STEPHEN BACH: A Real OTT Opportunity for the Clip Guys

Exciting OTT ad dollars mean there's new opportunity for clip media companies

This post was originally published on Medium.

I was an OTT skeptic.

I very clearly remember Steve Charlier coming into our office to pitch a new OTT idea for aggregating local news. This was 2013, 2014? No way, I said. No one watches those apps.

By then I was an avid Apple TV user. During my post-kids-in-bed, dad-only TV time I only streamed content (even though we paid full freight for Verizon Fios), but I never veered from the first row of apps on my 2nd generation Apple TV.

Netflix, HBO Go, iTunes movies, Hulu… OTT made sense to me for lean-back, relax, and binge programming. Every other app seemed like a novelty… and I’m pretty sure the content owners sitting in the third and fourth row of Apple TV’s Home screen would have agreed. It was a marketing move. No one was actually watching.

My work at the time was leading biz dev for a big video distribution platform — I lived in the world of short-form VOD, licensing content (mostly news) from hundreds of providers. Desktop, mobile web and apps made sense to me… I just didn’t understand the OTT opportunity for all the clips I was licensing. Why would I — as a user — go to a content owner’s specific app, browse for videos, click play, and sit through an ad? I couldn’t see this generating enough volume to appeal to advertisers.

Fast forward 4 years or so.

I still pay full freight for cable — you can consider me the opposite of a cord-cutter… I keep layering on the subscriptions — but now I personally only watch on Apple TV 4K and Roku. The cable package simply lets me log in to stream on my devices. I consume CNN entirely on the terrific CNNgo app. I watch SportsCenter on ESPN’s app. Fox Sports Go gets me NFL on Sundays and all the YES games and Yankees highlights.

Yes — that’s mostly live programming — and still sort of a lean-back experience. But over the last two years, we’ve witnessed the introduction of a new type of presentation — short-form clips bundled together to create a channel that looks like “TV.” There’s even a guide which resembles what you get on your Fios or Xfinity set top box.

pluto ott

Pluto’s cable-like guide.

Pluto and Xumo have emerged as leaders here. The Roku Channel — which features content from ABC News, Cheddar and Newsy — is now the fifth-most popular app on Roku, according to Digiday. Amazon is rumored to be developing a free, ad-supported app.

These are now real revenue generators for the clips media companies have been creating for their own Web sites, YouTube, and other platforms.

These apps often string short-form content together in a way such that every few clips, there’s a block of ads… just like TV. And the ads take over the whole TV (hello viewability!) and can’t be skipped (video completion rate!). In other words, advertisers like this… there’s money here! And now the volume is catching up to the demand.

I saw a great presentation at DMEXCO by Mark Zagorski, the CEO of Telaria, where he said the ad-supported video spend on connected devices in the US jumped from $4.7B in 2017 to $8.2B in 2018… and they’re projecting $13.3B in 2019.

I have a pretty non-scientific gauge for whether these things are going to work… do I personally want or need to use these apps in my free time? I’m a fairly active media consumer but certainly not a bleeding edge technophile. In many cases, the answer is no (sorry Go90, Vessel). But in this case, I’m actually watching these apps… and it’s not just me!

Pluto is said to have 10M active users, and Xumo’s viewership grew by 325 percent over the past year.

Content owners sitting on a library of short form videos now have a real opportunity. OTT ad dollars are not just for the long-formers or live guys any more.

Vemba <br>is Hiring!

is Hiring!

Want to join our talented team to lead the industry in video distribution? Apply now!

Need support? <br>We’re here for you!

Need support?
We’re here for you!

We’re committed to solving problems and being there for our partners. Reach out any time.

Schedule a Demo