By Chris Hampartsoumian, Regional Director SEA, Accedo
Rogers’ theory still stands true today and for any type of product or service.
There are five distinct stages in a product adoption curve and five groups of consumers. They are: Innovators, Early Adopters, Early Majority, Late Majority and Laggards.
When it comes to the adoption of OTT, which has been widely discussed over recent years, we see very different stages in different markets. It is also very much service dependant. For example, for Netflix as a Product, based on the Q4 numbers for what it refers to as Domestic Streaming (North America market), one might argue that its product is moving from the early majority to the late majority – as it reaches around 50% of TV homes in the US.
In Asia, the picture is somewhat different. When it comes to the big shift from traditional TV distribution to OTT distribution, we believe we are more likely somewhere in the early adopter’s phase.
Crossing the Chasm
In his book ‘Crossing the Chasm’, Geoffrey Moore investigates and expands upon the theory of ‘Diffusion of Innovation’ and the Product Adoption Cycle. Moore argues there is very often a chasm between the early adopters of the product (the technology enthusiasts and visionaries) and the early majority.
This comes down to the rate at which a product or idea is adopted before reaching the early majority. For OTT providers in APAC, the challenge now is crossing that so-called chasm and moving from traditional distribution and screens to OTT and multiscreen, gaining widespread adoption. The early adopters are instigating a gradual pick up in OTT consumption in Asia, but the percentage remains pretty low right now.
Asia is also a very mobile-centric region. It will most likely play a part therefore in the OTT world, where there will be a high percentage of the looking to consume OTT content on handheld smart phones. As we move to early majority, however, it will be interesting to see whether that trend changes and we begin to see more demand for OTT content in the living room.
In other regions, we are also now seeing the trend for the multiservice consumer, where consumers will subscribe to multiple OTT services to satisfy their content needs. As consumption increases across Asia, I expect we will see many consumers adopting that approach from the start. In a competitive market, this has a number of advantages as providers are not looking to be the only choice for a consumer, just one of the choices.
AI, machine learning, and data analytics are becoming all the more important, enabling OTT providers to learn from behaviour and consumption habits and push relevant content suggestions to consumers. We are starting to see providers use this to dynamically change the entire User Interface to suit different user profiles, regions, times of day etc, delivering a much more personalized and consequently engaging experience.
For machine learning to be effective, it has to start with lots of training data. It will be interesting to see how much OTT providers can garner from work done in other regions. However, given the important role of regional variations, that will only get us so far. It is likely therefore that India, where consumption numbers are 10 times more than other parts of Asia, could potentially be used for data driven decisions.
At CASBAA this week, I’ll be moderating a panel discussing OTT adoption and how content owners, broadcasters, and operators can bridge the divide. I’ll be joined by Google, TonTon, and Eros Digital.