OTT TV challenger brands hot on the tail of Netflix and Amazon

chessboard & Chess pieceSo many great insights have come out of our latest research paper, ‘OTT isn’t just for Christmas: The gift that keeps on giving’ and we’ve already looked at the results globally, regionally and demographically. In this post, we’ll take a closer look at the emergence of challenger brands that are giving more dominant forces such as Netflix and Amazon Prime a run for their money.

The Challenge

The big challenge facing all OTT operators is that a large percentage of consumers have adopted a ‘dip-in/dip-out’ approach to on-demand services. This is true for global brands such as Netflix and Amazon Prime, as well as for localised providers. There still exists an enormous potential for new and local OTT players to create their own niche, attracting both first time and multi-service subscribers. However, in order to survive and thrive, all are tasked with finding effective ways to build customer loyalty.

The Opportunity

The pay-OTT industry is still a dynamic and rapidly changing marketplace where incumbency is no guarantee of future success. The results from our survey in December saw that globally, Netflix is the dominant operator, with the exceptions of Germany, where Amazon Prime Instant Video leads the way, and Singapore, where StarHub is favoured and Netflix has yet to make a significant impact. Yet, there are signs that local rivals are fighting back against the global behemoths.

In Australia, 32% of the consumers that planned to subscribe to a new OTT service for the first time over the Christmas holiday intended to sign up to Foxtel Play, a local subscription-based VOD service. In Germany 22% were planning to go with Maxdome and in the UK 19% said they were opting for NOW TV. Even in the US – the most saturated pay-OTT market – Netflix is beset with tough competitors, including Hulu, which 15% of first-time OTT subscribers planned to sign up for. 

Seizing the Moment

Multiple service operators have bundled pay-OTT services into broadband, TV and phone packages to improve the perceived value. Singapore’s local incumbents StarHub and SingTel TV have managed to successfully maintain their own strong OTT market presence by leveraging their market positions.

Aggressive and effective outbound marketing is another factor, as witnessed by Now TV, which 10% of UK consumers now subscribe to. Many local players are also taking advantage of home grown content, competitive pricing, promotional activities, native language options and, above all, a positive customer experience – to seize the growing opportunity for increasing the pay-OTT subscriber base, as well as to benefit from the non-loyal nature of subscribers toward OTT operators worldwide.

Pay-OTT is still a relatively young market, full of possibilities. The heavy hitters should be careful not to rest on their laurels, as it’s still anyone’s game.

For more information on the growth of challenger brands and other OTT insights download our latest paper, ‘OTT isn’t just for Christmas: The gift that keeps on giving’.