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Guest Blog: Four Key Elements to OTT Survival

When it comes to monetizing online television, the industry is all over the map trying to reach the 87 percent of the U.S. that's watching video online. Ads or no ads? Monthly subscription or PPV? Bundled content or a la carte? The proliferation of delivery, device and content options means that consumers have more control than ever before, creating a Darwinian "adapt or die" environment for service providers. In response, many are moving toward business models that give consumers more choice, as evidenced by recent mergers and new offerings. During the last quarter alone, Verizon completed its acquisition of AOL (more on that later), Facebook announced it will monetize video with advertising and Hulu is exploring an ad-free subscription offering.

No one in the industry can predict with 100 percent certainty which monetization models will flourish, so players are placing bets across a range of options. At the center of every model, though, there must be elements that ensure a consumer-centric experience, including ease-of-use, mobile support, media logistics and consumer engagement data. In the end, no matter which models prove popular, these consumer-centric elements will be central to the survival of them all.

Consumer Engagement Data

"In a world driven by data, if you don't understand how your audience is engaging backed by data you have a huge problem."  This point made by Kevin Conroy, chief strategy and data officer and president for enterprise development at Univision, underscores the crucial and unique role consumer engagement data plays in driving video monetization models. As consumers pick and choose from the cornucopia of viewing devices, delivery options and content, engagement data is the weathervane telling the industry which way the wind is blowing.

Engagement data provides copious information that helps broadcasters quickly establish which assets are performing best and helps deliver better, more personalized viewing experiences, inform recommendations and increase views. Analytics can provide engagement data across screens, and drill deep, providing information on viewing habits, including time of day, location, when consumers started viewing, when and if they dropped off, and even provide some insight into why they dropped off: e.g. was it quality of stream related? The device? Because of an ad?

Consumer viewing behavior will only become more nuanced as new technologies, programming options and social trends take hold, and engagement data will provide the valuable insights needed to create offerings that anticipate consumer demand.

Mobile Offerings

Mobile viewing now accounts for 42 percent of all digital viewing, and by year-end, mobile is predicted to represent half of all online video consumption. Viewing isn't limited to just short content anymore either: nearly 60 percent of the time people spent watching video on tablets during Q1 2015 was with content ten minutes long or longer.

The "mobile movement" hasn't escaped notice among key industry players, and several have made big moves lately to ensure they're ready to seize the opportunity. Verizon's mobile TV service, Go90, is slated to debut anytime now. In keeping with the hybrid approach, it's rumored that the company will monetize its content with a combination of sponsored programming, ad-supported fare, and perhaps even pay-per view and some free content. The DirecTV and AT&T merger not only creates the world's biggest pay-TV company, but also positions the new entity to serve up mobile-centric consumer-friendly packages, such as its recently introduced all-wireless bundle that combines DirecTV service with AT&T mobile-phone plans.

As mobile becomes an increasingly essential element in meeting consumers' desire for programming on-the-go, consumer engagement data can play an essential tool in helping providers understand what type of content mobile consumers are viewing and when. Sport programmers, for example, might see that consumers are watching video during their commute home and serve up segments that highlight the evening's upcoming game, with short player profiles, etc.

With drivers like faster, bigger, and less expensive smartphones in the offing, and cheaper, more ubiquitous Wi-Fi availability, the popularity of mobile screens has nowhere to go but up. But there's still work to do before the industry is prepared to seamlessly meet consumers' growing appetite for mobile video. Tactical issues, such as better user interfaces, need to be ironed out, and more importantly, providers need to be willing to push more content over the top. As it stands now, too many providers are waiting on the sidelines of the OTT game.

Media Logistics

Consumers want their online viewing experience to be pleasant and relaxing, not stressful. Unfortunately, though, problems such as slow downloads, "stutter" signals, irrelevant and repetitive ads, and poor quality streams are still common in the online video experience. Service providers can save viewers from these headaches with the right supporting digital technologies.

Content discovery and recommendations tools are indispensable in creating a better user experience, providing a steady stream of the programming that an individual consumer prefers and offering navigation tools to help them find more of the programming they like. While great content is the ultimate trump card, an easy and intuitive discovery and personalized experience is key to building and engaging audiences. In fact, when consumers are offered content by a discovery engine that recommends videos on a personalized basis, they will view that new content 50% of the time.

Media logistics software and services can consolidate and streamline management of content in the cloud by packaging video for online and on-air delivery, and by providing support for the behind-the-scenes aspects of content creation, such as media production and post-production. These tools not only simplify the building, production and packaging of content, they also provide the right metadata and proper tagging so consumers can search and find content more easily.

Ease of Use

Regardless of whether content is monetized via subscription or advertising, it's important that providers make the monetization experience seamless, relevant and engaging. Subscription technology should be secure—to protect content and viewer's personal information. Log-ins should be easy and quick, and minimize the time it takes for viewers to start watching. And, very importantly, online ads should be personalized and contextually relevant to the individual viewer. A recent Yahoo! study showed that 54% of respondents reported being more engaged when ads were personalized, and 42% said they found personalized ads more relevant to them.

Currently, many organizations employ a variety of disparate digital technologies to help improve the consumer experience. However, these tools are becoming increasingly sophisticated and specialized, making it difficult to manage them separately. A unified platform with a single dashboard can dramatically simplify and streamline the process.

As service providers grapple with the perfect formula for monetizing online video, we'll continue to see models that cover a lot of ground. Hybrid business models will be the order of the day because certain types of content and audiences are best suited to certain models: ads, subscription, sponsored or free. No matter which models prevail, I'm willing to bet that mobile support, consumer engagement data, media logistics and ease of use will be integral parts of the equation. These essentials will provide the baseline for a consumer-first experience.