The television business has seen many fascinating moves in the OTT video world in the recent weeks. The industry has seen the launch of AT&T’s DirecTV Now service, Netflix introducing the ability for members to download content for offline viewing, and CBS adding live NFL games to their All Access service. These moves together with many others started to unveil the key ingredients in the success recipe to take on the traditional multichannel television world.
OTT services, especially those services that provide access to “live” networks, do not offer the one-size-fits-all model of cable television. The various broadcast networks took much long before they enjoyed retransmission consent fees. From ESPN to USA or from A&E to Discovery, no matter what the programming genre is, the owner, the form of products, and business models were definite. However, it is not certain what will work for long in the OTT world and this uncertainty has led to many experimentations.
There are many variations in the streaming service business model. Netflix follows an all sub fee approach; Hulu follows a mix of monthly subscriber fee together with a big load of advertisements (even though they offer a paid ad-free option); and then, there are hosts of digital native multichannel networks (MCNs) that go with advertising only. These experiments also extend to the OTT products also. The differences in deal making and complexity of existing programs has led to a varying mix of live and on demand programming, distribution platforms, and user interfaces.
It is not yet time to know how all these changes will affect the industry, as the services like DirecTV Now are not fully formed. Nevertheless, experts already see ingredients that can be the foundation for creative, technical, and business success.
Many of the experts were skeptical about the OTT skinny bundles that do not offer any live programming. Live sports like NFL games and Super Bowl gets much attention, but events like the Grammys, Oscars and even MTV’s Video Music Awards take the viewers out of the on demand mindset. Even though DirecTV Now included many stations of the major network owners to their service, they have acknowledged that there are still many spots to fill.