OTT Has Reached a New Level of Maturity

Dimitar Serafimov | Wed Nov 08 2017 | Industry insights

OTT TV maturity

Since its original incarnation, OTT has come on leaps and bounds, enjoying many important twists, turns, and changes. And today, many signs point to a new level of market maturity.

New research reports have found that rather than an increased level of new services hitting the market, the existing ones - across the entertainment spectrum - are gaining ground, strengthening their processes and striking up valuable partnerships, pushing them into new and exciting dimensions.

What's more, OTT has found its way in the media and entertainment world. A recent study from Parks Associates shows that 53% of U.S. broadband households subscribe to both a pay-TV service and at least one OTT video service. 

The same study noted the maturity trend in the US market, where the number of new OTT services decreases and fewer services being shut down. The number of existing services is quite high, and their major challenge will be to hold firm and expand to new markets.

OTT services trends - Parks

Now, as OTT develops and becomes more mainstream, so does the level of partnerships between broadcasters and service providers. In particular, there are five factors that are driving the success of these partnerships:

  • The fragmentation of OTT content: In 2015, there were 33 new OTT video services in the USA alone, which is quite incredible. Content specializations and themed service will start bulking up. As a result, partnerships are being forged to improve content offerings.
  • The success of bundling: According to recent research from Ampere, bundling multiple SVoD or OTT services has become somewhat of a driving force throughout the market. In fact, almost three-quarters of web users in the US have at least one SVoD subscription, and in nine of the 13 markets studied, at least half have one or more subscriptions.
  • The polarization in the OTT subscription market: A host of OTT services are evolving to be complementary to the market’s most significant players, instead of trying to fight against the likes of Netflix, Amazon, and Hulu in a direct sense. Consumers are increasingly self-aggregating their OTT and entertainment services,  adopting primary entertainment content sources and supplementing them with video options that work for their personal needs.
  • A low threshold for OTT service survival: The OTT game, if played well, is very fruitful indeed. But, as the medium becomes increasingly popular and new services emerge from the woodwork, overall subscription rates are stagnating. Not only this but as licensing fees rise, many OTT services will struggle for survival in saturated pockets of the market, meaning that to enjoy a successful future, forging partnerships to share resources and expertise fast becoming a necessity.
  • Low brand awareness many OTT providers: With a strong focus on entering the market quickly, sometimes failure can ensue due to low levels of investment in marketing, technology capabilities, and brand development. As these three elements form the very foundations of OTT success, mutually beneficial partnerships are becoming all the more likely.

There’s no doubt about it: OTT has reached a significant milestone in its story. And with any milestone comes the need to adapt and evolve. We are living in incredible times and as a service provider, as long as you’re willing to collaborate, connect, roll with the punches and continue to innovate - success will be inevitable. Kobe had a couple of cool quotes on his transition to a mature player, that resulted in a jersey number change.

In line with the industry trends, Cleeng has invested a lot in strengthening our platform for maximum scalability and robustness. We continue to help broadcasters go to the next level and build up their service for maximum ROI.

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