Exploring the Future of OTT Video

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Many see mobile as the top channel for video, but over-the-top (OTT) is looking like a strong challenger

Video is one of the most exciting and effective marketing channels today, and it's only getting better as new technology and platforms emerge.

In the marketing world, much of the video conversation has focused on mobile, and for good reason.

“Consumers are spending more and more time on their mobile devices so there will always be a time and place for mobile,” says Tal Chalozin, CTO and co-founder of Innovid. “Mobile will always be a critical component to the customer journey ]and] marketers have no shortage of options when it comes to touch points and vehicles for message delivery, and mobile is a legitimate option.”

On mobile, due to the size of screen and data costs, shorter is better. So what can brands and content creators with bigger stories to tell do to get their messages to consumers?

Enter Over-the-top (OTT) platforms. These platforms—Apple TV, Roku, Sony's Playstation 4, and Microsoft's Xbox One—are ushering in the new, digital phase of premium TV.

“We are seeing that consumers prefer to watch long-form content on their television, particularly via an OTT device where they can watch the content they prefer on their own time,” Chalozin says. “Mobile video needs to be brief given shorter attention spans and retention levels. It's two completely different experiences; with two completely different solutions. One is snackable and on-the-go and one is focused on more premium, long-form content.”

Longer videos lend themselves to longer breaks for advertising. In many ways, this is as close as marketers can get to recapturing the heyday of TV marketing. Indeed. The rise of OTT is a clear indicator that the death of TV-sized video has been greatly exaggerated.

“The future of television is television. While consumers are slowly decreasing the amount of time they spend watching linear television, it's much more accurate to say TV consumption is evolving than it is to say it's dying,” Chalozin says.

The OTT flavor of TV is doing more than simply evolving the format; OTT is growing, both for marketers and for consumers alike.

“We are seeing a boom in [OTT] devices and experiences, [as] 20% of all ads we deliver are placed via OTT devices. This represents a 300% year-over-year growth, and we don't see this trend slowing down anytime soon,” Chalozin says.

Chalozin sites four trends in OTT that are driving video forward: the consolidation of small niche services into larger bundles; the near certainty that these bundles will start replacing cable TV subscriptions; the already substantial spend TV advertising already commands; and the wealth of meaningful data OTT devices can provide.

As digital streaming services proliferate, there's a growing market for consolidation services that give consumers access to all of the various services they subscribe to in a single interface. Although Netflix, Hulu, and Amazon combined come out to less per month than even a basic cable TV subscription (with much better content and control to boot), searching for a show or a film through each of these platforms isn't the best experience.

There are already a number of apps in the market that attempt to address this need, but big movers like Amazon are getting out in front of the issue as well. The natural progression from there is a revamped, more a la carte model that will either encompass or eclipse cable subscriptions in the near future.

With this comes a shift in the allocation of TV ad spend.

“Right now, marketers are spending more than $70 billion on television advertising annually, and that's just in the United States. As television content moves toward digital channels, the pot will grow bigger,” Chalozin says.

Of course, the strongest pull of OTT is the data; just as is the case with all digital media. Guess work, estimates, and samples cannot drive TV metrics in a world where TVs, and the devices connected to them, are powered by the web.

“Nielsen ratings only take into account the viewing habits of about a million households,” Chalozin says. “OTT services will be able to gauge how many people watched a given show and identify which qualities make for a hit.”

This gives OTT-favored services like Netflix much more negotiation power, and gives marketers a stronger sense of what audiences are actually watching—not because the content airs during a specific time slot, but because people are actually watching it.

“Ultimately, OTT will look a lot like traditional television but all related elements, such as the user interface, ad experience, content discovery and measurement, will be significantly improved,” Chalozin says.

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