It will astonish few to none that over-the-top technologies are a major buzz point at this week’s NAB Show 2016 in Las Vegas. The show floor is full of technology to address OTT-happy consumers, and those consumers are clearly top-of-mind for both traditional broadcasters and pay TV operators alike.
Earlier this week, Amazon revealed its plans to take on Netflix and Hulu with a stand-alone video streaming service. For $8.99/month new customers can access Amazon’s Prime video streaming service when previously the only way to get it was with $99/year Prime membership.
So what’s Amazon’s strategy here? Amazon’s VP of Digital Video Michael Paull shed a bit of light on that during NAB’s “OTT Landscape — Why Now and What’s Next” session saying that the move is part of Amazon’s mantra to keep customers happy by constantly giving them more choice. Bundling Prime video streaming with the original Prime membership package built awareness, and now the streaming-only option just adds yet another way for consumers to choose to remain (or become) an Amazon customer.
Rather than accessing a variety of OTT apps that all have different user interfaces, Amazon’s advocating a one-stop approach with a UI that many customers are already familiar with. “The ecosystem we’re creating is all seamless,” Paull says. “Consumers just want to watch their program, not figure out where all the buttons are in the app.”
He also noted that he doesn’t believe OTT services will completely put an end to established pay TV services.
“Traditional pay TV is still very large and I think it will be around for a long time,” Paull observes.
There’s no denying there’s a disturbance in the force brought on by OTT, but others at NAB also agree there’s still a place in the ecosystem for more traditional TV delivery — albeit far, far away from where it once was, and often involving the words “skinny bundle.”
Speaking at another NAB session this week, Howard Horowitz, president of Horowitz Research, presented some of the research firm’s latest consumer data showing that since 2010, the percent of TV viewers who stream at least some of their TV content has risen from 15 percent at the beginning of 2010 to 57 percent in January 2016.
“There is no denying that we are in an age of disruption. What we see, though, are two trends happening in parallel. Viewers’ love of television is growing and, simultaneously, streaming is becoming increasingly commonplace,” Horowitz says. “People are not moving to streaming for the sake of wanting to stream. They are moving to streaming because they want more access to the great content they love, and this is a key opportunity area.”
In the annual “State of OTT 2016” study, Horowitz takes a look at the key market for over-the-top services: Viewers who spend at least 20 percent of their TV/video viewing time streaming content and who represent 47 percent of the TV viewing universe (“core streamers”).
Notably, the Horowitz research indicates that 75 percent of core streamers who have a multichannel subscription report being interested in replacing it with an Internet-delivered, linear, skinny bundle of only their “essential” networks, at the right price, which translates to 22 percent of total TV viewers.