Oh what a week it was. Not one, but two major announcements, neither unexpected, but still pretty newsworthy. So much for the summer doldrums.
1. Disney Launches Two OTT Apps
While full details are not yet available, Disney announced that they were going to launch two OTT apps, one for ESPN and one for Disney Channel. The ESPN app will have NHL and MLB games, but not NFL or NBA. Details were fairly sketchy beyond that. The Disney app will feature original programming plus movies from Disney’s catalog that they are pulling from Netflix (or, more accurately, not renewing.)
Why It Matters
Disney’s play is all about data. As we noted the other week, ESPNs recent troubles are due more to cord shaving than to people specifically looking to get rid of ESPN. The more data Disney has on their customers—and the new app will give them names, phone numbers, email addresses, credit card numbers and IP addresses—the easier it is to tailor advertising to them, to program for them and to promote new shows to them as well. Disney can take their learnings from their OTT apps and use them on their traditional distribution channels as well, extrapolating user preferences and profiles to create more effective audience-based ad programs and make more informed programming decisions.
The other thing to note here is that this is not a slam dunk for Disney. At least not yet. We need to wait for more details to come out—pricing in particular—but consumers are being overwhelmed by the number of OTT apps and are quickly figuring out that the sum of all those apps quickly approaches that of their cable bill. One likely reaction is an increase in churn—viewers will subscribe for a month or two in order to binge a specific show and then sign off until something they really like is available again. That makes it tough for these apps to show any profit and also incentivizes them to keep trying to lure viewers back with new and better stunts.
Finally—something else we’ve been banging on about forever—the app based ecosystem lacks any kind of overriding program guide, a way to organize it and keep track of your shows and channels. Roku and other connected device manufacturers have been taking steps to introduce this sort of feature on their devices, but people often have different devices on different TVs and may just use the smart TV interface on others. In other words, there’s got to be a better way.
What You Need To Do About It
If you’re an MVPD, this could be your golden ticket: there’s no reason you can’t aggregate some of these apps and start selling bundles along with broadband. Your main goal in selling pay-TV has always been to create stickiness for your other services, broadband in particular. If you bundle up subscription and ad-supported apps, provide some sort of overriding interface for them, put them on a white labeled Roku stick and sell them along with broadband, that should put you head and shoulders above your competitors.
If you’re a network and you don’t have an OTT app yet… WTF? The data alone is worth every penny you’ll spend building and marketing it.
If you’re an advertiser… there’s a lot of opportunity for you, both for branded content plays and for traditional interruptive advertising. It’s a way to experiment with audience-based buying and to see what happens if you really target those messages you send to your customers.
2. Facebook Launches Its “Watch” Video Feature
Meanwhile, Facebook stole much of Disney’s thunder by announcing the launch of its new “Watch” feature. Watch will be home to dozens of short-form video series, seemingly all non-fiction. The initial crop includes some very familiar, Boomer-and-X friendly names like NASA, the NBA, National Geographic and Billboard.
The series will all have their own Pages on Facebook and fans will see updates of new episodes in their News Feeds from series they’ve “liked.”
OTOH, as we pointed out, Facebook’s internal search system is less than optimal (that’s being kind) and unless they do something to fix it, we predict a whole lot of frustrated would-be viewers. And, as Jason Damata noted, getting Facebook users to care about video series is not the walk in the part Team Zuck is making it out to be—there are a lot of challenges to getting viewers to adopt a whole new behavior pattern for the app.
Why It Matters
As Delmondo founder Nick Cicero pointed out, the big news from Facebook’s announcement is also around data, as Watch will have census level ratings for its shows and Facebook will also have a world of data on what these viewers like, where they live, where they’ve vacationed and who their friends are. That should, as you might imagine, prove incredibly valuable to advertisers who are looking to target their messages to specific audiences.
What You Need To Do About It
If you’re an MVPD, you need to start thinking about adding short-form video to your offering, maybe even partnering with Facebook. Short form will not compete with long form, but for viewers on mobile, a two-minute video might be just the ticket and all it’s going to cost you is server space.
If you’re a network, there’s not much to worry about from Facebook’s short form videos—viewers don’t see it as competitive with your product, though it may steal some of their limited attention span. Facebook’s upcoming long-form channel is more of a challenge to networks, though we see it as a rising tide lifts all boats type situation—Facebook will be yet another network making quality content, with the added bonus of vast amounts of data. (SEE ALSO: Netflix, Amazon.)
If you’re an advertiser, you want to jump on this ship right away. Being able to gain all those insights about your audience—and to track the actions they take after seeing your ads—makes this a no-brainer. The value of what you’ll learn is going to be far greater than whatever you wind up spending on ad placement.