Across the globe, the OTT market continues to grow significantly and there’s still opportunities for growth within specific segments. Whilst TV advertising income declined by 7%, online audiovisual revenues grew by 25% year on year. Earlier this year, Ofcom reported that TV streaming services overtook pay TV for the first time in the UK. In the U.S, 59.5 million homes used OTT services in April – an increase of 15% year-on-year, according to comScore.
Cheaper prices might offer OTT streaming services a competitive advantage, but one of the main drivers of subscription is the access to unique and original content.
To offer a more in depth look and explore the opportunities in OTT, the MVNOs Series team caught up with Matt Jones CEO at OVO. In this interview we discuss how OTT is impacting MVNOs, whether telcos should invest in content production or focus on partnerships with content providers, and OVO’s approach to unique content.
What the expansion of OTT means for MVNOs? Should they invest in content production or should they rather partner with content providers?
With OTT disrupting the broadcast value chain we saw the opportunity to create a purpose-built media-telco. OTT has created fragmentation and ferocity with content owners reaching directly to subscribers bypassing aggregators and traditional broadcast networks.
Traditional broadcasters are acutely aware of this trend, and are working hard to diversify their channels beyond the TV set to satisfy and keep audiences. But beyond the major global players, pure OTT platforms working on low margins should be worried too. They have no alternative revenue streams to offset the rising cost of acquiring rights and their business models are dependent on acquisition or production of content.
As a purpose-built media-telco, we’ve created multiple revenue streams leveraging the best of entertainment and the best of telco, while avoiding the baggage from each incumbent industry.
What are benefits for MVNOs who decide to approach this opportunity?
MVNOs are uniquely placed to capture the attention of audiences migrating away from traditional broadcasting. MVNOs have well-known brands, committed customers and higher ARPU services. Most importantly, we have something that broadcast and OTT players don’t have straight away; we’ve got first-party data, an understanding of the whole household and existing relationships with customers that give us the need to speak with them regularly.
We’re also the provider of the basic commodity at the heart of modern broadcasting and OTT: data. That makes MVNOs uniquely placed to create genuine sustainable value beyond simple access to content. This unlocks an enormous prospect base for marketing, improves customer retention and gives our telco customers something to love beyond a good mobile deal. These benefits translate to ARPU and margin improvement while also opening up PPV and subscription revenues and advertising revenue streams.
Should Telcos invest in content production or should they rather partner with content providers?
We do both. Particularly when it comes to partners that don’t have an established content product, we’ll produce it ourselves – which gives us the ability to create content that is of a quality the fans want and keeps them coming back.
In other cases, it will make more sense to provide the platform for third-party content. With our international sport properties for example, we’re taking content from overseas and making it available to local audiences.
Our philosophy is that the most important consideration in terms of who produces the content, is that the product is of a quality that will keep attracting fans.
How do you find something that is incredibly unique and also valuable?
The one thing we look for is avidity. A sport or entertainment property that has an avid fan base is always going to catch our attention. The opportunity for OVO is, avidity does not correlate with mainstream media attention in this country. Drag racing is an excellent example; drag racing fans watch by the millions, but the sport hasn’t been broadcast live on TV since the 1990’s.
We aim to be everything to somebody, rather than just something to everybody. This is particularly true when looking at our focus on sports with well-developed grass roots participation right through to international competition. That’s important in broadcast because it pays homage to fans giving them pride in their participation and making their heroes accessible.
What new types of wholesale engagement can MVNOs develop with the network provider?
Our wholesale partner, Optus is a vital part of our ecosystem. Without its reliability and approach to partnering, there would be very little difference in the telco services provided in Australia.
Optus plays an active role in our business. It’s a closer relationship across all aspects of wholesale from ground zero service provisioning through to tech ops and all the way up through the executive team.
This allows us to design collaboratively using OVO’s unique purpose as the guideline for all product development. For OVO, a big part of that is data.
For example, with Optus’s help, we’ve been able to be first-to-market with a plan designed specifically for tweens and teens, and we’ve successfully launched mobile broadband as a legitimate alternative to fixed internet for millennial audiences and specifically sports fans.
Who are you looking forward to meeting at the MVNOs Asia 2018?
We’re really interested in talking to other MVNOs that have and/or are considering bridging media and telco, or have had success with media savvy audiences in their respective markets.
Our entire business has been constructed as a virtual platform that can be licensed to other operators globally. We’re open to talking to anyone that wants to learn about our AI-driven SDK and capability around media, and how that works in conjunction with our CRM and billing systems.
Matt Jones is an industry disruptor, launching the first of its kind Media and Telco brand OVO Mobile in 2015, Matt is the driving force behind convergence of new media & telco – by bringing together Telecommunications with Media Rights and digital broadcast for mass distribution. As OVO CEO, Matt was nominated for Start-Up Executive of the Year at the CEO Magazine Awards 2017 and was awarded runner-up. The Award recognises the achievements of leaders and professionals, and the contributions they have made to their companies across industry-specific categories. Matt lives on the northern beaches of Sydney with his wife Mel and daughters Charlotte and Lucy. Meet with Matt Jones at the MVNOs Series events – including the MVNOs World Congress and MVNOs Asia.