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www.parksassociates.com
The Lifecycle of
OTT Video Services
June 12 10:00 AM CT
www.parksassociates.com
Audio Recording Playback
Parks Associates invites you to view and listen to the webcast recording.
Click link to view recording: https://attendee.gotowebinar.com/recording/7487873588139751169
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Speakers
Marek KielczewskiSenior Vice President Global EngineeringSeaChange
Brett SappingtonSenior Director of ResearchParks Associates
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Hints of the OTT Lifecycle
68 85109
156192
214
1825
55
43
30 5
1 1 8 7 8 4
-50
0
50
100
150
200
250
2013 2014 2015 2016 2017 2018
Closed New Existing
United States OTT Video Services, 2013-2018Parks Associates OTT Video Market Tracker
Source: OTT Video Market Tracker 2014-2018 | © 2018 Parks Associates
# o
fO
TT
Vid
eo
Serv
ices
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Product Lifecycle
An
nu
al
Reven
ues
Time
Introduction /
Market
Development
Growth Maturity
Introduction
• Establish market foundation
• Few participants
• Keys: Survival / Industry
awareness
Growth
• Capture market share
• More competitors
• Keys: Refine offering / Fight
competition
© 2018 Parks Associates
www.parksassociates.com
Product Lifecycle
An
nu
al
Reven
ues
Time
Introduction /
Market
Development
Growth Maturity
Maturity
• Competition and consolidation
• Fewer but larger competitors
• Keys: Retention / Scale
Decline
© 2018 Parks Associates
www.parksassociates.com
The OTT Video Market Lifecycle
An
nu
al
Reven
ues
Time
Introduction /
Market
Development
Introduction Phase
• Mostly transactional video
• Computer-based viewing
• Streaming video yet to emerge
• Physical media was a primary
industry focus
© 2018 Parks Associates
www.parksassociates.com
The OTT Video Market Lifecycle
An
nu
al
Reven
ues
Time
Introduction /
Market
Development
Market Change (2005-2007)
Lessons Learned
• Appeal of streaming
• Business model has to match
the lifecycle phase
• Connected devices influence
consumer perception
© 2018 Parks Associates
www.parksassociates.com
The OTT Video Market Lifecycle
An
nu
al
Reven
ues
Time
Introduction /
Market
Development
Success in the
Introduction Phase
• Innovate
• Drive awareness
• Maximize accessibility
© 2018 Parks Associates
www.parksassociates.com
The OTT Video Market Lifecycle
An
nu
al
Reven
ues
Time
Introduction /
Market
Development
Growth
Growth Phase - Early
• Increased competition
© 2018 Parks Associates
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Increasing Competition
68 85109
156192
214
1825
55
43
30 5
1 1 8 7 8 4
-50
0
50
100
150
200
250
2013 2014 2015 2016 2017 2018
Closed New Existing
United States OTT Video Services, 2013-2018Parks Associates OTT Video Market Tracker
Source: OTT Video Market Tracker 2014-2018 | © 2018 Parks Associates
# o
fO
TT
Vid
eo
Serv
ices
www.parksassociates.com
The OTT Video Market Lifecycle
An
nu
al
Reven
ues
Time
Introduction /
Market
Development
Growth
Growth Phase - Early
• Increased competition
• New priorities
• Get to market
• Capture subscribers
• Beat the competition
• Strategies employed
• Ubiquitous presence
• Follow the leader
• Blended business models
• Focus on discovery © 2018 Parks Associates
www.parksassociates.com
Adoption across Generations
0%
20%
40%
60%
80%
100%
Q3/16(n=1,406,±2.61%)
Q3/17(n=1,517,±2.52%)
Q3/16(n=1,587,±2.46%)
Q3/17(n=1,722,±2.36%)
Q3/16(n=1,700,±2.38%)
Q3/17(n=1,489,±2.54%)
Q3/16(n=280,±5.86%)
Q3/17(n=281,±5.85%)
Gen Z/Gen Y/Millennials(1982 and forward)
Generation X(1965-1981)
Baby Boomers(1946-1964)
Mature(1945 and earlier)
1 service only 2 services 3+ services
Number of OTT Service Subscriptions by Generation (2016 - 2017)Among U.S. BB Respondents in Specified Generational Group
"DM6005/DM6006/DM6010. To which of the following video services does your household subscribe?“ | Source: Multiple Surveys: American Broadband Households and Their Technologies | © 2018 Parks Associates
% w
ith
Nu
mb
