Why publishers are choosing streaming: Part 2
The opportunities for publishers creating OTT channels: finding the paths to success.
In the first part of this series, we identified how some publishers have been drawing on new digital media to reach their audiences. Video specifically has become a big part of the content they produce and share online — the so-called ‘pivot to video’. In 2017, the noise surrounding this term was attributed to Facebook, as the social network shifted its priority to video.
This, and other motives addressed in part one, have led to new directions for publishers. In case you missed it, you can find the link to the first part here.
In the second and final part of this series, we’ll present an analysis of what such ventures mean to these publications, and touch on some options on how to find success in OTT.
The online video trend takes off
A large part of changes in the publishing industry have happened because of publishers responding to trends that have emerged since the growth of digital versus print.
Print does remain a key part of the media landscape, despite how much it’s suffered from the internet age. It however survives mostly due to the creation of companion websites.
We’ve mentioned how incredibly visual the digital world has become, and how it will grow to be even more video-centric than it is now.
An essential aspect to this response by publishers is about finding the best opportunities for monetisation — that is, following the money, as well as audiences. It happens that audiences, particularly those which are younger, are growing more and more fixated on streaming services.
The influx of OTT to households has been driven in part by improved connectivity, smart TVs, new connected devices, and the proliferation of new services (subscription streaming and on-demand services in particular are in around 40% of households).
Consumers in the UK, as around the world, have embraced over-the-top video — and so the number of connected devices within the home has increased.
Publishers did not set out to be OTT providers. For all of them, channels such as YouTube were not necessarily a destination but an addition to their offering.
Many would have simply started by growing a considerable following on YouTube, Snapchat and other social media. This would often be accompanied by a sequence of: creating sections on their websites exclusively for video content; building a strong body of on-demand content; then shifting this content more easily to an OTT service.
Publishers have attempted to offer other multimedia products, such as interactive online experiences and podcasts, but video is usually a much stronger draw.
As print shifted to digital, and as the digital space has itself evolved, media organisations have been forced to go into several directions, including those places which would not ordinarily serve as their natural homes.
Facebook and Twitter didn’t plan on being news platforms, yet last year the Pew Research Center reported that 67% of adults in the US get at least some of their news from social media.
As we pointed out in part one, digital publishers have been experimenting with video on these platforms longer than legacy broadcast and print news outlets.
The producers of the digital media company NowThis have admitted to looking for an emotional angle to guide the narrative of most of their videos, as it boosts their chances of earning more likes and shares — which in turn makes it easier for the Facebook algorithm to find it. These are frequently more watched than factual videos by organisations associated with ‘hard’ news, such as The Guardian and The Telegraph.
Indeed, publishers (digital-born or not) have been investing in the creation of videos specifically for online use. The vast majority of them are taking into consideration each social network’s audience and its needs, besides their own exclusive audience. This has important consequences for the content they produce.
On Facebook, where top publishers have some of their highest consumption rates, the average length for a native news video was 75 seconds. The most successful off-site and social videos, according to a 2016 Reuters Institute report, are under one minute and designed to work with no sound (ie with subtitles).
It’s hard to distinguish if this ‘video-first’ mentality has happened because publications were listening to audience needs, or if audiences started connecting with this type of content and that led to its expansion by every publisher. Either way, there is no shortage of reports and studies showing that video drives more engagement than static content.
Concerns when experimenting with OTT
This year, a few publishers have announced their plans for dedicated OTT channels or services. This follows previous endeavours by competitors amid market analysis indicating that consumers are progressively spending more time on streaming OTT content.
During any moment of economic restructuring — as the publishing industry has been going through for some time — there is likely to be a degree of experimentation to find what will enable them to survive or succeed. Many publishers are simply locked in this process.
With media outlets embarking on an almost unprecedented journey in streaming, there are a lot of aspects to consider.
Besides the overarching concerns of having a stronger emphasis on video as opposed to text, and finding innovative ways to connect with audiences across different types of media, there are three crucial elements for them to grapple with: content, distribution and business models, which are often interlinked.
