Consumer frustration at OTT TV experience

Wednesday, January 3rd, 2018
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Consumer Frustration with OTT Experience Will Drive Important 2018 Changes, Ooyala Report Finds

  • Rising Smartphone Penetration, Improved Connectivity, Convenience Contribute to Significantly Increased Mobile Viewing and Traditional TV Disruption

Report Highlights

  • Mobile video consumption is an estimated 28 minutes a day, up 25% from 2016, per Zenith Media
  • Live, linear OTT viewing will surpass traditional broadcast TV viewing by 2020, per Unisphere Research forecast
  • The majority of video content on every screen – connected TV’s desktop or mobile, is not long-form, per recent Ooyala analysis

SAN JOSE, Calif. — Ooyala, a leading provider of software and services that simplify the complexity of producing, streaming and monetizing video, has released its State of the Broadcast Industry 2018 report which maps out the challenges for content creators and distributors as they strive to maintain and grow audiences in an increasingly fragmented media landscape.

Importantly, the report – which draws on Ooyala’s own data and analysis as well as research conducted by other organizations – delves into consumers’ frustrations as they navigate a world in which there may be simply too many choices.

Research underscores that viewers are embracing content anywhere, on any device. However, it also indicates that Millennials, arguably the key demographic for streaming services, already are overwhelmed with the plethora of options – estimated by Park Associates to include more than 200 OTT services in North America alone are in operation; 49% of viewers saying there are now too many TV programs from which to choose, according to Hub Entertainment.

And yet amid all this abundance, Millennials also indicate they are not completely satisfied with their current OTT services, per Morning Consult. Consumer frustration will drive improvements in the OTT experience: streamlined authentication, better content curation, personalization and easier search and discovery, Ooyala predicts.

At the same time, mobile viewing will continue to explode: surveys predict that mobile video viewing will account for 75% of mobile data traffic by 2022, per Ericsson. “TV viewing is continuing to go to a much more personalized, one-to-one experience,” said Belsasar Lepe, Co-Founder and SVP of Products and Solutions at Ooyala. “Where previously you might have sat with your family and consumed your favorite show together, it’s going to be online and much more personalized with additional features such as virtual and augmented reality.”

The State of the Broadcast Industry 2018 comprises insights gleaned by Ooyala through its work with the largest video distributors in the industry, in combination with other expert research and analysis from other sources.

The Ooyala report identifies several areas of focus by content distributors as they seek to attract and maintain share of view. These include:

  • Format experimentation – Content delivery services are experimenting with formats, such as vertical video or mobile-specific content series, to optimize the TV anywhere viewing experience;
  • Social media – Major social-media platforms, including Facebook (with an estimated $1 billion content spend next year), Twitter and Snapchat – all grasping the growing role of video online – are jumping into the streaming pool with big investments in long- and short-form video;
  • Bundling – Skinny bundles are gaining traction, and distributors will end the year with more than three million U.S. subscribers to mini-bundles, per comScore. Look for more bundling experiments in 2018;
  • IP technology – Traditional television companies – broadcasters and cable programmers alike – are going all-in on IP technology, focusing on the related metadata which providers believe will drive critical advances in every area of video delivery. The next-generation broadcast TV standard, ATSC 3.0, is an example. This embrace of data will be crucial to TV industry success during the next five years;
  • Original Content – Though some viewers are saying “too much content,” creators are attracting viewers with a combination of originals and exclusives, the budgets for which will continue to soar. Consequently, distributors will have less patience for the time it has traditionally taken to build audiences and they may be quick to cancel shows – so look for shake-outs this year. Content creators will also pursue new revenue streams (subscription plus advertising, more merchandising of shows, etc.)

Given these findings, OTT is entering a pivotal year. Online viewership of marquee 2018 events such as the Winter Olympics and the Royal Wedding is anticipated to “break the Internet.” In 2018, success may come to the companies which excite consumers with innovations in discovery and content delivery, funded through new monetization methodologies.