The market is currently undergoing rapid change, driven mainly by consumers, who are quickly adopting new over-the-top (OTT) technology. Traditional pay-TV providers now face stiff competition from OTT providers, some of whom are further disrupting the value chain with direct-to-consumer offerings. OTT is growing faster than traditional pay-TV, and the consumer demand for OTT services and applications is higher than ever.

For today's content providers and programmers, whether traditional or digital, preparing and delivering content has never been more challenging or complex. As executives are charged with recreating the broadcast experience for OTT delivery, they must assemble multiple vendors and manage highly complex integrations. The result is an expensive and static operation that requires disruptive hardware updates every 24 months on an average to stay competitive.

Following the rising consumer demand, market is witnessing the launch of a deluge of new services, all vying for traction from consumers. As it is difficult to foresee which solutions will succeed in the long term, video providers are launching multiple offerings and solutions for their content catalogs, dressed in new differentiated brands. This activity has created an environment of fierce competition between solutions. Consumers are now exposed to a mass of video services, all available at their fingertips and with no long-term commitment. Many consumers are using multiple services at the same time, some of them even simultaneously, and churn is more frequent than ever.

Signal to Screen: Content Delivery

Media companies continue to explore new ways to expand audience reach and grow revenue through OTT offerings, but have faced challenges such as managing device proliferation, abiding by content business rules, streamlining system interoperability, and enabling consistent monetization and ad support across devices. OTT solutions to date have often required multiple vendors and bespoke solution development for each platform, resulting in high upfront development costs, time-consuming implementations, and challenges in maintaining and upgrading applications and platforms.

OTT solution providers are addressing these challenges with cloud-based video distribution platforms, enabling content owners and broadcasters to quickly and safely distribute their content to their audience on any connected device. New OTT solutions are emerging that eliminate the need for modular, disjointed, and costly workflows that are a drain on capital expenses and resources. Easy-to-deploy OTT platform and turnkey solution for content owners to rapidly deploy high-quality, direct-to-consumer, live and on-demand video services across platforms ensures the best security and video quality possible.

In one cohesive, connected, and highly efficient platform, requirements are met for live delivery, VOD asset creation, syndication to premium online destinations, as well as traditional cable outlets, just to name a few. For programmers, broadcasters, and content creators, this eliminates the concern over managing the complex integration between multiple vendors, the software interfaces between them, and the delay it adds to their time to market. A cohesive, feature-rich, and powerful platform can reduce multiple vendor dependencies, normalize workflows, create efficiencies, and improve time to market and execution

Domestic Landscape

OTT has come up in a big way in India. The technology has opened up a completely new way for operators to generate revenue from VOD, catch-up TV, and interactive applications. Growth in smartphone penetration and improvement in Internet speed in India provide opportunities for OTT providers but the market is still in an emerging state.

The key findings of a recent Frost & Sullivan report have been cited as:

  • lIndia is an attractive market for multi-screen video consumption in hours, gearing at 66 percent since 2015, which has led to emergence of numerous OTT service providers in the past two years.
  • lThe major driver for online video consumption is attributed to the demography of Internet users, wherein 65 percent of the users are between the age group of l5 and
    34 years.
  • lBroadcasters such as Star TV Network and Zee Entertainment are driving services as well as viewership for alternative media rather than cable TV or DTH providers
  • lThere are about 66 million unique video-connected viewers in India, and about 1.3 million OTT paid-video subscribers.

Drivers and Challenges

  • lYoung demography. Around 50 percent of the mobile users
    in India are in the age group of 18–24 years.
  • lDemand for multi-screen TV viewing. OTT is viewed as an additional revenue opportunity for content producers, content aggregators, and broadcasters and, thus, venturing to have a multi-screen presence.
  • lStrong international audience and regional content. High population of Indian diaspora abroad gives an opportunity to the OTT players to increase the subscription user base.

Three Big Predictions

  • lThe market is likely to grow at a CAGR of nearly 30 percent over the next 5 years in number of viewers owing to improvement in network infrastructure and awareness in terms of services that OTT offers.
  • lAlt Balaji and Amazon are expected to launch services in the immediate term. Reliance Jio could be the next game changer as they unveil their services.
  • lAt least 30 percent of TV households in 2020 will have access to OTT through their television sets. Broadcasters such as the Star TV Network and Zee Entertainment are driving services as well as viewership for alternative media, rather than cable TV or DTH providers.

Global Outlook

Expansion in both mature and emerging OTT markets around the world is expected to add more than USD 35.4 billion in new revenue by 2021, bringing the market to
USD 64.78 billion, up 120 percent from USD 29.4 billion in 2015.

While SVOD subscribers are expected to see rapid growth through 2018, more than doubling to 383 million from 163 million in 2015, eclipsing ad-supported video in the market, AVOD is expected to rebound and make up the lion's share of revenue by 2021. AVOD revenues are anticipated to be more than USD 15.3 billion by 2021, up from USD 14.58 billion in new revenue, asserts Digital TV Research. USA will see the greatest raw growth, adding USD 8.24 billion to the pie, with China nearly quintupling revenues and adding USD 6.24 billion.

From the 220 million SVOD subscriber additions between 2015 and 2021, 107 million will be in the Asia-Pacific region and 28 million in the Middle-East & Africa. The North American market has still not reached maturity, with 28 million additions expected between 2015 and 2021. Western Europe will bring in an extra 30 million to its total.

New OTT services are being launched and the bar is being raised, requiring that streaming services replicate and improve upon traditional broadcast features and functionalities.

Content Workflow

It is no longer sufficient, and certainly not economical, to simply simulcast a broadcast channel. Several factors can affect OTT delivery of content – whether a channel can be streamed versus broadcast, sports, and in market rights. In this scenario, it is becoming more relevant that OTT platforms support this business logic, enforce rules, and enable content replacement on all screens. This advanced workflow should also incorporate server-side stream stitching, where rights can be granted or enforced all the way down to an individual user level.

Multi-Network Path

As OTT growth and deployments soar, so does the demand for robust and reliable content delivery networks (CDNs). Currently, more and more programmers and service providers are embracing a multiple-CDN approach to delivery. Having a multi-network path enables delivery of the content, irrespective of a network's conditions in a geography or metro area.

4K and HDR

Talk of 4K streaming is a bit premature, unless it is on Netflix or Amazon. 4K has been the limelight of various broadcast events throughout the year, but the reality is that 4K streaming is still a few years away, at least for the masses. Most platforms are capable of processing this content, but it is difficult in terms of bandwidth and computer power. The average HD Netflix stream is delivered at 3.34 Mbps. A comparable 4K stream requires 15 Mbps of dedicated bandwidth. Streaming 4K content is more than a technology problem, it is a business problem – in the high costs to shoot, edit, store, and stream 4K.

What may break through the glass on this front is HD content created from an HDR source. In the most rudimentary terms, HDR provides for more and deeper colors that can be applied to a streaming rendition.

As quickly as OTT is growing, it is changing. Incumbent providers face a host of challenges against an onslaught of demanding users and new competitors. In order to succeed in this chaotic market, OTT service and solution providers must build a better workflow. Whether it is employing new technologies, better delivery infrastructure, or the latest in end-user analytics, OTT providers must continue to restate or face the inevitable – subscriber churn. From content discovery to advertising to video quality to multi-device support, viewers want their online video to be television-like. And that means continually upgrading OTT offerings to ensure the highest quality of experience.


 

axon

carl-zeiss

BroadcastAsia 2017

Digital version