The traditional methods for reaching, engaging, and monetizing consumers are breaking down, as millennial, Gen Z and older consumers migrate to digital, mobile and social platforms. Content producers and owners can no longer rely on pay TV and other traditional distribution channels to reach this next generation of consumers. This evolving consumer landscape requires the development of direct-to-consumer digital platforms, including over-the-top TV (OTT) that simultaneously (i) appeal to this evolving consumer, (ii) fit with other distribution strategies and commitments, and (iii) deliver compelling financial returns. L.E.K. Consulting has helped many clients successfully navigate this complex journey.
How we help
We provide clients with end-to-end support around the launch and growth of global direct-to-consumer digital services, focusing on over-the-top services. Specifically, we help clients answer key strategic questions along each step of the OTT service growth path.
- Commercial case development
- What is the core value proposition of our service offer?
- How do we manage contention between OTT and other content distribution channels?
- What windowing strategies do we need to employ?
- What is the audience/subscriber potential for our service offer?
- How does subscription potential break down by audience segment?
- What mix of business models (e.g., SVOD, AVOD, TVOD, other) should we employ?
- What level of investment is required?
- What range of revenue and cash flow can we expect?
- Content and feature planning
- What set of content and features should we prioritize for development?
- What is the relative value of content and features to prospective subscribers?
- What is the ROI of development?
- Pricing and packaging
- For SVOD services, how do we price the service given our target consumer base, the value we are providing and the competitive landscape?
- What pricing tiers, with what differential benefits, will maximize revenue?
- Tactical subscriber growth support
- For existing OTT services, how much runway do we have to further penetrate our target fan base?
- What levers can we pull to drive incremental subscription and reduce churn?
- International expansion
- How do we take our domestic service international?
- Which markets do we prioritize?
- How much and in what localization should we invest in, by market?
Examples of our work
L.E.K.'s work has had a meaningful impact in driving the digital business of our clients. For example, with our support:
- A sports entertainment company launched a subscription over-the-top that quickly reached over 1 million paying subscribers globally
- A professional sports league nearly doubled the subscribers and revenue of its digital subscription service
- A major media company successfully launched one of the first digital multichannel video provider services
- A professional sports franchise developed a business case for a disruptive OTT service launch to successfully bolster its linear rights negotiations
- A major media company was able to understand the implications of the growth of OTT on its core film and TV businesses, and to develop response strategies