Boston – Netflix, Amazon and Hulu set the stage for OTT-delivered subscription VOD services, but a massive wave of more focused, genre-based has emerged to reach a more targeted audience, and that wave is only expected to get bigger.

That was a big focus here Tuesday (May 17) in a session titled, “Single and Loving It: The Who, How and Why of Standalone SVOD."

The benefits of this approach is that services can be created to target the “super fan” and serve an audience in a unique way that broader SVOD services don’t offer, said Martin Keely, GM of subscription platforms at Fullscreen, which recently launched a $4.99 per month SVOD service.

“We’re just getting started,” he said.

Seth Laderman, EVP and GM of Comic-Con HQ, likened the rapidly expanding SVOD market to a “race,” as everyone attempts to build and launch services for specific audiences, and then get those viewers to actually pay.

But he said there’s some risk involved in targeting niches, because those viewers will also be looking to find similar content from other sources.

There’s an “endless appetite” for premium content, so providers need to rein it in with a curated service,  Ben McLean, SVP of business operations and strategy, digital, at NBCUniversal and Seeso, the new comedy-focused SVOD service, said.

He said offering limitless choice works if viewers know what they want to watch. With Seeso, he said, “We want to [offer] a highly curated, highly-programmed environment” that can engage an audience quickly.

“Seeso is our first swing at this,” McLean said, calling its comedy focus a “large niche.” And expect more. NBCU, he added, is also “looking at digital opportunities across the landscape.”

“There are no more gatekeepers,” said Tom Pickett, CEO of Ellation, a company that produces, designs and helps to market services/brands like Crunchyroll, an Anime-focused service with more than 700,000 paid subs, and Creativebug, a service for craft enthusiasts.

But he agreed that the downside of this second stage of SVOD is the amount of choice and fragmentation in the market, which makes it difficult for a new service to breakout from the pack.

And the technology that underpins these services is as key as the content, David Mowrey, VP of product management at Clearleap, said, noting that more than 100 standalone SVOD services have been stood up over the past nine months.

Not everyone has the resources of  a Netflix to build in all the content protection, interfaces, analytics and billing support. “It’s an extremely challenging thing for a standalone service,” he said. “You need a solid technology partner to do that.”

And the core video service is just one element of these services. To gain and retain customers, SVOD providers must think about “dimensions that go well beyond the video,” Pickett said.

In the case of Crunchyroll, the service is building in additional perks and benefits. One example is its partnership with a service called Loot Crate, which a mystery box of four to six pop culture items. Loot Crate, Pickett said, recently launched a new box focused on Anime, so Crunchyroll offers its subs a $5 discount for it.

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Online video is rapidly becoming big business for Big Blue.

IBM, a company that conjures up images of the early days of computing, is pushing hard into the world of multiscreen video with a growing, evolving cloud-powered platform. Rather than baking it all from scratch, IBM’s recipe has called for a sprinkling of M&A moves that have further consolidated the video-streaming market.

Late last year, IBM snapped up Clearleap, the Duluth, Ga.-based cloud-video back office and infrastructure firm. It followed up that move with its more recent acquisition of Ustream, a live video-streaming specialist.

Both deals came in the wake of IBM’s 2014 purchase of Aspera, a vendor that enables large data transfers over broadband networks, and its acquisition of Cleversafe, a maker of object-based storage software and appliances.

Clearleap and Ustream have been folded into a newly formed unit called IBM Cloud Video Services. The division, led by former Clearleap CEO Braxton Jarratt, positions IBM to take on the sector’s other giants, including Amazon Web Services and Microsoft Azure, as well as Comcast, which is becoming a force in the cloud-powered content delivery and video-streaming market.

IBM’s buying spree also ties it more closely to the world of video entertainment distribution. Clearleap’s partners include HBO, A+E Networks, BBC America, Sony Movie Channel, Verizon Communications and Time Warner Cable. Ustream’s client stable counts HBO, the National Football League, Discovery Channel and Facebook, which has made video a key component of its social-media platform.

By adding Ustream to the mix, IBM can tie into a key trend in streaming — preparation and delivery of live events. On-demand video is part of Ustream’s repertoire, but “live has been our core competency from the very beginning,” CEO Brad Hunstable said.

Ustream has its own global content delivery network, but has also built an abstraction layer that enables it to plug into Akamai and other content delivery netwoks (CDNs) around the world, taking advantage of their transit and peering relationships.

That “software-defined content delivery network” lets Ustream optimize video quality at the individual viewer level, said Hunstable, who will continue with IBM. “As [video] traverses the open Internet, optimizing for the best path and the highest quality is very critical.”

