Emerging OTT Players

A Forbes article found, dated Aug 24, 2018, 09:50 AM by Contributor Howard Homonoff

Which Emerging OTT Players Are Best Positioned For 'Connected TV' Success?

Insights on media disruption, business models and growth strategies

"The newly emerging OTT players have diverged distinctly among (at least) three different business models. Fubo TV is battling the existing giant (and skinny) bundle players with its “virtual multichannel video provider” or “vMVPD” service, depending upon a combination of subscriber fees and ad revenues. Other SVOD services such as Philo TV propose to be cable “supplements,” with a much smaller monthly subscriber payment but without high-cost programming such as live sports, news and major broadcast networks. And then we have the pure ad-supported video on demand (AVOD) apps such as Tubi, Xumo, and Pluto (all with the “TV” moniker attached) and the Roku Channel itself, although it says a lot that you can’t consider Roku “emerging” anymore." (Homonoff)

About the new kids on the block, Howard describes in the article:

"David Gandler, Founder and CEO of Fubo, describes his company one of the “super-premium” vMVPD services, facing “massive” competitors in AT&T (DirecTV Now), Dish (Sling TV), Sony (PlayStation Vue), Google (YouTube TV) and Hulu (Hulu Live, owned by Disney, Fox and Comcast). All of this is separate from other media giant efforts to go directly to consumers with more "a la carte" OTT offerings such as CBS All Access, HBO Now, and ESPN+. According to Gandler, his battlefield is a high-stakes environment and you’ve got to have a lot of money (Fubo has raised $150 million to date), big plans to spend it on technology, and a vision for a global future (not surprisingly, he makes the case that Fubo possesses all three). Its content strategy is sports-first, and Fubo was the only OTT service to stream the recent World Cup in 4K. It has also added an expanded list of classic news and entertainment networks (just this week Fubo added Turner’s networks to its stable).

Fubo is going right at the base of today’s multichannel video customers, with 75% of its subscribers being cord-cutters. Its audience is 80% male 25-54, with the bonus for advertisers of sporting (no pun intended) 70% of its users with household incomes over $125,000. As Gandler points out, he’s seeking a big subscriber payoff: ARPU (average revenue per user) of $600 to $650 per year, versus streaming services such as Spotify that expect an ARPU more like $45-50 per user. High-stakes indeed.

If Fubo seeks to be the center of the sports streaming world, Philo is running about as far from that as they can. Philo’s CEO Andrew McCollum (billed as one of the co-founders of Facebook) sees the high cost of live sports programming as “the number one reason people turn away from the cable bundle.” Philo, like Fubo, is building its business model with a mix of subscriber and advertiser fees, a dual revenue stream that McCollum sees as essential to the content distribution future. But Philo is a $16/month subscription compared to the sports-rich Fubo at a starting point of $44.99.

McCollum sees a fundamental issue with TV today: “People love TV – it’s incredibly popular – but it’s an incredibly mediocre experience.” Philo sees itself not as a replacement vehicle for cable, but perhaps as part of a bundle of other services, and recently executed a deal with a group of small cable operators (the National Cable Television Cooperative) to promote Philo to its users. McCollum is focused on providing Philo subscribers with what McCollum calls “TV superpowers” of recording, starting a show at the beginning, etc., while creating better content discovery tools (still a challenge even for Netflix) and adding social aspects to the experience (interacting with friends on the app while watching). It’s innovation as table stakes." (Homonoff)

Read more what Howard Homonoff writes about  Xumo and Tubi <here>

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