The new OTT strategies: advertising, exclusive passwords...

Enrique García Maroto, director of the national consulting area of GECA, shares his vision on the new business models that could mark the future of OTT platforms worldwide.

Just a few weeks ago the news broke: Disney+ publicly announced that it will soon launch lower cost subscription options in exchange for the inclusion of advertising on your platform. News that, despite being a real novelty in the streaming market, did not come as a surprise to experts in the sector, since rumors in this regard have been heard for some time. The mouse company has, a priori, user support of these services to take this step. And as stated in the 11th wave of the OTT Barometer of the consulting firm GECA, a 55.8% of said users I would welcome this option of being able to pay a reduced price at the expense of integrating ads. In the specific case of Disney+ users in Spain, this percentage rises slightly to 56.9%, compared to 28.9% who say they would prefer to pay a little more for not having ads and 14.2% who say they would unsubscribe with the arrival of advertising.

Obviously, now it is up to Disney+ to define What will be the conditions of these new subscriptions? (what the reduced prices will be, the number of commercial breaks, etc...), since not all types of advertising would be equally well received by subscribers. Taking again as a reference the OTT Barometer, a study launched in 2019 by GECA to measure the habits, preferences and consumption of users of streaming platforms, for 62.5% of those surveyed the most acceptable would be an announcement before the start of a chapter. It is not surprising that this is the format considered most appropriate, not only because it is equivalent to the historical pre-roll (which is the least invasive format), but because it is also something that, for example, platforms like Movistar Plus+ It has already accustomed its subscribers to it for years.

Advertising lands on platforms

As we said before, the arrival of advertising to streaming platforms is not something that completely surprises. It is not just because I have previously seen some tests in emerging markets or due to the establishment in recent times of platforms that rely exclusively on this source of financing to maintain themselves, as is the case of AVODs (Advertising Video On Demand), como Pluto o Rakuten. It is not because it has been evident for some time that it is going to cost streaming platforms more and more efforts. get to increase your subscriber base and it is obvious that they are going to have to look for new formulas with which to attract those who still refuse to pay to enter these new consumption windows.

In the case of Disney+, it is clear that the strategy of lowering prices in exchange for including ads can be a way to continue growing among those sectors less willing to invest in this type of services, even more so considering that one of its main niches are families with children in which it never hurts to look at what expenses can be cut.

An emerging trend?

However, taking into account that the price of these platforms continues to be valued as affordable among their users (their cost is positioned as the fifth most attractive subscription reason for them, according to the GECA Barometer), it is still difficult to predict whether some other of the large video-on-demand platforms will follow in Disney's footsteps+. At the moment, Netflix has already stated clearly that it is something that They are not considered in the medium term, although at the same time without denying that this may change in the future. In fact, Netflix's hegemonic position as leader by number of subscribers is, in turn, one of its main handicaps by making it increasingly difficult for them to grow, both in Spain and in the rest of the world.

Given this, the American streaming giant did draw attention recently by announcing in mid-March that it was going to begin putting obstacles to those clients who want to share the account with people who do not live in the same house. In a first pilot test announced for Chile, Costa Rica and Peru, Netflix is going to apply a new policy whereby users of an account who do not live in the same household will have to either migrate their profile to a new account of their own, or become an additional member of the existing account, with the consequent increase in price.

As we can see, something as common today as sharing an account with family and friends can soon become impossible or, at least, increasingly complicated. And at that moment, when we can no longer share expenses between several users and we are forced to pay for various platforms to access the maximum possible catalog of content, that will be when these new subscription formulas with reduced prices in exchange for including advertising (like those already proposed by Disney+) make all the sense in the world.

A leap full of challenges

It should be noted that the entry of advertising into these services will not be without challenges and possible controversies beyond defining how and how much. As GECA highlights, these platforms They are going to have to put aside the great opacity that still accompanies their data (number of users per country, content viewing, moments of greatest demand...) and search for a independent meter agreed upon by the market to be able to be accountable to advertisers who want to pay to incorporate ads into their services.

Returning to the case of the traditional payment platform Movistar Plus+, this one already had to articulate a audiometric panel audited by Kantar to certify your consumption data in order to sell commercial spaces. But that is not going to be the only challenge ahead for the platforms that bet on this new hybrid modality since, in an increasingly fragmented and saturated market, it is evident that their entry into the fight to gain control A piece of the pie of advertising investment is not going to be seen favorably by conventional television.

Until now, these two different businesses have been competing for the contents and the viewing time of the viewers. However, the extension of the hybrid model to more streaming platforms would surely set off alarm bells in commercial channels, who until now had been weathering the storm in a relatively calm status quo that sought the complementarity of both types of business.

The Disney+ or Netflix model?

In any case, it is still too early to predict whether other platforms such as HBO Max They will bet on the hybrid model of Disney+ (in fact, in the US it has already done it, just as Hulu did in its day) or by the model of Netflix aimed at stopping key sharing (perhaps the most likely at the moment in markets like Europe).

What is certain is that the dizzying changes that are taking place in the Spanish and global audiovisual market still bring us many new developments and shocks in the short and medium term.