Verizon Digital Media Services Execs: Personalization Plays Key Role in Effectively Monetizing OTT Services

Many content owners have already launched over-the-top (OTT) online video services, but some of them have yet to find effective ways to increase revenue, reduce costs and keep viewers satisfied, according to Verizon Digital Media Services (VDMS) executives, who pointed to personalization as one key path to monetization.

There’s been a “huge shift” of late in what broadcasters are looking for when it comes to OTT services, Jason Friedlander, VDMS director of marketing communications, said June 15 in the webinar “Content Intelligence and the Business of Streaming Video.” Most traditional broadcasters have already launched OTT services and put their content in the cloud, although they may be looking for a slightly better solution now, he said. As part of the “phase we’re in now,” the main questions that are being asked concern how to personalize those services, how to keep users engaged, and how to make the services successful, he said.

Among the takeaways from the webinar: areas that are ripe for optimization include personalization, the video workflow and the application of user data, and there are benefits to applying intelligence to improve the performance of online video businesses.

“One of the most important things to think about in this coming year, and more, if you’re in the business of” OTT video isn’t how you create such a service, but “how you make a business out of it” that can generate revenue and profits, Colin Dixon, founder and chief analyst at nScreen Media, said on the webinar.

Pointing to the tough reality that OTT providers are facing now, Dixon cited the findings of a consumer survey conducted by U.K. company Paywizard late last year. Although many of the respondents were planning to sign up for online services, “disturbingly,” 33% of them said they planned to cancel the service within six months after watching the programs they wanted to see, he said, adding: “Bing and bolt has become a real problem for the online industry.”

Dixon also pointed to TiVo data showing that personalization is effective in helping to not only hold on to pay TV service users, but also get them to pay more for the service. “Operators are making steady progress in rolling out personalization and getting people to use search, and that is … increasing the number of people that are using their pay-per-view” systems, he said.

OTT services need more great content to keep customers engaged after hooking them initially, and Netflix is an example of one company that has been able to do that effectively, Friedlander said, noting that the “personalized experience” that company provides has been one key to its success. “If you’re not giving them some reason to stay, they’re going to disappear,” he said of viewers, adding: “You have to be smart about how you acquire and produce and create content, and how you present it to the user to make sure that doesn’t happen.” Those running these services must make sure they’re targeting users so they will be engaged long enough to create brand loyalty and for users to see enough ads to make it profitable for the company’s service, he said.

Friedlander pointed to what he deemed a common misconception: that viewers hate ads. People don’t hate ads — “they hate irrelevant ads,” he said, stressing the need for content companies to use personalization and data to make sure viewers are only seeing ads of interest to them.

“Everything should be in the cloud” now because it provides “infinite scalability” for content owners, Friedlander also said. He and Tad Ro, VDMS director of product, devoted a large portion of the webinar to stressing the benefits of their company’s new Media Xperience (MX) Studio. In announcing MX Studio in April, the company described it as a cloud-based “content intelligence system,” saying it provides rights holders with an automated online video production and distribution system that bundles together an easy-to-launch OTT service with all the data needed to find out how their owned and licensed content is performing.

MX: Apps provides clients with smarter, customized viewer experiences for their OTT services, while MX: Programming helps bridge the worlds of traditional and online TV, according to VDMS. Benefits of MX: Programming include its ability to perform content scheduling and windowing for clients, Ro said on the webinar.

VDMS is also “integrating subscription management-type … features into our MX Studio as a whole,” Ro went on to say, noting his company is working to provide subscription management features to clients, so they can support subscription video on demand, transaction video on demand and “even pay-per-view for live events types of scenarios.”

MX Studio also includes MX: Syndication that allows clients to publish and monetize content across owned and third-party OTT services with integrated player and ad services. MX: Vision, meanwhile, provides clients with an effective way to track and monitor insights, analytics and intelligence, Ro said.