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How Innovative Brands Are Succeeding with OTT

Trace Galloway VP, Solutions Engineering, Vindicia

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Agenda: The OTT Global WaveOTT Monetization ModelsMaximizing Revenue and Lifetime Value Three Critical Steps to OTT SuccessOffer Personalization Is Key The Concept of “Frictionlessness” Data-driven DecisionsWhat Are Innovative Brands Doing?

How Innovative Brands Are Succeeding with OTT

Trace Galloway VP, Solutions Engineering

Vindicia

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Worldwide disruptive wave

Anywhere, anytime, any screen

Global leaders disrupting the market

$20+ billion next year

Transforming the landscape for: MVPDs Content owners and publishers Broadcasters and networks

Riding the Global OTT Wave

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Today 1.6 billion people worldwide actively watch online video on a variety of devices Represents over 20% of the

planet’s population

An estimated 900 million access TV programming and movies online today Will swell to over 1.3 billion video

viewers by 2019

OTT Global Growth

Source: Parks Associates

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OTT Service Provider Checklist

Compelling content licensed and available

Network/application infrastructure

User experience/flows

Monetization strategy to maximize revenue

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OTT as a feature

Advertising-supported OTT

Pay-per-view OTT

OTT subscriptions / recurring revenue

Hybrid OTT models

OTT Monetization Models

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OTT as a Feature “TV Everywhere” brings

OTT to subscribers at no additional charge

Turns OTT into a feature of MVPD distribution model, but fails to monetize OTT delivery

May stem flow of departing customers, but a feature is not a product

Not a long-term solution

Selecting the Right OTT Monetization Model

Ad-supported OTTOTT available without sign-in

or credentials

Ads are notoriously slow to load and play, and offer a poor user experience

May work for occasional users, but may drive away consumers who want more

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Pay-per-View OTT

Charge for each unit consumed

Effective when content is based on special events, such as sports or concerts

Makes high customer acquisition costs inevitable

Selecting the Right OTT Monetization Model

OTT Subscriptions and Recurring Revenue

Successful OTT players such as Netflix, Hulu Plus, Amazon, DIRECTV, Vimeo, Foxtel Presto, Telstra, and Media Prima

Consumers willing to try subscription and other recurring revenue-based delivery models

Hybrid OTT Monetization Models

Subscription video on demand (SVOD)

Credit-based consumption

Freemium subscriptions with ads for nonpaying users

Other hybrid models

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Predictable revenue streams

Less upfront commitment for consumers

Price and promotion flexibility

Long-term relationships

Control over user experience

Benefits of Subscription and Recurring Revenue Models

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Maximizing Revenue and Lifetime Value

ACLV = ((Avg. Mo. Revenue – Avg. Mo. Costs) x Average Customer Lifetime) – Acquisition Cost

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Three Critical Steps to OTT Success

1. ACQUIRE 3. EXPAND2. RETAIN

Billing, packaging, price, promotion, bundling, couponing and offer management all have dramatic but different effects throughout the customer lifecycle

Convert More Sales Expand User RevenueReduce Customer Churn

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Simplifying the GUI Reducing clicks to buy Third-party pages Mobile apps

Payment methods – not just more, but the right ones Offline payments Mobile payments

Resale/wholesale models Service providers (mobile, broadband, video)

Promotions/coupons Stacking

Loyalty Virtual currency and credits

Acquiring OTT Subscribers

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Geographic, demographic, sociographic

Hybrid models – SVOD, TVOD, freemium

Price, offer, payment flexibility

Social interaction, gamification and loyalty programs

Real-time scale and security

Integration of linear and OTT bundles

Offer Personalization Is Key

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Remove barriers between OTT service and consumer

Simplify sign-up, purchase experience

Easy in / easy out

No commitments

Trust the product/service

Frictionlessness

Reducing the Barriers to Service Adoption

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Data-driven DecisionsBusiness Insight and Intelligence

Key metrics and business operationsConsumer behavior

Views / plays / replays

QOS

Subscriber worthiness

Content profitability

Cohort analysis

Retention

Active vs. passive churn

Socioeconomic data

Acquisition cost analysis

Chargebacks

Churn management

Peer rankings

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Prepare to Iterate to Drive Market Acceptance

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What Are Innovative Brands Doing?

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OTT monetization models vary dramatically by demographics and sociographics

Core tenets of successful monetization Customer lifecycle:

Acquire, Retain, Expand Frictionless commerce Offer personalization drives

acquisition and retention

Nothing is sacred Data-driven decisions Iteration is critical to success

Key Takeaways

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What are you doing to capitalize on OTT and the

subscription-based economy?

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Questions?Thank You

www.vindica.com