OTT consumer experience strategy: Are you going the right way?

The current over-the-top (OTT) TV marketplace has become extremely competitive, with few established players, many challengers, and countless new entrants. Competition has spiced up the dynamics. New consumer experience strategies are being launched each day. It is challenging for an existing player to compete in this market, and even more difficult for a new entrant to launch its OTT offerings in this tight space.

OTT apps: A few years back

The digital strategy behind the launch of an OTT app was an extension of the organization’s existing linear TV strategy. For most of the media companies, the strategy was to launch their OTT app with as much high-quality content as possible and acquire maximum users through various means. Much like the linear TV market, the focus earlier was either on exclusive content or on managing the price points for their targeted audience.

The content was, and still is, a key differentiator for the success of OTT apps.

The other key differentiators besides the content were the quality and the delivery experience on multidevice and varied platforms. All strategies revolved around ways to monetize the content, but little focus was on creating a unique consumer experience (CX) strategy for the audience. Everyone was in a rat race, and time to market was so critical that many strategic decisions, that were crucial to the app experience, were hastily taken.

Present day: Unique apps not so unique anymore

However, the points of differentiation that used to exist a few years ago are now points of parity for majority of the OTT apps. Most of the media houses take a standard approach to creating an OTT app using a white label OTT solution. While this enables them to have a faster time to market and create the bare minimum functionality set with ease, it compromises on creating a unique differentiator for the app. This leaves exclusive content as the only differentiator in the market.

The focus on acquiring a variety of content has led to an industry where competitors become collaborators and collaborators become competitors.

In 2019, Disney merged with Hotstar and rebranded itself as Disney+ Hotstar to expand its reach in the Indian market. Prime Video and Lionsgate Play, once considered as competitors, have joined hands and now, one can view Lionsgate Play content on Prime Video. Currently, there are ongoing talks about the possibility of a merger between Zee and Sony.

Only a few, who kept the consumer experience strategy at the center of their entire OTT offerings were able to succeed and establish themselves as market leaders. For example, music streaming platform Spotify has made personalization the center of its customer experience and customer retention strategy and has emerged as the market leader in its domain.

The OTT consumer experience strategy: Why the need to re-evaluate?

To establish, scale up, and differentiate themselves, media companies need to rethink their consumer experience (CX) strategy holistically. They need to understand the audience's pulse, their current needs, and their future wants. Content exclusivity will always be a bone of contention between different media houses, but creating audiences that are loyal and engaged is equally critical.

Media houses need to evaluate their audience’s current needs and in the future, cater to their increasing demands.

Until now, OTT apps were built to ensure that the CX was tailored to a specific device like an Android TV, an Apple TV, a Fire TV, an Android mobile, or an iPhone. Substantial effort was put into making these apps consistent and functional across all platforms. Today, this is no longer a differentiator but a bare minimum expectation.

Exclusive content: Yes or no?

In search of exclusive content, the media houses acquire a lot of content through organic or inorganic means. For example, Netflix produced several hit shows such as House of Cards, Money Heist, and Stranger Things exclusively for their platform. While exclusive content does create a unique buzz, the vast content inventory is difficult to manage for the providers and cumbersome to explore for the viewers. Cataloguing and displaying such a huge content base completely to an audience in one go can be detrimental to the overall OTT consumer experience.

Exclusive content brings new viewers to the OTT, but the content may or may not be needed once the buzz wears out.

Amazon Prime Video recently acquired the famous production and distribution house, MGM, and added more than 4,000 films and 17,000 TV shows to its already huge list of content. Also, it brings into question the exclusivity factor as well. For example, while Viacom is offering free streaming of the IPL 2023 on its OTT Jio Cinema, Disney Star has bagged the broadcast rights of the same for television.

Also, to deliver the best quality video experience on devices with ever increasing resolution capabilities, content is created in very high-quality and transcoded into multiple formats. While this content works well for audiences with high end devices and with good network bandwidth, it may cause delays in mid-to-low end devices or a low bandwidth network.

Need of the hour: Addressing the concerns

The rethought OTT consumer experience strategy should address these concerns while creating new points of differentiation to set the OTT app apart from competitors. How?

• Consider user preferences: The experience should not only be tailored for devices but also for user preferences. It should also consider what individual users want, and if needed, be custom tailored to their preferences. For example, if a user prefers to watch a movie in Spanish with English subtitles, the experience should automatically consider this next time when the viewer watches a Spanish movie.
• Make the content easy to discover: While displaying a huge amount of content to viewers, the focus should be on making the content discovery easy. Providing suggested recommendations, bumping up the categories that users prefer, and making search more intuitive are a few ways to improve content discoverability. The success metric will here be the minimum number of clicks required to reach the desired content.
• Eliminate buffering issues: Lastly, while we manage high quality content resolution, we need to ensure that the user does not encounter buffering delays. Technologies like prefetching or features like offline download can effectively solve this issue and boost the overall consumer experience.

What’s the focus: Customer acquisition or viewer engagement

Until now the focus of OTT players was always to acquire new audience. Customer acquisition at all costs was always the key struggle for all OTT players. They used different strategies like acquiring rights for high profile sports event, getting exclusive content rights, providing OTT services as bundled offerings for the telco and ecommerce customer base. Like, FIFA 2022 broadcast rights were bagged by Viacom18 and Amazon’s Prime Video subscription also includes perks related to its ecommerce and music platforms.

Significant customer acquisition cost can affect the bottom-line of the business. 

However, acquiring the customer is only one battle won. The real challenge is in keeping the viewers engaged and retaining them as loyal customers. While focusing on getting as many audience as possible in a short period of time, many OTT players miss out on the need to build capability on delivering a consistent experience to such a huge audience base.

Many-a-times, the current infrastructure is not able to sustain the higher level of user load in a short span of time, especially during exclusive live events. Hence, the app crashes. This has caused unforeseen loss in revenues and a subsequently higher user churn. Also, OTT players never invest in engaging the audiences and creating a loyal customer base. 
Losing a disengaging customer not only means future revenue loss but also a waste of the efforts and cost spent in customer acquisition.

You might be aware of the infamous Meta outage that impacted 3.5 billion users, led to losses of around USD 60 million, and wiped off almost 5% of Meta’s share value.

OTT apps: The future

The need is to create an OTT service that is highly scalable, cost effective and ensures customer retention and loyalty. The service should not only know what audience is watching right now but what they will watch in the coming future. To do this level of immersive engagement, the OTT players need to know their audience in and out.

OTT players should know their audience’s preference, behaviors, social group, likes-dislikes and watching pattern to suggest them the right mix of content to watch.

The future of OTT apps includes hyper personalized, customized video experiences specifically tailored for the next generation for which they need to implement necessary functional and technological changes in their current offerings. Only then the OTT players will be able to retain and engage their customer base and make better revenues, while securing their bottom-line.

Want to re-evaluate your OTT consumer experience strategy? Reach out to us!