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FIVE SMART TACTICS FOR OTT SUCCESS:Launch and Build Your Internet TV Brand

©2016 Brightcove, Inc. All Rights Reserved. 2

FIVE SMART TACTICS FOR OTT SUCCESS

The OTT video market is still nascent

and can seem complex and competitive.

But it is also the largest global media

opportunity in decades, so taking a wait-

and-see approach is not a viable option

for content brands. Traditional broadcast

and cable have proven that TV is the most

influential medium for building brands and

driving commerce. Today, OTT technologies

are delivering the power of TV with the

agility and scale of the global internet.

From entertainment studios with compelling

films for a targeted audience; to a radio

broadcast station with a stable of digital

talent; to a regional newsroom looking to

launch a mobile-first video destination, this

new era of video offers a twofold promise.

First, media companies can extend existing

content to new audiences; and second,

they can deepen audience engagement

with new content and video experiences.

Diving deep into the highly competitive OTT

landscape without the right planning risks

wasting time and money. This whitepaper

outlines five smart tactics that will give

brand owners the confidence and authority

to prepare a successful OTT offering:

1. Clearly define a unique content strategy.

2. Build toward maximum business model agility.

3. Design a distribution roadmap across platforms and screen sizes.

4. Adapt TV marketing tactics to find, nurture, and build your OTT audience.

5. Design, launch and refine your video offering and technology solution in a single, iterative effort.

2:17 11:19


The OTT Era of TelevisionRealNetworks released one of the first

streaming platforms in 19971. A decade later,

in 2008, Netflix announced Watch Instantly

and launched the service with about 1,000

titles2. Soon, the rapid growth of iTunes and

Netflix made it clear that a successful video

service could be delivered ‘over-the-top’ of

the public internet, rather than through the

expensive, closed networks of broadcasters,

telecom and satellite providers and cable

operators.

Today, OTT innovation is powering

the third era of TV. Video platform advances,

adaptive formats, delivery network

enhancements, connected streaming devices,

and monetization technology have brought

IP video closer to its explosive potential, both

as a consumer experience and as a business

model.

Prescient media brands have been investing

in OTT for well over a decade. MLB.tv

launched in the spring of 2003, offering

a full season of streaming for $79.95 and

signing up over 100,000 subscribers3. In the

United Kingdom, the BBC’s iPlayer launched

in December of 20074. Hulu followed suit in

2008, differentiating itself from Netflix by

its ad-supported business model5. In 2011,

Amazon rebranded its streaming offer as

Amazon Instant Video. Since then, they have

bundled tens of thousands of titles into the

Amazon Prime subscription offer, creating

a juggernaut in the subscription video-on-

demand market6.

Today, there are hundreds of mass market

and special interest OTT services in all

categories. Parks Associates tracked 33 OTT

service launches in 2015 alone. In addition

to major launches like HBO Now, SlingTV

and Go90, niche services like VidAngel

(family-friendly versions of movies and TV)

and XiveTV (high-quality documentaries)

leveraged clever programming strategies to

gain beachheads in OTT.

OTT service usage has increased as well.

By the end of 2015, 58% of U.S. broadband

households used at least one OTT video

service on a monthly basis. More than 25%

used two or more OTT services monthly.

While definitive usage numbers for each

service do not exist, market research

provides some insight into take rates7.


PERCENTAGE OF RESPONDENTS WATCHING EACH SERVICE ON A WEEKLY BASIS:

Netflix (streaming only)

My cable TV provider’s online video service

Amazon Instant Video

Hulu Plus

HBO Go

Online premium sports package (MLB.TV, NFL Mobile)

HBO Now

iTunes

CBS All Access

Vudu

Google Play

Sling TV

Altman, Vilandrie & Co online survey of 3,461 respondents. Percentage of

respondents watching that service on a weekly basis.

13%

11%

11%

7%

6%

6%

4%

4%

3%

3%

3%

36%

A recent survey conducted by Altman, Vilandrie & Company details the percentage of

respondents who use the major services on a weekly basis.


