For a new business that most media companies see as an opportunity, the over-the-top market already has a problem, according to a new report from Accenture.
Accenture’s new report, Reshape to Relevance, finds that as technology gives consumers more choice, being relevant is of paramount importance, and yet, the global OTT has “a relevance problem,” the consultant said.
In a survey, Accenture found that 50% of video subscribers said they believe they’re paying for at least some content they don’t care about.
“However, people will still pay for the right content. True, subscription TV is showing signs of erosion both in use of bundled services and viewing time, but adoption of subscription-video-on-demand (SVOD) services is growing, particularly among younger consumers,” the report said. “With low-cost bundled SVOD services like Netflix available in the market, aggregators need to become smarter about their bundling value to consumer.”
Accenture’s study found that 30% of consumers are willing to pay to remove ads from their video subscription services, which is less than the 38% reported last year.
Younger viewers are more tolerant of TV ads, which implies that a future ad market could be an opportunity for OTT video, and not a threat, the report said.
“Taken together, these are strong indicators of both the importance of ad-supported models and the necessity of reimagining ad placement for digital OTT content. Companies should also explore pay-per-view (PPV). Consumer interest in PPV is four times actual usage and that presents a seriously untapped opportunity,” according to the report.
Accenture’s study found that global SVOD adoption among online consumers already paying for video services has grown to 52% from 44% last year. It also found that 44% of global video consumers are willing to share their personal data in exchange for something in return.
In addition to OTT TV, Accenture looked at other categories affected by technology including digital voice assistants and extended reality.
How important is relevance? Accenture reports its research reveals that in the U.S., companies lost $1 trillion in potential revenue by not being relevant enough and losing business to competitors.
To Accenture, being relevant means increasing the value a consumer perceives in a product so they’ll want to buy it for their home.
“That’s the challenge facing extended reality technologies right now. In the end, it might mean rethinking a business model to give people what they really want, and that’s a big issue today for over-the-top (OTT) video providers,” according to the report.
To appeal to consumers as their preferences are changing with new technology, products and services need to be:
- Intelligent, flexible and scalable to consumers’ needs
- Able to tightly integrate with other products and services
- Highly trustworthy
- Available to consumers, when and where they need them
- Optimized for consumer value