Summit Explores OTT’s Promise and Pitfalls

The opportunities and pitfalls of the over-the-top market were the leading subjects of the OTT & Video Distribution Summit taking place Aug. 2 in Marina del Rey, Calif.

Consumers are cutting the cord with their cable companies and moving to OTT because of its superior value, including better choice and lower cost.

“Consumers have basically said, ‘We’re paying too much. I don’t want to watch all those channels,’” said panelist Mickey Alpert, president and CEO, Merisco Solutions, and former EVP at Cablevision.

“Cable companies are literally the most hated companies in America,” said keynote speaker Jeff Binder, EVP, home and entertainment, T-Mobile U.S., because they are regional monopolies and don’t have to cater to customers.

In addition to OTT services peeling away video subscribers, another threat to cable is the coming 5G technology, which will be a “game-changing technology,” he said. Cable companies that have been able to lean on broadband fees, even as cord cutters have eschewed buying a video subscription, may find customers can get rid of broadband with 5G.

“There are changes around connectivity that are coming that are probably a bigger story in some ways I think than the story about how the content industry is changing,” Binder said.

“4G changed the way all of you use your phone; 5G is going to change the way all of us use our home as well as our phone,” he said.

For now, though, it’s the chance to get the content they want at a lower price that is drawing consumers to OTT services.

“Customers value choice and flexibility,” said panelist Kathy Payne, head of content acquisition management, Amazon Channels. “At Amazon, we’ve decided we’d like to offer channels a la carte.”

Amazon Channels aggregates such OTT subscription services as HBO, Showtime and Starz. There are more than 150 channels offered in the United States, Payne said, not to mention the hundreds available internationally.

“We’ve heard from customers loud and clear that they like the option to just buy channels a la carte,” she said. “It’s really easy to come in and pick what they want.”

In addition to a la carte there are bundled OTT services that are making a go of it, such as Philo, which started in colleges. “It’s a TV package that hasn’t really been available before. [It’s a service] without paying this huge amount for sports,” noted keynoter Andrew McCollum, Philo CEO.

There are also ad-supported services that offer programming to consumers for free. Roku Channel has aggregated some of those. Roku’s Seth Walters, VP, demand partnerships, called it “our sandbox for creating our most premium ad-supported service on Roku.”

Making a go of it as a new OTT service is a challenge. The number of domestic OTT services has reached more than 200, with the three top players dominating, noted Brett Sappington, senior director of research, Parks Associates.

“It’s Netflix, Amazon, Hulu and everybody else,” he said, adding there is a second tier of services, such as HBO, Showtime, Starz and CBS, that range from 1 million to 5 million subscribers.

A smaller service must differentiate itself and appeal to a niche, rather than try to compete with the big pocketed broad services offered by Netflix and others, he said.

“If you cannot specifically identify who your customers are then you’re probably not going to be successful,” he said.

Offering exclusive or new content helps, as consumers rank new release or original content as most important, according to Parks research.

Many OTT services overlook marketing, and that’s a mistake, Sappington said. Startups “don’t realize the marketing costs involved,” he said.

He praised the marketing efforts of independent film streaming service Fandor, mentioned in a panel at the summit. Panelist Felice Oper, COO of Fandor, said they had sold 290,000 subscriptions through a Costco bundle with subscription theater ticket service MoviePass in just two and a half months.

“It was a very successful transaction,” Oper said. “We’re still working with Costco.”

Keynoter Darcy Antonellis, of Amdocs-owned Vubiquity, talked about the international reach of the OTT business and the services her company supplies it, noting her team is often on a plane.

“We all have to be thinking global,” she said.

“It’s all about understanding where the audiences are,” she added. “It’s an on-demand world, but it has to be in a form and a language for a particular culture.”

She offered an anecdote about a viewing spike at 3 p.m. that they found involved parents waiting for their kids to get out of school. She said the industry must start to understand how to service consumers when and where they need entertainment.

A prominent woman in the industry, she also addressed the dearth of women in the entertainment and technology business. Having mentored girls 8-13, she noticed, “You could almost set your watch, because of peer pressure, when they were gonna shut off STEM [science, technology, engineering and math].”

“It’s a real challenge for our country,” she said. “You don’t want any room as smart as one brain, and you don’t want any room as smart as a collection of similar brains.”

Roku Bows Branded Channel in Canada

Roku July 23 announced the launch of The Roku Channel in Canada, an ad-supported platform streaming catalog movies and TV shows. The Roku Channel requires no subscriptions, fees or logins.

In Canada, Roku said the channel is expected to average about a third less advertising per programming hour than ad-supported linear TV.

“Our users are looking for great free content, and with the launch of The Roku Channel we are making it easy for them to find it,” Rob Holmes, VP of programming, said in a statement.

Every month The Roku Channel will feature a selection of classic movies, starting with Bad Boys, Julie & Julia and Grown Ups, alongside a curated selection of content from existing channel publishers on the Roku platform.

