In a previous entry on this blog we looked at why direct to consumer (D2C) video platforms have risen so much in popularity in recent years, and how there’s never been a better time for content owners and broadcasters to create their own offering. But why is that? In this blog, we’d like to explore three of the key reasons why more content owners are going direct.
Viewers are comfortable with multiple services
In their Quantum Viewing Behaviour survey in 2017, TDG asked viewers ‘When it comes to live TV plans, would you prefer to ‘build it yourself’ by piecing together different groups of channels/networks, or select from preset packages or ‘bundles’ of channels?’ 63% of those surveyed said they would prefer to build a content diet for themselves, rather than selecting from pre-bundled offerings. Similarly, BTIG analyst Rich Greenfield, who has long been touting the end of the traditional TV bundle recently said “If you end up not spending $80 on live TV, it frees up a lot of meaningful wallet share to spend. There are lots of opportunities for new services to exist.”
Netflix has demonstrated extremely successfully, that viewers can get the content they live via an OTT service and they don’t need to pay through the nose for it like they had previously with traditional linear, pay TV offerings. For niche and mid market providers, this opens up a market they had previously only had access to as a part of those packages, but now they can go after those viewers directly, and those viewers are happy to build them into their content diet, as services are now affordable, snackable and provide only the content they most engage with.
A key aspect, particularly for middle market players, is how technology has made a D2C offering more accessible than ever before. Previously, large solution providers focused almost entirely on delivering for tier 1 companies with large, complex, bespoke offerings, which were priced accordingly. But recent advances in cloud technology have reduced the complexity and cost of delivering a D2C service, while the productisation of solutions have streamlined deployment processes and increased speed to market.
Further, the increased popularity of SaaS based commercial models has ensured that content owners or broadcasters that don’t have digital budgets running into the millions of dollars can still launch and run a direct to consumer service with predictable, affordable costs that enable the service to grow in line with business needs.
Aside from simply being lost in the enormous shuffle of other channels when bundled into larger packages, a key challenge for mid-market content owners and broadcasters was ownership of the viewer. In most cases, the viewer had a relationship with the package provider, not with the content provider. This has been a particular issue for niche content, as niche viewers have been proven to be more passionate and willing to spend time and money engaging with their preferred content.
Content owners and broadcasters of all types are recognising the benefits that a dedicated OTT deserive can bring them, such as the creation of new commercial opportunities, the capturing more first-hand data and insights, and the increase in value of their content. None of this would be as easy to pursue if they didn’t have a direct relationship, on their owned and operated platform, with their viewers.Contact Airbeem