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9 considerations for launching your ott service internationally

Understand the most important considerations when launching your OTT video service internationally with real-life examples and strategical considerations.

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The convenience, choice, and competition of video-on-demand has changed the demand for how content is consumed around the world and has enabled an industry that was previously highly localized to one with a global footprint. In 2017, Netflix saw it’s international subscriber-based overtake its US audience and that success validates just how critical global expansion is to the company’s strategy. Disney is also finding success overseas as it’s currently the leading streamer among traditional media players, having garnered over 60 million paying subscribers within its first nine months. A large portion of that growth can be attributed to its combined offering with Hotstar, India’s largest streaming service, which currently boasts about 8 million subscribers and approximately 180 million monthly active users (MAU).

Read next: MAU and other cross-platform ott app metrics to measure success

While the streaming wars are in full swing, battles will continue to be fought worldwide as Disney, ViacomCBS, WarnerMedia, Discovery, Lionsgate, and NBCUniversal have all recently shared their respective plans to launch their services around the globe.

International expansion is probably one of the biggest, high-reward opportunities. It offers OTT service providers the following benefits:

  1. Open your business to new markets and reach a wider audience to acquire more customers
  2. Increase company revenue
  3. Build closer customer relationships
  4. Provide a better experience than the competition
  5. Scale technology costs
  6. Build enterprise value

However, reaching consumers that have completely different expectations and behaviors presents significant challenges for all companies. This is where a solid globalization strategy comes in.

Globalization is the process of taking your business global with the help of both localization and internationalization.

Localization is a process of translating content, changing currency, pricing, and providing customer service to meet the linguistic, cultural, and legal requirements of a specific market.

Internationalization is the process of designing a product into the language and culture to suit each market individually.

Having worked with global companies on launch and growth strategies, below are nine factors OTT service providers should consider before expanding internationally.

demographics

It’s important to review your target market where you wish to expand. You should expect to understand each market’s cultural diversity, language, and customer behavior. Your OTT service should match the demands of those you are targeting.

Cultural differences can be significant. Be sure you take into account:

  • The aesthetics, comprehensibility, and cultural appropriateness of images and color symbolism
  • Ethnicity, clothing, and socioeconomic status
  • Local customs and conventions (i.e. social taboos, popular local religions)

content creation & distribution

creation

OTT service providers and studios alike should ensure that their films resonate both domestically and globally. Take Pixar’s 2015 movie “Inside Out” in which Pixar made 28 changes to 45 shots in the movie in order to appeal to viewers outside of the United States.

Source: Disney/Pixar

For example, In the American version of the movie, Riley hates the taste of broccoli, whereas Japanese audiences saw the little girl refuse to eat bell peppers.

“We learned that some of our content wouldn’t make sense in other countries,” said director Pete Docter in the statement. “For example, in Japan, broccoli is not considered gross. Kids love it. So we asked them, ‘What’s gross to you?’ They said green bell peppers, so we remodeled and reanimated three separate scenes replacing our broccoli with green peppers.”

distribution

Since Netflix began producing originals in 2013 (House of Cards), the company’s worked tirelessly to secure the global rights in addition to distributing or coproducing local projects such as Spain’s “Money Heist (La Casa de Papel),” the United Kingdom’s “The Crown,” and India’s “Sacred Games” in order to appeal to audiences all over the world.

If traditional media companies have previously sold their global content rights in long-term international deals, they could find themselves at a disadvantage. Disney, for example, is slated to launch an international streaming service under its Star brand that will feature Disney content that it deems “non-family-friendly”, however, it doesn’t own global rights to two of its biggest shows including Hulu’s “The Handmaid’s Tale” and ABC’s “Grey’s Anatomy”.

