Meet the New Contenders for the OTT Content Crown

Yes, we are all familiar with the current face of online video, affectionately known as FANG: Facebook, Amazon, Netflix and Google/Youtube.

But there are some new contenders for the OTT crown coming…I’m talking Apple, Hulu, Vice, Snapchat and…. Yes, Facebook!

And that’s not even counting the big telecom and video platform operators who are aching to get into the game too, like Verizon. They are all craving a slice of the content cake too.

https://digiday.com/media/inside-verizons-struggle-build-digital-entertainment-business/

Everyone was pretty exciting to see Apple make their first big move (sorry “planet of the apps” ain’t it), and put their “money” where their mouth is - - last week’s announcement of the poaching of SPT’s two top TV execs means that what everyone suspected was going to eventually happened has well, happened: Apple is entering the TV biz in a big way. Why after all would Jamie Ehrlicht and Zack Van Amburg leave Sony at the top of their game? They must have serious commitments from Apple brass that yes, the company is going to dip into that US$200+ billion surplus of cash, and go for it.

https://variety.com/2017/digital/news/apple-zack-van-amburg-jamie-erlicht-video-1202468110/

To be sure, Apple has most of the elements that they will require to be successful in their new serious foray into television. They are resources rich, have a profile and leverage in the trade that is unparalleled, an incredibly powerful brand presence with consumers, and of course, a technology backbone and DNA that will lead the horses to water… But to make them horsies drink, Apple has to push some other buttons as well. First and foremost, they will need to have a very clear and viable plan for their entry. They will also need to extract value from the consumer - - yes, every one will give Apple TV Shows a look-in on the strength of “Apple” as a brand, as well as the powerful promotion and distribution they will no doubt leverage, but there needs to be a real value proposition for viewers and audience as well. There are just too many other entertainment and television and video options easily available to think that a few hot shows will see them through. Hell, they certainly will help, but that won’t be enough to compete for the limited entertainment dollars that people will have to spend on their media bundles. How will they bend the industry, and revise their business to redefine this market to suit them and their original production ambitions and plans? Who will they partner with when it comes to platforms (or will they go it alone)? Lot of questions, and the obvious scary one that’s overhangs always, did they enter the fray too late? The marriage of tech and content has always been an uneasy one with arguable results - - the most notable example in our industry is Sony Corp. and SPE. Most observers would say that the expected virtues of this tech/content marriage have never fully been realized. It’s tough enough that Apple is getting out of the gates later than everyone else, but then, is the game already stacked against them?

Look we’ve even got Hulu getting antsy - - while they cannot boast of anything near the global presence that the FANG gang possess today (although they are big in Japan), perhaps they have some ambitions to go that direction. At least they’ve been making some noise about how Hulu remain serious players in the big game of content spend, and won’t be outdone by Netflix and Amazon:

https://www.fiercecable.com/online-video/hulu-spending-as-much-as-amazon-original-series-development

A player that really strikes me as interesting is VICE. At this stage, they are a pure content play, but they are up and coming, and could even crash (at least a portion) of the FANG party. They are not an all-encompassing platform, nor are they a tech player at heart, nor do they have an e-commerce foundation to fall back on, but they are still pretty exciting, and who knows how they will be able to leverage their command of the content category of which they’ve become the Kings. Not only are they raising big amounts of capital now (without losing control of the company, by the way), but they have a very clear and unswerving positioning that is directed at a sharply defined audience. They are all about serious, gonzo journalism and news aimed at the (more aware) millennials, and they aim to become a big global brand. Surely, they must be feeling that a clear opportunity has arisen for Vice and Viceland since what the World needs now, is a little less CNN, and a whole lot less “fake news” online. I am not sure what Vice’s overall ambitions and objectives are beyond commanding the market when it comes to their particular category of content, so I will be keeping my eyes and ears open and hope to learn more. Clearly, at a supposed value of US$5.7 billion, there’s more than meets the eye… UPDATE: just read that Shane Smith has outlined his plans to create a global OTT platform, in the manner of Netflix, which delivers on demand programming and content directly to consumers. The capital recently raised from TPG will be deployed to build subscription streaming and video services. They're also going to make a hard push into scripted programming.

https://www.adweek.com/digital/vice-is-now-valued-at-5-7-billion-thanks-to-450-million-from-investment-firm-tpg/

And of course, there’s a legacy player who is making some smooth new moves…it’s the grand dame that puts the “F” into FANG, Facebook. They are pushing for a bigger overall piece of the overall US$70 billion TV advertising market. While they have done admirably by growing their share of this pie via their success with mobile, Facebook are now getting into the long form video business as a big part of their strategy.

 https://www.ft.com/content/2047563c-4bd6-11e7-a3f4-c742b9791d43

Here’s the question that is lurking in my mind: have we reached a point of saturation when it comes to Peak TV? Have we hit the actual peak, and are sliding down the other side? I certainly hope not: my livelihood and sanity depend on the demand for exciting original programming to continue growing across the globe! But it's hard not to stop and consider, that while there will remain a lot of OTT money pouring into more and more original programming in the near future, are we (the viewers) in danger of getting overwhelmed with the endless television choices we now have? After all, there’s been slight, unsteady industry reaction to the fact that Netflix is canceling some series (Sense 8, The Get Down) that everyone had thought were popular and perhaps were coming around for Season 3. While I don’t think there’s anything extraordinary or surprising that even Netflix also needs to follow the rules of market and consumer economics, it must have shaken up all of us in the television content business who were hoping against all sense that this “teat would ne'er go dry”.