Q&A: Matthew Wilkinson, Magine Pro

Matthew Wilkinson, general manager at Magine Pro, talks about opportunities and challenges facing new entrants in the OTT TV market.

How much opportunity is there for new entrants in the OTT TV market and what are the key things that operators need to focus on in order to succeed?

We now see consumers subscribing to three or more OTT services, and although they are the smallest, they are also one of the fastest growing segments in the market. For new OTT service entrants, it’s a great opportunity to grab the number three or even four spot next to the OTT streaming incumbents such as Netflix, HBO, and Hulu.

Content is arguably the driving force behind this growth. Original content, in particular, that’s not readily available elsewhere, is one of the key reasons consumers sign up to more than one service. New OTT service entrants don’t necessarily need to produce original content to attract subscribers though. They could explore securing rights for local or regional content that is often overlooked or not being widely distributed.

It’s also important they carefully consider their monetisation model and whether it’s suitable for their content and target audience. To build a sustainable OTT business, you need a clear strategy with prudent expectations of consumer pricing acceptance and service uptake.

What are some examples of potential new OTT TV markets that are currently underserved?

As viewers consume more and the move away from traditional viewing habits to OTT services, content owners have a golden opportunity to capture dark & niche markets.

Consumers are being offered a barrage of generic services that target mass audiences and offer broad programming type. However, there are niche segments that have appeal across global markets, populations and cultures. Lower tier sports leagues like American College Football, for example, typically have a wider and more loyal following, which are willing to pay a premium if it’s not carried by legacy broadcasters or media distributors.

Content owners are also not limited to maximising the value of their content through distribution on traditional channels (local TV and satellite etc). They can expand their footprint and explore untapped markets by taking their content direct to consumer with their own OTT service. A significant dark market is local content for overseas expats & diaspora, where access to content via transitional means is either illegal and of low quality, or just not available.

What are the key features and functionality that OTT TV services need to succeed, from Magine’s own experience of operating services?

Magine have over seven years experience operating direct-to-consumer services in Scandinavia and Germany. We leverage our experience and understanding of good UX/UI to build platforms that fulfill our B2B partner’s needs, and provide exceptional experiences for their customers.

We believe a user-friendly service that heroes content and aids discovery is key to attracting and retaining users. Our templated solutions can be independently curated and managed by our partners, giving them full control over what, where and how their content is featured.

The user experience should also be seamless. Regardless of where or what device they watch on, subscribers should be able to enjoy high-quality streams without buffering or downtime issues. And local payment solutions that enable users to pay fees easily are also essential if you’re operating a global service, and especially in emerging markets. 

What challenges do operators face in breaking into the OTT TV market and what solutions are available?

To avoid getting lost in the crowd, new OTT entrants need a clear differentiator and value proposition. Trying to cater to all consumers can result in you catering to none.

We are starting to see a rise in niche OTT services for this reason. Our partners PassionFlix and True Royalty, for example, offer niche content that appeals to a smaller subscriber base, which is more loyal and dedicated than the general consumer crowd. And as they are able to target a very specific audience, their marketing efforts are much more effective.

Getting a new OTT service up and running takes time and can come at a considerable cost. At Magine Pro we help our partners overcome these barriers and provide a proof-of-concept Pioneer solution, alongside a full end-to-end Premium service that is proven, cost-efficient and ensures a quick time to market.

What business models make the most sense for operators looking to build a sustainable service offering?

Subscription-Video-On-Demand (SVOD) remains one of the most popular monetisation models for OTT services, as it ensures a steady recurring revenue and has a lock-in effect on users. At Magine Pro, we also promote hybrid models that blend SVOD/TVOD and/or AVOD to ensure no money is left on the table.

Monetising through Ads means OTT services can offer limited free content to users that are hesitant to pay a Subscription or Transaction fee upfront. Through upsell activities, these free users can convert to paying subscribers, increasing average revenue per user (ARPU) and the customer lifetime value.

This Q&A is sponsored content.