Ustream will also help IBM reach into different parts of the market. Its “Pro” platform, for example, is a generic, all-purpose system that can take on large-scale events, while its “Align” product taps the same core technology but is tailored for smaller events, such as corporate training videos and town halls. Align is “like an internal version of YouTube,” Hunstable said.

The team-up with IBM will fuel the “next phase of our growth” and deliver a “different kind of scale,” Hunstable said, noting that Ustream had reached an inflection point. To reach the next step, it needed to either consider a major round of capital financing or take on a strategic partner, he said.

“Live [streaming] is definitely hot right now,” Hunstable said, adding that virtual reality presents another significant opportunity.

IBM expanded its cloud video play again via the M&A path, this time snapping up Ustream, a provider of cloud-driven live video streaming services that counts HBO, the National Football League and Discovery Channel, NASA, and Facebook among its clients.

Financial terms were not disclosed, but the purchase comes on the heels of IBM’s acquisition of Clearleap, a multiscreen video platform specialist based in Duluth, Ga.

San Francisco-based Ustream handles on-demand and live streams to about 80 million viewers per month, IBM said, noting that the portfolio includes Ustream Demand, Ustream Align (for secure internal employee communications), and Ustream Pro Broadcasting, its scaled live video streaming system.

Ustream will become part of its newly-formed IBM Cloud Video Services unit that combines Big  Blue’s R&D labs and its strategic acquisitions and investments, including Aspera and Cleversafe.  That unit is led by general manager Braxton Jarratt, the former CEO of Clearleap.

“Aligning our expansive video and cloud innovations into an integrated unit will create opportunities for clients to take advantage of this medium in the most strategic way possible,” Robert LeBlanc, SVP of IBM Cloud, said in a statement.

“Through this latest acquisition and the creation of a new cloud business unit, IBM will provide an end-to-end suite of digital video solutions for the first time under one roof,” added Jarratt.

IBM said 2015 revenues for its cloud business rose 57%, to $10.2 billion.

IBM’s Ustream deal again shines the spotlight on the M&A action swirling around video streaming, and follows other recent mergers, including Amazon Web Service’s buy of Elemental Technologies, Turner Broadcasting System’s takeover of iStreamPlanet.

While ESPN is a key element of Sling TV’s core $20 per month OTT service for cord-cutters, sports may not necessarily be the tie that keeps the traditional pay TV bundle bound together, multiscreen specialist Clearleap found in a new consumer survey.

Clearleap, in an online survey of 435 consumers age 18-49 conducted in January, found that only about a third (36.58%) of sports fans would pay $20 or less per month to stream sports without a cable subscription. A much larger group -- 51.34% -- said they wouldn’t pay for such a service at all. Just 8.05% said they’d be willing to pay between $21 to $49 per month, and 4.03% said they’d pay more than $50 per month.

“There isn’t a lot of evidence to support the notion that sports are keeping subscribers tied to the bundle,” Clearleap noted in the study. “Even those respondents who identified as sports fans weren’t overly tied to the bundle because they needed their sports fix – nearly half said they watch plenty of other shows that require a cable subscription.”

The results of the survey “challenge many of the widely held assumptions about what’s keeping many consumers from cutting the cord,” Clearleap said. 

Clearleap’s study also found that fans of the “big three” U.S. sports (football, basketball and baseball) overwhelmingly prefer watching on traditional TV, while soccer and hockey fans were 14% and 13 more likely, respectively, to use streaming players, gaming consoles and mobile devices to watch live sports.

Almost 87% of those surveyed said they use traditional TV (antenna or cable) to watch live sports, compared to a streaming box such as an Apple TV, Amazon Fire TV or Roku device (5.4%), a laptop (4.13%), smartphone (2.22%), or a gaming console (1.27%)

Of those surveyed, 57.09% said they have never logged in via their cable provider to watch TV on another device, versus a few times per year (20.76%), at least once per week (7.96%), and at least once per day (6.92%).

Additionally TV shows were the most popular form of TV Everywhere content (51.43%), compared to movies/documentaries  (21.9%), and regularly scheduled sporting events and playoffs (20%). As a side note, FreeWheel, the ad tech firm owned by Comcast, found that sports dominates the live streaming landscape, representing 82% of live video ad views in the first quarter of 2015, versus 11% from news, and 7% from live simulcasts of entertainment-focused content (up from 5% in the previous quarter). 

But according to Clearleap, a company that counts Scripps Networks, A+E Networks, and Time Warner among its clients, found that roughly 45% of sports fans said that they had yet to download a sports-related app. Among those that do, the feature they use the most is accessing final scores (72.67%), followed by game summaries (46%), news from their favorite team (38.67%), and video (30%).

Chicago -- Hulu’s recently announced partnerships with a handful of MVPDs isn’t just about getting the OTT service on the set-top box, but also centers on deeper business relationships that aim to increase Hulu’s subscriber base while also giving cable operators a new source of recurring revenue. 

