Mad for Sports: How Live Programming is Driving Video on Demand

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SubscriptionTrends_2x_Purple.pngMarch Madness is upon us, along with the predictions. No, not which teams will be in the Final Four—but how many hours of lost productivity will businesses suffer due to distracted employees! Estimates are that anywhere from 24 to 82 million employees will use company time not just to watch games but also to research the brackets, make their bets, and track results. And this may result in employer losses totaling as much as $2 billion.

But employers’ losses are OTT providers’ gain. Last year, video-on-demand (VOD) revenues worldwide reached $25 billion in 2016, according to the Boston Consulting Group (as reported in eMarketer). This whopping sum included ad-supported (AVOD), subscription-based, and transactional content. North America represented 57% of the global total, or $14.3 billion.

The undeniable popularity and potential profitability of live sports is not lost on the TV industry in the US and elsewhere. In a recent survey by Digital TV Europe, 380 TV industry professionals from 42 countries around the world were asked about the key differentiating factors for video-on-demand (VOD) services. As the segment has become increasingly crowded, differentiation becomes critical to growth and success. Nearly three-quarters of the executives surveyed cited sports and other “time-sensitive” programming as a primary way to stand out from the pack. Respondents ranked sports content more highly than “offering a wide range of popular content” and even over offering a VOD service at a lower price point.

While sports and live programming were seen as the main differentiators, the TV executives surveyed also noted the importance of other elements related to “platform enhancement.” Offering a reliable streaming experience that was free from downloading issues was cited by nearly two-thirds of respondents. Indeed, streaming services are increasingly recognizing the critical need to provide hassle-free, high-quality customer experience, as we discussed in this recent blog post.

This comment from the CMO of Conviva, a company offering solutions for online video optimization and online video analytics, sums up the challenges well:

Live events such as March Madness present unique capacity challenges to OTT publishers and service providers alike to maintain great quality of experience (QoE) and do so at a reasonable cost. It requires very careful peak capacity planning and provisioning. In particular, March Madness is challenging because of the long duration of the event, its distributed viewership and its unpredictable match-ups that drive unusually high viewership for sometimes just a few emotional moments in any given game or city.

Recurly supports a number of very popular OTT providers who regularly broadcast live events with record-breaking sign-up and viewership numbers. To learn more about how Recurly can support your subscription OTT business, sign up for a demo below.

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