What Not to Do When Launching an OTT Channel and 3 Reasons Why You Should

Let’s face it: even some of the biggest companies venturing into OTT have hit a brick wall, throwing hundreds of millions of dollars into their ventures only to see them go up in flames. To say it’s a tough ride is an understatement and, yet, the OTT landscape boasts tremendous opportunity, with many actually getting it right. Beyond the thriving Netflixes and Hulus of the world, channels like Fubu and Crunchyroll are also seeing great success, proving you don’t have to be one of the 800-pound gorillas to do well.

So, how do you launch a successful OTT channel? Perhaps the answer lies in considering what NOT to do. Trends tend to be cyclical. We were there for the rush of new cable channels 20 years ago and now we are dealing with the rash of OTT channels. This experience has led to three very important DON’Ts and their flipsides, the benefits of doing it right:

1. Don’t have unrealistic expectations about ROI. You may have to spend money to make money. While that doesn’t mean breaking the bank, you do have to anticipate that you’ll be spending forward before you see any gains. Be prepared to spend a year investing before seeing any monetization, and consider striking a balance between acquired and original content. Channels with 100 percent original content require huge budgets. There’s a reason Netflix cut its teeth on acquisition before delving into original programming.

The payoff: OTT’s potential reach is enormous. By 2021, eMarketer estimates that OTT video viewer penetration will approach three-quarters of internet users in the U.S. alone, with the number of subscription users at 78.6 percent (or 164.6 million people). That’s a much more significant reach than the 30 million typical of linear TV, and I haven’t even mentioned global potential, where you are not yet even touching 95% of the possible viewers.

2. Don’t neglect the consumer. It’s vital that you know both who you’re targeting and how to deliver them a robust user experience. So often, those launching OTT channels put all the focus on content and forget about the consumer. A recently launched comedy-themed OTT platform was abandoned by consumers due to its unreliable and poorly designed technology, and a service launched by a major telecom company failed to understand the interests of its target audience altogether. In both cases, executives poured a ton of money into the content, believing that its high quality would alone justify the price to consumers, but flat-lined when their user experience and marketing fell short. The best offerings have an equal emphasis on content and consumer: delivering quality content to the right audience and doing it well.

The payoff: OTT ventures that have a well designed user experience also have the potential to yield valuable feedback/analytics, providing a “testing ground” for rolling out new content and advertising strategies.

3. Don’t go at it alone. Knowing OTT is an investment requiring time and money, consider aligning with a supportive partner willing to help shoulder the risks. OTT ventures often fail when they try to take everything under one operation. There’s power in numbers, and a lot of people in the second tier are looking for partners.

The payoff: Combining forces with the right partner will enable you to divide and conquer, focusing key strengths in the right places (content vs. technology, as recommended above) and giving your OTT channel the best shot at longevity and future monetization.

A successful OTT channel tailors its user experience to each individual, depending on the brand, genre, type of audience and content. At the end of the day, it’s about creating a sense of excitement and community around the service that goes beyond adding new content every day.

Jeff Pryor is a public relations and brand strategist for Priority PR.