Over-the-Top (OTT) content is here to stay. Streamed over the Internet, OTT content is overtaking traditional distribution models. Companies like Netflix, Hulu, Sling TV, Pandora and Spotify are leaders in the category, but a number of new companies have jumped on the over-the-top bandwagon as the model continues to prove its viability and profitability.
OTT content is often characterized as being “a la carte,” where consumers pay for only the shows or movies they watch rather than committing to a bundle of channels predetermined by the cable company. Many OTT providers offer their content through a monthly subscription, often at a rate far less expensive than traditional cable TV.
Millions of viewers seek new, original content
In the US, 70% of consumers access some kind of OTT content each week. One of the biggest providers, Netflix, reported just over 69 million subscribers worldwide, including more than 43 million in the U.S., as of Q3 2015. Hulu, which offers both a free and paid subscription service, reports that the latter service numbers nine million subscribers.
As the model gains traction, more companies are entering the marketplace, ratcheting up the competition for viewers and their subscription fees. To stay competitive and garner greater market share, many OTT providers have started offering exclusive, original content.
Netflix’s popular serial dramas, House of Cards and Orange is the New Black, are two of the best known and most popular original series, available only to Netflix subscribers. Hulu and Amazon also offer several dozen original shows, with new ones premiering regularly.
YouTube, perhaps the first OTT content provider, is also developing new original content, in collaboration with some of the channel’s biggest stars. This content will be available commercial-free, via their new subscription service called YouTube Red, which launched last month. The channel plans to release additional original programming, including movies, in 2016.
Exploring strange new worlds
Another example is CBS—an old-school TV network—which is launching a brand new Star Trek series in 2017, going where no network has gone before in the process. The pilot episode will air on the CBS television network, but all subsequent episodes will be accessible only via CBS’s recently launched OTT network, called CBS All Access. The platform already features the various iterations of the extremely popular Star Trek series, now monetized as subscription OTT content.
Creating a curated niche
Exclusive, original content is one route to increased market share. Another is niche, curated content. Twitch, for example, allows viewers to watch other people play video games and other e-sports. This is a huge market: Twitch boasts 45 million unique viewers. Twitch is also expanding into other types of content, for example music content and creative content “inspired by video game culture.”
Along this vein, Twitch recently acquired the rights to all 31 seasons of the 80’s PBS series, The Joy of Painting. Viewers may recall the decidedly unhip yet talented host and painter, Bob Ross, who according to Twitch’s head of creative, “pioneered the entire idea of creating something in real-time.” Twitch does know their audience: over 5.6 million viewers tuned in to watch a nine-day marathon of the show's entire run, in October of this year.
Afrostream is another curator of OTT content, whose niche is African and African-American movies and television for French-speaking audiences, a wholly underserved market segment. The service launched in September in France, Belgium, Switzerland, Senegal and the Ivory Coast, with thousands of subscribers signing up months before the actual launch, and 72,000 Facebook fans.
The next wave of OTT
Undoubtedly, further innovations for ways to compete in the OTT market will come to the fore. For example, media companies with large archives of popular content could monetize their archive/library footage and give it new life (and create new revenue streams) by packaging it up for a new generation of subscribers, as CBS has done with the previously aired Star Trek series. Will other TV networks follow CBS’s lead? What will be the next wave in OTT content monetization, and are there ways your company can take your content over-the-top?