Publishers participating at launch include American Classics/Hatch Farm Studios, FilmRise and Total Content Digital; others are expected to be added over time.

In Canada, the Roku streaming platform offers a collection of more than 5,000 free and paid-for channels offering access to 150,000 movies and TV episodes. The Roku Channel will be rolled out over the coming weeks. Once available for their device, Roku users can add the channel from the Roku Channel Store and start streaming free movies and TV shows.

Roku reports second quarter fiscal results Aug. 8.

 

LAES: OTT About Change, Speakers Say

While there are many forms of over the top, or OTT, distribution, the term OTT is ultimately a “signifier for change” in the entertainment marketplace, said Erick Opeka, EVP of digital networks at Cinedigm July 17 at the OTT Channels Conference. The conference, which Opeka chaired, took place during the Los Angeles Entertainment Summit, produced by the Entertainment Merchants Association.

Speakers on the panel, “OTT 2022: Prognosticating the Future,” discussed the varied landscape for OTT players, from paid subscription to free ad-supported distribution, and the dominance of goliaths such as Netflix.

Panelists speculated about where Netflix would be in the next five years.

“They will look much bigger,” said Pluto TV’s Jeff Shultz. “It will be much harder for anyone to catch them given the lead they have created.”

Neil Davis of Ucast TV speculated that Netflix would be acquired by Apple, and Roku’s Randy Ahn quipped that it would be owned by Roku.

Meanwhile, National Research Group’s Jeff Hall said it would be continuing to expand internationally.

Many panelists noted the many opportunities for international growth of OTT.

Content on Indian knitting patterns can find an audience in India, Hall noted.

“Listen to the consumer,” he said.

Panelists also discussed ways to compete in a market dominated by the likes of Netflix, Amazon and other giants.

“It’s really challenging for an independent to find a place,” Davis said.

Content discovery is key, noted Ahn.

“We make it easy for publishers to build channels,” he said, noting that the Roku Channel is “essentially like a supermarket endcap” for OTT distribution, making it easier for consumers to use and discover OTT content.

Having a strong brand can also be a help “if the brand is important enough,” Shultz said.

HBO’s online service “has a chance to be a Netflix-like brand,” Hall said.

Panelists also addressed the impending Walt Disney Co. streaming service.

“I think they are going to have a harder time than I would like them to have,” Hall said, noting the service would have to expand beyond family programming.

Meanwhile, Ahn said Disney could “potentially redefine entertainment,” and Shultz, noting Disney’s valuable IP, wondered “at what expense it will come to Netflix.”

In another presentation, Tubi’s Adam Lewinson called his AVOD service “free Netflix” and noted it had accumulated 8,000 movies and series, using machine learning to help each piece of content find its audience.

Targeting a niche is also a way to find an OTT audience, noted Here Media’s Paul Colichman on another panel.

“Anyone who’s trying to compete with Netflix [with its wide appeal] should go home now,” he said.

Speakers agreed that OTT has put traditional TV on a path of decline.

IHS Markit research analyst Dan Cryan told the audience that 2016 was the peak of traditional TV.

“In five years, we won’t be talking over the top because it will all be over the top,” said Pluto TV’s Shultz.

Roku Celebrates 10 Years of TV Streaming with Free Content and Discounts

In celebration of 10 years of TV streaming, Roku May 14 announced it has unlocked free content for Roku customers and is offering discounts on select streaming players.

“The celebration falls just ahead of National Streaming Day on May 20, which encourages people to stream entertainment and recognizes the massive change in the TV industry,” according to a Roku press release. “This year marks the 10th anniversary of the first Roku player, the first ever device to stream Netflix to the TV.”

“For 10 years, Roku has facilitated the massive shift in the way people watch TV and we’re extremely proud of the contribution we’re making to streaming entertainment,” said Matthew Anderson, chief marketing officer, Roku, in a statement. “We can think of no better way to thank our base of nearly 21 million avid streamers than to offer free hit entertainment in partnership with some of the biggest and best TV networks like Shotime, Fox, EPIX, Smithsonian Earth and more.”

Content from select channel partners is available for free in the Roku Channel through May 20, including premiere seasons of the Showtime series “Billions,” “Ray Donovan” and “The Affair”the first season of EPIX’s dark comedy “Get Shorty”; episodes of hits from Fox, such as “The Four: Battle for Stardom,”Beat Shazam” hosted by Jamie Foxx; and “Love Connection” hosted by Andy Cohen; as well as nature and wildlife documentaries from Smithsonian Earth.

Consumers can also save on several Roku streaming players in the United States. For a limited time, customers can get $10 off the Roku Streaming Stick ($49.99) and the Roku Ultra ($99.99), as well as $15 off the Roku Streaming Stick+ ($69.99). The offers are available at major retailers including Amazon, Best Buy, Target and Walmart.com, and at Roku.com through May 26.