Hulu reached out to the pay TV universe about potential partnerships about a year ago as Hulu sought new ways to expand its core subscription service, Tim Connolly, Hulu’s head of distribution and partnerships, said here on a panel focused on online video strategies. 

Key to that was to show the MVPDs that Hulu and its deep catalog of TV shows offered a valuable, friendly complement to traditional pay TV services. That message has apparently been resonating. Following an initial agreement with Cablevision Systems, Hulu announced similar distribution pacts this week with five other MVPDs --  Armstrong, Atlantic Broadband, Mediacom Communications, Midcontinent Communications and WideOpenWest (WOW!) 

Connolly said the focus of those agreements is to bring Hulu to the set-top box and offer a “holistic" environment that ties Hulu’s content together with cable operator’s on a unified interface. 

While that could help cable operators keep eyeballs on their platform, Hulu's MSO partners will also get a share of Hulu's subscription revenue, Connolly said. 

While Hulu looks to amplify MVPD offerings, Sling TV is taking a different approach with OTT, delivering  skinnier bundles tailored for cord-cutters and cord-nevers, starting with a core package that sells for $20 per month, alongside optional add-on packages. 

The decision to develop the service was made more than five years ago as it became apparent that the traditional TV market would reach a saturation point and decline, due partly to costs.  “We needed a different model” to reach a different demographic, Roger Lynch, Sling TV’s CEO said.

“The $20 price point was really critical to us,” Lynch added, noting that hitting it was “the most challenging thing for us to do.” 

Lynch said it would’ve been easier to replicate the big bundle and deliver it over the Internet, “but we would’ve completely missed the market we were going after.” 

Lynch and Connolly also addressed churn, a huge challenge faced by all OTT video service providers. Both agreed that a big focus is to get customers to stay on the service for at least three months. After that period, churn rates tend to fall significantly. 

Sling TV is trying to hit that number through device bundles that offer a free or discounted Roku and Amazon streaming devices when customers agree to commit to the service for three months. 

But other subscribers can join or leave the service on a month-to-month basis. “We don’t necessarily view that activity as churn” in the traditional sense, Lynch said, noting that acquisition costs for OTT are far less than what a traditional MVPDs.

 He also said he expects consumers to be drawn to the Sling TV during big sporting events. “The challenge there for us is to make it [the service] interesting to them year-round.” 

As for new players looking to launch OTT services, they should be careful not to simply go about it by dipping their toe in the water and experiment with a “half-baked solution,” given the state of today’s competitive online video marketplace, Braxton Jarratt, CEO and co-founder of Clearleap, said. “That era was four-to-six years ago.” 

Clearleap teamed up with HBO Nordic, which is battling with Netflix, to help the OTT service essentially rebuild its architecture. That service relaunched about more than a month ago, and the improvements to the quality of the underlying service have already resulted in improved churn and better daily sales, he said. 

Looking to scale up its ability to support linear video services on a range of connected devices, Clearleap has inked an integration deal with iStreamPlanet, a provider of live streaming services, and one that teamed with Microsoft and other partners on the delivery of NBC’s coverage of the Sochi Games.

The deal paves the way for the integration of Aventus, iStreamPlanet’s cloud-based live video streaming platform, with Clearleap’s multiscreen video logistics and workflow system. They claim the tie up will help premium content owners – from sports leagues, TV networks and broadcasters – rapidly spool up multiscreen strategies.

Clearleap has supported live video streaming on its platform before, complementing its delivery of on-demand assets. But the integration with iStreamPlanet will lend expertise in the area and help Clearleap scale up that capability without having to procure and provision that those dedicated systems, explained Jennifer Baisch, senior director of product marketing at iStreamPlanet.

“Customers want a holistic solution” that can handle live events, linear channels and short-form and long-form VOD, added Clearleap VP of product management Dave Mowrey, noting that the initial mix of content supported by Clearleap and iStreamPlanet will include a mix of live cable channels and live PPV events.

Mowrey said Clearleap and iStreamPlanet are working with joint customers around the world, but wasn’t in a position yet to reveal them.  Clearleap’s stable of partners includes Food Network, HBO, InDemand, Verizon Communications, Travel Channel, and Time Warner Cable, among others. iStreamPlanet’s client base includes NBC, Turner Broadcasting, Notre Dame Athletics, AMC Networks, AT&T and Microsoft.

In addition to supporting traditional MVPDs, the partnership would also put Clearleap in position to help out so-called “virtual” MSOs, particularly in international markets. “The line between programmers and service providers is really blending,” Mowrey said.

Clearleap and iStreamPlanet will be showing off their integrated handiwork at the NAB show, which runs April 5-10 in Las Vegas.