Approaches to Planning & Building D2C OTT Services

Kauser Kanji
March 21, 2023
Approaches to Planning & Building D2C OTT Services

OTT, at least from a product perspective, is now a mature (and crowded) market. Even smaller broadcasters, content owners, film studios, independents and sports rights holders typically have some form of OTT service whether it’s D2C (direct-to-consumer), B2B2C (via, for example, Amazon Prime Channels or Roku) or through the presence of their content on set-top boxes or MVPDs (or virtual MVPDs). 

This then begs the question: is anyone still planning, building and introducing new OTT services (or, indeed, upgrade existing products)? 

The short answer to that is, yes. 

Just last month (February 2023), for example, BBC Studios, confirmed the launch of BBC Nordic and BBC Nordic+ which replaced BBC BRIT and BBC Earth in Norway, Sweden, Denmark, Finland and Iceland. Separately, Sky Showtime will complete its European rollout this quarter when it goes live in Spain and Andorra. ITV’s new flagship streamer, ITVX, debuted to much excitement in November and December last year. And both Disney and Netflix have recently modified their offerings to include AVOD tiers. 

Whether these adaptations – or indeed, new launches – are a response to audience feedback, catering to new user or content niches or part of a longer-term change in direction, each company’s approach to creating or expanding their OTT services will be guided by one or more of four strategic elements: Reach, Ambition, Commercial & Technology. 

#1. Reach

When conceiving of your new or upgraded OTT products, who are you trying to reach? Is it a specific audience like 16–24-year-olds that may favour viewing platforms like personal tablets and games consoles? Is it an older cohort who may still be Pay-TV subscribers using, predominantly, set-top boxes to access on-demand content? 

Ultimately, your budget may not be unlimited so identifying and understanding preferred user groups is a crucial first step in your planning process.

#2. Ambition

What are your aims and expectations for your OTT services? 

ITVX, when it launched last year, went online with at least six different content types: 

  • Linear (simulcast)
  • Catch-up
  • Box sets
  • FAST channels
  • BritBox (effectively, a back-catalogue of content)
  • Digital premieres

Deep Bagchee, ITV’s Chief Product Officer, speaking about the new product at an event in February, explained that,

When we were thinking about ITVX last year, it was about ‘how do we truly become a streamer’? And the big goal was to truly become a destination for discovery and to really have people think of ITV and ITV’s streaming proposition as somewhere to go from the moment they turn on their TVs at night to get some entertainment. Whereas with Hub [ITV’s previous streaming platform], you knew that a show had been on linear and you were going there specifically to look for that show.” 

Similarly, Matt Westrup, SVP of Technology & Operations at A+E Networks EMEA, when talking about the broadcaster’s new Crime Investigation D2C service, told in an interview in December 2022 that:

The approach was that there were multiple approaches and they evolved over time because what we didn’t do was a top-down strategy. 

As an organisation, we are a heritage / Pay TV / linear channels / free-to-air provider and we had a bit of AVOD… so our [new] VOD engagement was around servicing various VOD platforms – be they SVOD and BVOD. Initially, we didn’t have some golden D2C target to hit; to launch our brand, aggregated and curated, in a single environment. We’ already launched an SVOD product with Apple and Amazon and, because our Crime brand did really well with Amazon, that was the spark to change our thinking [and go to D2C].

#3. Commercial

For a long while, between around 2018 and 2022, SVOD looked like it was going to replace pay-TV as the new preferred way for consumers to access OTT services. Spurred on by the success of Netflix (whose CEO, Reed Hastings, had been adamant that he would never introduce an ad-supported product), competitors like Disney, Paramount and Sky, as well as specialist providers like ESPN, BT Sport and DAZN, all adopted a subscription-first outlook. 

Now, however, in 2023, with a super-competitive OTT market, global cost of living crises and high inflation, AVOD has again risen to prominence. 

Which pay model (or models) is your planned OTT service going to run with? Do you stick to one mode? Can you be pragmatic, like ITVX, and cater for multiple options (AVOD / SVOD / FAST)? Alternatively, and if you're making your offerings available on platforms like Amazon Prime Channels, Apple or Roku, are you happy to share revenues or pay a cut of the subscription to the platform provider?

#4. Technology

When it comes to actually building your OTT service(s), how do you anticipate doing this? The common industry experience is that you usually have four - theoretical if not uniformly realistic - options:

  1. Do it yourself by deploying hardware, software, people and infrastructure that you already have (or can permanently hire) in-house. Netflix is the exemplar here but even it uses some external specialists
  2. Once your evaluation, engagement and legal processes have been completed, outsource the entire operation – both the construction and maintenance of your entire suite of OTT services – to a single end-to-end supplier perhaps using a white-label solution (in our experience, no-one ever does this)
  3. Buy a specialist vendor that has all of the capabilities you need and get them working on bespoke solutions to achieve your goals (e.g. Disney’s acquisition of Bamtech)
  4. Use a hybrid approach: a combination of internal and external resources.

When Matt Westrup, and his colleagues at A+E, first started thinking about their new D2C service, they,

“… thought we wanted, for a long time actually, a white label, out of the box solution because we just wanted to deal with a single vendor. But as we went through the process of looking at our priorities - functionality, cost, quality of product – we realised that the [vendor] market didn’t seem to offer a managed, or semi-managed platform, pre-integrated with best-of-breed constituent parts, that could make the product we needed… Something that was more than a pure white label but wasn’t a build-your-own model either… that was affordable.”



This blog marks the beginning of a five-part series. Keep an eye out for future posts covering the ins and outs of planning and constructing D2C services!

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