Tuesday, January 21

Smart OTT is the new normal, Asia Pacific to be second largest market

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KUCHING: Living in an on-demand world, a simple swipe of one’s mobile phone or a few clicks of the mouse can now bring consumers a plethora of content and applications.

BroadcastAsia2016 exhibitor, Peter Lofling, Director, Asia Pacific from Edgeware noted in a press release that Direct to Home (DTH), IPTV and Over-the-Top (OTT) services are projected to grow in the next five years on the back of government support in infrastructure development including fibre roll-outs fueled by increased consumer demand across the Asia Pacific.

The region is expected to become the world’s second largest for OTT SVOD services by 2018.

“It has no doubt been a great year for OTT in the Asia Pacific, with many new OTT service launches, most notably Netflix launching in Hong Kong, Singapore, South Korea, and Taiwan earlier this year,” he said.

For the coming year, Lofling opined that Smart OTT will be the new normal as “We are already seeing increasing competition in the OTT space, and the number of players will continue to increase this year” he said.

Pureplay OTT players who aggregate content will face competition from new entrants including traditional pay TV providers, broadcasters and content providers who have started offering their own OTT services.

With increasing competition, 2016 will solidify a new normal in which OTT providers compete on being smarter – both in acquiring or producing high concept originals, and in delivering relevant content to the consumer the way they prefer without compromising quality.

Smart OTT requires providers to consider the packaging, formats and commercial model that work for the particular customer category. The increasing amount of available content via alternative distribution platforms are challenging the customer channel bundle model as viewers increasingly question the need to pay for content they are not interested in.

This will likely result in new product packaging models and increasingly “slim” alternatives, specially designed for OTT distribution.

This would in turn forces companies to reconsidering the ad-revenue model.

Personalisation by ad insertion finds its place in the industry. Ad insertion technology has been particularly popular for live streams, replacing old ads with new ones, leading to new revenue opportunities.

“We can expect stronger industry adoption of the technology, fuelled by the fast-growing phenomenon known as programmatic advertising. Programmatic ad spend is estimated to grow at 20 percent annually and digital media spend will, for the first time, account for more than a quarter of total advertising spend in 2016,” he said.

We will also likely see more innovations on ad format, such as shorter, interactive ads and advertising with a purpose.

With some creativity, the implementation of ad insertion in combination with analytics technologies sees no boundaries.

“Driven by consumers’ expectation for high quality content on demand, OTT remains key in 2016. To stay ahead, the imperative will be for the industry to look at innovations that enable best viewing experiences from networks, content delivery services to ad-revenue models.”