Three trends to watch for in European OTT TV

taylor_riese_headshotBy Taylor Riese, Head of Sales, EMEA

Europeans have typically spent less time zoning out in front of the TV than their American counterparts. That’s changed recently thanks to the popularity of over-the-top (OTT) TV. In 2017, Europeans watched two hours more on-demand content per month compared to the previous year, according to an IHS Markit study. And nonlinear video consumption grew 21 percent year-over-year.

Europeans now watch nearly as much TV as their North American counterparts. Currently, they only watch 11 minutes less TV per day than Americans, according to Eurodata TV Worldwide. With so many Europeans watching so much TV, it’s an optimal time for international media companies to enter the region and for European broadcasters to begin pouring resources into OTT. But to achieve success, they’ll first need to understand three trends shaping this growing market.

1. Unite and conquer

With the recent boom in OTT viewing, many native European broadcasters are trying to figure out how they can get a slice of the pie. Netflix is less dominant in Europe than it is in the U.S. – most countries in Europe can access only 50% of Netflix’s U.S. TV show catalog, according to Statista. This is an enormous opportunity for content providers to enter the world of OTT without signing away ownership of their content to another service.

However, just like in the United States, consumers are not willing to subscribe to 20 different OTT providers to watch everything they want. To help capture more viewers, many European content providers are opting to work together to launch joint OTT services.

In France, there’s Salto, a joint venture of three different French broadcasting services. In Spain, Loves TV is a collaboration between several different Spanish content providers. By combining their libraries, these broadcasters and supposed competitors can work together to try and dominate the growing market.

2. A new OTT backend

Combining multiple libraries into one OTT platform can be a tricky technical challenge. Content from different broadcasters may be formatted and encoded in different ways. Existing workflows for video delivery are also unlikely to be cross-compatible. On top of that, there’s the additional challenge of preparing each piece of content for playback on a myriad of popular OTT devices.

European broadcasters will need to invest in robust backend technology to continue expanding OTT at its current rapid pace. They’ll need to build workflows that efficiently serve content to cooperatives like Salto or Loves TV and to their own platform. Turnkey third-party providers, like Verizon Digital Media Services, can have an important role to play in these developments. By centralizing processes and streamlining workflows, a well-designed third-party platform can make launching a cooperative service faster and easier.

3. A hunger for premium sports content

Europeans love football (soccer in the U.S.), and broadcasters are listening. Competition over TV rights for top leagues has been heating up, driving prices for rights packages through the roof. Revenue for major football clubs in Europe increased 9% this year mostly thanks to higher TV earnings.

Recently, some OTT platforms have been getting in on the game. Streaming service Eleven Sports owns exclusive rights for the top leagues in Spain and Italy. Amazon has even tested the waters, purchasing a small rights package for the British Premier League. If this trend holds true in Europe as in the U.S., we can expect to see more and more sports viewing shift online. Broadcasters would do best to prepare by building robust OTT offerings now and experimenting with innovative ad tech and other monetization strategies.

It’s an exciting era in the European OTT media marketplace. Europeans are watching more TV than ever. They want variety, but they won’t sacrifice convenience, which means that a lot of different media owners are beginning to collaborate in sometimes unexpected ways. And European viewers want sports. No European service has risen to the top in the way Netflix has in the U.S., however, with easy access to turnkey OTT technology, there’s the possibility that everyone can engage a significant number of viewers – and the ad revenue that goes along with them.

Attending IBC? Schedule a meeting today to discuss how to utilize OTT to help your business grow. Or stop by and visit us (Hall 5, Stand B64) at the show to learn more about how we’re delivering the future of media.