Unreel’s 6 Bold Predictions for OTT in 2018
This past year was a fast paced whirlwind ride for streaming video. From Disney’s purge of Netflix, to the wild inflation of predicted OTT revenue set to reach $120 billion by 2022, any one paying attention to this space probably had their head spinning most of 2017. Without a chance to catch one’s breath, 2018 promises to bring about just as much change, as the fledgling OTT industry continues its march on to maturity.
For Unreel, 2017 brought about significant developments as well. New partners, new opportunities, and new features led to huge growth that is expected to continue forward exponentially in the New Year. With our finger on the pulse of everything streaming, here are Unreel’s 6 bold predictions for 2018.
1. ROKU remains the largest OTT platform in the US, despite Apple’s and Amazon’s best efforts.
It is hard to qualify Roku as an underdog considering where they finished in 2017. With 40 million monthly active users, their size is nearly double Apple TV’s and 5 million greater than Amazon Fire TV’s . Although the undisputed leader in the space today, Roku has a target on its back, with two of the largest corporations in the world well within striking distance and taking aim. Apple, with its revamped 4K Apple TV and new billion dollar annual content budget has renewed its commitment to become number one after Tim Cook predicted ‘the future of TV is apps’ all the way back in 2015 . Meanwhile Fire TV, with competitive pricing and the support of the Amazon beast including Amazon Prime, is also vying to dethrone Roku.
Despite fighting in a multiple front war, Roku has two distinct advantages that will allow it to stave off the competition for at least one more year. The first edge Roku has is variety. In 2018 1 out of every 8 TVs sold in the US will run on Roku’s operating system. Roku also offers several different models of its streaming hardware, ranging from a bottom of the market, no frills stick, to a full-fledged HD black box model. Roku serves up so many incarnations of its platform that at least one fits the needs of every consumer. Roku’s other advantage is content. Without a streaming service of its own, Roku has the flexibility to be fully agnostic when it comes to content. This along with a strong discovery experience has allowed Roku to grow to over 5,000 unique apps (channels) on the platform, far more than Apple and Fire Stick combined. Roku sits on an embarrassment of riches when it comes to content, and it will continue to be their beacon, drawing increased users in 2018.
2. Consumer brands not known for content will launch streaming services on OTT.
In the same way brands flocked to YouTube in the last decade, 2018 will be the year they take their content to the next level and launch multi-platform streaming services. It is a strategy that companies like Red Bull, with Red Bull TV, have already seen value in for years. Moving onto living room screens with an OTT streaming service that offers both original and syndicated content has now become cost effective for non-tech savvy brands. The ability to engage with consumers beyond just the web, by providing them with entertainment and branded messaging on every device, has immense value.
The benefits of an OTT streaming service for companies are clear; everyone wants to be a ‘lifestyle’ brand that connects with consumers in a certain niche’, large or small. However, in the past the cost of technology and a compelling content strategy prevented most brands from doing so. In 2018 the friction to launch on OTT will be reduced to the point that any brand will be able to become a streaming service. For brands that have not yet begun producing video at scale, endless content to appeal to any target market can be seamlessly syndicated on a pure revenue share basis. The year 2018 will see brands no one ever thought would go OTT do precisely that.
3. OTT will be the largest new source of revenue for publishers.
Much as with consumer brands, the cost for publishers to launch OTT streaming services around their top publications and fill them with content has plummeted. This prediction goes a step further however; publishers who adopt this strategy will see OTT become their most lucrative new revenue stream in 2018. Magazines in particular occupy a prime position to leverage their brand into a streaming service. With an addressable, passionate audience and thorough understanding of what interests them, expanding from text on paper to video on OTT just makes sense. Niche’ verticals are equally as popular on OTT platforms as they are on the newsstand, and magazine brands are situated to take full advantage. Even for publishers green to the video world, syndicating content known to be of interest to fans has become simple and more than enough to begin generating new revenue.
4. Netflix will not skip a beat losing Disney content.
Perhaps the biggest news of 2017 in the OTT world was the earth-shaking announcement that Disney would not only pull its content from Netflix over the next few years, but also create its own competitive SVOD services. It is hard to argue that Disney content is not a significant part of Netflix’s library, but Netflix is prepared. According to Netflix’s chief content officer Ted Sarandos, this move has been expected for years . Netflix has always known the day would come when the studios turn on them, and that is why their budget for original content has skyrocketed year-by-year. The point for Disney and studios to kill Netflix by withholding content has past. Although it stings to no longer offer Pixar, Star Wars, or most Marvel content, there will be many more Stranger Things, Houses of Cards and Masters of None to keep consumers Netflix and chilling throughout 2018.
5. Apple starts to get content right.
Netflix has demonstrated the importance and high cost of producing successful original content and Apple has taken notice. After a disappointing toe-dip into the content game in 2017 for Apple, with Carpool Karaoke and Planet of the Apps somewhat tanking, the company is ready to double down with its immense cash reserves backing their bet. More telling is the hires Apple has made as 2017 comes to a close. Apple has been acquiring a stable of seasoned content veterans including Jamie Ehrlicht and Zack Van Amburg, former Sony TV executives best known as the producers of Breaking Bad, Jay Hunt of British TV fame, and most recently four Chief level employees of Amazon prime  . A team with a proven track record and unlimited resources can only mean Apple is on the right track to give Netflix and gang a run for their money.
6. Studios and entertainment companies finally figure out how to use Big Data to inform content strategy.
The vast user-data that Netflix, Amazon and Facebook lean on to make virtually every content decision will finally be available to non-tech focused ‘old-school’ content developers. With advanced streaming services of their own, the old Hollywood studios and networks can finally go beyond Nielsen data to understand their viewers, identify trends, and turn creative decisions into strategic ones by relying on new data, once beyond their grasp.