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OTT Falls Into the Same Trap as Cable

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Choice can be a great thing when you can choose Dodge over Ford, chocolate over vanilla, or pizza over a burrito. But what happens when there is too much choice? Just check out Amazon. If you search for “TV Wall Mount,” there are more than 7,000 results. At that point, choice can become almost paralyzing as you struggle with figuring out how to select what you want from all the options.

In some ways, that is what has been happening with cable television. There are hundreds upon hundreds of channels, with so much choice that channel surfing has become an activity in and of itself. And it’s probably one of the primary reasons consumers give for cutting the cord—they don’t want to pay for channels they don’t ever watch. A typical cable consumer might ask, “Why should I pay such a high fee for all this content that I don’t need?” But price really isn’t the issue, is it? When you do the math, if there are 300 channels in a cable subscription and the subscription costs $100/month, that means each channel only costs about 33 cents. So, no, it’s not about cost; it’s about choice. When there is too much to choose from, people often turn away or grab the nearest item (which is why appearing on the first page of search results is so important).

OTT services have provided people with a way out of the indecision loop offered through electronic programming guides (EPGs). For example, HBO Now offers a specific type of content that someone would otherwise get through a cable subscription. So do Hulu and CBS All Access. And, unlike the linear programming world of cable, these services allow viewers to find whatever they want—from the latest releases to 30-year-old archives—from the same home screen. That’s a lot of choice. So what happens when someone ditches cable for three or four OTT services? Say they have YouTube TV, Hulu, Netflix, and HBO Now. The same paralysis they tried to escape from cable is presented to them again, but this time, it’s not in a handy, single-screen guide. No, it’s spread across four different experiences, with four different ways of finding content and four different content libraries. It’s choice on steroids.

When streaming video and OTT first began to make serious inroads to consumer viewing behavior, the industry wanted these new services to be “broadcast quality.” They wanted video delivered over the internet, whether live or on demand, to be as much like TV as possible. And, unfortunately, that’s coming to fruition with the amount of choice being presented to consumers. Not only is the streaming quality just as good, but there is an overwhelming amount of content as well.

So, what now? If OTT falls into the same trap as cable, presenting the viewer with an overwhelming selection of content, will consumers drop their subscriptions as well? It’s clear there’s a problem with just replacing one— cable—with the other—OTT. But it’s not an inescapable trap. With so much more data at their fingertips, OTT providers can radically alter the content-choice experience. They can personalize how content is presented. Rather than choice, it becomes recommendation. But not just recommendation based on what someone has watched in the past. It’s recommendation on what they have watched across multiple OTT services—how a fan of The Office might be a future fan of Parks and Recreation even if they were consumed differently, or, more importantly, how a fan of Chris Pratt might not like him in a specific film that’s not comedic.

OTT has a chance to become better than cable by limiting choice to provide the exact, targeted content that’s most appealing to the viewers. Otherwise, it’s just a bigger, more fragmented EPG.

[This article appears in the June 2019 issue of Streaming Media Magazine as "Will OTT Fall Into the Same Trap as Cable?"]

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