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      At the top of the game – building OTT assets

      Vibhuti Arora by Vibhuti Arora
      May 5, 2017
      in Interviews, Roundtables
      ShareTweetPostEmail

      BroadcastPro ME recently hosted a roundtable discussion in association with video security solutions company Verimatrix on ‘Enhancing Competitiveness for Video Services in the Middle East’. We bring you a detailed report. High internet penetration, a proliferation of smart devices and a large proportion of the population under the age of 30 are some of the […]

      The BroadcastPro ME roundtable with Verimatrix was held on the first day of CABSAT 2017.

      BroadcastPro ME recently hosted a roundtable discussion in association with video security solutions company Verimatrix on ‘Enhancing Competitiveness for Video Services in the Middle East’. We bring you a detailed report.

      High internet penetration, a proliferation of smart devices and a large proportion of the population under the age of 30 are some of the factors that have led to a revolution of sorts for OTT in the MENA region. As the market gets more competitive, with a growing number of global and homegrown services entering the region, it is throwing open a whole new world of opportunities for both operators and consumers.

      BroadcastPro Middle East recently hosted a roundtable discussion in association with video security solutions company Verimatrix on ‘Enhancing Competitiveness for Video Services in the Middle East’. The roundtable addressed some of the key issues facing OTT and pay TV companies, such as creating robust digital models to provide quality content to viewers, and the role of technology and services in providing better audience engagement and optimally monetising and safeguarding OTT assets.

      The discussion was moderated by Steve Christian, Senior Vice President, Marketing at Verimatrix, with a panel of C-level executives from leading pay-TV and OTT services in the region.

      The speakers were Samer Geissah, Vice President – Innovation at du;

      Dr Raed Khusheim, CEO of Selevision; Neil Martin, Chief Commercial Officer, OSN; Marco Bonomi, Regional Vice President of Sales, International (EMEA & Asia) at Minerva Networks; Amine Lalami, Chief Commercial Officer at icflix; Roque Manuel Solabarrieta Chelech, COO, E-Vision; Danny Bates, CCO and Co-founder of Starz Play; Hisham Arafat, CEO of CMT Technologies; Amarjeet Panesar, Head of Broadcast and Information Technology, Econet Vision; and Nadine Samra, Head of Digital Business – Middle East at Zee Entertainment Enterprises Limited.

      Christian began by asking the panellists whether OTT, as a phenomenon, is additive or subtractive to the business of pay TV and existing linear services.

      “How do you see internet-delivered TV versus other modes of delivery?” he asked.

      The panellists were unanimous in their view of OTT being complementary to traditional pay TV, though with its own set of challenges. For starters, the amount of content available on the internet is, at times, overwhelming for a viewer and serves no purpose unless it is directed to the right viewers.

      E-Vision’s Roque Manuel Solabarrieta Chelech questioned: how does the consumer navigate the immense amount of content available on several OTT platforms?

      Hisham Arafat of CMT Technologies said it might be a good idea to integrate various OTT services and serve them on a common platform, which will simplify the process of content discovery and give the users what they want.

      “Telco operators should have open platforms where they can integrate apps such as Netflix, iclfix, beIN and so on. The operators should work towards bringing together all the brands and operate as cohesive units rather than competing with each other,” Arafat said.

      Panesar added that while all of the OTT platforms are important, and consumers should be given the choice to opt for what works best for them, collaborating on a single platform will be a good value proposition in the long run.

      “The overall cost will come down if networks join and collaborate,” he noted, adding that consumers want content at the cheapest price point.

      “They don’t care how it reaches them. Technology is only for enablers. We need the right business approach that works collaboratively instead of working in silos, which is the case presently. For a consumer, one single market works better. One platform offering a variety of content might be the answer. Just like a mall with various brands in one place, we need a common platform for content as well.”

      OSN’s Neil Martin queried: “Unlike linear TV, where you know what to expect from a certain channel, it’s a challenge to find content effectively on OTT platforms. For OTT providers to have an open library to make content searchable through a search repository might lead to an interesting dynamic.

      How do you then prioritise your search? If five people are offering the same thing, how do you choose one?”

      Panesar stepped in at this point to add that different service providers should not offer common content and compete with each other, but should be supplementary.

      “The platform is easy to manage. The real challenge will be in devising a business plan for monetising this content, because different content is priced differently and each owner has paid a different price for a certain type of content.”

      Martin seconded that and added: “The dollars we have invested may be 10 times more than others have. I want to make sure I get a return on my investment proportionately within the ecosystem. First, for individual customers – you create a functional perspective followed by a content discovery perspective. How they knit together; that’s a much more difficult conversation. There is a commercial overlay on top of what you want to do for customer experience.”

