How far has the power shifted towards OTT?
Over-the-top (OTT) is where growth is. In the world of sports, it is quite clear that tech companies are taking the lead on innovating the way video is delivered and consumed. PwC’s latest report shows that this brand of digital media rights companies have the most optimistic fast growth potential in the next three to five years, ahead of advertising, licensing, and ticketing.
Source: PwC’s Sports Survey 2018
The emergence of services like DAZN signals this. One of the newest entry in sports streaming started offering both live sporting events and original programming to a global audience, DAZN is aiming to become the 'Netflix of sports'. Whilst tech companies - along with media giants like Facebook, Amazon, and Twitter - are the ones pushing for innovation, bidding for rights and looking for strategic partnerships.
What makes for a consistent experience in an OTT service?
In the OTT space, content is king, yet who are the knights defending their leader? A successful OTT service needs a robust infrastructure, a seamless authentication (login, registration), the richness of apps, content entitlement, and the right customer care processes. Sports OTT viewers have high standards for quality and tech vendors should comply.
How would you recommend strategically tackling what is a competitive OTT landscape?
Focus on subscriber retention. The initial acquisition is easy if you have a popular brand, with that in place you then need to increase engagement and satisfaction. The sports OTT market is just too big of a sector to overlook. Massive sports brands with big fan bases have to find a way to lock-in those fans with a great service, and build stable revenue streams.
In this competitive market where subscriber acquisition costs are high, there is a growing need for services to focus on retention rather than solely acquisition. The economics behind this is clear.
Acquiring a new subscriber is five to 25 times more expensive than retaining an existing one
Harvard Business Group
What we notice is that viewers expect ongoing value, seamless experience, and immediate fulfillment. On the supply side, businesses need innovation, modularity, and flexibility, simplicity and security to cope with the challenge.
We built an SRM (subscriber retention management) stack based on these learnings.
What are the options for sports OTT broadcaster to tackle churn?
Churn is a massive problem through the whole broadcast industry. Stats show that over 50 per cent of cancellation rates for some online services are caused by opportunistic viewers that sign up only for their favorite programming (tournaments, leagues). Especially in sports, due to seasonality, churn can be an ROI killer. You need to have a good strategy to monitor churn and maintain the right level of engagement throughout the year.
At Cleeng, we opted for a video focused, data-driven, 360 degree take on churn and identified three major groups of churn generators: payment, engagement, and satisfaction. Having the benefit of focusing strictly on ecommerce video solutions - pay-per-view (PPV), SVOD - allows us to integrate the tech ecosystem into one solution and build a comprehensive dashboard. The product itself called Cleeng ChurnIQ empowers OTT broadcasters to tackle churn at all the phases of the customer journey, from login to payment, consumption, ending with customer care.
What else impacts viewer retention?
There are many factors that influence a viewers loyalty to an OTT service. The crucial ones, I would say, are engagement levels (how often you connect and for how long), payment (credit card and app stores) and the overall experience with customer support.
How important is specialisation on the vendor side?
In the fragmented market and supply chain, it’s really cool to see how vendors specialize in the areas they are best in and try to complement each other. I think that makes the industry healthy and sets the base for sustainable growth.
Making it easy to integrate with the different partners via APIs and breaking down products into more flexible and modular format is must do for technology providers nowadays. In sports particularly, big broadcasters often need to strengthen specific areas of their stack and look for specialists that can fill those gaps. That’s why Cleeng is the preferred tech partner to many leading sports brands and suppliers, like Ostmodern, Maestro.io, Brightcove etc.
What are the different revenue models available to OTT broadcasters?
Monetising live video remains a top priority for sports organisations. There was a cool stat in a recent Techcrunch article recently. Out of the 100 most-watched live telecasts in the US in 2005, 14 were sporting events; in 2015, sporting events comprised 93 of the top 100 telecasts.
Increasingly, sports businesses choose subscriptions to build stable revenue streams and that fits their drive for sustainability. In a recent example, SportsMax, the leading sports broadcaster in the Caribbean, set up a dedicated sports channel with Cleeng and broadcasted all the live games via a streaming app. They used our access and identity management (IAM), entitlement and payment modules to create a set of passes with synced coupons to run a promotional campaign. That resulted in obtaining more than 20,000 users.
Next to that, broadcasters often opt for the proven PPV model, especially for one-off live events or during tournament. A recent example was the Golden Boy Promotions superfight between Canelo Alvarez and Genady Golovkin last month. We had a challenging task to set up a high-volume PPV event fast, to meet with the HBO Boxing anti-piracy standards and prepare first-class customer care. The organisers picked our Core, Merchant, Tattoo, and Hi5 modules and that was the perfect fit their specific needs.
Ideally, organizers look for a solution that offers the flexibility to cope with different business models, and many languages or currencies. This way, when there is a new opportunity somewhere, they can quickly roll out the right solution for that market. That’s the benefit of using Cleeng.
Read Cleeng's exclusive eBook: The Role of Customer Care in OTT. Learn more about customer care's effect on churn; live vs subscription video specifics; proactive vs reactive care; best practices and the Tennis Channel case study.