A Crowded Space: Is There a Bullish Case?Given the potential for OTT, it is not surprising to find a flurry of activity in the market. The OTT

market is expected to generate an estimated consumer paid revenue of $15.6 billion globally

through 2018. Yet, this represents just 4% of worldwide pay TV revenue, suggesting plenty of room

for growth9. Ad-based revenue for OTT services will also grow. Magna Global tracked a 38% YOY

increase in 2015 global digital video ad spend to $15.4 billion10.

These factors contribute to the positive business case for launching an OTT service. However,

it is clear that diligent execution against a strong plan is also critical. You can increase your

odds of carving out a successful position in the OTT market by implementing these five tactics:

1 Clearly define a unique content strategy.

2 Build toward maximum business model agility.

3 Design a distribution roadmap across platforms and screen sizes.

4 Adapt TV marketing tactics to find, nurture, and build your OTT audience.

5 Design, launch and refine your video offering and technology solution in a single, iterative effort.

Let’s walk through each one.


Great content makes the medium of video even more powerful. Thus, it is essential to have a focused, compelling programming strategy as the foundation for an OTT launch.

Here are some questions to consider:

• Which genre(s) of content

do you plan to offer?

• Describe your target audience

in detail. When and why do

they watch your videos?

• How much content will you offer?

How frequently will it be refreshed?

• What is your budget? What is your

targeted production value?

• Will you offer a catalog of licensed

shows? Originals? Will you offer live

and/or video-on-demand content?

A hallmark of the pay TV era was the

dramatic increase in the number of channels

and genres that could appeal more deeply

to smaller audiences. Digital video has

amplified that trend. Today, content creators

are producing shows of all stripes, each

one with a creative vision that appeals to a

specific audience.

While some shows may broaden their appeal

and grow a diversified following over time,

others can find success as coveted niche

offerings. This speaks to a key advantage

of OTT over broadcast TV. It is possible,

or perhaps necessary, for your content to

appeal more deeply to a narrower audience

than is economically viable in the traditional

TV model.

Also, note that your OTT content strategy

does not need to be constrained to a linear

schedule or a single device. Indeed, one

compelling aspect of OTT is that your

content strategy may provide opportunities

to attract audiences across two or three

diverse viewing behaviors. For example,

if you have a catalog of dramas worthy of

binge-viewing on a big screen TV, your

OTT service might also offer viewers the

opportunity to snack on short-form mobile

videos in a promotional run-up to a new

release.

1: CLEARLY DEFINE A UNIQUE CONTENT STRATEGY


Executing Your Content Strategy

Capturing and retaining audience engagement is no small feat. Here are three tips:

1. NURTURE A HEALTHY PROGRAMMING LIFECYCLE. Utilize “tent pole content” (i.e. compelling,

high-production value content that will appeal

to mass audiences) as audience growth driver;

seasonal shows to build momentum; and more

frequently produced, everyday content to

maintain relevance with fickle attention spans.

2. ESTABLISH GOOD PRODUCTION HABITS.

Get good at multi-purposing and versioning

of content. Whether this pertains to content

rights or original productions, videos of

different lengths and formats are powerful

assets in multi-platform media. Some

content may translate well across platforms,

other assets may require a comprehensive

reinvention for specific platforms.

3. LEVERAGE THE LONG-TAIL OF TALENT.

Due to advances in camera technology and

content creation tools, it is easier than ever to

produce great content. Thousands of talented

video creators globally can help

you create content. For example, the

Tastemade OTT service has scaled with

contributions from over 5,000 creators around

the globe.

CASE EXAMPLE:

How Acorn TV Leveraged a Focused Content Strategy.

Brightcove customer RLJ

Entertainment is a premier

independent entertainment studio

offering niche SVOD channels,

including Acorn TV. From its launch

in 2011, Acorn TV has been laser

focused on viewers that love British

TV mysteries and dramas, curating

some of the most popular titles in

the genre, including Poirot, Foyle’s

War, Doc Martin, and Miss Fisher’s

Murder Mysteries. In 2015, Acorn TV

premiered the final three episodes

of its franchise, Poirot, starring

David Suchet, including the Emmy-

nominated finale ‘Curtain,’ resulting in

a major boost to subscriber growth.