- Content:
There isn’t a single recipe for success that publishers can follow when deciding their content strategy.
Depending on the company, the format, genre and length which they choose will vary. PeopleTV’s programming, for instance, features original series and specials centered on celebrity, pop culture and lifestyle. They have been trialling both long and short-form content.
The content itself reflects People and Entertainment Weekly’s (EW) magazine brands. They picked a special edition, released as an EW issue in March 2017, exclusively dedicated to Hollywood’s best untold stories, and launched it in 2018 as an in-depth docuseries on the streaming channel.
Their one-on-one celebrity interviews, always an important draw for both the People and EW print publications, have been refashioned into long-form videos for PeopleTV.
A very different example is Bleacher Report’s B/R Live, whose primary goal was to be the publication’s live sport streaming service. With B/R’s owner Turner Sports having the rights to the NBA and those of other major sports leagues, the emphasis here is on driving fans towards live coverage of sporting events.
Conversely, Wired made the decision to transfer their original programming from YouTube to their new OTT platform, investing in their most popular content, such as ‘Almost Impossible’ — a series about exploring the science behind remarkable human feats, with an average duration of 8 minutes per episode.
Be it short or long-form, sports or news, original series or not, having the right content for the audience is a crucial aspect in creating a successful OTT strategy. This may seem obvious but is important to state (and to keep stating).
When PeopleTV went through a rebrand in September 2017, the company issued some stats that revealed that iOS users typically watched more short-form content on the channel. This was a piece of feedback among many that they and other publishers will have to accommodate as their channels evolve.
- Distribution:
There have been variations in the way publishers have chosen to distribute their video content. This hasn’t always meant creating a streaming service from scratch and using a direct-to-consumer plan. Some have begun with launching their platforms and then looked for broader distribution channels.
One important commonality among many publishers is their emphasis on creating content for video-friendly platforms, such as YouTube, Snapchat, and Instagram TV (IGTV).
Brands are more alert to how consumers watch video than ever before, but not everyone risks creating an individual platform and producing new content, in new formats, that aren’t strictly for YouTube and social media.
If they do want to increase their viewership, though, a logical direction to take is finding their audiences on as many devices and platforms as those audiences use, and making it easier for them to view content wherever they navigate.
There has been a strong push for publishers to gravitate to digital media players such as Roku, Amazon Fire TV, and versions of operating systems designed for these players, in the case of Apple TV and Android TV.
Publishers we’ve mentioned, Condé Nast (owner of Wired, Bon Appétit and many others), People and EW, Bleacher Report, Vice and Refinery 29, as well as others such as Reuters, have all aligned with these products to distribute their OTT content.
Another distribution option being tried by the owners of PeopleTV is the partnership with streaming bundles such as FuboTV and philo — alternatives to pay-TV that offer a range of channels that are cheaper than traditional cable packages carrying hundreds of channels.
These streaming ‘skinny’ bundles are only just getting started themselves, and are already facing some difficulties, but it’s currently another way to reach more connected viewers — which could make a notable impact on audience numbers for PeopleTV and other publishers who choose it.
- Business Models:
The other part of the experiment is to develop a business model that can be profitable and sustainable in today’s digital sphere. For an OTT platform, it’s just as urgent (if not more so) that a strong monetisation strategy is put in place.
The topic of paywalls is still being furiously fought over in 2018. Publishers like The New York Times have defended their subscription-first model, saying that it is proving effective. In this newspaper’s case, subscription revenue surpassed one billion dollars for 2017, which accounted for 60% of the year’s total earnings.
One of the main drivers attributed to the increasing emphasis on OTT is the fact that ad money is also shifting to these platforms. In Wired’s case, for instance, Audi, HP, Quicken Loans and Verizon were the OTT channel’s first sponsors, running ads on the channel until late 2018, after which they’ll be replaced by other sponsors.
