Unlocking the ‘superpower’ of personalisation is key to OTT success in 2023

Trusty remote control in one hand, bucket of delectable popcorn in the other, the avid TV viewer settles comfortably into his favourite armchair and begins scrolling through the multitude of channels available for his viewing. Meet the Couch Potato, one of the most culturally-defining symbols of “television watching” as we knew it in the halcyon days of pay-TV.

Today, while viewers continue to be drawn to compelling content, it is increasingly unlikely they are doing so from the faux perpetuity of their couch. Nor are they likely to be drawn in by a scattergun approach that succeeded with the couch potato.

With the latter, content owners offered a wide range of content to the same audience group. After all, with so many channels to choose from, surely there is something for everyone, right?

Today, content is proliferating at an exponential rate and is being consumed on significantly more platforms and devices, in turn creating increasingly personalised streaming experiences. Personalisation will grow in 2023 as data analytics tools get more sophisticated and over-the-top (OTT) service providers learn what motivates their viewers, says Applicaster in a new report that examines the top OTT trends to watch in 2023. According to Applicaster, successful platforms will provide targeted recommendations and curated content to customers, maximise omnichannel engagement campaigns, and offer personalised onboarding.

Before they can do so however, they will need to gain a ‘super power’ to gain business success in 2023.

OTT 2023 buzzword

While content census was already available during the age of the Couch Potato, and was significantly improved when the digital set-up box was introduced, those efforts to understand viewers are arguably rudimentary, compared to what is available today. According to Applicaster, advancements in AI, blockchain technology, as well as data storage and computing capabilities, have made OTT data analytics the key for operators to guide the most effective marketing strategies and business decisions in 2023. In essence, data will be a game changer, as Ido Hadari, CEO of Applicaster, described, “Data is more than a trend. It’s an industry evolution.”

“In an increasingly crowded and competitive OTT environment, clever data collection and analysis capabilities are a ‘super power’ — insights into how users are interacting with platforms and content are becoming critical for OTT providers to effectively drive engagement, market share, and monetisation.”

Besides content, data will also allow operators to create hybrid monetisation models, including pushing more personalised ad strategies through the increasingly popular advertising videoon-demand (AVoD) model. As AsiaPacific Broadcasting+’s Loewe Tan recently highlighted, more streaming services are considering the AVoD model as a viable and meaningful source of revenue, including Netflix. In fact, the streaming platform’s CFO, Spencer Neumann, expects ad business to represent 10% of Netflix’s revenues, or US$3 billion, in the not-too-distant future.

Neumann said, “It’s a multi-year path. We’re not going to be larger than Hulu in year one, but hopefully over the next several years, we can be at least as large.

“We wouldn’t be getting into this [ad] business… if it couldn’t be a meaningful portion of our business.”

Neumann’s optimism stems from the fact that Hulu, which only operates in the US, is operating a multi-billion $$$ ad business where half of their subscribers are on an ad-supported tier. Netflix’s AVoD offerings, on the other hand, is selling ads in multiple markets around the globe.

Another trend Applicaster identified is the increasing popularity of live sports streaming, which has proved to be a major disruptor in the pay-TV ecosystem.

In Singapore for example, pay-TV operator StarHub, having secured exclusive broadcast rights to the English Premier League (EPL) for the first time in 12 years in 2022, decided to make the EPL available to football fans to watch live matches on the StarHub TV+ OTT service. Speaking to APB+, Johan Buse, Chief, Consumer Business Group, StarHub, explained, “A trend we identified a few years back was timeand place-shifting, whereby customers want to playback shows they missed and stream content seamlessly from one device to another. “To meet this change in viewing habits, we embarked on our TV transformation journey in 2020 and became the first in Singapore to integrate OTT and linear into a single entertainment platform.”

With increasingly sophisticated devices and 5G creating an immersive viewing experience for sports fans on devices beyond the traditional TV set, sports streaming will continue to grow. The caveat, however, is creating viewer loyalty, which may prove to be a double-edged sword for operators.

Laura Tapias, VP, Americas & Iberia, Applicaster, highlighted, “Sports fans are loyal to teams, not broadcasters – they’ll alternate streaming services to watch live games. This makes sports content perfect for bringing in new users and finding ways to make them stay.”

With the sheer number of content available to consumers today, it might not come as a surprise if many are suffering from content fatigue. On the contrary, media research company WARC Media predicts Gen Zs consuming 13 hours of media daily in 2023, spending at least 40 minutes on each channel. This includes not only OTT services, but also podcasts, music streaming platforms, and more.

WARC Media also noted that 16-24 Gen Zs globally consume more audio content per day than all forms of TV viewing combined.

To address these new viewing habits, Applicaster advised OTT platforms to meet Gen Z where they are to keep them engaged. This includes plugging into social media trends, adopting cross device strategies, and recommending more personalised content and advertising.

When it comes to content and Gen Zs, the short-form video hosting platform TikTok comes readily to mind. Besides the fact that TikTok has 1.2 billion monthly active users (as of March 2022), approximately 43% of its global audience is between 18 and 24 years old, fed on a daily diet of short-form content specially curated to suit the preferences of individual users.

If Gen Zs are spending more than half of their waking time consuming content, short-form content could offer a key path to reach target audiences, as many content platforms are beginning to acknowledge.

In 2021, YouTube introduced YouTube Shorts, which hosts vertical videos at a maximum length of 60 seconds while Netflix introduced Fast Laughs in 2022, a short-form video feature.

Besides using short-form content to appeal to viewers, Applicaster also expects more OTT bundling announcements to be made in 2023. Mergers such as that of HBO Max and Discovery+, says Applicaster, will help to combat churn by offering consumers options that match their budgets and reduce subscription fatigue. Tapias added, “Streaming users face two big challenges: the amount of apps their devices can host, and the amount they spend per month. The solution to the first is aggregation, the solution to the second is bundling. Both are equipped to fight streaming’s worst enemy — churn.” Clearly, operators today are facing more challenges than their counterparts or themselves did in bringing content to the passive viewer that was the Couch Potato. However, despite the evolution in viewing habits, viewers are still likely to levitate towards compelling content – if only operators can deliver the right content at the right time to the right devices, and at an acceptable price point.