In March 2016, Acorn TV revealed

it had reached over 240,000 paid

subscribers, a 100% increase in year-

over-year subscribers11.

“INSTEAD OF TRYING TO BE ALL THINGS TO ALL PEOPLE, WE CAREFULLY CURATE RICH AND DEEP CONTENT OFFERINGS THAT SERVE DEDICATED NICHE AUDIENCES. OUR ACQUISITION AND PROGRAMMING STRATEGY KEEPS CHURN LOW AND CUSTOMER REFERRALS CONTRIBUTE TO OUR HIGH CONVERSION RATE.”

-Titus Bicknell, CDO & EVP, Operations for RLJ Entertainment on Acorn’s content strategy


Media businesses have thrived using a mixture of free, ad-based subscription and transactional business models. Business model flexibility is also critical in the OTT ecosystem.

Netflix, Hulu and Amazon all used distinct,

innovative consumer models that drove

adoption of their multiscreen TV services.

Hulu launched as a free, ad-supported

service available on the PC. The ability

to stream to connected TVs was one of

their first upgrades. A choose-your-own

ad format improved user experience and

changed the ad sales process. More recently,

a “No Commercials” tier was added to give

viewers even more control and choice on

their ad exposure.

As media companies have done throughout

history, OTT services will likely need to

experiment with a blend of business models.

The following table provides an overview of the

different pricing strategies for consideration:

MODEL DRIVERS QUESTIONS

FREE, BRANDED

CONTENT.

Brands fund unique content opportunities in

order to earn mindshare.

Is there a sufficient amount of

compelling content endemic to

the sponsoring brand?

FREE, AD-BASED

BUSINESS.

TV ad budgets shifting to online. Ability

to programmatically buy a targeted TV

audience. Broadcast quality ad delivery using

server-side insertion.

Will the service have sufficient

audience scale to attract

sufficiently large media buyers?

TRANSACTION,

LIVE PPV OR

DOWNLOAD.

Unique, exclusive VOD or live event content

can command up to $60+ on a per-view basis

in the pay TV ecosystem. The convenience of

portability for premium long-form content is

also a driver.

Is there a sufficient amount

of purchase urgency on the

content itself? Is the purchase

process friction free?

FREEMIUM AND

SUBSCRIPTION

VIDEO-ON-

DEMAND SERVICES.

Draw in subscribers with great content, and

package a subset of that content for free in

order to get viewers hooked.

Is there a sufficiently sized

catalog of content? Do titles

have sufficient production

value?

2: BUILD TOWARD MAXIMUM BUSINESS MODEL AGILITY


CASE EXAMPLE:

DramaFever, Leveraging Business Model Flexibility

DramaFever, a leading online network

for primetime shows from around

the world, started in 2009 with 10

Korean drama series. Today, over

70 international content suppliers

provide tens of thousands of content

hours for their subscribers.

DramaFever has mastered two

critical skills in digital media.

1. The ability to balance content

syndication with its own

channel-building effort.

2. The ability to balance ad-supported

revenue with paid-subscriber fees.

When the service first launched, the

company focused on syndicating

content to platforms like Hulu,

YouTube and iTunes. Those efforts

have helped accumulate a monthly

viewership of 21 million12.

At the same time, DramaFever has also

established its own platform with a paid

subscription model12. In June 2015, they

rolled out an advanced subscription

back end which enabled the company

to create innovative offers13.

There is still a free, ad-supported

version available on the PC. But there

is also a $0.99 per month option,

billed annually at a rate of $11.88,

that is viewable on TVs with ads and

grants access to exclusive titles. At

the $4.99 tier, ads are removed and

subscribers can also “cast” programs

from a mobile phone to Chromecast

and Airplay devices. Finally, for $9.99

a month, subscribers can download

and watch titles offline, a great option

for fans of DramaFever who may have

active air travel schedules, for example.

