That’s the forecast of Peter Lofling, Director, Asia Pacific from distributed video delivery provider, Edgeware, who says that living in an “on-demand world, a simple swipe of one's mobile phone or a few clicks of the mouse can now bring consumers a plethora of content and applications”.
According to Edgeware, the growth in Direct to Home (DTH), IPTV and Over-the-Top (OTT) services will make the Asia Pacific region the world's second largest for OTT SVOD services by 2018.
"Driven by consumers' expectation for high quality content on demand, OTT remains key in 2016. To stay ahead, the imperative will be for the industry to look at innovations that enable best viewing experiences from networks, content delivery services to ad-revenue models,” Lofling said.
On what he calls ‘smart OTT’ Lofling said, “We are already seeing increasing competition in the OTT space, and the number of players will continue to increase this year.
"Pureplay" OTT players who aggregate content will face competition from new entrants including traditional pay TV providers, broadcasters and content providers who have started offering their own OTT services (e.g. Viacom's Noggin, HBO Now, CBS All Access, BBC iPlayer).
“The need to reach consumers' multiscreen demand with a direct-to-consumer offering is inevitable. With increasing competition, 2016 will solidify a new normal in which OTT providers compete on being smarter – both in acquiring or producing high concept originals, and in delivering relevant content to the consumer the way they prefer without compromising quality.”
According to Lofling, Smart OTT requires providers to consider the packaging, formats and commercial model that work for the particular customer category.
He says the increasing amount of available content via alternative distribution platforms are “challenging the customer channel bundle model as viewers increasingly question the need to pay for content they are not interested in”.
“This will likely result in new product packaging models and increasingly "slim" alternatives, specially designed for OTT distribution,” Lofling said.
On advertising revenue models for the industry, Lofling said personalisation by ad insertion is finding its place in the industry.
Lofling said ad insertion technology has been particularly popular for live streams, replacing old ads with new ones, leading to new revenue opportunities. “We can expect stronger industry adoption of the technology, fuelled by the fast-growing phenomenon known as programmatic advertising. Programmatic ad spend is estimated to grow at 20% annually and digital media spend will, for the first time, account for more than a quarter of total advertising spend in 2016".
Lofling notes that, with the vast availability of audience data – from the service providers, media networks, advertisers, and national statistics agencies – TV service and content providers can now combine real-time analytics and ad insertion technologies to provide targeted, personalised experience to viewers at the right time.
“As we shift TV viewing from big to smaller screens (and with less patience), there will be more scrutiny of the type of ads we see. In the streaming world, the consequences of bad ads – those that are repeated too often or are context unaware – are likely to do more damage to the business than simply channel switching.
“With so many options, unsatisfied viewers are ready to unsubscribe existing service and never look back. This puts demand on brands and advertisers in re-evaluating how to reach their audience cross-device, and constantly delivering advertising content that is relevant, timely and engaging.
“With some creativity (and commercial awareness), the implementation of ad insertion in combination with analytics technologies sees no boundaries,” Lofling concluded.