Transactional, Ad-Supported OTT Models Relevant as Ever, Event Told

Houses of worship and corporate video; transactional and advertising-based VOD; and pick-and-choose subscription plans are among the models gaining traction in the “fluid” over-the-top video market, said panelists on a recent Streaming Media future of video event.

One model won’t fit all needs, panelists said, and models and pricing tiers evolve. Fandango Chief Commercial Officer Kevin Shepela cited a “video diet” in today’s world with multiple choices of content consumers. Shepela called transactional “very much complementary” to subscription VOD, in the way traditional pay TV has long had a coexisting transactional component. He cited a 50+% crossover of SVOD and TVOD customers, saying “transactional video will be viable for those folks that don’t want to participate in a recurring billing relationship with a provider” or who have “subscription fatigue.”

Disney+ is an example of that approach: Its $7.99 monthly Disney+ service is supplemented with premium day and date theatrical releases for as much as $29. “I don’t think one will supersede the other,” said Lauren DeVillier, CEO of Struum, a nascent service that's an aggregator and provider, allowing consumers to apply viewing credits from a $4.99 monthly subscription across over 30 services. “I think there will be a lot more experimentation,” she said.

Shepela referred to subscription “meal plans” that consumers have had delivered to the home, “but it doesn’t mean we’ve gone to the grocery store to buy individual ingredients for a one-off meal.” He sees a stream of content fed to consumers and then the premium content they “explicitly go out and get.”

Laugh Out Loud CEO Jeff Clanagan said so much free content is available on OTT and social media that premium content has to give consumers a reason to pay for it. Clanagan referenced content being put behind paywalls that’s “not necessarily premium.” Aside from Disney, he said, “You have to be careful in terms of what is a consumer going to pay for because there’s so many choices out there.”

Successful OTT models “scratch a particular itch,” said Interpret Vice President Brett Sappington, noting first-run movies that people want to see as soon as possible vs. content that’s “constantly given to them” in a Fast (free, ad-supported streaming TV) model vs. bundled services or a straight subscription. Consumers are using an evolving “portfolio” of different services, he said. That used to be a lot of SVOD with a little AVOD; now, it’s a “much wider variety,” with some of both, plus premium VOD. Fast is a way to consume content without having to think about what to watch next, he said.

Newcomer Struum allows viewers access to thousands of shows and movies for a $5 monthly subscription. It plans to have more than 60 services on the platform next month. Consumers want to “simplify their streaming experience and give them one-stop-shopping, one credit card, to access many different services,” said DeVillier. The service offers a range of genres. People tend to “dip in and dip out” of SVOD services, doing a free trial, binge and then mark their calendar to end the free trial, or they forget to cancel and get frustrated, said DeVillier. With their viewing credits, Struum subscribers can “dip in and dip out of all the shows they want to watch.”

DeVillier talked about interest in niche content among OTT viewers, with cooking shows the second most-viewed topic after adult content. Larger services are putting genres into sections for drama, true crime and other topics and making the sections easily clickable. Audiences are seeking niche interest-based content, which is a problem Struum is trying to solve, she said.

Laugh Out Loud came to market with a built-in audience around founder and comedian Kevin Hart, who had a social media audience of 100 million, said Clanagan. The company also produces content that has appeared on The Roku Channel and Peacock. The free service, with Old Spice as a sponsor, is working on a subscription model, said Clanagan.

On where OTT is headed, Mike Green, Brightcove vice president-product marketing and technology partnerships, said hiccups in delivery remain a challenge. Even among top services, “We don’t have delivery perfected across the board with the perfect user experience for the right individual,” along with the right targeted ads, data and monetization for content owners, Green said. “Everybody is doing OTT because they have a business objective." He said they should be asking: “What are we doing to evolve the way we process information and make decisions to make the most of this OTT opportunity?”

Being nimble enough to take advantage of new opportunities will be key for success in the fast-evolving industry, Green said: “We weren’t even talking about Fast a year and a half ago,” he said, “and that’s arguably one of the hottest topics in the OTT ecosystem right now.”