      Du’s Samer Geissah at this stage said that OTT is a big word, but for a consumer, it just means content, irrespective of whether it is delivered on OTT or linear channels.

      “Most studios are investing in original productions to differentiate their service,” he said, adding that it is eventually a customer’s decision to watch what they want and these decisions are often influenced by social media recommendations and what’s trending.

      He also added that mobile is no longer a leading platform.

      “The large connected screen is more popular. The question is how do you differentiate your content from the herd. It’s a business case, and to succeed, we need to partner with the right content as well as platform providers.”

      Martin pointed out that globally, pay TV traditionally was built on live sporting events and Hollywood movies.

      “One of the things that has happened in the last 10 years of OTT has been a change in the consumption patterns. People have moved to binge viewing on box sets, which was not available five or six years ago. The trend has now gravitated towards box sets for series. The other thing through OTT and also what the telcos have done is there is greater emphasis on an early window cycle for movies. The consequence of this is that people are more sensitive to how they spend their money and there is a preference for exclusive, premium content.”

      Martin further added that as a brand, OSN is associated with flexibility, better production value and exclusive premium content. It’s imperative for operators to have a good understanding of their customers, in order to service them better. He gave the example of Netflix reinventing itself by spending more money than Hollywood studios on original content.

      Panesar observed that as a marketer, cost is not a predominant vector, but for the consumer it is.

      “Consumers will spend on services that are affordable. The idea is to keep growing volumes.”

      He reiterated that collaboration is key to keeping the cost down and making services affordable to consumers.

      “Collaboration among platforms will bring the CDN cost down by 60-70%, which is a huge cut, and as a result of this, consumers will pay less, which in turn will convert into more subscriptions.”

      Amine Lalami of icflix shed light on how the streaming company takes decisions based on data gathered from users.

      “I think the biggest challenge is to offer the right content to the right people. Relevance is very important; consumers need to relate to the content they are being offered.”

      Quality of experience is yet another piece of the puzzle. And then there is the question of billing.

      “The fact remains that content will be your key differentiator. The secret lies in original productions, which no one has, and that’s applicable to any platform, not just OTT. While exclusive content creation is important, equally important is what kind of content will work in a specific market. That knowledge comes from data,” Lalami pointed out.

      Dr Raed Khusheim of Selevision said that telcos are not the only option for consumers. It is impossible for telcos to cater to everyone’s needs.

      “Telcos provide a platform and they are good at it. To cut down on the cost of CDN, a nano CDN might be the answer. We have tried it and it works just fine.”

      He emphasised the role of social media in content discovery, adding that Dubai is not a true representation of the MENA region, which is a very heterogenous territory.

      “Dubai has a huge range of content offerings and better infrastructure to deliver that to the end user. Not all MENA countries have that. Some MENA countries just introduced 4G. Owing to all these factors, FTA continues to dominate the region. Key FTA operators in the region acquire the best content and know what appeals to the viewers. Then we have a very strong community of YouTubers, and user-generated content is already making waves.”

      Christian asked whether YouTube is a competitor. Samra’s response was that YouTube is mostly associated with small nuggets of user-generated content, which in turn gives an edge to operators with premium content.

      “It will be challenging for YouTube to bring premium content into the fold. What may work for them, however, is to have a mix of user-generated and curated content with robust search engines, but there is an overwhelming amount of content out there,” she added.

      Panesar pointed out that YouTube has been a driver for better bandwidth and it is a very strong brand, but he doesn’t consider it competition. Lalami reiterated that content will be the key differentiator, while Martin said flexibility of viewing is important to win eyeballs.

      While great content and excellent user experience were key differentiators, how do operators combat illegitimate services, which are eating into their share of the business?

      “Offer content which is not available anywhere else before the pirates do, and there is a good chance of you getting the eyeballs,” Lalami said.

      Martin raised an important point here about publishing content before the pirates.

      “It is almost impossible to do that, so offer exclusive content and a great user experience to beat illegitimate services. OSN Ya Hala is our second most popular channel, which is mainly driven by high-quality original productions.”

      Geissah added that the ability to offer a better content window to popular content is what makes a better OTT experience. The idea is to get it out first.

      Martin mentioned yet another challenge pay TV operators often face is their relationship with telcos, which needs to improve to add value to the subscriber base.

      Lalami noted that the prepaid base makes up 95% for all operators. For an OTT company, it is a great value proposition to work with an operator that understands the market, has a large user base and controls the price.

      E-Vision’s Chelech then brought in the telco perspective, saying that this is a $1.5 trillion business.