er
of
OT
T
Se
rvic
es
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The OTT Video Market Lifecycle
An
nu
al
Reven
ues
Time
Introduction /
Market
Development
Growth
Priorities Today
• Service awareness / differentiation
• Content
• New offerings
• Fighting for share
• Marketplace positioning
• Not a zero-sum game
• Perceived value and unique
content
• Worldwide evolution
• New experiences
• New channels
© 2018 Parks Associates
www.parksassociates.com
The OTT Video Market Lifecycle
An
nu
al
Reven
ues
Time
Introduction /
Market
Development
Growth
Priorities Tomorrow
• Capture share through new
services, partnering or acquisition
• Expand to global markets
• Retention
• Perceived value
• Personalized experience
• Promotion / merchandising
within the service
• Innovation© 2018 Parks Associates
www.parksassociates.com
Perception Matters
0%
25%
50%
75%
100%
Netflix subscribers(n=1,559, ±2.48%)
Hulu subscribers(n=745, ±3.59%)
Amazon subscribers(n=1,190, ±2.84%)
Is the service that changes or adds content the most frequently
Is the best value
Is the service you are most likely to recommend to others
Is the easiest to use
Big 3 OTT Services: Service Comparisons Based on Perceptions & Experience (Q3/17)Among U.S. BB HHs That Subscribe to 2+ OTT Services and Also Subscribe to Specified Service
% S
ele
cti
ng
*Asked to HHs with children | "DM6020.You indicate that you subscribe to the following services. Which service?" | Asked of a subgroup of n = 5,009Source: American Broadband Households and Their Technologies Q3 2017 | N=10,017, ±0.98% | © 2018 Parks Associates
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Individual OTT Service Lifecycle
OTT Service Idea
Funding
Content Rights
Business Model
Platform
© 2018 Parks Associates
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Individual OTT Service Lifecycle
An
nu
al
Reven
ues
Time
Go-To-Market
• Branding
• Segment
targeting
• Initial comm /
promotion
• Product
iteration
© 2018 Parks Associates
www.parksassociates.com
Individual OTT Service Lifecycle
An
nu
al
Reven
ues
Time
The OTT Gap• Adequate
revenue / ROI / capital
• Adequate awareness
• Compelling content
• Attracting target users
• Successful channels
• Differentiation
• Quality UX
© 2018 Parks Associates
www.parksassociates.com
Individual OTT Service Lifecycle
An
nu
al
Reven
ues
Time
OTT Growth• Aggressive
promotion
• Additional
sales channels
• Greater
content
investment
• Geo
expansion
• Feature
enhancement
© 2018 Parks Associates
www.parksassociates.com
Individual OTT Service Lifecycle
An
nu
al
Reven
ues
Time
OTT Maturity
• Scale
• Retention
strategies
• Innovation
• Partnering /
acquisition
© 2018 Parks Associates
www.parksassociates.com
Differentiation is critical to longevity
Detailed user data and service agility will be
keys for growth with retention
Think in portfolios, not single services
Plan globally, execute market-by-market
Be willing to disrupt yourself
Takeaways
23© 2018 SEACHANGE INTERNATIONAL, INC. © 2018 SEACHANGE INTERNATIONAL, INC.
The Lifecycle of OTT Video Services
Marek Kiełczewski, Senior VP of Global Engineering, SeaChange
June 12, 2018
24© 2018 SEACHANGE INTERNATIONAL, INC.
Our Global PresenceSeaChange Operates Globally Across All Locations
SeaChange Office
Proven, Future-Proof Solutions | Cloud Experience | Expertise in Scaling Massive Video Subscriber Bases
25© 2018 SEACHANGE INTERNATIONAL, INC.
SeaChange - By the Numbers
200+Service Providers on
platform
50Countries served
Financials
67%2018E Gross Margin
$80M2018E Revenue
25%2015A - 2018E Software platform revenue CAGR
15 yearsAverage tenure for our Top
10 customers
1.5M+Content titles
in customer libraries
10M+Daily ad insertions
40M+Subscribers served by our
video platform daily
Customers Solutions
26© 2018 SEACHANGE INTERNATIONAL, INC.
What We Do
27© 2018 SEACHANGE INTERNATIONAL, INC.
27© 2018 SEACHANGE INTERNATIONAL, INC.
Acclaimed for Innovation
28© 2018 SEACHANGE INTERNATIONAL, INC.
28© 2018 SEACHANGE INTERNATIONAL, INC.
The World of Video: In Transition!
