Sponsored content | The challenges for broadcasters of going direct-to-consumers

Speaking recently with a sports executive (and a client), he shared a great feedback: “Gilles, I never thought we would learn so much in just one year selling to our fans”. Why I interjected? Well, making all of these people happy, managing their feedback instantly on social media, and dealing with the unpredictable nature of the web, I never realised that”.

This was a great reminder of the challenges broadcasters are facing moving ahead with their OTT strategy, trying to sell direct to consumers. Over-the-top has a bright and prosperous future, let’s say there is a consensus on that. Technology is no longer the limiting factor to ROI, and more and more companies realise the potential of selling direct is enormous, financially and strategically.

Of course, although going direct has the potential to yield great success, it does come with its fair share of strategic challenges, decisions that broadcasters will have to make to ensure a positive ROI.

Here are a few recommendations for sports broadcasters that should made their lives easier:

1. Build a service, not a product

To build an all-encompassing OTT service that appeals to your users is a complex task. Delivering a sustainable business requires a firm understanding of consumer behaviour, customer support and monetization models.

Not only it’s vital to source the right content and provide a smooth user interface, but you also have to consider the logistics.

For example, think about the iPhone vs Google Phone. You can build a great phone, but if you want to sell it direct, you need to be able to handle the ordering process, customer service, logistics, and aftercare. Apple wins on delivery. The same goes for videos. To ensure success and longevity, you have to manage the service fulfilment, handle tax, generate promotional coupons, and provide quality, end-user support.

So, it's plain to see that to thrive in the world of OTT, you need to consider a range of aspects that span beyond video content alone. If you build a platform where service is at the foundations, you will be a winner.

2. Deal with device fragmentation

One of the other major challenges OTT providers face is device fragmentation. In today's world, viewers are constantly on the go (hence the allure of OTT) which means that your content must sing on every single device.

The problem with many services is coverage. Making your content available to download and ensuring it is optimised for every mobile device on the market is a sure-fire way to overcome the issue of fragmentation.

Youtube is only ten years old. At that time, the web was 100% desktop based, but the world has only recently wised up.

Most recently, we had live football games with up to 72% of mobile users, collectively using more than 170 different devices (like with our client Chivas TV in Mexico).

3. Define the right offering for your audience

To secure long-term success and a service that suits the needs of your target audience, you will need to think long and hard about how you want to deliver it to them.

Will you use PPV, SVOD or TVOD? What will work best? Make your decision carefully and you will yield the best possible results. If you’re not wholeheartedly sure, run tests to understand your target audience’s appetites.

Pay-per-view will perform brilliantly for one-off events like big fights, or seasonal events like Six Nation in Rugby, or the Tour de France. But, subscriptions and passes are ideal for federations like golf and tennis, for example, and will provide broadcasters the power to feed their audiences with prime video content on a regular basis and build a loyal, returning base of viewers.

4. Launch and don’t spend too much

One thing you should realise right off the bat: you don't need to spend millions to become a success. In fact, working closely with industry specialists can deliver optimal solutions that will result in the perfect ROI.

One partner may promise to do it all. Look for example what the TV / Cable industry did: for years, they promoted and collected funds. Yet, they took almost 50% of the revenue generated. Now, everyone want to abandon the ship.

Look what some of our clients have achieved:

NHRA (National Hot Rod Association) is a prime example of combined sports TV rights, with a direct-to-consumer approach; the company decided to go over-the-top and managed to get excellent an ROI after a mere three weeks of broadcasting online.
Golden Boy Promotions, selling some of their matches (most recently Canelo-Smith) direct from their website, in parallel to HBO distribution.
– Another example, WFTDA, one of our client's, an organisation that puts together roller derby games, is very popular in the US, but in the rest of the world, it has a niche, yet incredibly dedicated fan group. By selling their services direct, they built a significant level fresh revenue to support their sport and gain traction. It’s a strong example of the revenue potential of OTT.

At Cleeng, we work with specialists like Arqiva, Brightcove, VDMS, to deliver the best results, and we can do this all for a fraction of the cost, very fast.

Author: Gilles Domartini is one of the online video industry front-runners and founder of Cleeng, an e-commerce platform for live and on-demand video. If you are interested in discussing business with Gilles, reach out and schedule a meeting at the upcoming Sportel conference.

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