According to Parks Associates’ latest report, in the US only, more than 15 million households are not reachable via traditional cable or satellite TV. And this number is still higher in other regions, such as Latin America, Europe, Asia and Africa.
This is just one of the reasons why the number of potential Over-The-Top (OTT) new subscribers between 18 and 40 years old is estimated to reach 332.2 million globally by 2019 (reaching 18 billion dollars in revenue by then – meaning an increase of 800% from 2011).
Besides sport premium OTT services and rights owners, Telcos, pay-TV operators and multi-channel sport broadcasters are the ones that will benefit from this dramatic growth, especially if they will apply a suitable go-to-market strategy, as per the chart here below:
Users will be everyday more willing to pay for exclusive content, especially if live video is into the proposition and available on any device, any time and everywhere. The reasons why TV broadcasters should embrace this kind of solution are the follows:
- increase the ARPU (Average Revenue Per User), that will be one of the key KPI to measure the success or failure of any OTT solution. Increasing the ARPU would also mean reaching a direct and bigger Return On Investment (ROI) for the acquisition of sport TV rights, that counts heavily overall.
- increase customer satisfaction (and retention), giving them what they are looking for: Live and VOD content available any time, everywhere and on whatever device they are using.
- enhance the brand image of the company: offering a full OTT solution will help to reach all the market segments, especially Millennials (people born between 1990 and 2015).
- reduce the customer churn: the value for money proposition.
- gain a competitive advantage in the digital landscape.
We expect this new go-to-market approach to impact users behaviour in respect to the traditional TV market. Actually, I won’t be surprised if DAZN, the German name of the new “Netflix of Sport” that will be launched by Perform Group in the German speaking territories (and in Japan, with a slightly different name), will disrupt the Sport eco-system in the next 12 months.
The first clear example of this fast moving sports digital market is the re-designed TennisTV that will be launched by ATP Media in collaboration with deltatre towards the end of 2016 as it will showcase how the OTT proposition won’t be a must for broadcasters only but also for any sport organisation (mainly Leagues, Federations and Clubs), independently from their size or from the TV rights’ deals they currently have in place.
Reaching new users via all the possible devices is not a threat but a clear opportunity: building official applications for AppleTV, Roku, connected TVs, PS4, Xbox, Amazon Fire TV and others will allow sport rights holders to offer users the best video experience, reaching growing audiences, and consequently impacting very positively into the first line of their P&L.
The time-to-market and the Direct-to-Consumer strategy will also be an important test for all the players and digital operators that wouldn’t like to be left behind in this new video digital opportunity.
Besides it’s really impacting how Telcos companies are embracing these solutions and the recent merges, in some cases, between telecommunications corporations and TV broadcasters is accelerating the digital adoption of new and innovative OTT solutions.
Telenet and BT Sport, in association with deltatre, are clear samples too: both companies are heavily investing to enrich their offer proposition to their fan base delivering a full solution in the market that allows these companies both to acquire new users both to bring a better users experience to the current subscribers.
If you are interested in the most effective ways to leverage OTT, we would welcome a discussion with you.