Nobody can dispute that Over-The-Top (OTT) video distribution is here to stay. In most markets today, TV and video consumption via internet-connected devices is commonplace in most people’s daily entertainment consumption habits.
Although television consumption today still combines (and will do so for some years) traditional linear TV with OTT, over time more and more viewing hours have shifted away from linear viewing and to OTT.
It has been proven that if you get people to discover your service, provide compelling content at the right price accessible on multiple connected devices, and offer the right user experience, people will be willing to pay US $5-10 per month.
But how long you can you retain your OTT customers in a market that is fully fragmented in terms of original content, has indistinguishable pricing structures, and a homogenous user experience?
The market is becoming more and more competitive, and If you are in the OTT business you know that today the main challenge to your service is churn.
Even if you manage to keep your users, how will you ensure that you get the highest customer lifetime value out of your customer base?
Getting your customers to stay with your service after the initial viewing experience, enticing them to become avid consumers, or getting them to return for more is never easy to achieve.
The entire industry is currently talking about how OTT providers can differentiate themselves from competitors. OK. That’s good. It means the market is more mature now. But, first of all we have to address the fundamentals: Does your service align with your customers’ expectations? Are you listening to the users of your service in real time? Are you responding to their requests quickly? Are the ones who pay the bills satisfied with the service? Do you really know your customers?
For me, this is the starting point: the key to a successful OTT service starts with understanding your customer’s needs and being able to respond to them quickly whether in terms of content offering, user experience, or business model.
OTT managers need to fully understand the data-related power that the internet brings to the table when it comes to knowing their audience, enabling actionable learning, and predicting customer behavior. We are in a completely new era where data is crucial for running an OTT service, and it will be the key differentiator between the winners and losers.
As computer processing power has increased and can now occur at extremely high speeds, Big Data and Artificial Intelligence algorithms have become hugely relevant to managing your business rules. We can now answer key questions in real time. Questions such as:
- Which customers are most likely to churn next month?
- What content are my customers more willing to pay for next week?
- Who are the customers who recommend the service more frequently?
- What is the sentiment of my service on a Friday night?
Even more importantly is that we enable actionable learning from the questions above and make a positive, real-time impact with numerous automatic actions.
We have gotten to a point where we can let computers process massive amounts of information at a speed we simply can’t match; this allows us to focus on making better, faster decisions. This is the real differentiation.
I think the most powerful AI algorithms that will be used in OTT have not yet been invented. Still, to be successful, we must welcome the era of data, accept data as the DNA of our decision-making, and embrace this new mindset that sooner or later will change our industry completely.
Previously this was only possible for big companies like Netflix, Amazon or Google. Now with the cloud more accessible than ever, new Data as a Service platforms can do the job for us in a cost-effective way, which was unimaginable just a year ago.
Do you want to jump to the next OTT level?