M+E Daily

NEW YORK — The over-the-top (OTT) television sector remains fraught with challenges for networks, advertisers and consumers, according to media industry executives who spoke Sept. 27 at the New York Media Festival.

“Right now, OTT feels very much like the wild west to me,” M. Scott Havens, global head of digital at Bloomberg Media, said during the Festival’s Future of Television conference.

That’s because the space is made up of traditional media companies like his and the others on the panel, along with many new media companies, platforms, devices and bundles with different pricing models including ad-supported and pay ones, he explained during the panel session “Redefining Distribution: The Melting Pot of OTT, Cable & Linear Television.”

“It just feels untenable,” Havens said, adding: “If you’re a publisher or a creator of content it’s very difficult to navigate to figure out exactly where you want to place those bets. And I think for marketers, it’s really confusing. How do you reach all these people? It’s very fragmented. It’s hyper-fragmented. YouTube seems to frankly be the only one that aggregates a massive digital audience to reach through OTT. And then, as a consumer, I don’t know what to buy or where to find anything anymore.”

Havens predicted that over the next five years, “clearly there’s going to be consolidation and failures.” But there will still continue to be “a lot of major players” left in the space, he said. He also predicted that consumers will not be flocking back to the “mega bundle” of TV channels that have traditionally been the norm with pay TV services.

Christy Tanner, SVP and GM at CBS News Digital, agreed that the OTT space is, in “one sense, a wild west,” and that’s because “the fragmentation is pretty extreme,” she noted, adding: “You have connected TVs, you have different boxes that you can connect to connected TVs. And it is confusing if you just try to draw it on a chart.”

But she said: “What surprises me continually is how smart consumers are.” She pointed to the many consumers who “go to a big-box superstore, buy a television, turn it on and figure out how to find” channels including CBS News, as well as the many consumers who are subscribing to new OTT services.

Despite ongoing challenges, “I don’t think digital advertising is a mess for everybody,” she also said, telling the conference: “It’s a mess for some very high-profile metrics challenges that Facebook and Google have had. But by no means do we consider digital advertising to be a mess at CBS. It’s working very well. It’s growing at double-digit percentages year over year, and it works pretty seamlessly.”

Earlier in the day at the Future of Television conference, Peter Gallagher, COO at Verizon Digital Media Services, stressed the importance of networks focusing on their unique brands and offering the right, unique content to build an audience. “If you just have the same content as everybody else, you’re not really differentiated,” he said.

Gallagher went on to say that “what really needs to mature in this industry is how advertising is managed.” Although there’s been a “lift” in advertising thanks to OTT services, it’s “not offsetting the decline in advertising on traditional platforms,” he said. Therefore, “there needs to be a lot of experimentation and a lot of things to drive acceptance of advertising in these new models,” he told the conference.