As Netflix, Disney, Amazon, and Apple battle for the estimated global $1 billion over-the-top subscription market, one company – Magine Pro, an OTT platform for mid-tier market video-on-demand and TV content – is asking the question: Will the VOD market be The Battle of the Global Giants or is there room for thematic streaming services that all together could create a wider diversity in the market? Put another way, is there enough consumer demand for specialist services for sports, kids programs, genre-specific series and movies, food and cooking services etc to make it a sustainable business?
Magine Pro asked technology and media analyst company Omdia and European TV industry publication Digital TV Europe to investigate these questions in depth. Digital TV Europe put forward questions on this topic in their annual TV industry survey to understand the view of the leaders and experts in the TV industry. In parallel, Omdia undertook some deep digging via consumer and market research to find new insights about the future of thematic services.
Here are some of the key findings that are also presented in the comprehensive report Thematic Services: The Future of OTT? just released by Magine Pro:
Global paid OTT video subscriptions are set to reach one billion by the end of 2020, increasing by 20 percent year-over-year over the coming five years and driven by both new product launches and the ongoing uptake of current subscription video platforms. This means there will be increasing room for both general entertainment and thematic services. Omdia forecasts that revenues generated by thematic OTT video subscription services will be more than $2.8 billion this year alone.
The stakeholders in the TV industry believe that the majority (68 percent) of consumers are more likely to choose an extra thematic niche service on top of their existing general VOD services instead of adding another new general entertainment service. “The view from our readers is that there is more room for niche services than for more general entertainment offerings,” Stuart Thomson, editor in chief of Digital TV Europe said in a recent webinar.
Just as for the mainstream services, an updated library of exclusive or original content is a key element for both acquisition and retention of subscribers. High retention is an even more important success factor for thematic services as their supplementary nature means they are more sensitive to changes in consumer habits and market economics. That means that thematic services need to have a constant influx of content to maintain long term retention. As a supplementary service, there is also a risk that consumers will test different services in short periods of time, while having the general VOD services for longer periods of time. Therefore a close and ongoing relationship with the subscribers is key.
Distribution and marketing partnerships are most often needed. Typically this is made with distribution partners such as telcos and internet service providers, but also companies and organizations working within the thematic community. “To achieve audience reach, telcos can immediately give access to millions of subscribers, said Matthew Wilkinson, CEO of Magine Pro. At the same time, thematic services can help telcos to differentiate against the competition. This creates an ecosystem with opportunities from both sides”
Click here to read the full report https://www.maginepro.com/thematic_services_the_future_of_ott/