“AS THE NUMBER OF NICHE CHANNELS GROWS IN OUR ECOSYSTEM, OUR PRIMARY GOAL IS TO TRANSITION FROM A CONTENT DISTRIBUTION PLATFORM TO A CONTENT MARKETING PLATFORM, WHERE OUR BRAND, ALONG WITH OUR CONTENT, TRANSCEND TECHNOLOGY AND MEAN SOMETHING SPECIAL TO OUR USERS.”

Suk Park, DramaFever Co-Founder and President


For the past decade, video and TV insiders have been speculating about how many different screen sizes viewers would regularly watch. While the biggest screen is still where a majority of traditional TV viewing hours takes place, in the OTT landscape, there are three additional screens that require attention.

Each screen presents users with a different viewing environment. While all types of content are watched on every device, each screen also has a special role in the consumer’s overall video experience. Media owners need to expose their content assets in creative ways across this four screen canvas to drive loyalty and engagement and should aim to find a way to program these experiences efficiently and scalably.

The Four Screen Experiences Defined:

TV - THE BIG SCREEN

Notwithstanding the rapid uptake of

desktop and mobile video viewing, the

original, and biggest screen (the TV) is still

the source of the largest pool of revenue

and value in the video market. While not

every OTT service has enough compelling

content to drive premium, immersive and

“lean-back” viewing experiences, this

traditional TV watching experience will

continue to be a core driver of value for OTT

offers. 95% of ad views on TV connected

OTT devices are within TV-style live or long-

form content, indicating the lean-back value

of the big screen14.

SMARTPHONE - THE FIRST SCREEN

While smartphones are often used for

viewing long-form content, they generate

63% of their ad views on top of short-form

content14. But smartphones are also critical

for finding content, sharing it, even creating

it. Tune-in notifications and social sharing

targeted at mobile devices are an accepted

best practice at media companies. From

there, one more click on the smartphone

remote and compelling content can be cast

to the nearest connected screen.

3: DESIGN A DISTRIBUTION ROADMAP ACROSS PLATFORMS AND SCREEN SIZES


TABLET - THE PORTABLE SCREEN

The tablet has proven to be exceptionally

attractive for “lean-back,” TV-style

experiences. 69% of ad views on tablets are

within live or long-form content14. That gives

the tablet a powerful position within the

four-screen landscape. While the tablet is

ideal for personalized viewing experiences,

it can also be watched with a friend or

family member. And while the tablet has

smartphone features that make it ideal for

finding, buying and sharing content, it also

enables a more relaxed, lean back viewing

experience that can draw audiences into

premium, immersive TV content. A recent

Digitalsmiths report revealed that among

respondents who own an iPad or tablet,

37.1% watch video on their device, and 90%

of those do so on a weekly basis. The top

content genres they watch are premium

movies, TV shows, and previews/trailers of

movies and TV shows15.

PC - THE VERSATILE SCREEN

Notwithstanding its reputation as a more

“lean-forward,” active usage environment,

the desktop/laptop still drives significant

video viewing. 40% of all ads viewed within

video content were seen on a desktop or

laptop computer, according to Freewheel14.

Notably, the PC environment is well suited

to all content lengths, with 26% of ad views

within live content, 38% within content

longer than 20 minutes, and 36% within

content shorter than 20 minutes14. Most

leading web video brands with OTT service

platforms, including YouTube, started

out with strong browser-based video

experiences that they continue to nurture.

Mapping out a comprehensive four-screen distribution strategy that takes advantage

of the particular strengths of each

screen will provide your OTT brand with

additional spark at launch.


Pay TV distribution provides programmers a level of “built-in” audience. In the OTT model, viewers need to be engaged by marketing across a range of channels and messaging touchpoints.

Digital, mobile and TV platforms will help build awareness. However, alternative outlets, including eCommerce, catalog and other physical channels can also be instrumental in driving growth.

Here are five tactics from traditional TV marketing operations that have been embraced by OTT providers:

ON-AIR PROMOTION

For linear TV, on-air promos remain one

of the most valuable tactics for driving

viewership. Many local broadcasters have

successfully utilized onscreen talent call-

outs to drive App downloads. Similarly,

successful YouTube channels often utilize

in-video clickable links to cross-promote

other videos and channels. And some OTT

services have established YouTube barker

channels to promote new services.

