Netflix is only the tip of the OTT iceberg

Netflix may be synonymous with OTT among many consumers but such subscription VoD providers are just a small subset of the greater OTT revolution that is transforming all parts of the pay TV industry all the way from the camera to the final point of consumption. This does not mean that OTT is sweeping away established pay TV operators, many of which continue to thrive and prosper in a multiscreen world. But it does mean that OTT is where the growth is now right across the board and any traditional TV operator that ignores this reality will indeed perish. It is worth noting that most if not all of the subscriber growth for operators such as Sky is now coming from their stand-alone OTT offerings. At the same time all the innovation around advertising and recommendation now revolves around the multiscreen extensions of their traditional subscription packages over cable, satellite or dedicated IPTV infrastructures.

Those are just two flavors of OTT involving the traditional operators. For Telcos already in the TV business there is an additional twist here, which is that OTT can also extend the effective footprint of their primary TV service.  OTT enables multiscreen offerings in addition to their traditional home services.

For Telcos entering the TV business for the first time OTT is really the only game in town. It is true that fixed line operators have the option of IPTV for delivering TV services to their own broadband customers, but this requires greater investment in infrastructure, for example to deploy IP multicast for efficient use of bandwidth. For OTT the investment required is less, while the deficit in QoS is being reduced or even eliminated by newer Adaptive Bit Rate (ABR) technologies.

bigpic1b

As a result of the improving QoS and the lower infrastructure costs of OTT, combined with the expanded footprint it enables, it is increasingly rare now for a fixed line Telco to deploy an IPTV platform for a new TV service. The same applies to those ISPs entering the TV field, for which OTT allows them to reach their customers even if they do not own the access infrastructure.

Another major group of more recent entrants are mobile operators, which are now in a position to offer TV services for the first time as the latest 4G/LTE networks are deployed with sufficient bandwidth for High Definition video. Although mobile operators typically own end-to-end infrastructure their subscribers may roam onto other networks to access a signal or when they are abroad for example, so OTT is the only option for widespread coverage.

OTT is also creating opportunities for a host of content providers, giving them the opportunity to expand their geographical reach and provide direct access over the Internet, bypassing the broadcasters or pay TV operators they have traditionally had to deal with as “middlemen”. OTT provides such newcomers with a low cost and low risk path to market without having to invest in any delivery infrastructure at all. Under this category we can also include a new breed of service provider, almost an aggregator, acquiring online rights to premium content for specific markets. One example here is Next Generation Sports Network (NGSN), which in June 2015 launched the beta version of its sports website with mobile apps that allow subscribers in the United States to view a variety of soccer games from around the globe.

bigpic2b

Another category of OTT providers are traditional broadcasters offering online access to viewers with live and time shift content while away from their living rooms, potentially anywhere in the world. One of the first and most celebrated examples is the BBC’s iPlayer in the UK, with requests for TV programmes now running at almost 9 million a day. For broadcasters along with all the new players, OTT also enables development of new features via apps to increase engagement and potentially generate additional revenue.

All this is happening in large part as a result of the Internet coming of age as a medium fit for delivery of premium video content. There still remains a lot to be done to improve end-to-end QoS as consumer expectations continue to rise and video becomes available in ever higher resolutions, especially with ultra HD now coming along.

In addition to QoS there are issues related to scaling to provide the increasing hardware resources required for live OTT streaming to a very large number of end users. The complex requirements of scaling the service have delayed the deployment of live OTT services. Some operators have deployed a hybrid distribution mechanism that combines DVB-T or DVB-S for live broadcasts with OTT for their other services such as VOD, PVR and catch-up TV.

A crucial point sometimes missed amid all these developments is that OTT is not just about reach and reducing cost to market but also about service enrichment. Whether you are a traditional pay TV service provider or an emerging pay TV operator you will want to exploit the opportunities that OTT provides to deepen the engagement with viewers through interactivity and personalization, while tapping these for additional revenue creation.  This is where Comigo fits into the picture.  Comigo provides a cloud based back-end platform that allows new revenue generating TV services to be created remotely without much additional investment. This fits with the spirit of OTT as a medium for a new generation of service providers to reach customers directly and profitably without all the heavy lifting that has been required until recently.

Close Window

Please fill in your details. We will contact you soon to schedule.
Close Window
-->