Media Brands Bet On OTT To Lift Legacy Businesses

If you subscribe to an over-the-top “skinny bundle” in the near future, or if you check out Amazon Channels, which offers independent streaming services for Amazon Prime members, you might see a familiar logo or two.

Sports Illustrated this month announced plans to launch a branded OTT streaming service through the Amazon Channels service. SI joins sister publication People Magazine’s PeopleTV, a celebrity-centric OTT service that first launched in 2016. Magazines like Motor Trend and Outside already offer streaming products.

Hallmark Channel, whose family-friendly films have been a well, hallmark of the holiday season, is launching its own OTT service through Amazon Channels, giving subscribers on-demand access to its vast movie library.

Discovery Communications, in announcing new leadership for its Animal Planet brand earlier this month, said in the announcement that the brand’s new global president, Susanna Dinnage, would be tasked with “pursuing opportunities for market-specific direct-to-consumer products for animal lovers.”



Discovery already offers a streaming service based on its “Say Yes” wedding franchises.

All of these legacy print and TV brands are hoping that OTT subscription revenues can create new revenue streams, as traditional print advertising and subscription revenues decline, and as more and more consumers cut or trim expensive pay-TV packages.

Whether enough customers are there to support these niche streaming services is another story.

Magid’s 2017 Media Futures Study showed that while many consumers would be interested in a streaming service based on a major TV brand like ABC (31% of respondents interested) or Discovery (22% of respondents interested), the interest dropped considerably for smaller TV brands.

For magazine companies that are not known for their premium video content, that challenge is likely magnified. No matter how strong a media brand is, in order to go OTT, the value proposition needs to be apparent. Less, it seems, may be more.

Disney is planning a branded direct-to-consumer offering in 2019, featuring its library of films and TV shows, supplemented by four to five original TV shows and four to five original movies every year.

“Our plan is to price it substantially below where Netflix is,” Disney CEO Bob Iger told analysts on the company’s last quarterly earnings call, noting that while the library would be strong in terms of quality, it would still be small compared to Netflix.

Disney’s strategy highlights the risk these legacy media brands face. While many media brands are strong, consumers so far seem to appreciate the value of services with large libraries like Netflix. 

If Hulu and Netflix subscriptions start at $7.99 per month, and both rotate in dozens of new programs each month to add to their sizable libraries, then what is the right price for a niche service from a single brand? 

It’s a question many media companies are probably asking themselves as they plan product roadmaps laden with OTT offerings.

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