The rise of OTT networks will soon create a new version of the traditional cable bundle, but in a reconstituted digital form, according to panelists at the Octagon Sports Marketing Symposium. The accelerating development of OTT networks has created a wide array of choice, but also something that is unsustainable in an entirely separated form, the panelists said. “Five to 10 years from now, where does this lead to, this OTT space? From my perspective, what we’re going through now is this revolution of choice, but eventually the bundle through virtual MVPDs and other alike will become the new old,” Octagon Senior VP Dan Cohen said. “The average household is spending $180 a month right now on unbundled services. That is unsustainable. And there’s only more OTT products that are going to hit the market. The bundle comes back, but in direct-to-consumer, vMVPD form.” In the meantime, it is expected there will be a great deal of experimentation in the industry with many different OTT products and business models, not all of them necessarily successful or grounded in rigorous business fundamentals. “There isn’t a straight line that drives through all of these deals. Some of them are what I would call press release deals,” said Oath VP and GM of Yahoo Sports Geoff Reiss said. “The Wednesday (MLB) deal for Facebook, for example, did not change the trajectory of Facebook’s business one bit. And it didn’t change the trajectory of (MLB’s) business. It was a neat proof of concept more than it was indicative of a bigger change.” Similarly, Reiss pointed to the 1 million subscribers for the new ESPN+ OTT network as a sign of how far this part of the industry still has to go. “That’s an impressive number until you look at the denominator and realize they currently reach 87 million people through other people’s work, other people’s distribution. And that gives you an idea how much friction they still have to get through.”
DATA QUALITY: Winners in the emerging space will be largely defined by the quality of viewer experience, something that will be fueled by data. “At the end of the day, the difference is the experience,” said Jeff Volk, deltratre Senior VP and Head of Business & Revenue. “If the experience brings people in, and they enjoy and watch longer, the data will then be the last differentiator and enable that direct relationship with the fan.” Added LiveLike co-Founder & Chief Business Officer Miheer Walavalkar. “We believe that sports, and really any kind of media and entertainment, is becoming more a participatory experience instead of a passive, lean-back experience..”
QUICK HITS:
- Yahoo’s new NFL live streaming package thus far has generated an audience that is nearly two-thirds aged 39 or younger, an average viewing time of 30 minutes but broken up into several smaller chunks, and some of the highest ad completion rates of any video product Yahoo has.
- Panelists lauded the upcoming “Tiger vs. Phil” PPV event that will carry a cost of $19.99 and include significant digital extensions. “Golf needs this. It needs an injection,” Cohen said. “Golf’s average age of a viewer right now is 64, 65 years old...Golf needs something new, something motivational, it needs a challenger-type piece of content.”
- While the emerging digital players such as Facebook, Amazon, Netflix, Google and Apple, often known as FAANG, are capturing significant industry attention, traditional media operations will also key forces in the OTT landscape. “You’re finally seeing the legacy traditional media players become more aggressive in this space,” Cohen said. “They’ve allowed the wolf into the den, these independents to pop up and carve out where they should have been.”