PUBLICITY AND PERIODICALS

Promotional partnerships with

entertainment publications can help

generate buzz. For example, Crackle has

partnered with Entertainment Weekly on

multiple promotional tactics. Subscribers

to Crackle are offered four free issues

in connection with registration; and

Entertainment Weekly has promoted Crackle

on its digital platforms, including Facebook.

SOCIAL

Social networks like YouTube and Twitter

are playing an increasing role in building

buzz and driving tune-in for major media

brands like the NBA. Social apps and push

notifications on smartphones provide

compelling tune-in tactics for OTT services

as well, especially those with programming

strategies for debuting VOD content and

streaming live events.

4: ADAPT TV MARKETING TACTICS TO FIND, NURTURE, AND BUILD YOUR OTT AUDIENCE


TARGETED ADVERTISING

As addressable and programmatic TV

advertising systems mature, not only will

they help you monetize your service, but

they also should be seen as an effective

channel for driving viewership as well.

Buying ads via these new platforms can

enable you to drive awareness and tune in

among specific audiences.

One important promotional channel for

OTT services is on streaming platforms

themselves. For example, Roku provides

a rich set of advertising and promotional

capabilities, building these tools directly

into its OS. Content providers on the Roku

platform can promote their services to users

during new user signup, in the channel store,

on the device’s home page, and through

video ads. The Roku Ad Framework (RAF)

enables cross-promotion of channels and

shows – content providers can target

their audience with ads promoting new

programming or channels, allowing users to

click through and follow the promoted show

through Roku’s MyFeed feature or download

their channel from the Channel Store.

ECOMMERCE

Top media brands today, including the

new rising stars of OTT, often have a

merchandise or retail extension to their

marketing plans. Tying content with

merchandise boosts top-line revenue,

and also has a positive spillover effect

for brand awareness and affinity. A good

example of this is the DailyBurn online store,

where vitamins and other health-oriented

merchandise are sold.

CASE EXAMPLE:

DailyBurn: TV Ads, Digital, and eCommerce Together

The DailyBurn streaming service was launched in 2011 with a strong value proposition: DailyBurn is a low-cost video alternative to private training at the local gym.

They have executed smart retail partnerships, including participation in Amazon’s marketing launch of the Fire TV and the Apple launch of their brand new operating system for TV, tvOS. DailyBurn has also executed a targeted ad campaign on local cable TV, hitting key demographics, including exercise fans who are likely to pay for private training at the local gym.

The DailyBurn online store enables them to mesh eCommerce with their content operation. The results of these tactics working together are impressive.

DailyBurn is one of the most successful OTT services, ranking #1 in Health & Fitness and #93 Overall on Apple TV in downloads, and #12 Overall in gross revenue. DailyBurn is also the #1 app within Roku’s Fitness category. Most impressive, DailyBurn increased subscribers by 56% in 2015 to end the year at 105,000 subscribers16.


In the past, OTT services have taken quarters or years to design, build and launch.

First, a market-facing team outlines a vision

for the consumer offer. That drives product

requirements for a solution architect, who

then defines the functional blocks needed to

complete an end-to-end platform.

For each functional block, there are

multiple vendors that can fulfill the

specified requirements. It is rare for a tool

to provide all possible functionality, so

custom code may be needed, resulting

in multiple integration and engineering

efforts. The entire solution needs to be

well-documented, and typically specialized

resources need to be trained to maintain

and support it.

Unfortunately, these complexities make it

especially difficult to articulate roadmaps,

translating to a low level of flexibility and

business agility.

Brightcove pioneered the OVP category and

over the years we have partnered with some

of the world’s leading media companies to

launch successful OTT services. We have

seen up close the pressure-filled challenges

that organizations face to get to market

quickly or else risk losing out to competitors.

