What OTT Offerings Can Learn From Other Industries

Four models for OTT success
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Sometimes the key to disrupting your own industry is to be smart enough to look outside of it.

OTTs—or over-the-top offerings—are increasingly a commodity. Remember when Netflix was the only player out there? Now there’s HBO Go, Amazon Prime, Hulu and a diversity of network players. Even Apple is looking to take a bite out of the OTT pie.

For a couple of years, Netflix surprised everyone when it decided to start producing its own original content. A growing number of players have followed suit and are now doing it, making it more critical than ever for OTTs to diversify their offerings into the future.

Related: NHL Network Goes OTT for First Time

Luckily, other industries can help pave the way, with powerful solutions that OTTs can “steal.” Here are just a few.

1.Content Metering: A longtime strategy of the publishing industry, content metering involves giving away a constrained number of video plays or limiting free views to a certain amount of time. Netflix offers 30 days free when you subscribe, as does Amazon Prime, but here’s the truly disruptive idea: Do as news sites do and offer a limited amount of content for free to anonymous users.

OTTs are often seen as a “closed shop” where you can’t sample content before you subscribe. How can users answer the question, “What am I getting for $10 a month?” for themselves? Content metering is an excellent method for enticing users to subscribe long-term, and it’s also a win-win: What would happen if you gave away access to five episodes of any show people wanted, free, for a month? They’d want more. And even if many people hold off on paying for a subscription, their monthly return activity would boost viewing traffic—which gives you something to sell to future advertisers.

Related: TiVo: Millennials Are Major Video Consumers, But Extremely Impatient

2. Day or Weekly Passes: These days, a monthly subscription is a big investment; people don’t necessarily want to be tied down before they’ve tried out all the options. So make granular what’s available to them.

Daily or weekly passes are the stronghold of public transport companies and even theme parks. Why not OTTs too? This non-recurring subscription model is great for special-interest content and may earn you dollars from someone who is otherwise disinterested in buying a full, recurring subscription. You can also net a higher margin on a daily or weekly pass: If your monthly subscription is $16.99, a day pass could cost $6.99.

3. The Freemium Model: App developers love this: They release a good app for free with ad support and offer a slightly better paid version with no advertising. In October 2014, nine of the top 10 apps in iTunes App Store in the U.S. were “freemium”—mainly because people are willing to pay eventually, once they’ve given the app a try for free first.

Related: Next TV Summit: Benefield: PlayStation Vue Audience Not Just Millennials

It’s also a common model in music. Spotify and YouTube both have premium ad-free options for music.

Think of this as a longer-term variation of content metering. The difference is that people can go on using your service for free, provided they’re happy being exposed to ads. Many will end up converting once they’ve concluded the service is good.

4. Bundled Subscriptions: Some free apps include something called in-app purchases—meaning the core service is free and small extra add-ons incur a minor fee.

In some ways, you already see this in entertainment: Netflix offers tiered subscriptions that enable different numbers of people to access the same account at the same time. This can also apply to multiple devices: You can charge a small fee if your user wishes to access content from more than one or two devices (which he or she likely will).

What other smart models have you seen work in other industries? Chances are, they can apply to yours too.

Scott O’Neill is senior VP North America | MPP Global.

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