In October 2016, OTT accounted for only 8% of total video ad spend. In 2017, that proportion had more than tripled. 2018 is set to be an ever better year for growth.
Subscription models have proven to work when publishers meet big OTT providers, for example Buzzfeed’s show on Netflix, but it’s still mostly uncharted territory for smaller publications launching their own OTT services.
Some niche content publishers have seen success here. Take WWE Network, a subscription-based service owned by the WWE, and Crunchyroll, the largest anime streaming service in the world. WWE reached a record 1.8 million paid subscribers in 2018, and Crunchyroll surpassed 2 million paid subscribers.
Moves like that made by B/R Live to offer subscription, per event, or per section, options are to be expected by sport publications and sport media companies in the future. The way content is presented to sport fans is changing, as proven by the NBA’s new microtransaction option. This, too, is being trialled.
The promise of OTT
“Our video business is one of the most important assets to our company’s future, recognized by our audiences and advertising partners alike,” Condé Nast CEO Bob Sauerberg wrote in a memo to staff.
An important driver for publishers developing a dedicated OTT service is that they have outgrown YouTube or their own websites. With so many of these media organisations having invested heavily in, and pivoted towards video, their video content libraries on social media have become too big and confusing to navigate.
After all, these platforms were not intended for curated video experiences. If a publisher is going to create original series, dedicating a sizeable production team to these, and plans to continue to grow its catalogue, then, it might be time to look for its own space.
The more video content a publisher has, the greater the need to upgrade the platform it is in, so that its audiences can discover that content, improve engagement and sustain their following.
An OTT video app or channel offers a degree of flexibility and control that no social network can match, allowing publishers to create the best platform to draw and keep consumers in.
Publishers are increasingly gravitating towards next-generation content management systems (CMS) such as our own Skylark product that can cater to different types of media and deliver the right content to their readers and audiences, irrespective of the platform or device.
Many paths to success
Most of these OTT services are new. It is still very early to tell what impact they will have on publishing as well as the broader media industry.
Several digital-centric platforms have faced financial challenges in the past year. Refinery 29, Vice and Bleacher Report made substantial cuts in 2017 and 2018, and Buzzfeed is restructuring.
Although each had its own particular reasons for these — Facebook’s move to reduce publisher content in the newsfeed led to cuts in Vox staff, and other publishers have been struggling to meet revenue targets — all recognise the importance of understanding broad audience and consumer trends, as well as finding the best sources of revenue in the long term.
There isn’t a set path to success yet in this emerging streaming industry. It isn’t essential to build up a following as big as some of these publishers have had on video platforms and social media networks, just to shift content to a specialised OTT service afterwards.
It helps that the audience has knowledge and interest in the content provided in the channel. The most important factor is to develop a product strategy that takes into consideration:
- setting clear individualised goals;
- creating a minimum viable product (MVP), testing this, and iterating it;
- defining a distinct content strategy that will ensure maximum engagement;
- and having the right tools to deliver the content, manage it and measure it.
It’s imperative that the level of dedication to content is balanced with the product design and creating the best user experience.
There are bound to be some bumps in the road, and there’s still a lot to understand about where audiences are heading and what can trigger more changes (for example, new technology and devices).
With this two-part series, we’re not advocating that it’s become an absolute necessity for publishers to go OTT in order to succeed. The point to note is that blindly developing a video streaming platform without having the right product strategy and advice is madness.
Every business is different, and entering this environment requires an assessment of business needs and goals to determine whether it’s the right time or even appropriate to develop a video offering outside of an existing video sharing platform such as YouTube.
To keep up with consumers and advertisers alike, publishers turned to video. Now, they’re developing streaming platforms to entertain the idea of OTT dominance. They are right to be so wired about it. This is the time to act.
Thank you for reading!
If you like this article, give us 50 claps. If you really like it, let us know why. Leave us a comment with any question or opinion you might have on the subject.
You can reach us on Twitter @Ostmodern to continue this and other discussions.
Follow our publication for more stories on tech, design, video and other interesting topics.
