By Jason Friedlander, Director, Marketing Communications
There are many myths about OTT that need to be debunked. Otherwise, we run the risk of misunderstanding the market and its opportunities. This goes for content producers, advertisers, those in TV business and even consumers. To distinguish facts from fiction, we need to know:
What is OTT?
OTT stands for over-the-top, which refers to streaming content delivered over the internet, as opposed to over-the-air or cable.
What are the to four OTT myths?
Myth #1: TV is dead
Let’s be clear: TV is not dead. Not even close. There is currently more content than ever; even Twitter has TV. The way to beat this myth is to realize that the definition of TV has changed. Television streaming over the internet is still TV. We no longer only watch linear television. We’re now streaming, sharing and engaging in a personalized model of video content. We’ve traded channel surfing for binge watching. It’s all still TV. Netflix is no different to television than HBO was to cable in 1980. They are companies that distribute and, more importantly, produce amazing content.
Myth #2: Content owners are ready
The second myth I want to examine is the idea that organizations are ready for the shift from linear TV to OTT. Some organizations, such as the streaming video natives like Netflix and Hulu, are more ready than others. But for most, they are still working through how they want to prepare for the future of TV, which is essentially here. They know how to make their content available for digital marketplaces, but they lack the data to fully understand the “where” and “how” to present it.
One of the key takeaways from the 2017 NAB show is that legacy TV and media companies are struggling with the transition to streaming content. They have been at the top of the game for 65 years. To continue to succeed at a high level, they have to understand how to program for a digital viewer. This means that the content experience must be personalized for each viewer.
Myth #3: Consumers don’t like ads
One of the most persistent myths around is that consumers don’t want advertisements. In fact, over 50% of Generation Z (the generation younger than millennials) enjoys watching ads. The key is that they have to be engaging, relevant ( personalized) and inoffensive. A related myth is that subscription fees for services are enough to maintain a fit ecosystem. This is simply not true. They aren’t enough.
Myth #4: Advertisers are ready
Programmatic ads are the future of OTT monetization, and the market is not prepared. In traditional television, you are selling to an entire market. It’s one ad spot that is delivered to the entirety of your audience. But, with over-the-top advertising, you are serving dynamic ads for each spot as the content is highly personalized.
How we buy ads has to evolve. The programmatic space has a long way to go to be well-stocked with high-quality video that is brand safe. We need traditional ad buyers to stop fearing the loss of their jobs and become pillars for programmatic so that the entire industry can succeed. We saw this resistance in OTT advertising when traditional leaders from broadcasting feared the inevitable. The current leaders of those businesses are the ones that leaned in to over-the-top, instead of backing out of it.