It has never been easier to launch an OTT service.
Over the past few years, traditional broadcasters have extended and grown their VOD services online against the growing shadow of Netflix while an acceleration of stand-alone OTT services has created more competition for viewer attention and further fragmented content destinations. As product manager, OnDemand at BroadView Software and through the experience of being a core team member in launching TMN GO in 2013, watching the growth of this industry has been fascinating.
It has never been easier to launch an OTT service. The technical barriers, up-front/operational costs, and financial risk are lower than ever. While many early movers took the most significant risks in building their in-house tools to stake their claim, there are now plenty of companies and services that have lined up to sell picks and shovels.
So, where do we go from here?
We have seen the adoption and maturation of multi-platform scheduling and rights management solutions, and of managed services and white label online video providers (OVPs) such as Comcast technical services (formerly thePlatform) and MLB Advanced Media (MLBAM) as well as aggregators such as Vubiquity and IBM. There is an equal number of companies offering application templates or deep expertise to put your brand on smart TVs, smartphones, and tablets. Combined, these have established de facto standards and modes of operation that allow us to follow a known and repeatable pattern to achieve baseline functionality.
Some are taking it even further. Netflix is championing the adoption of the interoperable master format (IMF), a SMPTE standard for video and audio with the goal of reducing the labor and cost of versioning content for different purposes. That will simplify making content available in a different language, technical specification or even editing it to make a trailer or promotional item. We are also seeing deeper integration between the products and services used to deliver content to subscribers on multiple platforms, to the point that we can start thinking about content as a service.
Now that this baseline of functionality is more achievable than ever, we see the commoditization of long-form video content delivery. The only avenues to stand out are through great content, exclusivity, and availability.
It has been lucrative for many to license their content or strike deals with Netflix, Amazon Prime Video, or Hulu as it avoided the risk they faced in launching a standalone service or allowed them to hedge their bets as they launched their OTT services. It is still a valid approach unless you have an extensive and desirable library or are lucky enough to fill a niche that has an audience willing to pay for it, but it comes at the cost of the dilution of your brand as content becomes associated in a viewer’s mind as part of Netflix or another service.
Disney has done these calculations and has decided not to renew their deal with Netflix to instead launch their own SVOD service in 2019. They are betting that their library content is more valuable bolstering the Disney brand than through licensing to other services. Disney is in a commanding position with their purchase of a majority stake in MLBAM this summer that provides them with an expanded sports library, a proven content delivery stack, and an experienced team.
Now, with their recent purchase of selected 21st Century Fox assets, they will have a majority stake in Hulu and gain the rights to popular franchises like X-Men - turning them into a true juggernaut.
Where does that leave the rest of us?
Few can compete directly with Disney or Netflix at that level of vertical integration. Our advice is to take advantage of this commoditization trend to lower your operating costs where possible and to focus on exclusive or original content because that's your best bet in standing out and staking your claim in this ever-changing landscape.
This article was originally posted on the Broadcast and Cable January 2018