      “Telcos invest billions in CAPEX most of the time in hard currency but earn in local currency, which makes it harder to balance the returns equation when substantial volatility exists in the currency market.”

      Geissah said that telcos need to play a bigger role in adding value to the products they distribute.

      “We need to do more than being mere pipes. With all the data, we have the wherewithal to offer the right content at the right price, bundling it or giving it for free. The secret to success lies in segmentation and micro-segmentation of the market, and how we package content.”

      Christian then drew the panel’s attention to retaining subscribers, given the high churn rates of OTT, and whether these churn rates are a cause for concern.

      Geissah said no one will own all types of content and a customer has loyalty only to content, not to any specific platform.

      Zee’s Samra noted that MENA consumers are ready for multiple OTT services, and pointed out that households already have multiple subscriptions.

      Martin said that having different business models, OTT services don’t regard churn rates as a deterrent to growth. There seems to be widespread acceptance among OTT companies about churn rates.

      “We should be cognisant of the fact that people will want to use different services at different times for different reasons.”

      Christian then directed the discussion towards big data, consumption models, device usage and patterns and piracy.

      Danny Bates, CCO and Co-founder of Starz Play, pointed out that big data analytics was a key driver for digital growth.

      “Data is the core of our business. We practically apply all of our big decisions based on big data. Our content buying decisions are based on our understanding of the market in terms of what the customers are watching, what they are downloading from legitimate and illegitimate sites, and what kind of content is most consumed on our site. Everything we do is data-driven, even our marketing campaigns. We start with two thousand to three thousand creatives, then keep the ones that work based on conversion rates.

      “We study the various channels that bring in customers and everything around them. When we launch a new app or portal, we study the data around their consumption and how it impacts customers. Do they explore more content or watch more content? Do they find more and disrupt to lower churn rates? These are some of the pertinent questions that big data answers for us.”

      Martin asked if a young company like Starz Play had enough data to assess churn rate and gauge whether a customer is a stayer or will dip in and dip out.

      Bates responded by saying that even as a young company, Starz Play had started making decisions around lifetime barriers.

      “We see consumption patterns of customers in the 30-day trial period and how they engage with the product. For instance, if data shows a customer is with 51% series viewing, the drive to retain is led in that direction.”

      He further added that the company is currently focused on its acquisition programme and hitting the figures for net growth.

      Martin revealed that OSN is also ramping up its data analytics.

      “We have universally connected set-top boxes and thousands of our customers use companion products such as OSN Go, so we have a lot of data from OTT and connected boxes which goes into our repository. We are going through a process to use that. With our new products launching soon, data will be integral to them.”

      Chelech agreed that E-Vision was also driven by data for all of their acquisition for TVOD.

      “We know which content is being consumed where. In fact, we tailored our buying strategy around big demand for series and kids content. The e-junior SVOD has revealed some fascinating results for us.”

      There was a consensus that demand for content is leaning towards series instead of movies. Samra commented that drama is leading content globally and that Arab viewers have traditionally consumed lots of series.

      Some of the other questions around content revolved around whether Arab viewers preferred subtitled or native Arabic content. Data gathering has shed light on what the customers are “actually doing on your platform”, Samra said, adding that the role of social media cannot be ignored in collecting data.

      “As a platform owner, we need to know to what extent social media drives the content discovery process and how recommendations work. All data sources should be integrated to have the real picture of consumption patterns.”

      Christian asked the panel if there were “limitations to the kind of data platforms can collect, and whether you need permissions from authorities”.

      Dr Khusheim said that while there was no restriction on how much data a platform can collect for their own research and analysis, they cannot publish any of that.

      Geissah said that platforms do not look for individual data records.

      “We look for trends, nationalities, viewing times, areas, to know where people are watching what.”

      Bonomi said that as a technology company, Minerva develops service management infrastructure for the delivery of connected entertainment. The tools and modules they provide are becoming more intelligent and helping operators with their decisions.

      “From a business and administration perspective, our platform will tell in advance which linear or on-demand assets the public will most likely prefer, to make sure that operators provide users with the right content at the right time. From a consumer perspective, we are making our user experience smarter. Artificial Intelligence will eventually become part of the platform and drive the UI rendering engine, thanks to advanced caching mechanisms.”

      He added that with devices becoming thinner and smaller, more intelligence is being offloaded to the cloud, unlike in the past when everything was on the set-top box.

      “A number of global players including Apple, Amazon, Google are now shipping their own devices: operators like du and Etisalat must now have applications for these platforms to deliver their content offerings in an effective way. Moreover, providers of on-demand content such as Netflix, Amazon, Google are now delivering linear offerings too. In this fast-moving environment, traditional on-premises solutions will be abandoned in favour of next generation, cloud-based, virtualised multi-tenant platforms, leveraging intelligent edge systems.”

