Futuresource Panel: Linear Is Dying, Long Live OTT

WEST HOLLYWOOD, Calif. — If you need a hint as to what the future of the OTT space is going to be, Erick Opeka, executive VP of networks for OTT channel operator Cinedigm, can point you in the right direction.

“As we look at the various buckets of consumers making the switch, the canary in the coal mine is the younger viewers,” he said, speaking May 12 at the Futuresource New Content Horizons event in West Hollwood, Calif.

He pointed to recent research showing millennials averaging more than three OTT subscriptions each, a number that has to have traditional pay TV operators concerned.

“People are experimenting, taking on the idea of cord cutting and cord shaving,” Opeka said. “There are a lot of people interested in this space.”

Gene Hoffman, CEO and chairman of digital subscription services company Vindicia, said the problem traditional pay TV companies are encountering is that for the longest time, they’ve been stuck with a set-top mentality. And when they do look into doing OTT, they struggle with whether to go it alone, or get help getting it off the ground.

“We’re looking at the end of linear viewing, and there’s no question it’s going that way,” said Larry Namer, president and CEO of Metan Global Entertainment Group. “[People] are consuming traditional TV shows, they’re just doing it [outside of pay TV]. And for OTT operators, it’s going to continue to be “an increasingly competitive ecosystem,” Namer said.

George Barrios, chief strategy officer and CFO for World Wrestling Entertainment, likes to use his company’s WWE Network OTT service as an example of the potential in OTT. And with good reason.

WWE Network — which launched in early 2014 with a $10 subscription fee — is now available to 650 million TV households worldwide, and logged four billion hours watched by subscribers in 2015. It’s currently available in 180 countries, and has 1.82 million subscribers, who averaged 188 hours of consumption each on the channel in 2015. It’s the fifth largest direct-to-consumer service in the world.

“No one was talking about direct to consumer at the time,” Barrios said about when WWE decided to launch. HBO, CBS, Showtime and others have since followed, obviously. “Now you can’t go a day without someone announcing [a new OTT services].”

Still, saying OTT means the death of traditional linear services may be a little far fetched, according to Carl Hibbert, associate director of media and entertainment content for Futuresource Consulting. “We’re still talking about 100 million homes that take pay TV services,” he said.