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The Lifecycle of

OTT Video Services

June 12 10:00 AM CT


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Speakers

Marek KielczewskiSenior Vice President Global EngineeringSeaChange

Brett SappingtonSenior Director of ResearchParks Associates


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


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


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



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




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




An

nu

al

Reven

ues

Time

Introduction /

Market

Development

Success in the

Introduction Phase

• Innovate

• Drive awareness

• Maximize accessibility




An

nu

al

Reven

ues

Time

Introduction /

Market

Development

Growth

Growth Phase - Early

• Increased competition



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



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


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



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




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


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


Individual OTT Service Lifecycle

OTT Service Idea

Funding

Content Rights

Business Model

Platform




An

nu

al

Reven

ues

Time

Go-To-Market

• Branding

• Segment

targeting

• Initial comm /

promotion

• Product

iteration




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




An

nu

al

Reven

ues

Time

OTT Growth• Aggressive

promotion

• Additional

sales channels

• Greater

content

investment

• Geo

expansion

• Feature

enhancement




An

nu

al

Reven

ues

Time

OTT Maturity

• Scale

• Retention

strategies

• Innovation

• Partnering /

acquisition



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


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


What We Do



Acclaimed for Innovation



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


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


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.


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


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


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


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.


Q&A


WWW.PARKSASSOCIATES.COM

Brett Sappington

Senior Director of Research

972.490.1113

[email protected]

Thank You

the lifecycle of ott video services - parks associates · week, you’ll get a coupon for the...

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