By making linear channels available alongside VOD, broadcasters are giving viewers the best of both worlds.
The OTT industry is continuing to grow at an impressive speed, and demand for content is showing no signs of dwindling. This continued growth is hardly surprising given that consumers worldwide have engaged in cord-cutting en masse, rejecting traditional cable and broadcast linear TV in favour of OTT.
Since its beginning, OTT’s unique selling point has been that viewers can watch what they want, when they want. Fast forward to 2023, and this may well be changing as more and more linear channels become available online. What does this mean for the industry? Will linear OTT continue to grow in popularity so that it coexists alongside on-demand content, or is it more of a short-lived trend?
What’s driving the rise in popularity of linear OTT?
There are several factors at play that are all converging to cause linear channels to gain traction in the OTT space. In a battle to adapt their service provision to meet changing viewer needs, broadcasters and pay-TV operators are launching broadcaster video-on-demand (BVOD) services that provide branded linear channels alongside on-demand content. This availability of broadcast linear channels over the internet makes it possible for consumers to watch their favourite shows when they are first aired, wherever the viewer may be at the time.
Additionally, as consumers have responded to financial pressures over the last year by reducing the number of streaming services they subscribe to, free streaming services such as FAST and AVOD have both grown in appeal.
There has also been an increase in demand for niche content, and this is helping to fuel the growth of linear OTT. There are a growing number of FAST channels delivering a diverse range of content focused on interests such as classic cars, gardening, and food and drink, as well as genres such as real crime and documentary. Linear OTT also presents a great opportunity for broadcasters and content owners to monetise their content by dedicating a linear channel to a specific show such as Friends or Baywatch.
Why is linear TV still relevant in the streaming age?
Although traditional linear TV’s viewership is in decline overall, it still has a substantial audience and there are many viewers, particularly older generations, who have not fully embraced VOD. Linear OTT channels may well appeal to those viewers in a way that VOD does not. So by making content available in linear format, OTT service providers are extending their reach and appealing to a wider audience.
There’s no doubt that linear TV offers something that VOD simply cannot, in that it provides the kind of laid-back, undemanding viewing that you only get when you switch the TV on and let the schedule run. Additionally, linear is still the format of choice for sports and other live events because viewers naturally want to watch live events in real time. Watching a match on-demand after the event just doesn’t have the same appeal.
Linear OTT also allows highly targeted advertising, so it is attractive to advertisers and broadcasters alike. Unlike linear TV broadcast over satellite, cable or digital, where ad targeting is based on general factors like time slots, programme categories and demographics, OTT services collect and analyse huge volumes of user data so they are able to deliver highly targeted advertising specific to the user.
Will linear OTT coexist alongside VOD?
Viewers naturally want choice over how they watch content, and by providing both linear and on-demand content as a streamed service, broadcasters and video services are giving viewers freedom of choice. Broadcasters can personalise linear OTT channels to enhance user experience, and when done well, this improves engagement, which in turn leads to increased ad revenue.
On-demand and linear each have their strengths and weaknesses, and by making linear channels available alongside VOD, broadcasters are giving viewers the best of both worlds. This is also highly convenient to viewers, so we may even attract some viewers who have already cut the cord. There is still a place for linear TV in the age of OTT, and even though on-demand will likely continue to be the preferred mode of watching for OTT fans, I expect that we’ll see linear OTT grow to coexist in harmony alongside it.
By Gatis Gailis, CEO of Veset.