As the OTT market continues to erupt and cord-cutting persists, it’s hard to envision any scenario where market growth slows, as the pandemic continues to accelerate the adoption of new D2C services. This proliferation of new services will see businesses experiment and refine business models, pricing and packaging in an effort to maximize recurring revenues, however, it is the battle for engagement that is likely to take center stage throughout 2022 as more competitors arrive on the market. Many OTT services are focused on their data strategies to better inform experiences, products, prices, offers, and more. At the same time, they are looking to create a cutting-edge tech stack, fuelled by data – to facilitate growth, flexibility, and opportunities to increase efficiencies across the business. Following these themes, over the next 12 months we’re likely to see:
1. Surging OTT Competition With Increased Churn
The increasingly competitive landscape within OTT coupled with the streaming boom triggered by the pandemic means that the choice for consumers is greater than ever, with people in the US subscribing to more than four SVOD services on average. As more entrants move into the OTT market, the competition is set to increase further, and churn is likely to be a major headache for OTT services in 2022.
Unfortunately, not all OTT services have the budgets of Netflix and Disney+ to produce original content to keep users loyal and engaged, so it’s vital that services leverage alternative means – such as tools like Subscription Management, which mitigates both voluntary and involuntary churn – to develop relationships and keep churn to a minimum.
>> More Info Tip – Read our guide on Optimizing Recurring Card Payments and Reducing Churn
2. OTT Fragmentation a Perfect Breeding Ground for Aggregation 2.0
There is no denying we have reached a new ‘golden age’ of content creation, with titles suitable for all generations, offering both quality and choice in abundance. But given the competition, there is a real risk of consumer experience becoming the fall-guy with OTT services battling for subscribers. With fragmented content, experiences, billing, and identities, it is becoming increasingly difficult for consumers to really maximize the value of each individual subscription.
Enter: the super aggregator, a market disruption that can both reduce the risk of market saturation and increase consumer experience, by providing a one-stop-shop to aggregate all OTT services from various sources under one roof. A universal platform for content discovery, search, personalization, identity management, and billing. Part of this is already available from existing platforms, including some Connected TV (CTV) devices and app stores, such as Amazon Channels, but this is set to continue rapidly over the next 12 months.
>> More Info Tip – Read our Blog on Competition and Partnerships
3. The Battle for CTV OS to Intensify
The current CTV landscape is complex and somewhat chaotic, with consoles, streaming sticks, device casting, and different CTV Operating Systems (OS) for streaming from device to device. There is multiple OS within the CTV ecosystem such as Tizen OS on Samsung, Roku OS on Roku, tvOS on Apple, WebOS on LG, and even custom OS on domestic platforms like Sky Glass in the UK. Android TV is the dominant player in Pay TV STBs and gaining on CTV and console penetration with OEMs like Sony. This is a stark contrast to mobile, where we see a dominant duopoly with iOS and Android.
Media landscape cartographer Evan Shapiro predicts that the battle for subscribers or device penetration will become secondary to the race for CTV OS domination. He also predicts that the largest area of growth in ad spend will be on CTV platforms this year. Given Google and Amazon are two of the largest ad platforms in the market, we can expect them to go all-in on programmatic for CTV and equally the race for CTV OS domination. Given Amazon and Google are also both content providers and device manufacturers, we can expect a significant race of arms this year and beyond.
>> More Info Tip – Read our Blog on Why In-App Purchases Will Make Your Subscription Revenue Soar
4. First-party Data – Where Ads and Subscriptions Thrive
While many publishers have grappled with the news that Google was next-in-line to decommission third-party cookies for their Chrome browser, there is also a similar story to be told for streaming media, with many reliant on advertising to form all or part of their revenues. But there’s another angle to this, which is how the shift to harvesting more first-party data, will not only enrich ads but also, aid subscription strategies, with greater data-driven insight for products, pricing, and engagement.
Although Google temporarily postponed the ‘death of the cookie’ until 2023, this has enabled the industry to pivot from firefighting to a more strategic response. The prospect of capturing more first-party data for OTT, through the likes of richer registration flows, data capture, and progressive profiling, is an enticing proposition. As various regulations continue to arise and localize per-territory, this data will become an incredibly important commercial asset in 2022 and beyond.
>> More Info Tip – Read our guide on First-party Data – Time to Pivot from Firesighting to Strategy
5. Diversification: The Next Frontier for OTT?
Netflix’s entry into gaming and merchandise in the pursuit of diversification may seem odd on the face of it, but scratch the surface, and you can understand why. As competition intensifies and only so much content is available, how can you stop users from turning off? How do you maximize the hype around a particular TV show? This is where diversification outside of your content can become valuable – it supports your core proposition, not replaces, for example, accessing Netflix’s games doesn’t require any extra cash, or data to access.
But outside of gaming per-se, where the likes of HBO have now entered the arena, there are several other complementary diversification opportunities available for OTT services, everything from events, merchandise, interactive content, merchandise and – of course – even the metaverse, and we are likely to see an increase in diversification amongst the key players in the year to come.
>> More Info Tip – Read our guide on OTT Expansion and Engagement
The year ahead looks to be an exciting one for OTT, with increased budgets for content, be this rights or original programming, it is making up for what slowed during initial lockdowns, despite the acquisition bump. But with increased content fragmentation, consumers may be torn between services, paving way for technology, data, diversification, and aggregation to be differentiators and add increased value for the consumer. Maximizing the ROI of this content remains key and the flexibility to experiment, adapt and iterate is a crucial component to any OTT strategy in 2022 – this is where our end-to-end subscriber management platform, Subscription Management, can help. Get in touch to arrange a demo and learn how you can grow your recurring revenues.
We’re here to help
If you are reviewing your OTT retention and churn strategy, get in touch to arrange a demo of how Subscription Management can unlock all the tools needed to succeed now, and in the future.
Contact our helpful team; Telephone +44 844 873 1418 or E-mail marketing@aptitudesoftware.com
Alternatively, read the latest advice on preventing churn, from our Top Churn Prevention Methods for Media Guide
We’re here to help
If you are reviewing your OTT and Data driven strategy, get in touch to arrange a demo of how we can unlock all the tools needed to succeed now, and in the future.
Contact our helpful team; Telephone +44 844 873 1418 or visit our contact us page.
