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Telstra OTT Report Explores OTT Monetization Models

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In a newly released report, "OTT Monetization: Business Model Opportunities and Threats," report sponsor Telstra reveals insight into advertising- and subscription-based video on-demand (AVOD or SVOD).

"The reports shows SVOD trumps AVOD as a dominant form of monetizing OTT services globally," says Anna Lockwood, head of market development, Telstra Broadcast Services.

Commissioned by Telstra, the report's initial survey was carried out by Streaming Media and its partner company Unisphere Research, garnering responses from more than 500 respondents across North America, Europe, and Asia.

Respondents were asked to provide insight into their business models across the globe, and several key findings emerged that show a pattern of growing dominance for SVOD over advertising-based VOD, with Europe being the outlier in a few areas such as transactional VOD or TVOD.

For instance, 61% of respondents believe that longer subscriptions (with free months) are attractive to customers. This is followed closely by those who believe that package bundling is also attractive to potential SVOD subscribers.

In what may be good news for global SVOD customers, almost two-thirds of respondents said that pricing will not fluctuate in the near term.

"Our findings indicate that 65% of respondents will maintain their current pricing for the next 12 months," says Thomas Hogan, Jr., president of Unisphere Research.

Another key finding is that, while content continues to be a key differentiator, the need to partner with content providers and even other OTT service providers is growing.

"One-third of respondents believe that partnerships are key to growing their subscriber base," says Lockwood.

While SVOD appears to be outpacing AVOD in terms of OTT business models, successful monetisation still remains a challenge for many incumbent broadcasters. "OTT video services are increasingly dominating the market and putting pressure on traditional broadcasters to respond and remain relevant," says Lockwood.

This Telstra-sponsored report comes at a key time in the industry. Ooyala, an online video platform and Telstra"s wholly owned subsidiary, announced similar findings from its own analytics in the "Ooyala State of the Broadcast Industry 2017."

Ooyala notes that 2017 guidance for the broadcast industry can be summed up in five words: Go OTT or go home.

"OTT hasn't merely joined the mainstream," the Ooyala announcement states, "it's driving global broadcast strategies."

Reporting from our Streaming Media Europe counterpart also indicates that SVOD is part of key business plans.

"Multiple pay-TV OTT initiatives around the world indicate that OTT video is becoming increasingly core to service providers' product portfolios," writes Adrian Pennington in an article titled "SVOD Is the Clear OTT Winner," citing the early 2017 launch of an OTT service called BritBox in the UK.

Even at this year's Consumer Electronics Show (CES 2017) there were indications that consumer hardware, in the form of the 2017 releases of smart TVs, is being primed for SVOD as an equal partner to live-linear broadcasts. Samsung's new line of smart TVs, for instance, comes with digital rights management built in.

Content owners and multi-system operators are getting into the direct-to-consumer OTT solutions space. The recently-formed Comcast Technology Solutions, which combined Comcast Wholesale and the Platform into a new solutions arm, used CES 2017 to introduce a turnkey multiplatform OTT service for content providers to directly reach consumers willing to subscribe to individual OTT service offerings.

That leads us back around to the partnership interest expressed in the "OTT Monetization: Business Model Opportunities and Threats" report available for download today.

With so many OTT services being offered in 2017, will this be the year that content and infrastructure partnerships begin a wave of OTT consolidation? Download your copy today to see what other industry experts are paying careful attention to in the AVOD, SVOD, and TVOD segments of OTT delivery.

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