How OTT Players Harness Emerging Technology To Enhance Customer Experience

Content viewers continue to cut the cord at a phenomenal rate. With year-on-year growth at around 300%, the pace of this trend surpasses all predictions. And while linear TV subscriptions continue to decline, IPTV is yet to tap its full market potential. Despite this, most of content investment today comes from over-the-top (OTT) providers.

Over the years, the OTT narrative has undergone somewhat of a transformation. While the initial marketing emphasis was on price, the value of this differentiation tapered off as offerings became increasingly commoditized. The emphasis then shifted to distribution, followed by content. Here too, as differences between competitors became less pronounced, the focus shifted again: this time, to customer experience.

Today, even as OTTs compete to source the best premium content and improve distribution, experience remains the main differentiator – i.e., how content is consumed rather than the nature of the content itself. For an example, we only need to look at a typical household, which may consist of several family members, each with their own profile and demanding their own, individual personalized experience.

As software companies, OTTs hold a significant advantage in their ability to deliver such an experience. Without legacy architectural and cultural constraints, OTTs can adopt and unleash the power of emerging technology with relative ease. The following are some of the technology practices that OTTs leverage to create a customer experience that puts them at an advantage in the race to attract and retain customers.

#1 Data, the demi-god

The OTT narrative is about where you collect data, how you analyze it and how you use the insights gained to deliver personalization. Taking this a step further, it’s also about using the information to influence consumers’ subconscious viewing (and therefore purchasing) choices. Such analysis is conducted using three main tools: machine learning, mathematics (algorithms) and human creativity. This then enables specific content to be suggested to individual users based on their watching habits. It can even extend to the images or icons displayed to accompany each piece of content.

Accuracy too is improving. Behavioral experiments conducted on consumers help improve the algorithms that OTTs leverage to predict user choices and make personalized content recommendations (such as what the user might watch next, what prompts them to award a “like” and what drives them to binge watch). Such knowledge is supplemented by the work conducted by teams of talented individuals who categorize content and apply tags to create specific genres. The result is an enhanced viewing experience, augmented further by the ability to access on-screen annotations about the actors or content currently on the screen, with hyperlinks leading to more information.

#2 Content watching is personal

While families once gathered together to watch TV, content viewing has morphed into a largely private affair, where the content provider meets the individual user at the place, time and device of their choosing. A quality viewing experience is assured via a myriad of emerging technologies that enable omni-streaming, which include some very sophisticated tools that compress content and deliver it at a level of quality appropriate to the specific device being used.

The power of the cloud is another enabler for seamless content delivery to any location and device worldwide, with its ability to support the deployment of thousands of servers and terabytes of content storage within minutes. Moreover, with cloud elasticity, spikes in usage become transparent to users, while also allowing OTTs to keep a lid on costs by releasing resources when traffic is lower. As an example of cloud elasticity, Netflix recently successfully supported a record 45 million views of new release, Bird Box within only seven days.

#3 The software formula

Adapting to rapid technology change is part and parcel of the OTT mindset, whose business strategies typically focus on remaining nimble and agile, a hunger to experiment, and the ability to adapt their ecosystems accordingly. This explains why most of these organizations have embraced open source, which itself is agile and constantly being updated. Indeed, open source provides most of the software behind the data analytics, content encoding, data persistence, reliability and security upon which OTTs rely. The result is a competitive advantage that allows these players to make changes on the fly to deliver content in accordance with rapidly changing customer demands.

At the same time, OTTs are deploying many other technologies that support platform availability for seamless content delivery, channel of choice for payments, newer revenue models and disaster recovery mechanisms. Furthermore, with the emergence of 5G, bandwidth slicing will enable delivery of data speeds up to 50 to 100 times faster than today, something that will fundamentally change the way customers consume content.

Beyond technology

Finally, OTTs’ R&D resources include some of the most creative people on the planet, ranging from design experts to anthropologists. These experts conduct detailed analyses of the way users interact with their systems and how these interactions – such as visual appeal, ease and simplicity of use, attention grabbing cues and ways to make users stay longer – can be improved.

What about the incumbents?

While traditional content providers may perceive OTTs as a threat, many opportunities exist for them too, to jump on the OTT bandwagon while leveraging their existing strengths – primarily their customer base and the tremendous stores of data. The bottom line is that the market is huge, with plenty of room to offer the innovation and value that consumers seek.