Prior to being pushed into the COVID-19 whirlpool, television was experiencing its golden age, with traditional linear and TV broadcasts rapidly evolving to offer an extensive library of content to viewers. However, the pandemic has disrupted the television programming model, and to a growing extent, the cable industry. As more people are forced to stay home, the concept of the bored consumer searching for things to constantly watch has become a reality. A recent report published by Nielson cited that the time spent streaming videos from services including Netflix, YouTube, Hulu, and Amazon Prime Video more than doubled from a year ago as a result of pandemic.
Media consumption across the globe is increasingly happening in digital formats. The increase in the number of devices capable of supporting digital media along with high-speed internet access, has provided consumers with the option to access the media content of choice, be it information, entertainment or social activity – anytime, anywhere. OTT, also known as Over-The-Top platforms, are the content providers growing exponentially as more people switch to online channels for entertainment.
The convenience of OTT continues to influence many consumers, particularly Gen Z and millennials, to become ‘cord-cutters’. In 2020, OTT reached new heights, as media and content consumption saw a change in consumer pattern, buoyed by the shift from analogue to digital delivery, e-commerce and a new class of internet-enabled devices. Southeast Asia alone reported a viewership count of 180 million people consuming 8 billion hours of content through OTT every month. Netflix amassed about 195.15 million paid subscribers worldwide last year.
Why OTT is becoming the New Social:
- Cost Efficient: Although OTT services tend to be monetized through paid subscriptions, it is perceived to have a higher value in exchange for its low cost, compared to traditional broadcasting. This is because basic subscriptions for OTT platforms fall under the USD20 mark (a fraction of cable TV costs) for a larger and more diverse library of content – TV series, films, sport, music, and kids’ programs for streaming. Netflix’s packages start from USD8.99 /month, while Amazon’s Prime Video plan is as low as USD2.24 /month. Some OTT platforms like the Singapore-based meWatch offer advertising in exchange for free content.
- Original & Exclusive Content: Apart from streaming classic Hollywood blockbusters and binge-worthy TV series directly to consumers, OTT is capturing viewership with originally-produced content, exclusive to its platform. The Morning Show, Amazing Stories by Steven Spielberg, Carpool Karaoke and Defending Jacob are well-known Apple TV+ productions. While The Crown, Selling Sunset, Anne With an E and Tiger King are some of Netflix’s iconic originals. Local language content is also driving significant OTT usage, especially in markets like Thailand and Vietnam, where it is more popular than western programming. By 2022, OTT players are expected to spend approximately USD4 billion on local content.
- Mobility and Accessibility: OTT provides consumers with easy access to on-demand entertainment on-the-go, from a range of smart devices.
- Streaming Ads: Ads come with a major advantage of taking control of who your target consumers are, when and how to spend, and measuring how your efforts perform and a lot more. Another major advantage of streaming advertising is that it is much cheaper.
- Level of Engagement: OTT allows for a higher level of engagement from users who interact with the ads. Users are always on their phones and tablets while streaming content. As a result, they can respond immediately to an Ad by clicking to make a purchase or visiting the website on the spot. This, in turn, can help to raise sales and increase the overall return on your marketing spend.
Changing Media Landscape
No doubt, the OTT model has changed the long-held value chain of content creation and distribution, and it is becoming a major player in the media landscape. What then is the fate of traditional distributors of content, i.e., cable, broadcast and satellite TV? Industry watchers are of the view that OTT platforms should be seen as “cord-extenders” rather than “cord cutters”, arguing that just like print and digital media, the model will become synonymous with cable TV, and both platforms can co-exist in the market. The success of hybrid-monetization modelsis best exemplified by HBO. Realizing the increase in subscription rates for OTT streaming, HBO launched its own streaming services, HBO Max and HBO Go, to cater to a new generation of subscribers while retaining its current audience.
For an in-depth look at how OTT is fairing in the region as well as how the digital on-demand content market is becoming a powerhouse for consumer entertainment consumption, check out the The Future of TV report by The Trade Desk and Kantar here: https://bit.ly/3aHJctP.
Written by: Tanisha Khanna