OTT Video Finds Sweet Spot: Niche Content

By Aarthi Rayapura August 24, 2016

This post first appeared in MediaPost

By Craig Barberich, Global Head of Media Solutions at Zuora
As the OTT video market continues to expand — U.S. and Canada markets alone are expected to hit $24.39 billion by 2021— the industry has found what will keep audiences coming back for more: niche content.

This is a game-changer set to revolutionize the entertainment space. And the driving force behind it is new audience expectations.

Every industry out there knows we’re living in the golden age of the customer. From product development to geographical expansion, every aspect of business is now customer-driven. And if a business isn’t operating this way, chances are its days are numbered.

Customers care about the minute details, such as call wait times, easy payments, as well as the bigger questions around satisfaction and value from your service. More importantly, for media companies, they want to be able to access entertainment anywhere, anytime, and on any device. And it doesn’t stop there.

They also expect you to know what they want i.e customization and a delightful experience.

Now, as a subscription economy native, OTT video is perfectly poised to deliver this. Born and raised on the Internet, OTT video companies almost always offer multi-device services. They’ve also realized that niche content is a great way to stand out from the crowd and develop mutually beneficial relationships.

Unlike a broad based television channel, which caters to multitudes of interests, a niche OTT video service caters to a specific, narrow set of interests. This means it has the ability to understand audience expectations deeply and customize at a level that is simply not feasible for more broad based media companies.

What are the chances of you being able to filter down to mecha anime (a science-fiction genre that centers on robots or machines controlled by people) on regular television? And on the rare chance that you’re able to watch one, what are the chances of other mecha anime films being recommended to you?

Crunchyroll, the streaming service for anime fans can do just that.

Now, you may wonder how many anime fans are there outside of Japan to make business sense? The company has more than 750,000 subscribers who pay $7 to $12 a month. In turn, they can access over 25,000 episodes and 15,000 hours of officially-licensed content from leading Asian media producers translated in seven different languages, from English to Arabic. Plus, Crunchyroll does not operate in Japan at all and 80% of subscribers come from the English-speaking world.

Or look at Motor Trend OnDemand,the first SVOD service for automotive fans. It’s home to over 1,500-plus hours of updated live and original content, including exclusive, live streamed events, feature films, documentaries, and television series, all with an automotive angle.

With the right strategy, these services can serve as an attractive entry point to a larger value proposition. They can expand way beyond just video services and own the sub-segment. In its efforts to build a community, Crunchyroll is a regular at Anime conventions and has launched a podcast and show reviews. On its online store, it sells everything a fan could want — from anime themed books and apparel to housewares and hair clips!

Now, think of what a Disney streaming service can do with its infrastructure of theme parks and merchandise. Or a cooking streaming service or a horror video OTT service. The possibilities are endless.

There is no denying it. Today’s customers want to be treated as individuals, not homogenous generalizations. Niche OTT video understands this at its core. And therein lies OTT video’s winning formula.