Shifting
Viewing
Habits
New
Business
Models
Service Provider Business
Model
Pull vs PushAnytime,
Anywhere, Any Device, Any Network
D2CSubscriptionAdvertising
Hybrid
Service Provider business model is in transition
Moving
Video to
Cloud
Emerging
5G
Wireless
Transition of video to cloud for scalability, agility, innovation
Opportunity to deliver 5G
wireless video
29© 2018 SEACHANGE INTERNATIONAL, INC.
Scenario 1: Pay-TV OperatorPRESERVE LEGACY INVESTMENT
Preserve and
Augment Existing
Legacy Systems
• Adding multi-screen TVE features
• Migrating VOD (with stable demand but flat revenue) to a new system while maintaining existing 3PP integrations
• Adding new monetization option with advertising for linear and VOD
• Moving to new IPTV/OTT video platform
• Has a growing VOD library
• Wants ONE (centralized) content & metadata workflow management system running across multiple back-offices
Keep One Legacy
System While
Moving to OTT
30© 2018 SEACHANGE INTERNATIONAL, INC.
Scenario 2: BroadcasterEXPAND AUDIENCE REACH WITH DIRECT-TO-CONSUMER (D2C) OFFERING
Modernize
D2C Video
Services
• The audience’s access to content: web, mobile and connected platforms
• Need a cloud-native, multi-tenant content management architecture to provide automation, scale, and integration flexibility across multiple transcode, DRM, and metadata enrichment systems.
31© 2018 SEACHANGE INTERNATIONAL, INC.
Scenario 3: Content Owner/AggregatorEXPAND AUDIENCE REACH WITH DIRECT-TO-CONSUMER (D2C) OFFERING
Grow Customer
Base and Gain
Access to User
Metrics
• Business from legacy distribution channels is slowly shrinking.
• Deploy OTT for authenticated TVE multi-screen solution (requiring Pay-TV subscription).
• Launch D2C streaming video
• Managed linear in-house and outsourced VOD
32© 2018 SEACHANGE INTERNATIONAL, INC.
Scenario 4: MobileOFFER SUBSCRIPTION SERVICE WITH LOCAL AND GLOBAL CONTENT
Managed Service
Video
Subscription with
A-la-carte Option
• Leveraging Global CDN for delivery of video content anywhere in the world
• Managed subscription services with enhanced video a-la-carte or bundled with roaming packages
• Regionalized content targeting for catalog and price• Revenue share model
33© 2018 SEACHANGE INTERNATIONAL, INC.
Scenario 5: ISPADD STICKY SERVICES TO MAINTAIN CUSTOMER LOYALTY
Managed OTT
Services and
Skinny Bundles
• ISP reselling cable and telco last mile
• Deploy managed video services
• Personalized skinny bundle of live and VOD video to reduce churn and increase ARPU
34© 2018 SEACHANGE INTERNATIONAL, INC.
Offer
Transactional
VOD and Linear
Subscription
VOD and Linear
Free VOD and
Linear
Download
to Own
Download
to Rent
Electronic
Sell-Thru
A-VOD,
A-SVOD
Advanced
Offer
Models
• Buy 4 movies for the price of 3
• Subscribe to 10 Linear channels as a package
• Buy a linear package along with VOD titles
Basic
Offer
Models
• For a fixed fee, you can view any movie within a fixed period.
• Get a free movie after 3 purchases
• After buying 3 movies/bundles within the same week, you’ll get a coupon for the movie-of-the-week for free
• Discount at certain time of the day/week
• Buy a movie/bundle on Monday afternoon and get 50% off
(Rental period is automatically reduced to 4 hours to assure consumption during ‘slow’ hours)
• During the Holiday Season, all triple play customers get a free movie
• A disgruntled customer may get a $5 coupon as reward
Bundled
Offers
Coupons for
Free MoviesHappy Hour Promotion
Loyalty Program All You Can
Watch
Promotion / MerchandisingMonetization to Any IPTV and OTT Service
35© 2018 SEACHANGE INTERNATIONAL, INC. © 2018 SEACHANGE INTERNATIONAL, INC. CONFIDENTIAL.
SeaChange is a registered trademark of SeaChange International, Inc. All other marks are the property of their respective owners. While every effort is made to ensure the information given is accurate, SeaChange does not accept liability for any errors or mistakes which may arise. All features, specifications, system requirements and/or compatibility with third party products described herein are subject to change at any time without notice.
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Q&A
www.parksassociates.com
WWW.PARKSASSOCIATES.COM
Brett Sappington
Senior Director of Research
972.490.1113
brett.sappington@parksassociates.com
Thank You
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