Ever since Netflix became a household name, its success set the ball rolling for many businesses hoping to find their own treasure island in the ever-expanding OTT financial market. Honestly, there has never been a better time than today to launch an OTT service. Not only has the world already been laid with ultra-fast broadband networks, but with 5G mobile technology around the corner, video streaming quality is only going to get better. Of course, this looks like the preface to a fairy tale because reality is not all butterflies and rainbows. While it’s tempting to see OTT as a business plan that can’t fail, the truth is that there are a growing number of OTT platform failures that have been left by the side of the road.
In April 2020, Hooq, a Singaporean video-on-demand streaming service shut down. Despite big names like Singtel, Sony, and Warner Bros. jointly owning it, Hooq ott reached a dead end after 5 years of service. It barely raked in 1 million subscribers by 2019 but what’s more disheartening is that the figure was derived from five different markets. A once poster-child of the Southeast Asian subscription video-on-demand market, Hooq has since become a guidebook for businesses to take heed of.
Singtel, the largest shareholder of Hooq, said that it struggled to make a viable business model by citing factors such as the high cost of content, the fact that global and local content creators were increasingly going direct, and the unwillingness of emerging-market consumers to pay. Hooq launched, with a scalable business idea to deliver content to the masses via mobile devices and networks at affordable prices, but they failed streaming platforms. They were going after markets where free content was a primary source of consumption, therefore, paying for content wasn’t something the consumers were used to. It is also worth noting that when Hooq launched, they initially went with off-the-shelf tech vendors. Realising it didn’t work for the market they were targeting, they decided to rebuild their platform. This is a costly lesson to be learned, and streaming service providers can best avoid it by onboarding a trustworthy third-party expert such as Enveu from the very beginning.
Quibi, an American short-form video streaming platform for mobile devices, is another example of a streaming platform that failed to shut down. Quibi was made with the idea that young, hip audiences wanted shorter content. It raised a whopping $1.8 billion and was led by former Walt Disney chairman Jeffrey Katzenberg. So why did it fail when it looked like it was destined to succeed?
One of the reasons was that they left out TV apps. A Netflix study cited that 70% of all viewing happens on TV. Users were quick to complain that the app could be viewed only on a mobile. Another reason for its failure was that Quibi used the wrong paywalls. Quibi was loose with their paywall, giving users 3 months to try the app for free. When each show is 10 mins long, a user had no reason to subscribe at the end of 3 months. Quibi also reportedly misjudged its target audience. They wanted to appeal to the social media generation but the product did not complement that vision. Features that enabled likes or shares didn’t exist. Besides, with popular celebrities making content on Youtube and Tik Tok, there was no reason for users to pay $5 to subscribe to Quibi.
The bottom line is simple – While the opportunities that over-the-top video streaming has to offer are incredible, the marketplace is a tightly noosed competition. CEOs and CTOs of media houses need to get the fundamental basics in place. Certainly, there is money to be made and audiences falling in your coffers, but you have to go beyond just turning up with a product. Engage with consultants who will offer an objective approach in realizing every goal of your core idea and staying ahead of industry trends. Or better yet, help you be the first ones to create those trends.
Get in touch with Enveu right now and see the wonders that wait ahead!