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Partnerships Will Be Key to Success in 2021

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2020 will be a year to remember; among many hallmarks was the accelerated growth of OTT services. Most 2023 forecasts and business plans became realities as consumers shifted viewing to SVOD and AVOD platforms.

We also learned that the growth of the industry's biggest players ultimately dwarfed the growth the nearly 300 remaining services. Disney's announcement in December that they reached close to 87 subs in the first year since launch and their commitment to invest $14B-$16B in original content almost punctuates the point – even with an incredible year of growth, aspirational Tier 1 and Tier 2 services fundamentally were in a different game.

In fact, they're not even on the same playing field. With large subscriber and user bases come increasing advantages to keep winning. Data flywheel effects provide these platforms with enhanced insights into their consumers: how to better serve them through personalization, features, acquisition and win-back strategies. Most importantly, large subscriber bases allow for substantial advantages in content investment.

Competitive headwinds aside, as aspirational Tier 1 and Tier 2 services begin 2021, their hoovering up of targeted consumers in 2020 means having to reach secondary and tertiary targets that are more costly to acquire.

To win and get back onto the field, outside of M&A activity, these services need to forge new partnerships to deliver ever stronger and more robust consumer value propositions while also delivering scale against platform, content and marketing investment.

2020 strategies worked well in a pandemic but they serve as false positives when only measuring against internal business plans – they're not enough to win in the long term. Forging partnerships, delivering new business models, and scaling propositions must be the focus of 2021 or the only thing that may be accelerated is the clearing the field by the biggest players.

FIRSTLIGHT.AI

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