The Importance in Investing in Your OTT Technology

August 22, 2018

Blog CEO's Corner News OTT

If you’re a media company, regardless of size, someone in your organization is trying to develop, execute, or manage an OTT strategy.  What makes me so sure? Because over the past eight years of running Float Left, I’ve consulted with hundreds of media-focused companies and almost all of them are addressing the shift towards OTT.

Today, companies wanting to stay relevant must address the growing demand for TV anywhere at any time.  Consumers have taken ownership of how they’re watching content, and the industry is adapting. This rapid transformation is forcing broadcasters, networks, and content publishers to shift their strategies.

It’s All About the Technology

If you build it and MARKET it, they will come, and when they do, it better be awesome!

Organizations that understand the importance of building a service that doesn’t just “check the box,” but brings exceptional content in a delightful TV experience are in the best position to succeed.

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Case in point: most organizations are so focused on their launch dates that the quality of their service becomes an afterthought.  “I don’t really care about how it looks, we just need to launch!” Yes, I’ve actually heard this before, and it’s the wrong approach.  I’m not disregarding the need for deadlines, but to rush to market with a poor experience is better off NOT launching at all. There is fierce competition for a viewer’s time, and they don’t have the patience for a service that doesn’t engage them and make them loyal to a brand. The content needs to be compelling, and the TV experience must be “NETFLIX-CALIBER.”  No exceptions!

NOTE: For the sake of simplicity, we’re going to use Netflix as the poster-child example, but there are many excellent OTT and TVE services out there: Hulu, Ovation Now, Pop Now, and Crackle, just to name a few.

Aside from the content, what is it about Netflix that’s so effective? It’s the technology.

What does a basic OTT technology stack consist of?

  1. Media Servers – store, prep, and deliver high-quality video at scale.
  2. MetaData Servers (Content Management System) A CMS manages all information related to the content, such as title, description, runtime, ad cue points, and the like. These servers also send and receive information from the TV applications.
  3. Advertising Servers
  4. Subscription Management Systems (customer resource management)
  5. Analytics Services (Google, Nielsen, ComScore)
  6. TV apps. Simple on the surface but sophisticated underneath. When built properly they connect everything together and deliver a flawless experience to the viewer on every platform.

When everything is working together in harmony, you have created a service that attracts and retains viewers!

Netflix does this extremely well. They provide an outstanding TV experience that brings delight to their customers.  Yes, the content is fantastic, but so is the experience. It’s available on every platform and looks superb on every platform. It’s the same viewing experience regardless if it’s a set-top box, Smart TV, mobile device, or gaming console.  It pulls the viewer in and entices them to explore and discover more content. This reduces churn and creates a loyal customer.

Some nice features and techniques that Netflix uses to capture and retain customers are:

  1. Personalization.  Netflix knows what viewers watch and can make predictions on what they will want to watch next.  This helps to alleviate “content paralysis.” Having this personal connection with each of their customers gives Netflix a significant advantage over the competition.
  2. Robust searching.  Netflix doesn’t want customers spending quality viewing time looking for content.  If it’s not available right on the home screen, then viewers have an intuitive search function that returns relevant results quickly.
  3. Frequent content refreshing.  Netflix is continuously loading new content onto the platform.  I don’t think I’ve ever seen the same home screen twice.

While Netflix has set the bar high, it didn’t happen overnight.  And while a Netflix-style service is what companies should strive for, it’s more important to understand the fundamental principles of their success are tied to their technology. Organizations that are seeing success with OTT have recognized that churn can be traced back to poor technology.  Today, providing an exceptional TV experience is required for success.

Good Vs. Bad Vs. Just OK

Understanding the quality of your OTT technology is critical but also consider that technology isn’t always good or bad. It could be OK.  But “Ok” isn’t good enough today. It needs to be outstanding. It needs to pull in your viewers and provide them with a delightful experience.  At the end of the day, it’s the content that matters most. But even if the content is stellar, if the technology foundation is weak and the experience is subpar, the risk of losing viewers is high.

The amount of knowledge required to build and manage a scalable OTT service is high and increases continuously.  The challenge of deploying a multi-platform OTT service can’t be overstated. It’s creating and servicing apps on a plethora of fragmented TV platforms that each require a specific set of knowledge.

Just remember – it’s easy to build and launch a lousy OTT service.  It’s much more challenging to create an OTT service that scales to accommodate growth.

[bctt tweet=”Organizations that have seen success with OTT have recognized that providing an exceptional TV experience is the cornerstone of their service.” username=”floatleft_tv”]

A Real-World Example

A few years back I had been working with a media service that was providing faith-based content via an OTT service.  They had a few competitors, and one, in particular, was giving them anxiety. The main issue was they were spending a ton of money on marketing, capturing those viewers, but then losing them shortly thereafter. This forced the company to maintain a high acquisition cost each month with little ROI. With the high churn, this was a cycle they couldn’t break easily.

Upon further investigation we discovered a few critical issues:

  1. High load times on screens – the loading spinner was displayed on the screen way too long.
  2. The apps were poorly designed.  It gave the impression that the service was cheap.
  3. Videos took too long to load – again, high-latency.  The average viewer has about a 3-5 second threshold when it comes to waiting for videos to load.
  4. The content wasn’t organized logically.  It appeared to be laid out on the screen randomly which made it difficult for viewers to connect with and find what they were looking for.

So while the company was capturing viewers with solid marketing, they would ultimately lose viewers to the competing service. Some of the concepts around the TV experience are sub-conscience, but many of them are right at the surface.  These issues are unacceptable in 2018. If you launch an OTT service with any one of these issues, you run the risk of losing viewers forever.

Pulling together all the necessary pieces required to deliver a Netflix-caliber experience to consumers is a not an easy task, but remember, it’s about understanding the fundamental principles and making small steps  Why “Netflix-caliber”? Because that is what consumers expect. Netflix has created the gold-standard, TV service of the future.

Final Thoughts

Content is king, but technology is queen. Don’t underestimate the complexity of launching an OTT service. Question any vendor that attempts to simplify this to sell you into a packaged solution. Ask about customization — it may be OK now, but is the technology future-proof?

Media companies, broadcasters, publishers, or anyone that’s considering launching an OTT, direct-to-consumer service needs to ensure that the proper technology is in place before beginning. Once the service hits the market, it’s much harder to make the changes necessary to deliver the most effective service.

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