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DEW: Traditional TV Players Don't Have Leeway for OTT Experiments

Panel says live events are the exception as linear world continues to face stiff challenges 2/11/2016 10:25:00 AM Eastern

LOS ANGELES—For major media companies, it has been a week of reporting quarterly earnings and articulating plans for retrofitting their 20th century businesses for the digital world. Meanwhile, at the Digital Entertainment World Expo, OTT players weighed many of the same issues during a panel on monetization, with the added benefit of not having investors poised to hammer their stocks at the drop of a hat.

Mike DuBoise, EVP & Chief Operating Officer, Group 1200 Media, an indie content studio whose brands include anime distributor Funimation Entertainment, argued the media conglomerates have less room for experimentation in the digital arena. “The publicly traded companies can’t invest money in a losing business,” he said.

Gene Hoffman, chairman and CEO of subscription billing and payment solutions company Vindicia, said Netflix’s meteoric growth to about 75 million worldwide is proof positive that viewers don’t want to adhere to traditional TV rules. “Linear is in trouble,” he said.

The one area OTT services can’t disrupt is live events, especially sports. “Live events work. Look at the number CBS did for the Super Bowl,” said Andy Shenkler, EVP of chief solutions and technology for Sony DADC New Media Solutions. CBS reported a record 3.96 million unique viewers for its live stream of the Feb. 8 game, with nearly 112 million tuning in on the traditional broadcast side.

Miguel Santos, GM of cable network Myx TV, agreed that today’s digital world has lowered the bar for digital exposure for both companies and individuals (“There’s more niche products that wouldn’t exist in the 1990s,” he said) but also defended the role major content producers play. “There’s always going to be a need for branded channels,” he said. “They’re the ones providing this content to Hulu and Netflix.”

Hoffman said traditional players lack the “first mover” advantage, and their attempts to counter what Netflix and others offer have reflected an allegiance to the bundled world. HBO Now, he noted, has reached 800,000 subscribers for its OTT service, but won’t reach Netflix-like numbers unless it becomes more than a “$19 subscription to Game of Thrones and four to five movies you’re interested in.”

Big or small, OTT services that make their experience seamless for the end user will be the ones that win out in the end, Shenkler said. “Frictionless transactions are a must,” he said. “Otherwise I’ll go and find out if someone else is streaming it. The more we can flatten out the transaction model [the better].”

Jay Samit, CEO of multi-screen video technology company SeaChange, used the analogy of a Sunday morning preacher to make the case for monetizing today’s OTT world.

The most wild of fire-and-brimstone preachers, he said, could never count on reaching all that many people not so long ago. In today’s tech-hungry world, however, anyone can stream content live online (and set up a pay wall to make money off of it).

And as this OTT push continues, he said, “You’re going to see all sorts of new and interesting models all over the globe.”

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