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Amrita Hemdev
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By Amrita Hemdev
August 30, 2018

The combined size of the over-the-top (OTT) market is expected to surpass $64 billion by 2021, compared to $29.4 billion in 2015, a compound annual growth rate of more than 14%.

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As we move into the latter half of 2018, we’re going to continue to see OTT explode in the market with new features, technologies, and opportunities. These trends are more likely to increase your chances of beсoming a digital expert and help to build a successful digital strategy with OTT as a vital part of your future advertising campaigns.

50% of U.S. households are watching online video on connected TV sets.

Consumers have reached a new stage in connected entertainment where OTT is a standard source of video and viewers are more willing to experiment with multiple OTT services.

According to Parks Associates research, 50% of U.S. broadband households watch long-form online video content on an internet-connected TV set. The international research firm also reveals:

  • 69% of U.S. households have an OTT subscription; 38% have two or more subscriptions.
  • Households subscribing to three or more internet video services is one of the fastest-growing segments in the U.S. OTT space, increasing from 10% of broadband households in 2016 to 15% in 2017.
  • In the past 30 days, nearly one-half of U.S. broadband households have accessed video content from a subscription OTT service; 31% accessed free content.

 

Consumer experience is the new king of OTT.

The reality is that TV has become an increasingly personal affair, creating an extra hurdle for content providers to overcome. Consumers are expecting personalization in the established digital advertising and e-commerce space, why should they be offered the same OTT viewing experience, content, and ads as another viewer?

The majority of streaming services out there currently offer the same experience and design across their suite of apps. This happens regardless of who the viewer is, what their individual preferences are or how they have interacted with the platform before, which brings us back to the problematic issue of taking a one-size-fits-all approach.

Each type of fan has different needs and expectations when it comes to service functionality and design, offering a tremendous opportunity to deliver a highly personalized experience that will help drive ROI. Going forward, expect to see all kinds of better, and more creative, content and ads on every platform.

Viewers prefer an OTT experience. One of the benefits OTT providers have over traditional linear video distribution providers is the ability to build an interactive user experience meant to work on devices like Roku, Apple TV, and smartphones, without the need for a cable box or satellite dish.

 

The OTT industry is expected to grow more than 400M by 2022.

By 2022, more than 265 million households worldwide will subscribe to an OTT video service. Many of those households will pay for multiple services, so Parks Associates estimates it will surpass 400 million subscriptions in total.

Fifty-three percent of U.S. broadband households own a smart TV. OTT digital ads are continually improving the user experience to accommodate the shifting habits of consumers.

 

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TV is going through an OTT revolution.

The user behavior that cable TV providers fear most – cord-cutting – is projected to accelerate over the next five years. eMarketer estimates that by 2021, over 81 million U.S. consumers will have either cut their cords or never signed up for one in the first place. Cord-cutters are transforming into OTT subscribers.

The future of video is here and evolving. OTT streaming video is how video content is now shared, viewed, and monetized. OTT has emerged as the new generation of TV — driven by the ever-expanding array of connected apps and devices, the rapid pace of tech, and an insatiable demand for new content.

The pace of digital disruption that is transforming the TV industry is increasing day by day.

Savvy advertisers and media companies are following the mounting OTT audience growth. Today, OTT delivers the best of TV with the capability to precisely target consumers down to the local level and use demographic and psychographic factors.

 

“One trend that’s certain this year is that TV is quickly adopting digital methods. We see increasing collaboration with advertisers and media companies quarter over quarter. We are investing our resources into providing richer data, measurement capabilities, and new technologies to enhance the consumer experience via OTT digital advertising.”

Tiffany Flores, Senior Vice President, Ad Operations, ZypMedia

 

Local is the new global in OTT advertising.

At ZypMedia, we anticipate that distributing local or regional channels via OTT is going to be a significant trend this year. Cloud-based distribution solutions allow broadcasters to seamlessly create schedules and manage content rights, ensuring exceptional video quality via the internet and cloud.

Previously, advertising budgets in local markets would have gone to traditional advertising mediums like newspaper, radio, TV, direct mail, and out-of-home. Now small and medium businesses are finding the ability to advertise in places where the local broadcasters can not only offer the traditional mediums of reaching an audience, but also offer complementary digital products. Large media companies see the value OTT brings to today’s media mix and are beginning to offer OTT-specific advertising solutions.

 

“This growing trend benefits the entire ecosystem where consumers are getting exposed to relevant and engaging local advertisements versus viewing the same national brand advertisement over and over again.“

Aman Sareen, Co-Founder and CEO, ZypMedia

 

Digital products like OTT help reach the right target audience with a more personalized message down at the local level.

Viewers are far more likely to view the ads that relate to them more (i.e., local ads), resulting in higher ad demand. This has pushed more media station owners to double down on local ads.

 

“Local ads speak to local audiences. These audiences live and spend money close to the businesses they see ads for, making it easier for them to take action after seeing the ads.“

Karen Sowa, Director of Marketing, ZypMedia

 

The close touch provided via local digitals ads is a substantial opportunity for advertisers and media companies to use local targeting to increase awareness and interaction between the community and their businesses. This deeper connection has spurred campaign success that has pushed more media station owners to increase their focus on selling local OTT ads.  

For local advertisers looking to access cutting-edge marketing technology, ZypMedia promises the full package. We help large media companies with local outlets, like television and radio stations, plan and execute massive advertising campaigns.

 

It’s clear as we speed through 2018 and beyond that incredible things are happening in the OTT space. Stay tuned — it’s only getting better from here! 


Media companies have to be open to dynamic collaborations and partnerships. As video storytelling evolves alongside viewer consumption habits and technology, successful TV revenue models will be those that leverage the combined powers of linear and OTT and provide advertisers with relevant metrics to measure impact.

When you're ready to grow your OTT sales, we're here to help you accelerate your success!

SpotX has ranked ZypMedia as one of the top 5 DSPs to help it reach 18x year-over-year growth in advertiser dollars spent on OTT in 2017. We help professionals like you sell more over-the-top advertising every day.

You have questions about selling OTT advertising. We have answers. Learn more about how an OTT solution can support your business growth.

 

LEARN MORE

 

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Amrita Hemdev

Amrita is an inbound marketer. She studied marketing and project management at UC Berkeley and proceeded to work in a fast-paced, digital advertising tech startup, with a goal of increasing brand awareness. She is currently the Content Marketing Specialist at ZypMedia. Passionate about digital marketing and having five years of experience in this field, she also started her digital marketing and creative agency, Sociato, based in India.
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