It seems as though we’ve done quite a bit of recent writing about fluctuations, shifts, growths, rises, and so on. And in the television industry, the biggest conversation currently revolves around the rise of over-the-top (OTT) content consumption.
OTT content is any media that is distributed directly to consumers via the internet – including, but not limited to, audio, video, instant messaging, and phone calls.
The most well-known form of OTT content comes in the form of television and movies, with familiar moguls such as Netflix and Amazon grabbing their respective shares in the market.
OTT content is delivered to a device through a streaming service. In doing so, the content bypasses the telecommunications and cable networks traditionally needed to receive content.
For TV specifically, OTT content can be delivered to a number of different devices:
● Smart Devices (phones, tabets, TVs)
● Gaming consoles (Playstation, Xbox)
● Computers (desktop or laptop)
● Set-top boxes (Roku, Amazon Fire Stick, Apple TV)
Through a number of different streaming services, like:
In recent years, OTT television content has risen, and sharply so, leading to phrases like “binge-watch” being added to the common American vernacular. But why is it that the new form is moving with such momentum?
Why are consumers buying in?
Other than the ability to watch an entire season of Mad Men in one day, the most notable perk of OTT content is the level of convenience it offers consumers.
Even before the ability to stream television shows and movies, most consumers A) were already paying for an internet connection, and B) already had at least one of the internet-connected devices listed above.
On top of that, streaming content can be done with one account, across devices, and can be accessed in any location that has an internet connection, leading to a large number of viewers consuming content on mobile devices and laptops.
The convenience of OTT fits into the “any place, any time” mentality of modern technology.
Why are advertisers buying in?
Even though cable television may still get more total eyeballs on an ad, consumers interact differently with OTT advertisements.
In the modern world of advertising, attentive eyeballs are often more valuable than any other, even at lower quantities. Because of the nature of OTT content, viewers typically watch shows, movies, and thus ads more attentively.
Why is that? Choice.
When streaming content, consumers don’t just purchase packages. They purchase specific channels, networks, and subscriptions. Users pay based on exclusivity and with more discretion than with cable. Choice goes well beyond that, as well.
Just think about the way you surf the channels when watching cable.
Click, click, click, click…
With cable surfing, we’re more likely to be indifferent towards content, even building an immunity to certain ads, as we can simply move on to the next channel.
With streamable content, there’s a more concerted effort to choose what we watch. In fact, users actually have to go find the content. They have to seek it out and take the extra step, to not just switch it on, but decide to put it on.
Furthermore, it’s also more of a hassle to change channels and networks when streaming. All of this points to more careful attention being paid to the television, movies, and again, the ads that are delivered over-the-top.
For TV professionals and advertisers, this is a lot to come to grips with. The conversation at Digiday’s latest Hot Topic event proved exactly that.
Digiday Hot Topic
Throughout the year, Digiday hosts multiple “one day learning events” that they have aptly named Hot Topic events.
February’s 2018 Digiday Hot Topic was the “Future of TV.”
On February 15, 2018, members of Hulu, NBC, ABC, and many more media companies gathered to discuss how linear television and OTT services might co-exist in the future, and how viewers seem to be interacting with different types of content, and the ads present in that content.
The event proved that in the industry, there is an overall feeling that most companies haven’t quite figured out OTT, and are actively trying to do so. They’re trying to figure out how to best implement it, and why advertisers and viewers might prefer it.
If there was one consensus from the one day event, it’s that linear TV providers need to get innovative with social platforms and OTT to find continued success. Let’s look a bit deeper at our key takeaways from Digiday’s event:
OTT Viewer Habits
Asaf Davidov, Director, Ad Sales Research at Hulu, went into detail regarding viewer patterns in relations to OTT.
As people continue to watch less linear TV, it’s important that advertisers and television professionals keep a close eye on viewing trends, to see if and how they differ.
Davidov expressed the fact that viewing dayparts for OTT actually mirrored linear viewing behaviors, with the peak time being during primetime hours.
Davidov also stated that “new viewing behaviors are driven around choice,” echoing our previously expressed idea that viewers pay more attention to programming and advertising on OTT platforms, because they’ve made a conscious choice to watch the program
They don’t simply watch things because they’re on.
Focus on Youth
Another common theme from the event was the focus of media companies to appeal to more youthful audiences.
Both Nick Ascheim, SVP NBC News Digital, and Katie Nelson, Executive Producer at ABC, discussed their companies incentive to make their audience demographic younger.
Nick Ascheim from NBC cited the company’s news channel “Stay Tuned” that appears in Snapchat’s Discover Channel. NBC’s Snapchat news channel was introduced as a way to connect with the app’s youthful audience.
Katie Nelson of ABC expressed the fact that the company knows they need to make their core demographic a bit younger, currently having an average age of 47.
Digital, Digital, Digital
Throughout the entire night, the word used perhaps more than any was, “digital.”
While there may be many ways to do so, one thing is for sure foe media companies – digital innovation is the way forward.
Nick Ascheim of NBC discussed how their innovation and adoption of media changes have helped them stay on top of the evolving market. He stated that, “Innovation requires taking action immediately.”
To this point, all of the media companies that, without hesitation, adopted social and OTT, have been the ones finding the most success.
What’s Next for OTT?
As for the future of over-the-top media, to improve its environment for advertisers, a focus on attribution may be the way forward.
Roku recently announced the release of their new ad insights feature, for better ad tracking on their platform. By taking first party data and combining it with linear and OTT viewership trends, Roku will try to take the next step forward.
OTT ad revenue continues to rise, and if streaming services like Roku find more effective ways to track how their users engage with content and advertisements, we could see that revenue rise even more rapidly.
In the end, over-the-top content does not have to be the end of linear media companies, but it’s certainly establishing a need for change and innovation.