As a result, we are pleased to introduce

Brightcove OTT Flow™ - powered by

Accedo, an innovative new solution

designed to help media and content

companies quickly and seamlessly launch

new OTT services. Brightcove OTT Flow

is a joint offering with Accedo, the leader

in multi-platform application design and

development. Accedo’s App Grid app

management console powers apps for many

of the world’s leading media brands and we

have tightly integrated Brightcove Video

Cloud with the App Grid framework to

create one easy workflow for our customers.

We have combined our industry-leading

video ingest, processing, storage, playout

and monetization with Accedo’s best-

in-class client app development so our

customers can launch world-class OTT

services quickly — and with the confidence

of both their product and finance teams.

That’s the formula for success in fast-moving

markets: launch a viable consumer offer and

solution together, and update both of them

over time as markets change.

5: DESIGN, LAUNCH AND REFINE YOUR VIDEO OFFERING AND TECHNOLOGY SOLUTION IN A SINGLE ITERATIVE EFFORT


Now, media companies can leverage best-in-breed technology and deep industry expertise from video platform leader Brightcove and UX pioneer Accedo to ensure OTT success.

Get to market faster with an out-of-the

box solution

Unlock new revenue streams and

monetize content via advertising or

subscription models

Extend audience reach and a consistent

UX across multiple platforms including

desktop, iOS, Android, Apple TV, and

Google Cast

Reduce costs by eliminating the need

for developer time and resources while

still delivering beautiful and performant

cross-platform video experiences

Leverage cloud technology for smooth

and seamless app updates

Receive ongoing customer support from

our global team


BRIGHTCOVE OTT FLOW POWERED BY ACCEDO: BOLD, SMART AND FAST

Brightcove’s new OTT Solution enables brands to launch OTT services fast and with an affordable model that is redefining the commercial playbook for bringing OTT services to market.

ABOUT BRIGHTCOVE

BRIGHTCOVE INC. (NASDAQ: BCOV), is a leading global provider of powerful cloud solutions for delivering and

monetizing video across connected devices.

© 2016 Brightcove Inc. All rights reserved.

Brightcove OTT Flow solves the most

pressing obstacle for media brands today:

executing a compelling, differentiated OTT

service offering without compromising ROI

or missing out on the wave of growth driven

by changes in viewing behaviors.

To learn more about Brightcove OTT Flow, visit brightcove.com/media.


1. Wikipedia entry for RealNetworks states streaming video technology was announced in 1997. Taken from the Web March 20, 2016.

2. The New York Times, Jan 16, 2007, “Netflix to Deliver Movies to the PC”

3. The Verge, August 4, 2015, “The Changeup: How Baseball’s Tech Team Built the Future of Television”

4. Total Telecom Online, October 20, 2008, “BBC and BSkyB announce iPlayer deal”

5. USA Today, March 11, 2008, “Hulu goes live with free TV shows, movies online”

6. Wikipedia entry for Amazon Video states that the service was renamed to Amazon Video-on-Demand on September 4, 2008.

7. ParksAssociates.com, November 17, 2015, “Parks Associates Announces Top 10 Subscription OTT Video Services in the U.S. Market”

8. Altman, Vilandrie & Company, October 15, 2015, “AV&Co Consumer Video Research,” online survey of 3,461 respondents

9. Deloitte Touche Tohmatsu Limited, “Television’s Business Model: Fit for a Digital World”, IBC Leader’s Summit September 2014

10. Magna Global, June 22, 2015, “Magna Global Forecasts Global Advertising Revenues”

11. RLJ Entertainment, Presentation at ROTH Conference, March 2016

12. Digiday.com, January 28, 2016, “DramaFever finds Latin America loves Korean soap operas”

13. Digiday.com, September 11, 2015, “How DramaFever gets people to pay for Korean soap operas”

14. Freewheel, Q4 2015, Freewheel Video Monetization Report

15. Digitalsmiths, Q4 2015, Video Trends Report: Consumer Behavior Across Pay-TV, VOD, PPV, OTT, Connected Devices, and Content Discovery

16. PR Newswire, Feb 2, 2016, “IAC Reports Q4 2015”

END NOTES

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