Disrupting Traditional Media
Ariel Napchi, founder and CEO of content delivery company Hiro Media, recently spoke on how they believe OTT content delivery is expected to skyrocket in 2015.
OTT (over the top) content is a rapidly expanding new wave of entertainment viewing, freeing consumers from the limitations of viewing content available only through traditional sources, thereby disrupting traditional media and increasing the number of available networks for consumers. OTT allows viewers to access media through any number of internet connected devices including desktops, laptops, smartphones, gaming consoles, set-top boxes such as Roku, and gaming systems such as Sony Playstation 4 and Xbox One.
OTT – Ideally Suited to Broadcasters
Delivered directly from the content provider to the viewer via an open internet connection independent of the ISP, OTT eliminates the need for carriage negotiations or infrastructure investment by the internet provider. This unmanaged method of delivering content is ideally suited for providers who are primarily broadcasters rather than ISPs.
Examples of popular OTT content channels available now include Amazon Prime Video, Netflix, Hulu, HBOgo, and ABCgo. OTT has created an exciting new way for operators to generate revenue from On Demand services, catch-up TV, and interactive applications.
Established brands, such as the major networks, already have an edge in this market based on strong long-term relationships and consumer trust. They are well placed to deliver service that integrates traditional TV and the online experience through a single device managed by a single operator.
Improving Personalization of Content
The traditional distribution model of television is impersonal and requires viewers to select channels for viewing their content of choice, whereas the online environment allows for personalization and allows creators of content to target specific viewers.This trend is already being seen in advertising where online ads target content to the viewer. Video content needs to adopt the same approach, as content distribution is not changing through OTT services. As things stand today, the viewer still seeks out the content, but for the industry to effectively progress, the challenge will be to provide more personalized content with a push toward viewers, as is currently being done with targeted ads.
A Risk for Pay TV Providers?
Some have speculated that OTT may be a potential killer for the pay TV industry, but to make such a premature assumption may be a little naïve. Those who view it as potentially damaging to the current pay TV model maintain that the risk lay in its openness and ability to bypass networks owned and operated by pay TV providers. However, producing high quality content is expensive and unless revenue can be generated from it, the content simply will not be created. Trends show the content industry is being supported by subscription TV now available through a variety of mediums, perhaps the most popular of which is the set-top box.
A Leading Industry Expert Says…
According to Ariel Napchi, founder and CEO at Hiro Media, caution is needed to ensure we don’t repeat the patterns of old models such as traditional TV broadcasting – a passive and impersonal experience by definition. Rather, Napchi advocates personalizing content and targeting it in a proactive manner on sites and channels the viewer visits regularly. Viewers then receive the personalization they expect and content owners are assured of the maximum monetization of their content.
Ariel Napchi states that “Viewers should be catered to, with content in which they are interested pushed to the sites that they already visit. Any other approach will leave the industry in the past.” Napchi uses the example of millions tuning in to HBO weekly to watch “Game of Thrones.” Viewers have the option to view the show on the cable station or through its streaming service, but whichever avenue they choose, they are still searching for “Game of Thrones.”
The new OTT model must seek to automatically provide that content automatically regardless of where the viewer tuned in. Hiro Media’s Ariel Napchi cautions that both content and the distribution approach must be updated.