TV Providers Look to Originals to Boost Direct-to-Consumer Over-the-Top (OTT) Services

Content providers, who are rushing to create direct-to-consumer subscription video-on-demand (SVOD) offerings, are finding that repackaging TV content may not be enough to make the services successful. While the strategic objectives for creating original SVOD content may differ, the short-term results may be the ticket in attracting more customers.

High-profile SVOD service launches from HBO, CBS and NBC Universal prove that TV providers are beginning to warm to the idea of delivering direct-to-consumer over the internet. With SVOD pioneers like Netflix, Amazon and Hulu building huge online businesses on the backs of licensed TV programs, TV executives are leaning toward delivering their own TV programs directly online. They are also beginning to realize their existing TV portfolio won’t be enough to secure the audiences they seek. Like the SVOD pioneers before them, the new TV provider services are adding original content to the mix.
OTT Subscription
CBS announced that it will make a new series in the Star Trek franchise to be delivered in 2017. However, according to CBS head Les Moonves, it will be exclusively available through the company’s $5.99 a month All Access SVOD service. His goal is clear: attract more subscribers to the service.

HBO Now created a huge splash when it launched on Apple TV in March 2015. Though it has quickly jumped to a 5 percent market share, HBO thinks it can do better at attracting younger viewers. It recently announced a four-year agreement with Comedy Central alumnus and millennial favorite Jon Stewart. Stewart will be producing a variety of short-form video content targeted primarily for release on HBO Now.
NBCU’s new $3.99 a month SeeSo comedy SVOD service will launch with a mix of content from the company’s comedy archive. However, when it starts a free public beta on December 3, 2015 SeeSo will also have new shows and specials every week.

CBS, NBCU and HBO all want to use the original content to help boost subscribers to their services. ABC has other plans for its over-the-top originals. The company will release them exclusively through its TV Everywhere authenticated WatchABC app. And in another network differentiator, these shows could be a training ground for later transfer to primetime TV. A short-form series is already under development with Iliza Shlesinger.

For CBS, which has only managed to achieve a 1.7 percent penetration since it launched All Access in October 2014, original content with the caliber of Star Trek could be just what the company needs to ignite a growth spurt. Similarly, without originals, NBC’s SeeSo would be relying on content available through many other web video services to attract new subscribers.

For NBCU, ABC and HBO there may be additional benefits to focusing on short-form original content. Consumers value the portability and flexibility of SVOD services as it allows them to consume video at odd moments and locations previously inaccessible to video services. Shorter content is perfectly suited for these occasions.

Whatever the long-term strategic goals for the original development are, the short-term impact is liable to be more viewers.

In the coming months, many more TV content providers will launch their own direct-to-consumer OTT video apps. Along with a selection of the TV programs they are known for, expect original web-only content to increasingly be part of the mix.

Mary Kay Evans, Chief Marketing Officer

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