Cable providers have been waiting to see how Over-the-Top (OTT) services would impact their bottom line. While some predicted a flash in the pan trend, there is no denying that streaming services have started to cannibalize television consumer revenue. Cable providers could dig their heels into the ground and refuse to budge, but the wise move might just be to find a way to profit from OTT offerings.
The threat of cable-cutting is still a relatively new phenomenon, so cable providers have yet to discover a standard solution to the problem. Instead, we can track the different methods companies are using to cope with the new challenge. Based on recent moves, we’ve come up with these pieces of advice when considering the addition of OTT services to your offerings:
- Tap into the millennial attitude. Millennials now make up 20% of the American TV market, according to the New York Times. With small budgets and jam-packed schedules, many consumers of this age are looking for cost-effective, personalized media.
Consider following the lead of providers such as Frontier Communications. Frontier’s FreedomTV offering is a sleek package that includes local channels, a DVR, and most importantly- a 1-year membership to Amazon Prime. Cue millennial joy. This offering not only meets the needs of a vital demographic, but also demonstrates that Frontier Communications is up-to-date with the latest trends and leads the way in meeting customer demand. And for peace of mind, just know that most millennials do eventually bring cable back into their homes once they have kids. Because no one wants to see cartoons clogging up their Netflix queues.
- Keep it local with your own OTT app. Some cable providers have gone another route, creating streaming content based on their local channels. Waitsfield and Champlain Valley Telecom recently introduced GMA Video, a streaming service accessible on Roku. GMA Video includes all local channels, as well as options for additional streaming, meeting multiple needs with one easily adapted solution. With many cable customers already using OTT devices, such as the Roku or Chromecast, this offer allows ‘cord-cutting’ while still generating revenue for the cable provider.
- Be ready with a backup plan. As mentioned before, OTT services are still working out the kinks and there are no hard and fast rules for competing in this space. The only certainty is that the TV consumption habits are evolving- to what degree, on which devices and for how long will only be clear in time. So our advice? Think of your OTT offering as temporary. Best practices and success stories will continue to emerge as streaming services progress, and at that point you will better be able to strategize. Your best move for now is to build in contingency plans and to be prepared to switch strategy as consumer habits become clearer.
Over-the-Top services are now a part of the American home. With the threat of cable-cutting looming, there’s no better time than the present to get ahead of the challenge. If you’re interested in talking more about OTT-cable offerings, email us to start a discussion.