Though Disney will have to take back those rights in order to stream them on their own properties abroad, it’s nothing that the company hasn’t done before. Ahead of the domestic launch of Disney+, Disney agreed to run an ad for STARZ in exchange for the streaming rights for Star Wars: The Force Awakens.

language

According to Statista, English is the most common language used on the internet as of September 2020. However, the most spoken language in the world is Chinese with 1.3 billion native speakers. Spanish is the second most spoken language with 460 million speakers while English ranks third at 379 million.

translations

Your OTT service needs to have support for multiple languages and you need to translate all of your content, subtitles, descriptions, and other assets into the language(s) of the market you’re targeting. It’s not as simple as performing simple text translations. Make sure you get someone who knows the language really well, so both context and intention are not lost in translation.

subtitles

At the bare minimum, your service should include subtitles which are a text version of dialogue spoken during video playback appearing generally in the lower middle portion of the screen. For example, a movie might be in Spanish in terms of dialogue, but the subtitles can be English.

dubbing

Dubbing is the process of adding new dialogue to a video that has already been shot. It’s most widely used to translate foreign-language films into an audience’s language.

As Disney ramps up globalization efforts, the Disney+ user interface is already available in six languages (English, Spanish, German, Italian, and Dutch), however, the company also makes available subtitles and dubbing in 16 languages.

user interface

Adapting a user interface into each language and culture to suit each market will be one of the most time-consuming aspects of localization and it must be done with care and cultural sensitivity.

Below are examples where you will need to adapt your user interface:

  • Ensuring layouts work well in all languages, paying extra consideration to how different languages affect character length and sizes
  • The differences in dialect, register, or variety;
  • Writing conventions, such as the formatting of numbers (especially decimal separator and digit grouping) or date and time format, possibly including the use of different calendars

right-to-left

In right-to-left (RTL) script, writing starts from the right of the page and continues left. Arabic, Hebrew, Pashto, Persian, Urdu, and Sindhi are the most widespread RTL writing systems and if you’re localizing in any of these languages, there are additional challenges you’re likely to face.

In Arabic, it’s not just text that flows right to left, but the entire page layout. For example, navigation, icons, and elements that have direction in addition to content carousels should be mirrored in RTL.

Source: Netflix

business models

You should think about what business models will resonate in each market. Don’t be surprised to see several companies adjust their business models to specific markets and incorporate elements of subscription, advertising, and perhaps even pay-as-you-go.

Take Sony Crackle for instance. The service launched, and is offered as an ad-supported app in the United States, however, in 2016, they transitioned to an ad-free, subscription-based model in Latin America.

transactions

According to a study from E4X, most people prefer to buy from websites that display their local currency. Therefore, you need to research what payment methods are popular in each market. While credit cards might work in the United States, European consumers may prefer to use Maestro or PayPal. However, in Latin America, the majority of the population doesn’t have a credit card so online transactions are typically done through cash payment providers.

OTT service providers need to have a system in place that will not only translate the format of different currencies, but that converts the actual numbers as well. If you fail to account for these preferences, you’ll significantly limit your audience.

taxes & regulations

There are taxation and regulations that may make it difficult to work in a new country. There’ve already been signs of local governments stepping in to protect their own markets.

The French government mandates services such as Netflix, Disney, Apple, and Amazon to invest at least 25% of their revenue towards funding local productions. EU lawmakers have required video-on-demand services in the region to fill 30% of their catalogs with European-made content.

In Brazil, there are cross-ownership restrictions on content distributors and telecom carriers. Content distributors cannot own, directly or indirectly, more than 50% of a telecom carrier. And ownership of a content distributor by telecom carriers is limited to 30%, directly or indirectly. Additionally, Brazil has also passed a law taxing streaming services a minimum of two-percent to pay the municipalities where their customers are based.

As you can imagine, that’s complicated AT&T and WarnerMedia plans for HBO Max which is eyeing entry into Latin America.

in conclusion

The complexities of launching your OTT service internationally cannot be underestimated, While globalization has significant challenges, the rewards can pay dividends. Just like you need to account for the native nuances between devices such as Roku and Apple TV, you need to have the same considerations for your international expansion. What works in the United States may not necessarily work in Japan, even if they’re both fans of Pixar movies.

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