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How the pandemic has helped OTT to evolve

06/05/2021

Luke Durham, CTO at Switch Media, looks at how the pandemic has helped both SVoD and AVoD services find even bigger audiences

By Jenny Priestley

Published: May 6, 2021

Luke Durham, CTO at Switch Media, looks at how the pandemic has helped both SVoD and AVoD services find even bigger audiences

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OTT has boomed over the past 12 months as more of us have turned to television as our main source of entertainment through the Covid-19 pandemic. Reports from around the world have shown huge uptake of various entertainment services. An Entertainment Retailers Association (ERA) report published in January shows that in the UK video streaming and downloads were up nearly 40 per cent and that people turned to digital music, video and games in record numbers during the lockdown in 2020, increasing entertainment revenues by 16.8 per cent to a record 9.05 billion. It was the fastest growth rate since records began, driven above all by digital services, which saw revenues increase by 1.4 billion over 2019 to a new high of 7.8 billion. It's not just the UK that saw a sharp increase in digital growth; figures like these are reflected globally and OTT television is a major part of that trend.

The AVoD Attraction Because of this, the choices in OTT subscription options are expanding all the time with subscriptions now available for a wide variety of services and products fitness, education, health and wellness, cooking, and live entertainment you name it, you can subscribe to it. But we're now starting to see some subscription fatigue, where consumers are beginning to tire of signing up for an increasing number of subscriptions. We all want a variety of television content that we can watch when, where and how we want, but we also expect the option to either pay for SVoD exclusive and/or ad free content, or sign up to AVoD services and watch ads to access content for free. With this in mind, what impact is AVoD TV having on the media and entertainment market? And how prepared are we to watch ads to get content free of charge?

Deloitte's Digital Media Trends Survey, 14th Edition, which was published at the end of May 2020 to assess the impact of Covid-19 on US consumers and their media consumption, shows that countries are coming round to the idea of AVoD at different speeds. In Asia, ad-supported streaming services dominate. And, in the United States, services have leaned toward premium monthly subscriptions with no ads. However, the survey showed that, 47 per cent of US consumers currently use at least one free ad-supported streaming video service. Prior to and since the Covid-19 pandemic, More US consumers want cheaper, ad-supported streaming video options. Europe is definitely a bit further behind in the AVoD stakes but many broadcasters - including ITV Hub and 4OD in the UK - are successfully streaming content using an AVOD approach.

And this is not just limited to the major broadcasters. At the beginning of March, the UK saw the launch of SportsTribal TV, the first free, AVoD TV service specialising 100 per cent in sports-themed content. It provides 24/7 linear sports channels with no sign-up or registration and it will feature sports including motorcross, MMA, world poker, college sports and more, with new channels being added every week. Being able to watch what you want, when you want without signing up or paying is a very attractive option.

In Australia, Freeview recently launched its HbbTV AVoD service, which allows viewers to seamlessly browse and search for thousands of programmes including entire TV series, made available by Freeview's member free to air broadcasters, at no cost to the subscriber. Delivery of the new service was facilitated by Switch Media. In the US, Amazon recently announced IMDb TV which is a free, ad-supported streaming service, available on Chromecast with Google TV and other Android TV OS devices. Documentary+ from studio XTR, in partnership with the late Zappos founder Tony Hsieh, is a new AVoD service that's available for free worldwide. It provides short and long-form documentaries covering politics, comedy, pop culture, science and more.

To provide a larger range of services and options, some broadcasters are looking at a tiered approach like NBC Universal's Peacock platform, which has an ad-supported base plan offering mostly free content. For additional content, customers can choose a Premium subscription offering which is ad-free.

With the trend for AVoD growing fast, the time is now for global broadcasters who can grasp new advertising revenue stream opportunities, repurpose content and keep eyeballs firmly on their channels.

New Verticals Adopt OTT As well as the AVoD transition, another trend that we've seen in the last 12 months is the growth in smaller enterprises or individuals streaming tailored content to reach new and existing customers, particularly during global lockdowns. Earlier this year, Applicaster published its list of eleven 2021 OTT predictions and number six on that list was Corona's silver lining drives new verticals to OTT . The report says, Our industry is expanding. Sports leagues and teams, fitness and wellness, live music and faith are now streaming experiences to the living room. In 2021, we'll see some (if not all) of these genres evolve into verticals of their own. Covid-19 lockdowns have accelerated the move for the in-person events (concerts, religious services, workouts), and at the same time, teams and people-as-brands are getting savvier in retaining thei
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