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OTT's Me-Too Experimentation: So Many Choices, So Little Variety

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It’s an exciting time for online video. We’re seeing tons of experimentation, with new services launching almost weekly.

Inspired by the success of Netflix, dozens of companies have created their own low-cost, all-you-can-watch subscription services that feature a mix of older and original TV shows and movies. Dozens of services ... all doing the same thing.

OK, maybe there’s not that much experimentation. Maybe the only experiment taking place is how many monthly subscriptions the average viewer will put up with before feeling the financial strain.

Not all services cost money, of course. There are two business models: subscription and ad-supported. Both can be successful given the right price and the right mix of content. Crackle, Go90, and one Hulu tier are ad-supported. You can watch all you want as long as you view the commercials—you pay with your attention.

I thought 2016 would be an exciting year for OTT experimentation, with new business models testing the waters. But so far, it’s been a yawn.

Where are the a la carte services? Where are offline viewing options? I’d like to see OTT companies experiment in those areas, because I think consumers would jump at both.

To get another viewpoint, I talked over OTT experimentation with Dan Cryan, the senior director of media and content for business information company IHS. First, Cryan took me to school, pointing out that there’s a lot more experimentation in OTT than I’m acknowledging: There are premium services (Netflix, Amazon) and niche services (Crunchyroll). Virtual operators (PlayStation Vue and Sling TV) are finding success, Amazon is providing one-stop access to other services, and HBO is going directly to consumers. These are all things that have never happened before.

I know when I’m beat: There’s a good deal of experimentation going on. Maybe I’m overlooking it because I’m not seeing the new features I want.

As for a la carte, Cryan doesn’t think it will take off. “The TV business in America has grown up and grown rich on the bundle. The bundle has proven a very effective way to help justify price increases to consumers on the one hand, but also for channels to get more favorable terms out of operators,” Cryan notes. “There has been a perfect alignment behind the bundle from the business side of this equation, and consumers, generally speaking, have bought in to this despite the public rumblings to the contrary. There are some moves to un-fix this, but they are still few and far between.” Those moves include Amazon offering add-on packages and HBO selling directly to consumers.

I’d still love to see an option like Sling TV, but where subscribers choose the channels they want from a longer list. I believe it will come someday, but not in 2016.

What about offline viewing? Amazon Prime is currently the only subscription service that supports this, and only with iOS, Android, and Fire mobile devices. Netflix CEO Reed Hastings said during a recent earnings call that his company should “keep an open mind on this.” So it could happen. Would it be a game changer?

“Game changer, I’m not sure,” Cryan says. “Do I think it would be a meaningful enhancement for an important set of consumers? Absolutely. That important set of consumers being just about anyone who gets on a plane.”

Yes, this is really a frequent-flyer feature. But don’t forget about subway commuters.

Offline viewing would be a nice value-add for existing customers, Cryan believes, but it won’t win many new subscribers.

While there seem to be a lot of me-too offerings in OTT, if you scratch the surface you’ll see that new business models are being born. They may not offer everything we could wish for, but this is the testing ground where tomorrow’s TV habits are being created. It really is an exciting time for online video— for both the programs on the screen and the business decisions behind it.

This article originally ran in the June 2016 issue of Streaming Media magazine as “The Era of Me-Too Experimentation.”

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