OTT video is perhaps one of the greatest transformations in media since the advent of radio and television. OTT or over-the-top refers to content that is delivered over the internet and does not require a traditional broadcast or cable video infrastructure to distribute it. While everyone acknowledges it’s the future of media, very few companies have figured out successful business strategies to win in an extremely competitive market. Earlier this summer, Zuora organized an exclusive luncheon for New York City media executives at the iconic 21 Club where experts from Deloitte, Adobe, and Zuora weighed in on successful OTT video strategies.
The panel consisted of Kevin Westcott, Head of Media at Deloitte, Kevin Towes, Head of Business Development for Adobe Video & Advertising Solutions and Craig Barberich, Global Head of Media Solutions at Zuora. The main topics of discussion were strategies to acquire, monetize, and scale video subscribers globally.
Speaking on Deloitte’s new Digital Democracy Survey (a multi-generational view of consumer trends in technology, media and telecom), Westcott said that “every technological trend around media consumption we’ve seen in the last ten years has started with the youngest generation. It starts typically in the teenagers and the 19 – 24 year olds and grows upward. OTT may have been introduced early on by the teenagers, but now the Gen Xers and the Baby boomers are using these services. The number of services subscribed to the household are larger in the younger generation, but growing in the older generations.”
Towes added insights from Adobe’s Digital Index’s Digital Video Benchmark Report – “We’re starting to see a stabilization of the devices that consumers are watching on. We also know that the consumption is happening in the same place which creates an interesting opportunity. If you know where people are watching from, it helps inform how you engage with that audience and how you monetize them either through subscriptions per household or advertising.”
All the panelists agreed that customer acquisition in the OTT video business tends to be expensive and thus, customer retention becomes extremely important. “It’s your responsibility to figure out all the information you get through subscriptions, transactions, third party and social data, to understand your customers and what’s retaining them. It’s a lot easier to try to retain customers than to try to attract new customers. We hear some talk about down selling. While it sounds negative, if I can take someone who’s currently spending $79 a month and retain them at $59 a month, that’s a lot better than losing that customer altogether. So, how do you identify the potential to churn? Is it through their use of the subscription? Is it through some activity on social? Think of churn risk triggers that can help you retain your customers” advised Westcott.
The panel also discussed creative OTT video monetization strategies. Speaking from experience, Barberich revealed that “one of the areas that Zuora sees a lot of activity around is strategies for revenue generation. There’s the traditional route where you can continue to build your subscriber base but we are seeing another novel approach of “How do I sell other things to my customers such as events and merchandise?” These revenue models aren’t completely baked yet but it’s about increasing monetization of an existing subscription.”
As new companies unencumbered by preset business models and systems experiment with new ideas around content, delivery, and monetization, existing media companies have to balance the tried and tested with the new and promising. “The biggest challenge for them is “how do I deal with this emerging new set of challenges without killing my existing business models?” It sounds real easy: jump digital. But they can’t simply abandon their consumer base. Many have millions of existing customers and managing the transition is probably their biggest challenge” said Westcott.
The event – part of Zuora’s exclusive NYC thought leadership media series – was attended by senior executives from media companies across the spectrum from pre-launch to established brand names.
Check out MarketMix for Media for more information on how Deloitte, Zuora and Adobe can help you acquire, monetize and scale your OTT video business!
And download Zuora’s Blueprint for a Subscriber-Centric OTT Video Business!