Ever since Disney announced it was launching its own streaming service, fans haven’t stopped speculating. Netflix and Hulu subscribers wonder which of their favorites shows and movies will disappear, while Disney’s investors anxiously await updates on the broadcast company’s strategy.
For all the speculation it brought, though, Disney’s decision to put all its favorite offerings into one platform for its fans wasn’t exactly a surprise. Traditional pay-TV isn’t as dominant as it used to be, and the American Customer Satisfaction Index shows that viewers are more than 3.1 percent less satisfied with it this year than last year.
Experts predict that most major media companies will respond by following in Disney’s footsteps to stream some programming directly to consumers by 2022. However, doing so successfully takes developing and implementing a comprehensive OTT video growth plan, especially for companies that broadcast in multiple geographies.
Digital Transformation for Broadcasters
Most media and broadcast companies have already created great global brands with equally great products. But most lack the business and operational infrastructure and technical expertise in-house to create a robust DTC service.
The value of DTC video streaming is in creating a closer relationship with consumers, but broadcasters and content providers face some hurdles before they can reap the benefits of providing OTT content directly to consumers. One is the fact that, historically, most broadcasters have only operated within their own regions due to technical limitations and regional licensing rights.
Now, people want to take their favorite TV stations and programs with them wherever they go, whether that’s down the street or across the globe. Thus, content providers want to go beyond their traditional geographic territories. Media and entertainment companies are great at producing content that customers want to take with them, but they’re not so adept at developing the infrastructure their customers need to access that content whenever and wherever they want.
They can also be discouraged by global content licensing restrictions, the need to support multiple languages and multiple payment types. If companies need to collect revenue, they’ll need different payment gateways, a bridge across languages, and knowledge of that region’s tax regulations.
They also need to localize content, marketing, and support for all of their operations. But the complexity of intermediaries, special contracts, specialist lawyers, revenue collection, and tax laws can prevent broadcasters and content creators from even trying.
Tips for Mastering DTC
These and other challenges faced by networks and media companies can be overcome by transforming business and operations support systems — but it isn’t easy. It can take broadcasters and OTT media companies several months to several years, and from a few million dollars to hundreds of millions, to fully transform.
Some broadcasters have even started to partner with previous competitors in order to tackle the switch to OTT content together. In the U.S., for example, NBCU, Turner, Viacom, and Fox have partnered to create OpenAP, a platform where users can access much of their combined content. These partnerships create complexity in revenue sharing and settlement, however, so companies must take that into consideration before jumping in.
Every broadcast programming strategy should start with a comprehensive plan. List your target expansion countries, weigh the costs of operations against the potential for revenue, and take into account any necessary systems changes (such as billing and revenue management) needed to make it happen.
Use these three basic strategies to plan for your DTC digital transformation:
1. Start from the Outside and Move-In
A good OTT video growth plan starts from the edge, with its customer-facing APIs and video catalogs. The core systems are where legacy tech usually resides, whereas customer-facing systems have usually been optimized and are easier to put on the cloud. This will give the company more time to comprehensively restructure the legacy core systems without interrupting or diminishing their customers’ viewing experiences.
2. Find and Hire Tech Experts
Most broadcast and media companies aren’t tech companies, so they’d do well to hire a best-of-breed tech solution provider. Simply finding someone who still knows their legacy system’s outdated programming language can be a big enough challenge. Companies can make it easier on themselves by teaming up with a skilled tech provider — speak with one of Evergent’s specialists today to learn more about our catalog of solutions.
3. Invest in Staff to Gain their Support
Even with a good strategy and the help of technical, legal, and financial experts, the transformation will succeed only if the staff supports it. Broadcasters can generate that support by training staff to partner with a tech solution provider and get up to speed on SaaS system management, new APIs, commerce and security setups, cloud technology, migration tools, and more. Have mid-level management lead the charge; they already have their peers’ attention and know what needs to change within day-to-day operations.
With its vast resources and well-established brand, Disney makes moving to DTC video streaming seem easy. In reality, it isn’t. But soon it will become necessary for traditional broadcasters and networks to build an OTT video growth strategy if they wish to remain relevant. Fortunately, with a thoughtful approach and these few tips, these media companies can meet the challenge and extend their reach without overextending their own capabilities.
If you’re interested in finding out how Evergent can help broadcasters make the move to DTC video streaming, sign up for a demo today.