Build Your Video Business

Smart OTT Strategy: Fail Early, Often, and Fast

by Jamison Tilsner · April 26, 2016 · Comments

OK it’s time. Over-the-top (OTT) content delivery has moved from being a pesky buzzword to a very necessary component of smart video distribution. Every media company needs an OTT strategy. Millennials already average three paid SVOD subscriptions and are quickly turning away from cable and satellite services. Television-connected devices from Apple to XBox to Amazon have all recently opened app marketplaces. Now is the moment to establish a presence in a still-emerging landscape. Let’s think about your strategy. 

First: Focus on content   

Media companies should concentrate on what they do best: Creating and marketing original content. It seems like a no-brainer, but a lot of established television companies are missing this when they try to launch OTT networks and apps. They spend millions building custom front-end technology in order to “own” user experience. Similarly, newfangled “startups” within big media companies build differentiated user-experiences while wrangling multiple technology vendors, taking years to launch rigid OTT services that aren’t able to adapt to the rapidly changing landscape.

Meanwhile, individual videomakers and smaller companies create innovative content and amass shifting audiences. This is a great lesson learned from the explosion and continued dominance of YouTube — consumers value reliability, ease-of-use, and authentic original content.

In many ways, this moment feels a lot like the emerging online video ecosystem of 2007. Think about Vice and Buzzfeed, for example. They became global brands not by perfecting a customized video experience on their own domains, but by leveraging the power of networked platform providers to iterate on truly innovative content. They focused on using their resources to experiment with content and business strategy.

Pick a technology that lets you experiment

As with most media and technology startup ventures, it’s hard to predict how popular an OTT subscription service will become, or the best content strategy to maintain a particular audience. When I speak to video content companies big and small, I invariably hear some version of the same ultimate questions: Based on a given social media following and library of content, how many subscribers can we expect? What’s the optimal price point? How often should we release new content? What is the right video length?

The short answer: Every subscription service is different and no one can answer their specific case without experimentation. That’s why we’ve worked hard to develop tools with low upfront costs. The VHX platform is specifically designed to grow and adapt with audiences of any size or makeup, and is optimized and continually improved from learnings across a broad and growing network. The breadth of our network provides increasingly interesting data to inform decisions around everything from pricing (6 of our top 10 networks changed their price within the first 3 months of launch) to content length and more.

Experiment with business model, pricing, and content

A great example of early OTT experimentation is Find What Feels Good Yoga, a VHX seller who started their subscription video service with the same videos available on their YouTube channel. They offered a Pay What You Want option to their most passionate supporters, to understand viewers’ willingness to pay, and then drew on that community for inspiration for new exclusive content ideas that have continued to grow the subscriber base over time.  

Any distributed digital brand must engage users through multiple platforms, only one of which is likely to be a paid premium service. Sellers like Between Women TV and Black and Sexy TV have leveraged VHX’s flexible pricing tools to master incentive pricing and maximize subscribers. Both networks successfully converted existing social media followers to paid subscribers by offering a low introductory price for a limited period. Similarly, with pay-per-view video, we have seen that limited-time discounts have contributed to over half of overall revenue in some cases.       

Nimble OTT services will always win 

Trial and error will always be your friend. When you’re focusing on great content, and have the technology to support a nimble OTT network, you can really get creative with how you run a subscription video service that appeals to your audience. So now’s the time to fail! Experiment early and often with your content and marketing strategy, so your OTT service can keep growing, changing, and growing.