Streaming has forever changed our relationship with media – it’s now second nature to enjoy live sports, watch the latest TV, and stay up to date on news and current affairs from any device, rather seamlessly. The impact of the streaming revolution on brands and consumers alike is profound, and players of all sizes are recalibrating their content and distribution strategies to meet modern demands.
Pioneered by Netflix in the noughties, brands from all walks of the media landscape are rushing to launch their own over-the-top (OTT) offerings as a means to reach audiences more directly. As a result, the streaming video market is booming, and looks to indefinitely continue to surge – PwC’s Global Entertainment & Media Outlook, as reported by The Hollywood Reporter, predicts global streaming video revenues to hit $94bn by 2025.
Understanding the importance of DTC services
Yet, despite the media attention and consumer interest these streaming services generate, how they are positioned, marketed, and leveraged does not ultimately reflect the value they can offer. There is a common trend among operators and content owners to brand their DTC services as an add-on ‘anywhere’ delivery of their traditional Pay TV packages. You don’t have to look hard to find a pattern in the way these services are branded: Disney+, Discovery+, AppleTV+, Paramount+, ESPN+. The list goes on.
With this widely embraced marketing approach, consumers and brands are truly missing the potential of streaming services, which can serve as so much more than just an additional delivery method of traditional VOD and live video. Streaming opens up an entirely new window of opportunity for brands to engage with their fans, understand them on a deeper level than ever before, and explore meaningful new entertainment experiences and revenue opportunities. There is huge potential for them to leverage DTC streaming services as a genuine tool for audience engagement and monetization. The “+” can and should stand for more.
Driving fan engagement through DTC
Compared to traditional linear broadcasts, one of the big advantages offered by streaming technology is creating more of a two-way experience between the viewer and the content: a ‘sit forward’ rather than a ‘sit back’ viewing experience. Content owners and other rights-holders are increasingly looking for ways to exploit the rich possibilities thrown up by internet delivery.
The MediaKind 2021 Sports D2C Forecast showed that most sports rights-holders now consider it essential to have a direct relationship with their fanbase beyond an official website. By building an OTT DTC service, they open themselves up to a whole range of fan engagement tools, exploiting the full capabilities of an OTT medium.
Across the DTC services of the 40 rights-holders analyzed in the forecast, 16 different fan engagement features are utilized alongside, or enhancing, the live feed of the sports property. The most popular feature used by sports rights-holders is video-on-demand (VOD), creating a hub of highlights, replays, and archives. This was utilized by 88% of the rights-holders analyzed. Personalization was the next most popular feature, used by 50% of the rights-holders, allowing users to select their favorite team or athlete, with relevant content being served up to the viewer ahead of all other content.
These features are all transferrable to other DTC platforms that sit outside the world of sports – whether it’s a trade show’s digital offering or a streaming service delivering live or on-demand entertainment content. Other engagement features that they can tap into could also include audio, graphics, and virtual applications – providing just the first proof point that the ‘+’ nomenclature can encompass so much more than being just a means of content delivery.
A new approach to monetization
Another rather untapped appeal of DTC services is the monetization potential they offer content owners and operators. Standalone DTC services rarely utilize additional monetization features, regardless of the device it’s delivered to. However, once the service provider has settled upon the business model for its DTC OTT service, it could begin building additional revenue streams into the service. These revenues could include features such as advertising, merchandising, ticketing, and betting.
These features align quite naturally with many DTC platforms, especially those of sports rights holders. Yet despite this, among the 40 services analyzed by MediaKind, only 8% of the rights-holders used advertising while 5% of the DTC services provided merchandise sales. Moreover, none of the 40 rights-holders had an integrated betting service when we conducted the study. This is, however, likely to change dramatically in the coming years following the legalization of sports betting in the US in 2018.
Many of these tools are highly applicable to entertainment DTC services, yet underutilized. We are starting to see some more prominent players capitalize on internet delivery to expand their revenue streams. Last month, Netflix expanded its online retail and merchandising business by launching its online store, featuring apparel, toys, games, and other lifestyle products. The limited use of these monetization features among other services may be because they’re still in their infancy, and content owners are prioritizing delivering the best content experience and user interface. Nonetheless, the opportunities to prove the monetizable worth of ‘+’ services are ripe and bring real-life, tangible rewards.
MediaKind’s solution for tackling the DTC market
MediaKind recognizes the immense opportunities for content owners and rights-holders to embrace DTC streaming within their content distribution strategies. MediaKind Engage is our new DTC solution for video production, streaming, and audience engagement. It serves to help sports entities, broadcasters, channel originators, and content owners build new and supplement existing revenues with DTC offerings that increase fan engagement opportunities.
With MediaKind Engage, our goal is to enable a seamless transition to operating workflows in the cloud while also expanding the reach, scale, and reliability of streaming video content to a global fanbase. It provides a broadcast-grade framework that meets and exceeds today’s DTC market challenges around the quality of experience, ROI, and commercialization, enabling content owners to maximize the value of their OTT offerings.
As the growth of DTC platforms increases, content owners of all sizes have an opportunity to leverage OTT technologies to do so much more than just streaming – they can establish direct fan engagement, maximize recurring revenues, and increase secondary monetization opportunities. By building their services on robust platforms using cloud-native technology, they can launch new OTT innovations with greater speed, control, and ease, unlocking the potential of ‘+.’