The machines have taken over: the ott/ctv revolution
The tipping point was reached in 2018 with consumers in the OTT/CTV arena. What does the landscape look like this year, and where should marketers be focusing?
Doesn’t it feel like we’re living in the flashback scene of some futuristic Hulu melodrama? One in which the robots have taken over, but the twist is they have proven to be much more effective leaders than the humans they replaced. Their technology has solved world hunger, fixed the environment, created lasting peace…the only requisite is a five-year manual labor sentence in their galactic lithium mines.
We’ve felt the sands shifting underneath for some time, now it’s time to get our footing as we examine OTT/CTV offerings in the marketplace, and what that means for media professionals and consumers alike.
What’s New?
The established players have become ubiquitous in our lives. The head start that companies like Netflix, Amazon, Hulu, and YouTube enjoy is significant, but that doesn’t mean new competitors won’t soon be nipping at their heels. Content will play a crucial role in who wins this dog race and there are some sleeping giants lurking.
- AT&T is slated to launch a direct-to-consumer offering in late 2019, anchored by the content controlled from the Time Warner acquisition. Tiered service offerings are likely in the works with a “core platform of movies,” which will be followed by tiers of different offerings. Harry Potter and Justice League fans will likely be intrigued by what AT&T and Batman has to offer.
- Disney+ is expected to launch in late 2019. Powerhouse brands like Lucasfilm, Marvel, and Pixar are expected to draw fans and fanboys alike to the service. The channel will feature a live-action Star Wars series, which is currently in development and expected to be priced below industry standard Netflix.
- Apple has never felt the need to be first to the market when entering spaces like these, and their eventual entry opens the door for wide adoption amongst their already loyal customers. It’s unclear exactly where this content will live, but it’s clear that Apple is jumping headfirst into the content creation game with some of the big names they have brought on.
Expect a whole range of new OTT/CTV ventures to continue to rise in the next year. Viacom and Discovery both appear to have direct-to-consumer offerings in the works. Consumers likely aren’t even aware of all the FASTS (Free Ad-Supported Streaming TV Services) that are available to them, such as PlutoTV, TubiTV, XumiTV and The Roku Channel. The public will soon have more options than they know what to do with, which raises more than a few questions.
Why Media Professionals Are Excited
Industry experts did not anticipate the level of rapid growth seen last year in the OTT/CTV space. The digital-style, addressable campaigns that Ad-Supported OTT lends itself to allows agencies and advertisers to leverage consumer data to serve ads up based on demographics, purchasing habits, and other comparable factors. Buyers see the marketplace shifting to a “Big Data” friendly world, in which decisions on where advertising dollars are allocated are backed up by audience data to reach the intended target.
The ability to track the digital delivery in ways traditional measurement falls short is a key selling point in favor of the vMVPDs. Despite reaching this current point in the cycle, growth in the Ad-Supported OTT world will be slower than buyers would think because of the human component (those pesky humans!). The way traditional networks are purchased differs significantly from working with the OTT/CTV operators, and that requires education, understanding, and willingness to adapt and adopt. Confusion about how things are measured and sold will benefit those at the forefront of adoption.
Agencies and buyers looking for new opportunities for brands will be keen to stay on top of the options available in the Ad-Supported OTT/CTV world. The precise structure each will roll out with is still being determined. It’s easy to foresee massive churn rates with users as viewers seek out must-watch programming and move on from one platform to the next as trials run out and new options are available to sample. The current à la carte approach to OTT options is liberating to consumers and holds the creators’ feet to the fire to produce quality content for fear of losing subs. Data-driven marketing professionals will look to capitalize within structures that meet their requirements for targeting, tracking, and audience measurement.
Resistance is Futile
Will consumers revolt at the idea of having to add more subscription services and tacking on more monthly charges to their credit cards? Will the conglomerates begin to merge and bundle all their content together, creating some kind of “super-service?” Maybe we really are one step closer to handing control over to the robots. The tools professionals will have to evaluate campaigns holistically will continue to improve, so it is incumbent upon savvy marketers to stay ahead of the curve and work with the robots.
Sources:
https://www.entrepreneur.com/article/326236
https://digiday.com/marketing/buyers-adopt-tv-style-co-viewing-measurement-connected-tv-ads/
https://www.businessinsider.com/live-news-sports-ott-services-threaten-pay-tv-2019-1