OTT TV has fundamentally rewritten the rules for broadcasting and significantly eroded the revenues of traditional players – this much is undeniable. According to Gartner, OTT video-on-demand overtook traditional pay-TV sources for the first time last year, and the analyst has forecast that total spend on video services will increase by 18.8% between 2016 to 2020.

The inherent flexibility and choice of internet-delivered content is perfectly aligned with the modern consumer desire to watch their chosen programmes anytime, anywhere, on any device; indeed this has become a normal expectation, especially among the younger generation.

Ofcom data from 2016 shows that four in ten 8-15-year-olds say they prefer watching YouTube to classic TV, and even pre-school-age children spend an average of eight hours and 18 minutes online every week, which represents a staggering increase of an hour and a half compared to just one year previously.

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So traditional broadcasters may have been caught out by the pace (and direction) of disruption in their industry, but only they can dictate whether, and how, they make up the lost ground.

There is still all to play for, but providers need to act quickly to overcome barriers in terms of mindset, business model and technology if they are to capitalise on the third generation of OTT.

The threat to their position is compounded by the fact that telcos are increasingly partnering with streaming service providers, such as BT Vision offering access to Now TV and Netflix, among others.

Based on our knowledge of OTT provision since the early days of multi-screen adoption, we have identified four key elements which we believe are vital for broadcasters to consider within their digital transformation strategy.

First, the prevalence of omnichannel TV consumption means that providers must focus on delivering a consistent and fluid experience across platforms. This results in a need to provide a coherent brand offering across all touchpoints but also to the commercial opportunity to capture advanced insights into consumer behaviour and content consumption.

Although the theme of consistency is not new for the broadcast sector, many players from both the traditional and digital camps have not fully recognised the role it plays in customer loyalty and product development.

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With the take-up of connected devices set to continue on its meteoric trajectory, the importance of smooth navigation and advanced data capture across channels represents a key area in the competitive battleground.

Second, advancements in multimodal interfaces are already bringing a new dimension to broadcasters’ armoury of technical capabilities, and could help to combat the perception among the digital generation of the TV set as an anachronism. Gesture recognition technology – which recognises sounds, movements and even expressions – will appeal to consumers with a growing interest in interactivity, as well as to those with particular communication needs.

The two previous points about the ingrained consumer habit of ‘multi-screening’ and the desire for interactivity bring the reader to the third strand of the digital roadmap – the rise of Social TV.

This trend sees content producers encouraging their viewers to comment and interact in real-time through social media and online communities, or delivering extra information for fans such as episode synopses and cast member backgrounds through programme-specific Apps. Staying ahead in Social TV is a crucial way of promoting content to highly targeted audiences and driving engagement.

Take the example of the Netflix teen series “13 Reasons Why”. It is the most tweeted-about show of 2017 so far, with over 11 million tweets chalked up over the two months since its launch; its executive producer is an Instagram superstar and its cast quickly amassed giant Twitter followings. Connecting with this young, digitally-native audience is marketing gold-dust.

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Finally – Addressable TV advertising, where advertising is targeted at specific household audiences using geo-localised profiling. This holds the potential for even more granular targeting down to individual household members, so that adults and children view suitable ad content.

Here, the theme of interaction arises again – this is the key to converting promotions to actual purchases. There is huge, exciting scope for broadcasters to grasp the initiative in these technologies and offer the next generation of engagement models to brand advertisers.

Perhaps the most strikingly outdated aspect of the classic broadcasting model is pricing. Part of the attraction of the pure play OTT providers is undoubtedly the flexibility and customisation they offer in pricing options and subscriptions, covering different devices, lengths of contract and content.

In order to level the playing field, it is a priority for traditional broadcasters to overhaul their pricing models so they are perceived by consumers as more attuned to today’s market.

This does not have to entail offering single programmes, but could include premium offers to block out adverts, or to receive only those that are highly personalised, which would help bring in additional revenue and allow prices to be reduced.

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As they strive to adapt to these new business models and claw back competitive advantage, traditional broadcasters are seeking to partner with specialist consultants to guide their digital transformation.

Equally, OTT providers are looking for similar support to ensure they remain at the frontier of developments in the industry. Fincons Group believe that all broadcasters stand to capitalise on the modern appetite for premium content and to build customer loyalty if they can deliver added-value, personalised offers and pricing, consistently across all channels.

Sourced by Oliver Botti, head of International Business Development and Innovation at Fincons Group

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