“Roku pioneered streaming to the television with the launch of the Netflix player in 2008. Since then, the company has transformed how consumers enjoy TV, how content providers reach their TV audiences and how brands reach TV audiences,” read the release. “As of the end of the first quarter of 2018, Roku had nearly 21 million active accounts, and during that first quarter alone, Roku users streamed 5+ billion hours.”

Roku Shrinks Q1 Net Loss as Platform Revenue Tops Device Sales for the First Time

Streaming media device manufacturer Roku May 9 reported a first-quarter (ended March 31) net loss of $6.6 million on revenue of $136.5 million. This represented a 24% improvement from a net loss of $8.7 million on revenue of $100 million during the previous-year period.

Los Gatos, Calif.-based Roku said its operating platform connecting to the Internet is now incorporated in 25% of all TV sold in the United States. Roku remains a significant conduit for third-party online TV services such as Sling TV, DirecTV Now, PlayStation Vue, Hulu Live, YouTube TV, fuboTV and Philo.

“Nearly half of our roughly 21 million active users have cut the cord or have never had a traditional pay-TV subscription, which means that they simply cannot be reached through linear TV,” founder and CEO Anthony Wood wrote in the shareholder letter. “This makes our strategic position in the living room extremely valuable.”

Indeed, The Roku Channel, the ad-supported service offering catalog movies and TV shows from Lionsgate, MGM, Sony Pictures Entertainment and Warner Bros., in addition to live news from ABC News, Cheddar and People TV, among others, now ranks the 15thmost-streamed channel on Roku devices.

In March, Roku said it would make the branded channel available for the first time outside the Roku ecosystem on select Samsung TVs.

“We believe there is a significant opportunity to take The Roku Channel beyond the Roku OS platform to other large-scale platforms,” Wood wrote.

The CEO contends about 10% of all adults in the U.S. between the ages 18 and 34 can only be reached on TV via the Roku platform in the living room.

As a result, Roku is targeting the $70 billion domestic TV advertising market with its first-ever “upfronts” meetings with TV advertisers.

“This is a milestone moment for [over-the-top video], as advertisers have recognized that OTT must now be part of their TV ad-spending strategy,” wrote Wood. “While it is still early days, we believe this is a significant moment for the industry and for Roku.”

Roku-Commissioned Study Finds OTT Ads More Effective

Video ads on the Roku OTT platform are 67 percent more effective per exposure at driving purchase intent than ads on broadcast and cable television, according to a study conducted by MAGNA, IPG Media Lab and Roku.

The study, “Under the Hood of Over-the-Top Measurement,” commissioned by Roku, tracked and measured ads from four brands — Applebee’s, H&M, McCormick and Truvia. The study used the Roku platform to identify households with exposure to linear TV and/or OTT ads. MAGNA surveyed a total of 4,621 consumers — both those exposed to the ads and an unexposed control group. The survey consisted of traditional brand metrics, such as ad recall, brand favorability and purchase intent.

The study also found that consumers consider brands that run video ads on the Roku platform to be twice as innovative as traditional linear TV alone. In addition, consumers found the ads to be more memorable than those on linear TV, due in part to fewer ads on OTT.

“It’s clear that OTT offers advertisers distinct advantages over traditional TV,” says Kara Manatt, SVP, intelligence, solutions and strategy, MAGNA Global. “Given that OTT needs fewer exposures to generate the impact that linear TV provides at higher exposure levels, brands can run campaigns on OTT that are both more efficient and effective.”

Other findings, according to the study: moving impressions to Roku from linear TV provides a 32 percent increase per exposure in perception that brand has a unique story to tell; Roku audience targeting spurs larger brand lift per exposure than linear television; and OTT ads require less exposure than linear TV.

“Consumers are shifting their TV time from linear to OTT, making it important for marketers to also shift their ad investments,” said Scott Rosenberg, Roku GM of platform business. “This study demonstrates that ads on Roku deliver not only incremental reach, but also higher ROI than linear TV ads.”

MAGNA is the centralized IPG Mediabrands resource that develops intelligence, investment and innovation strategies for agency teams and clients. Part of the Interpublic network, the IPG Media Lab identifies and researches innovations and trends that will change the media landscape and how brands engage with their audiences.

Roku Channel Coming to Samsung TVs

Roku March 20 announced that The Roku Channel app is expected to be available this summer on select Samsung smart TVs.

Launched late last year, The Roku Channel offers users free access to hundreds of ad-supported catalog movies and TV shows from content partners.

There are no subscriptions, fees or logins required to access The Roku Channel. It is ad-supported and features approximately half the advertising per programming hour as compared to traditional linear TV.

“The Roku Channel has been a tremendous success,” Scott Rosenberg, GM of platform business at Roku, said in a statement. “By broadening our distribution of this app to other viewing platforms … we are able to engage millions more consumers.”