested in based off of decisions that I've made, and you can't get that without having those decisions right on the edge. So we continue to see that pushing down and decoupling, and from a technical standpoint, network is really the key, especially for streaming. If you can't provide solid, consistent throughput, if you can't have clean connectivity all the way to the end user, that is where the biggest challenges are. A lot of it has to do with emerging markets that don't peer very well. There are ISP monopolies where there is a particular nuance that we're not accustomed to here in some more mature markets. So you have to have partners that are connected to all of these different entities and provide a service that works across all these different nuances to continue to deliver consistent availability and performance."
Balancing the Boats
Given how much OTT content is watched on mobile devices, knowing which devices are used to consume OTT content in new territories and understanding the bandwidth constraints under which those devices are being used are critical factors in ensuring a smooth arrival and seamless adoption in a new country.
"Everything is going to mobile in some of the up-and-coming markets, so you do have to be able to balance the boats," says Morell. "I've spent a lot of years helping international companies deliver content streams into mainland China, where the mobile market was actually leaps and bounds behind what the Western market was. So you have to pay attention to bitrates, and you have to provide different formats to handle all of these types of nuances from a delivery standpoint. For us, having some local infrastructure and being connected locally to every ISP is the main thing, because through the ISPs and having a great backhaul, you're focused on the first mile, which most people handle with their origin; the middle mile, which is that long haul; and the last mile, which is really from the ISP all the way down to the end user. You have to really make sure that your service is able to address all of those."
As a targeted OTT service rather than a technology service provider, BritBox has a necessarily narrower view of device support in new markets, one that's driven by careful analysis of what the company can anticipate and identify as its audience's needs. "Because BritBox is not a service that's aiming to be ubiquitous across every single device, we really want to focus our energy and effort on where can we find our consumers," Powers says. "So we typically do that research, and then we look to what can we leverage that already exists in North America or in Australia, and then we ask, are there any devices that we need to build new apps for? The team has a lot of conversations with other distribution partners that are existing in the market because often, there may be a dominant telco, and it may make sense to do a partnership with that telco from the get-go or to build our own apps and then do a partnership in a second phase. But all of that comes into play and becomes part of the consideration set of our go-to-market launch strategy."
"It's been a huge shift in the market that now the consumer decides where they want to consume their content," says DistroTV's Nair. "It can be on a phone, it can be on a laptop, it can be on a connected TV set. It's important that we are available. So as a part of our tech development, we always look at platforms with growing audiences, and if it is substantial, we will develop to that platform."
Most importantly, Nair adds, when it comes to device support and streaming infrastructure, "for the end user, the experience when they are consuming content needs to be seamless, because if something doesn't work the way it should, you've lost a customer, and you might never get them back."
Rights and Licensing
Another inescapable factor in expanding OTT services on a global scale is navigating rights and licensing issues in each new territory. Global rights restrictions may inhibit an OTT service's ability to distribute identical content everywhere.
"From my perspective, it's gotten much more competitive, because there's been an influx of video streaming services, specifically in the U.S. in the past 12 months," Powers says. "It's become an increasingly competitive market for not just licensing of content, but also creating, commissioning, and co-producing content. Because there's so much demand for content, it is certainly creating a bit of a bubble in the licensing space. I think we're in a really good position with BritBox expanding globally because we can come to the table with a global offer and be able to actually see real synergies by pooling resources and investing in shows that we know will work globally."
Licensing is "a bit of a minefield," says Nair. "For retrospective licensing, content creators are very protective of their content, naturally, and giving out licensing rights is always a huge negotiation. When I sign up a content creator, the initial discussion is quick. Everyone is excited, and then legal comes in. And then the to and fro begins, with discussions going on for each clause, how to position the licensing rights. It's a bit tricky because content creators are looking to monetize their content, and the traditional models are changing drastically. A few years back, it was very straightforward: the theatrical release, then the DVD release, then in-flight entertainment. With the COVID pandemic in the last year, everything has changed in this landscape. Theatrical rights have just gone out. It's not even discussed. What's important now is the territories, and within the territories, what are the rights that are being given to us? For us, it's the AVOD rights, because we are advertiser-driven, and that itself is a long discussion because generally, content creators like the subscriber model, and we are not in that space."
But—like nearly everything in the global OTT scene—Nair adds, "That's changing fast."
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