All eyes on OTT content in 2018, as per DLA Piper report

Over the top (OTT) content is emerging as the main growth area for media companies in the Middle East and beyond, according to a new report – ‘International Media Sector Trends 2018’ – by the law firm, DLA Piper.

The report, based on an international survey of 200 in-house counsel and senior executives and a series of interviews, showed 82 per cent believe monetising content through over-the-top (OTT) distribution is a major growth area for their business.

By contrast, other developments, such as virtual and augmented reality, will be slower to affect mainstream media and entertainment. Only 4 per cent of those surveyed felt this would be a significant driver of advertising revenue in 2020, thanks to factors such as consumer hesitation and inadequate content offerings.

The DLA Piper report comes at a time when international media companies are announcing record levels of investment into online content, ranging from concept to production, as consumers’ growing appetite for viewing media on-demand shows no sign of abating.

25 per cent said that they expected OTT to drive the majority of their content views in 2018, a sharp increase on the 11 per cent of companies who said that it was a majority driver of content views for 2017. Nearly two thirds (63 per cent) stated that of all OTT models, Subscription Video on Demand has the greatest revenue potential for their business.

The development of targeted OTT content will be supported by the rise of the internet-of-things (IOT), according to the report. Three quarters (73 per cent) of respondents said data collected via the IOT is already enabling better targeting and production of content, with a further third stating that it is enabling more targeted subscription income.

The potential for monetising on OTT content is not limited to new market entrants. The report highlights that broadcasters and traditional players can easily capture a share of the market by leveraging their recognised brand and providing OTT content to consumers across a number of jurisdictions outside their home market.

Jamie Ryder, Media, Sports and Entertainment Lead, Middle East, “The findings of the overall report broadly reflect the changes we are seeing in the Middle Eastern market. The shift to OTT is a result of consumer demand; people want the content they want, when they want it, and how they want it, and original scepticism around whether people would consume long form content on their mobiles has long been dispelled. There are two standout trends: firstly the growth of OTT providers, with a number of new market entrants offering standalone subscription services. Secondly there’s a shift in the attitude of traditional pay TV broadcasters, who previously saw their OTT offering as an extension of an existing subscription or a “value add”. Now, the trend is moving towards those pay TV providers offering their own internet only services and subscriptions. Looking ahead, there will be no less demand for content in the coming 12 months and as there are so many competing entities for those rights now, it seems likely that competition will drive the value of those rights up. In addition, we expect to see more rights holders launching their own direct to consumer models.”