      Christian asked the panel about trends in device consumption patterns and whether the big screen is still the place to go. He also asked about user preference for browser versus app experiences on devices.

      Geissah was quick to reply that the small screen is now mainly used for breaking news and updates, but the big screen drives most of the VOD traffic.

      “We work closely with smart TV manufacturers to put our clients on those devices. There are specific proprietary services such as Roku (which is not present in the Middle East), Fire and other boxes such as Xbox, PlayStation. Smart TVs are a big player in this domain.”

      Bates said that mobile plays an important part in signing up customers.

      “80% of the customers that we sign up for our service sign up on the mobile.

      You are online most of the time, so that’s where you see the advertisement and that’s where companies can engage with potential customers. We have also seen a surge in big screen viewing numbers, which is up to 70% via either Samsung or LG TVs or Sony PlayStation consoles. For us, Samsung is the predominant one with about 25% of viewing share, followed by LG, PlayStation and Xbox. The consumption of our content grew dramatically on Samsung since we started offering Starz Play as a preinstalled app. Even when people use tablets, they use AirPlay and Chromecast to watch content on the big screen.”

      He also added that services need to go on every device, as customers demand that. There is clearly more engagement with apps, as Bates noted that 60% of viewing on its service happens on the Starz Play app now.

      Samra added that the kind of content that goes on various devices also varies based on what demography or age- group is being targeted.

      “The consumption of kids’ content is higher on iPADs and tablets, while for other age groups, the video consumption we have seen was at least 75% on iOS and Android applications – 20% on desktop and 5% on connected TV applications.”

      Panesar pointed out that the high cost of data packages on mobile devices is a deterrent. Most of the consumption takes place on the big screen, because it is connected to uncapped broadband.

      Dr Khusheim observed that children and millennials tend to watch more on the mobile, while the older generation watches more on the larger screen for a better experience.

      “We offer free-to-air content on our hybrid set-top box, which can also stream live content. If you buy a HD or 4K movie, you need a big screen to watch it.”

      Bonomi said the MEA region still has a lot of legacy/non-smart TVs, which means most of the viewing happens via traditional set-top boxes or apps on consumer electronic devices.

      “We want to give operators the option to reuse their legacy infrastructure via native or browser-based clients for STBs, native applications for consumer electronic devices, mobiles, tablets and web-based clients for PC and Mac.

      Interoperability and intercommunication between all these devices will be key, thanks to smart/software-based remote controls and voice recognition.”

      Christian once again asked the panellists about piracy.

      Dr Khusheim gave the analogy of piracy in media being like bacteria.

      “It’s everywhere, and with better broadband speeds and improved infrastructure, even piracy is getting stronger. The more we fight it, people come up with more ingenious ways to sell content illegally. Live TV will beat piracy, but offline it’s not easy.”

      Bates said the best way to counter piracy was to improve your own product offering and build the numbers.

      “You can worry about fighting it or improve your own product to win more subscribers. Fight it with exclusive, better quality content.”

      Samra agreed that offering content no one else has and improving the user experience are the best tools to fight piracy.

      The panellists concurred that audiences in the MENA region are traditionally used to receiving free content, which makes it harder to fight piracy, as does the fact that piracy is often perpetuated by the younger generation.

      Arafat noted that while free content is a big draw towards piracy, non-availability of content on legitimate sites is also a factor. Panesar agreed that pirate sites are capitalising on this.

      As a telco, Geissah said, du has been trying ways to combat piracy by cracking down on illegal sites and VPNs.

      “In the UAE, using a VPN is illegal, and so is Dish TV. We intensify our anti-piracy drive during big sporting events and shut down sites that are streaming illegally. But that’s not enough, as people come up with different forms of piracy. Egyptian African Cup matches were being live streamed on Facebook and Periscope, and we couldn’t do anything about it, because those are legitimate sites.”

      Bates commented that despite piracy, his company has a good growth trajectory.

      Panesar said technologies such as watermarking are a good way to combat content theft.

      Bonomi said that operators, with government support, might have to look into innovative ways to counter piracy; he gave the example of Switzerland, where downloading torrents is perfectly legal.

      “Completely different business models might have to be in place to ensure nobody incurs losses.”

      The panellists acknowledged the importance of high-quality content, technology and social media to win over consumers in a fast-changing and highly competitive OTT environment. They also agreed that collaboration between platforms may be the key to profitability.

      Tags: DUE-VisionEconetEtisalaticlfixMinervaOSNOTTroundtableSelevisionSTARZ PlayVerimatrixZee

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