Chalk, meet cheese: the complementary roles of linear and DTC distribution models  | The Financial Express

Chalk, meet cheese: the complementary roles of linear and DTC distribution models 

Growing numbers of ‘cord cutters’ are giving up cable connections and relying solely on OTT distribution services

Forecasts of the death of linear TV are greatly exaggerated.
Forecasts of the death of linear TV are greatly exaggerated.

By Rick Allen

Linear TV – good old broadcast television with a regular programming schedule – may seem like an anachronism to younger audiences. We are now meeting a generation that has never used a wired device. In addition, growing numbers of ‘cord cutters’ are giving up cable connections and relying solely on OTT distribution services. This has led many to wonder if we are nearing the end of linear TV as a viable medium.

On the face of it, this seems logical. After all, TV and connected TV (CTV) ad spends in the US is estimated to grow from the current $80bn to $93 billion in 2025. All of that growth is going to be from CTV. In 2020, the total number of US cord-cutters was 31.2 million. It is projected to reach 55 million by the end of 2022. 

But forecasts of the death of linear TV are greatly exaggerated. I believe a winning strategy for content owners is one where their linear and DTC distribution models play complementary roles. It no longer has to be DTC vs. Linear but, instead, DTC and Linear. Let’s look at the landscape.

Linear TV vs DTC distribution: reach vs detail  
Linear TV still has the advantage of unmatched geographical reach compared to streaming services. Even now, 75% of US households have paid TV. China is projected to add 33 million, and India, 28 million, pay TV subscribers between 2017 and 2023. This makes the linear TV distribution model a perfect choice for content owners who want to make a wide splash across huge geographical areas.  

What linear TV doesn’t do, however, is give content owners granular viewer data – who is watching what, for how long, and on what device. A content owner’s own DTC service, which provides these insights, can play a complementary role in creating and strengthening viewer relationships. So, it makes sense for content owners and brands to use a twin-targeting approach. Using linear TV, they can boost awareness across larger geographies. Simultaneously, DTC distribution lets content owners target fans and loyalists more willing to consume more content than what linear TV offers them – or where their favourite game isn’t offered on linear in their area.

OTT goes where linear TV doesn’t

Most linear TV services license content for specific geographies and periods. It’s unlikely that any content owner will be able to license all of its content, and certainly not in every country.  By creating their own DTC distribution platforms, content providers can extend the reach of those uncovered games or geographies.  

Conversely, content owners can negotiate a variety of carve-outs with the linear TV service: portions of the schedule that the broadcaster won’t guarantee televising, specified territories, and even re-air rights where games can be carried on the DTC service after a 24- or 48-hour holdback.
A DTC service can also carve out shoulder content – pre and post-game shows, speciality series on topics like sports betting, player interviews, and player lifestyle shows, among others. And all of this programming provides advertising slots that can be sold or included in sponsorship packages. 

This strategy worked for one of our customers, the Professional Fighters’ League. Realising that not all of their content was being used by their linear TV partners, they launched their own DTC platform. It helps them provide depth of content that attracts and engages die-hard PFL fans.
Your platform, your controls

DTC streaming services give you control over your branding. The content owner has the final say in posters, thumbnails, context, and marketing. On the one hand, this control helps content owners build their brands in ways that align with their growth strategy. It also allows for more experimentation than linear TV, as content owners can test different marketing collaterals, stream pilots before launch and track viewership to improve content quality. 

Further, if the appeal of a particular new series or nascent sports league isn’t clear in a given territory, a successful run of a season on a DTC platform can provide sufficient proof to then license subsequent seasons on linear TV. It creates a comprehensive, data-based approach for broadcasters, content owners, and creators.

A DTC platform is your insurance

As audiences get fickle, so do TV networks. There’s really no point in creating a vast content library only to find that your linear TV partner isn’t renewing a contract for a subsequent series or season. Having your own DTC streaming service helps you keep your options open. If your linear TV option shuts, you stream the content on your DTC platform.

To conclude, it’s safe to say that while the video may have killed the radio star, OTT streaming platforms are not going to do away with linear TV anytime soon. However, by using DTC as a complementary medium along with linear TV, content owners can maximise their brand value, attract, engage, retain viewers, and monetise their content to its maximum potential.

The author is the CEO at ViewLift

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First published on: 28-01-2023 at 09:39 IST