Why OTT is about more than TV
OTT (Over-the-Top) media is more than a TV streaming service technology, it’s evolving into a direct-to-consumer business model that could replace (or at least supplement) most existing forms of entertainment — and we should be really excited about it. Subscriptions and internet utilizing applications have already begun to replace cable and satellite television but industry leaders like Netflix have begun to see a bigger picture. In 2019, Netflix announced that their top competitor was Fortnite (not a competing streaming service) because beyond being a television company, they are an entertainment company competing for viewership time. Fortnite and other highly popular video games have been taking over the media consumption of younger audiences. Today, Netflix is in the process of developing its own video games. The Netflix arcade will take the form of a console-free OTT service included at no additional cost from regular Netflix subscriptions. This will likely launch a year or two after Amazon’s console-free Luna gaming system.
Netflix is also seeking to deepen consumer relationships with the Netflix.shop. Rather than selling generic t-shirts, Netflix has partnered with cutting edge artists to develop limited-time capsule collections that range from $30 to $300. By utilizing the intellectual property of Netflix Original Series, Netflix is using the store to integrate itself further into consumers preferences. This sort of option will likely be utilized by other streaming services with content cult followings like Paramount+’s Nickelodeon shows or HBO’s Game of Thrones franchise.
At the moment, the Netflix.shop isn’t fully integrated into the streaming platform as Netflix is dedicated to avoiding all forms of in-platform advertisements. Meanwhile, Amazon Fire Stick has integrated shoppable video ads in which purchases can be made without ever leaving the stream. The Fire Stick also has Alexa capabilities which allow users to say “Alexa, add to cart” in order to save the product for purchase consideration later. Peacock has made strong moves into the shoppable programming with a 2-hour holiday special “Steals & Deals” episode led by celebrity guests. The episode featured similar technology as Amazon’s shoppable ad, where users were able to make purchases without leaving the stream.
This past year, OTT streaming services have adapted to offer live sports in response to consumer demand. In fact, 55% of cable users aren’t planning on leaving their television plan because live sports are important to them. As sports become available through OTT, Disney will likely be the leader in live sports thanks to ESPN+ followed by Amazon Prime which bought the exclusive rights to NFL Thursday Night Football. At the same time, sports betting has become legal in most states which has a huge impact on viewer engagement for younger audiences since 26% of adults aged 25–34 are more likely to watch sports if they’re gambling over the game. The opportunity for OTT services to integrate fantasy sports and sports betting into their platforms is clear and may soon come to fruition. For one thing, 19 regional sports networks owned by Sinclair Broadcast Group were purchased by the casino giant Bally’s likely in an attempt to capitalize on at-home sports betting opportunities. For advertisers, this creates both problems and opportunities. Although game sponsorships are often high performing marketing opportunities, the introduction of OTT sports gambling may make more conservative brands hesitant to participate. It’s likely that as OTT technology refines and develops, there will be more opportunities for advertisers to integrate their ads and products into the streaming ecosystem.
