The panel discussion on internet video at the annual ASBU BroadcastPro ME Selevision Summit 2017 focused on profitability, partnerships, premium content and the scourge of piracy.
The panel discussion on internet video at the annual ASBU BroadcastPro ME Selevision Summit 2017 focused on profitability, partnerships, premium content and the scourge of piracy.
Since the pre-YouTube era of viral video clips in the early 2000s, viewers of all ages have increasingly shunned traditional linear TV for VOD. Much like virtual reality, the initial wow factor around the uptake for internet video has given way to bread-and-butter issues. The second panel discussion, titled Internet video is the new normal, focused on OTT and was sponsored by Irdeto.
The first question posed by moderator Nick Grande, Managing Director of Dubai-based TV consultancy and service provider ChannelSculptor, was: Has the era of profitable OTT arrived in the region?
Danny Bates, CCO and co-founder of Starz Play, responded by saying: We are now seeing the roadmap to profitability. Compared to three years ago, it is a completely different business now. Funnily enough, Netflix has helped. It has made customers more aware of this segment. Also, the evolution of making the product simple has been key. This includes the evolution of applications within smart TV, Android TV and so on to make OTT a TV viewing experience like any other. The individual cost per acquisition now allows us to generate a lifetime of value for the customer that is profitable for us. We now need to grow the scale and volume of that value.
Underscoring why internet video is the new normal, Maarten Kranendonk, Head of Partnerships, iflix MENA, stated in his opening remarks: When most SVOD players such as Starz Play and iflix launched, it was B2C. Now the telco partnerships have come into play, which is important for us because they bring us scale and subscribers, and we bring to the telco what they are not able to give to their customers.
The telco partnerships have come into play they bring us scale and subscribers Maarten Kranendonk, Head of Partnerships, iflix MENA
While Kranendonk believes B2B2C is the way forward, Bates said: We would like an element of B2C as well, since it is extremely important for us to have our own marketing channels vis-à-vis the end consumer. We also work closely with telcos. The telcos enjoy trust with the customers, and that is critical for us as online brands, especially when it comes to transactions.
Clearly, for the OTT industry to arrive anywhere close to the projected $1.75 billion by 2022, telcos will have to play a major role. Samer Geissah, Vice-President Innovation, Commercial at du, elaborated: The moment we allowed customers to use their post- or pre-paid credit to pay for digital services such as Starz Play, that was us saying we believe in OTT moving forward. The viewership for IPTV is on the decline, except for news and sports, and is moving towards VOD. Plus, the personalisation of services is why OTT platforms are doing better as compared to linear TV.
Personalisation of services is why OTT platforms are doing better as compared to linear TV Samer Geissah, Vice-President Innovation, Commercial at du
Geissah questioned the traditional approach of investing billions of dollars in setting up fibre networks, when the internet allows telcos to operate beyond their legally mandated areas of operation.
We have a diverse subscriber base that is matched by the diverse flavours of OTT on offer. Our arrangement with Wavo allows us to reach a certain segment of our subscribers in the fixed category that is outside of our fibre footprint. So if you are looking to get triple play from du in areas where our fibre footprint does not exist, for instance in Abu Dhabi, Fujairah or Sharjah or even certain areas in Dubai, subscribers get premium OTT via OSN with our double play, which is a virtual triple play. For our mobile base, we are looking for partners who can bring the latest series from Hollywood and a good mix of Arabic and Asian productions.”
Almost in response to Geissah, Nadine Samra, VP Digital Business MEA, Z5X at Zee Entertainment, stated in her opening remarks: We have a large footprint outside India, be it across the Middle East, Africa or Europe. Our aim in the digital world is to be as strong as we are on linear. Our first product was Zee Weyyak, and we launched it six months ago as an OTT service targeting Arab audiences.
In the coming months, there will be five exclusive series on Weyyak. I believe localisation is critical, especially for an Arab audience. It is an AVOD service. Z5, our international VOD platform, is more suited to a subscriptionbased model. Our pricing decisions will be based on being reasonable and reachable.
Original content created by OTT platforms will be the big differentiator Nadine Samra, VP Digital Business MEA, Z5X at Zee Entertainment
Samra announced that Zee Weyyak has had a million unique visits since its launch and reiterated that original content created by OTT platforms will be the big differentiator, as demonstrated by Netflix and others.
Kranendonk of iflix questioned the long-term sustainability of the AVOD model, despite the glut of hits: AVOD is a challenging proposition for operators and advertisers. With advertisers increasingly resistant to advertising in traditional models, subscription is the way to evolve an OTT service.
We produced an Egyptian series during Ramadan that did pretty well. We will continue to produce original content. Much like in Asia, we are looking at typically starting with comedy shows like other AVOD or SVOD players, and then move to scripted shows and eventually co-produce movies. On the whole, we are happy with how our partnership with Zain is evolving. That gives us access to a large number of countries in the region.
We work very hard towards bringing content that can be monetised Danny Bates, CCO and Co-Founder of Starz Play
Whether its AVOD or SVOD, monetisation of content is key, Bates of Starz Play stressed.
We work very hard towards bringing content that can be monetised. Not all content can be monetised on a subscription service. Arabic content on its own is very hard to monetise, and you have a premium local platform such as Shahid to contend with. But if you can bring content that is exclusive and in the first window and has the stars, we can take customers over the paywall.
With OTT grappling with fundamental monetisation issues, piracy was not on the top of his list, one of the panelists noted. To this, Richard Frankland, VicePresident Sales EMEA at Irdeto, presented figures illustrating significantly high penetration of piracy and predicted that OTT players will have to deal with the problem sooner rather than later.
In research we commissioned, 59% of our respondents in the GCC had access to pirated content. That is an enormous number, and if you look at millennials, the number goes up to 62%. Piracy should matter to rights owners, because they cannot sell content at the same price points; broadcasters will not attract the same number of subscribers, and consumers will suffer because they are sharing their password and credit card details with companies that are essentially criminals.
In research we commissioned, 59% of our respondents in the GCC had access to pirated content Richard Frankland, Vice President Sales EMEA at Irdeto
Conceding that the problem is too big for one operator, Frankland stressed the need for collective action from everyone in the industry. Enforcement is also around the corner, he said: We fully anticipate sports content providers and other rights holders to enforce watermarking as part of the next phase in general licensing contracts. These licensing agreements will become more onerous on licensees.
As a solution for fighting piracy while offering consumers a superior product, Geissah of du said: When we did our music bundling, we worked with a local start-up called Anghami. Any user who generates a certain revenue gets this service free of charge. We saw numbers grow dramatically and have seen additional consumption of data. So it is doubly rewarding the more we are able to bundle such quality propositions for home and mobile users, consumers will not want to opt for illegal options. Ultimately, piracy is a financial decision.
There was general consensus in the Q&A that followed that linear TV viewing will decline; but with little transparency on data in the region, the roadmap for the future of live and OTT subscriptions remains unclear. While lauding Starz Plays stated goal of reaching a million subscribers by the end of 2017, a delegate asked where OTT was currently placed in terms of numbers.
These are very early days for OTT, said Bates of Starz Play. If I was to estimate, outside of piracy there are 2.5m to 3m paid subscribers to OTT in this region. The good news is that smart TVs are now a fundamental part of TV viewing, accounting for 50% of consumption and slated to grow to 65% in the near future.
